The key issues that TCS faces are typical of Indian IT giants that provide consulting and global offshore outsourcing services. The competitive comparisons in business consulting capabilities between Indian IT services firms and global services majors present an interesting picture. The Indian players today face a myriad of challenges that they need to overcome before they can match the likes of IBM and Accenture in becoming consulting champions. The obvious difficulty first is in building the capability itself. As demonstrated, the company needs to gain both vertical and horizontal expertise (domain and process knowledge) to make its presence felt in the consulting echelon.
TCS' mission is to become a global top ten IT firm by year 2010. The changes on the customer front, caused by global competitive pressures, are throwing up a whole host of new opportunities and challenges for the company to act upon in the next five years. In turn, these developments are forcing the company to take a close look at the organizational structure, practices and decision-making process.
Manpower is another strong reason that could play a spoilsport for the Indian consulting party. The requirements for IT services and consultants are quite different; with India starting to face a shortfall of IT manpower itself, the future does not bode well here. TCS will need people not only with domain expertise, but also armed with complete process capabilities.
TCS' value proposition still remains focused on India, where the company continues to do the bulk of the work. However, Indian outsourcing faces a stiff challenge as other markets such as China, Russia are emerging in the field of Software Outsourcing. In order to address these issues, TCS has adopted a Global Delivery Model (GDM), which uses a mix of onshore and offshore development. However, TCS faces dramatic changes, challenges, and constraints as it uses the global delivery model to transform itself into a knowledge leader competing with established global giants. TCS is in the process of localizing the workforce and is addressing how to integrate them with the organization, be it training, best practices, sharing project management capabilities or quality consciousness.
Another challenge is that like all other Indian IT companies TCS operates at the lower end of the value chain and to be a really dominant player it needs to move up the value chain. The two-way movement of jobs and labor creates interesting implications for the future. As Indian firms expand in the US, their cost structure is certain to increase. In contrast, as US firms expand in India and other developing economies, their cost structure is likely to decrease.
To become a recognized global brand, TCS must promote knowledge leadership and create incentives to innovate. TCS has already established a high standard in software development, but now it must gain credibility by innovating next-generation tools, languages, technology concepts, and standards. Developing such capabilities requires a culture of innovation and a system that offers incentives to reward success. However, rigid processes such as CMM certification that have helped TCS to become known for quality might not necessarily encourage innovation. Therefore, TCS should collaborate intellectually with educational institutions and foster efforts to enhance cultural alignment in the coming years.
Furthermore, TCS must contend with significant infrastructure limitations as well as complex political and socioeconomic factors, which have a significant impact on the domestic business environment. With external political problems like a backlash from European and North American markets, TCS face formidable challenges in the next five years in its journey to become a global top ten IT firm by year 2010.
P.S: The above article is one of my MBA admission essays, which has been submitted to Warwick Business School.
1 comment:
good one :)
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