October 2005

Living the American dream

TCS is leaving no stone unturned to enhance its presence in the United States. That means planning ahead, thinking anew and growing all the time

The life-enveloping figurines of the IT world swamp are everywhere: the fingerprinting contraption at the airport, the e-card key to the hotel room, the ticket-swallowing-and-spewing turnstile at the train station, the entry phone to that Manhattan office, the museum gadget enlightening you on the merits of a work of art… The foot soldiers of this movement are just as ubiquitous: computers, computers and more computers.

Among the many enterprises providing the nourishment that keeps America's IT juggernaut in fine fettle is Tata Consultancy Services (TCS), the company that has helped power India to the top of the software charts.

TCS earns a whopping 60 per cent of its revenues from the US market. Says S Ramadorai, the CEO and MD of the company, "The US is the largest technology consumer in the world. The country has these technology belts that are fed by the universities, where the brightest of ideas are incubated. These are translated into technology applications for business. The whole value chain is very evolved and integrated."

Since its early days, back in the late 1960s, TCS has been focused on realizing its ambition of becoming a world-class technology organization, one that absorbs, adapts and applies IT for the benefit of businesses and industries. The US was, naturally and logically, its first choice in terms of markets. The company established its presence there in an era when nobody would have imagined it possible. In 1979, it became the first Indian company to set up headquarters in New York.

The size of TCS's American operations has grown to include more than 50 offices staffed with more than 8,000 professionals. Thanks to the breadth of its expertise in various IT areas, TCS is able to offer end-to-end solutions to a slew of outstanding companies, seven of the top ten in the Fortune 500 list.

TCS has long been entrenched in the industry verticals of banking, financial services and insurance. "These verticals account for 41 per cent of our business," says Arup Gupta, the president of TCS America, a 100 per cent subsidiary of TCS. "The future lies in the emerging verticals of media and entertainment, federal, state and local governments, pharmaceuticals, life sciences and healthcare, and energy."

TCS has a strategy in place for old and new business segments, and TCS America is the engine driving it forward. The subsidiary signs an average of 15 'master agreements' every month. It helps that TCS America has a wide portfolio of service offerings, but a more important factor is that it goes — as many of its customer testimonials make obvious — beyond just delivering on its promises. TCS's endeavours to improve continuously are bolstered by the Tata Business Excellence Model (TBEM), a 'customized-to-Tata' adaptation of the renowned Malcolm Baldrige framework. "TBEM is designed to lead to change, and leading change is a core value at TCS," says G Jagannathan, executive vice president and head of business excellence at TCS. "The model ties in very well with the strategic intent of the company."

TCS is among the few IT companies in the world to employ an integrated quality management system. "We are far better in our delivery processes than many top companies," adds Jagannathan. "In fact, we consult our clients on quality and help them improve their processes."

TCS takes special pains to treat the myriad requirements of its different customers in different ways. Right at the start of a project, it draws up a service-level agreement that details the parameters for cost overruns, delivery time, quality, etc. TCS also has a governance structure for each account, in the form of a pyramid that enables reviews involving people at different levels, within its own ranks as also from the client's side.

Additionally, the company recently launched an initiative called the 'account excellence program'. "Under this, the TBEM framework is being digitized in such a way that the account manager knows where he or she stands, in the context of excellence, in a clear, measurable way at any given time," says Mr Jagannathan. "There may, in fact, be no need for assessments at the end of every quarter."

While there are officers for excellence associated with an area or a set of accounts in New Jersey, Dallas and Santa Clara, Mr Jagannathan firmly believes that excellence in processes is not the function of any one department. "We are only the facilitators; our job is to throw light on people who are doing a good job." He adds that the spirit to keep raising the bar arises from the woodwork, from the people involved in the job.

For this to happen consistently, standards have to be ingrained in employees. "Our biggest challenge lies in the deployment of all our processes, approaches and initiatives to everyone. This year, for instance, we are adding 13,000 people. Educating and transferring knowledge to them and making sure everybody follows the same process is a Herculean task."

Keeping all its employees in the US, who may be at various client sites, on the same page is an exercise that requires a lot of time and effort. Saju James, TCS America's head of HR, is constantly faced with this challenge. "Suddenly, after having worked with peers in India, our associates may find themselves working side by side with clients in a different culture," he explains. "Integration takes time despite the briefings we give; some things can only be experienced first-hand."
TCS works overtime to minimize, even eliminate, the culture shock its people are confronted with. It helps its newcomers coming to America settle in and also has mentors to guide them. The first thing TCS does when it bags an account is nominate a relationship manager for it. These managers guide all the employees who come to the site. There is an induction program to share the details of the project as well. "The HR office has discussions and project meetings with the associates," says Mr James. "There are checklists and the consultants are taken through all the processes." Employees are put through an intensive 12-week training regimen at the TCS development center in Baltimore.

TCS also helps employees with the softer issues of integration. "Differences in clothes and food are not the only things to be considered," explains Bernadette Borrello, a senior HR executive, who holds orientation courses that highlight the differences in the Indian and American approach to problem solving. "The thinking patterns may be different," she says. "For instance, in Indian culture it is impolite to say no. Hence a person may be saying yes without really meaning it and an American has to learn to figure that out. On the other hand, Americans are direct and many cultures have a problem with that. Also, Indians do not like to challenge authority whereas Americans don't have a problem with that."

Such courses are significant for the flow of culture from both sides, particularly because TCS has an aggressive policy for local recruitment. The company already has about 350 Americans on its rolls and is looking to increase this number to 1,000. In the American context local hires add value with their expertise and experience in the marketing function.

Ms Borello says that earlier the hurdle in the recruitment of locals arose from the fact that Americans did not know much about TCS. But this has changed over the past few years. "Many of the people we recruit have worked with TCSers or have heard of the company; some marketing people even tell us they have lost leads to TCS. While attracting local talent I emphasize the point that TCS has doubled its numbers every two years and there has been no major downsizing. I also highlight the opportunity for growth and training."

Adds Mr James, "As far as attracting talent goes, we score over other companies on the parameters of exposure to technology and the options available for career growth. In most technology companies a person starts as a programmer in a particular skill. He or she may then mature to reach the next level or maybe two levels higher, but he or she will continue to remain a specialist. In TCS people mature into other roles, horizontally and vertically. They can move from technology into a sales advisory role or front-end sales. IT consultants in TCS have even taken up HR. There are many people who look for leadership positions and these are available at TCS."

The company also ensures that employees keep rotating between different assignments. This is a pull for many IT consultants, who want to be exposed to new, state-of-the-art technologies. "Also, unless people see an opportunity to come onsite once in three years or so, and continue for two or three years, they won't be attracted to the job," says Mr James. On average, Indian graduates travel on deputation after a year or two of joining TCS in India. They usually stay there for two-three years.

TCS has to be meticulous about forecasting skill requirements for the future so that there is no gap between an order from a customer and the deployment of resources. The US government has a cap of 65,000 for companies under the H1 visa (used for the specialized knowledge category). "The quota gets absorbed quickly," says Mr James. "We need to plan our manpower requirements for the next year much in advance. We need to know what skill and experience levels will be required at which locations."

Sathya HegdeTCS has to be particularly mindful of the aggressive employment and immigration laws in the US. Satya Hegde, general counsel, heading TCS America's legal department, says that customers always consider the company responsible for errors of omission and commission committed by company employees. "Things can go wrong as there is a human element involved," he elaborates. "If they do, we take it upon ourselves to proactively investigate the matter in a manner transparent to the client."

What has helped TCS improve its standing as a transparent organization is the listing exercise it went through in 2004. "American companies look for transparency before outsourcing their work," says Mr Gupta. But that is not the only positive fallout of the TCS initial public offering (IPO). The road shows carried out in the US in the run up to the IPO increased the company's visibility. In a market where an Indian company has to work hard to be recognized, this went a long way in drawing attention.

On the corporate social responsibility front, TCS, in the traditional Tata way, seeks not to be known but to be just and fair. The reputation it has built through its CSR initiatives has been sustained in its newer markets as well. "We have to be good corporate citizens in the American context too," says Mr Ramadorai.

TCS America has been involved with community initiatives in areas such as Buffalo and Columbus. In Buffalo it has participated in an initiative by senator Hillary Clinton and the Confederation of Indian Industry, helping establish a training centre that aims to turn the region from a manufacturing base into a services hub.

For all that it has achieved, TCS America cannot afford to — and does not want to — rest on its laurels. "There's always room for improvement," says Prof Pankaj Ghemawat, an external consultant for the company. "One of the factors that distinguishes a good business from a mediocre one is the belief that improvement is not a destination, but a journey. We always have a full agenda of things to talk about because we operate in a climate of such rapid growth and technological change. The dominant theme at TCS is what can we do better; we don't sit around congratulating ourselves for having created this powerhouse."

All said, TCS's American adventure looks on course for new discoveries, fresh leanings and a whole lot more of fantastic growth.