January 2015 | Christabelle Noronha
'United States is a hotbed of digital progression'
It is impossible to overstate the importance of the American market to the good health and continued profitability of Tata Consultancy Services (TCS) — about 50 percent of TCS’s turnover accrues from the US. The company is an increasingly recognised brand name in the region and has become a trusted IT partner for enterprises in different industries. Caring for this market is the responsibility of Surya Kant, TCS’s president for North America, the United Kingdom and Europe. An alumnus of the Indian Institute of Technology, Delhi, Mr Kant has had a distinguished tenure at TCS. He speaks to Christabelle Noronha about TCS and its business in the United States and North America, the company’s commitment to community programmes, and about the niche it has carved for itself as a brand.
How important has the United States been in making TCS one of the top players in the IT industry and in being the market that initially defined the company’s growth model?
The United States is an important market for TCS because of its size — it delivers more than 50 percent of our global revenues — and our 40-year history in the region. TCS began working with American clients in 1974 and opened its first office in the country in 1979 (in New York). That was a key moment in our evolution — America was the first country where TCS made its international presence felt. As for Canada, TCS has been present there for more than 20 years.
Taken together, our North American customer relationships span 47 American states and coast-to-coast across Canada. Our footprint in the region continues to grow. We are investing in new facilities, local talent and notable platforms to further enhance our offerings and the awareness of our brand and values. For example, we are the sponsors of the TCS New York City Marathon. We are also a year-round partner of New York Road Runners; this enables us to deepen our health and fitness engagement with communities in New York City and beyond.
North America, and particularly the United States, continues to be the major revenue earner for TCS. Do you see this remaining a constant?
The United States is the most advanced market in terms of software, services and digital technologies. The country is very open to global business and offers, for TCS, the largest pool of current and potential customers looking to innovate and transform their operations. America represents several benefits to a company of TCS’s size and scope.
What kind of growth do you expect in this market over the next few years?
We expect growth to continue at a strong and steady pace, given how the United States is a hotbed of technical and digital progression. An increasing number of our customers are embracing the potential of what we call the ‘digital five forces’: social media, big data, mobile, cloud and robotics and artificial intelligence.
Our global digital business is currently growing faster than the rest of the company, and could generate upwards of $5 billion in revenues in the next five years. A substantial portion of these revenues will come from the United States.
We are in the midst of a shift from the internet economy to the digital consumer economy. How will this affect the industries that TCS serves?
The impact will happen in two primary ways. Firstly, it will impact how we continue to interact with and serve our customers in using disruptive digital forces to effectively support their business needs. In many cases today, such as in the banking, retail and telecom industries, customers need to fundamentally transform their business models to remain relevant.
Second, TCS currently leverages the digital five forces to enable its employee base of more than 310,000 to engage with one another, to work on joint projects, share resources, learn new methods, keep up with company news, and for more light-hearted endeavours. For instance, our internal social network, Knome, has more than 240,000 colleagues actively connecting with one another across continents on a daily basis.
Have there been any path-breaking products that TCS has created using the digital five forces?
A good and recent consumer-facing example is TCS GoSafe Mobile, an app that provides feedback on your driving behaviour and helps you stay safe while on the road. Once installed, the app automatically starts each time you begin to drive, views the trip history and driving habits on a map, provides tips for improving your safety, stores your emergency contacts and initiates one-touch dialling or texting, when needed.
What are the challenges TCS faces in the United States?
The United States has witnessed a steady recovery since the last recession. However, one key challenge is the skills gap in the STEM (science, technology, engineering and mathematics) disciplines, in terms of the low number of qualified experts to fill current and future needs in these spheres. This is an issue that we are taking seriously. We are providing help in finding a solution here and giving back to the local communities where we work and live. Our flagship goIT Technology Awareness Program has engaged more than 7,500 students over the past few years and expanded from three to 10 American cities in 2014 (in addition to Toronto in Canada). Additionally, we have forged partnerships with national movements such as MillionWomenMentors and US2020, which collectively aim to connect a million STEM mentors with girls and women and people from underprivileged backgrounds.
How has the company’s business in the US changed over the years. How is it likely to evolve in future?
TCS has much deeper customer relationships and domain knowledge across a broad range of industries. In the last few years we have invested heavily in local talent, new customer centres and innovation labs, such as our facility in Cincinnati (the largest in the US) and our mobility and big data operations in Santa Clara. These enable us to better serve and re-imagine our customers’ business models.
With more than 310,000 people in 46 countries, how does TCS encourage knowledge sharing and cross-pollination of ideas?
Given the diversity of our employee base (we have people from 119 nationalities in the company), our geographic spread and young workforce (the average age of a TCSer is 29), we need to think and act differently to keep them engaged. We are fostering a culture of thinking big, helping employees realise their potential and make a difference. We cannot be too traditional; we must remain relevant, not just to employees but to customers and other stakeholders.
We employ social media as a key channel to share ideas, stories and a sense of community. We created Knome a few years ago to achieve this goal, combining the best elements of Facebook, LinkedIn and Twitter. We have had several instances where technical challenges have been posted in one region and colleagues from across the globe have shared their ideas or combined to arrive at a solution that was successfully applied. Beyond work-related matters, we also see colleagues sharing fun stories. This creates cross-continental bonds and deepens the sense of community within the company.
TCS has the lowest attrition rate among the top four IT companies in the world. What are you doing to retain talent?
Our employee retention success can be attributed to our learning and development programmes, to our reward and recognition initiatives, to the career counselling and mentoring that we provide (about 90 percent of leadership positions are filled internally), to our leaders driving the employee engagement through different communication avenues, and to the creation of a sense of purpose and pride for our people through our corporate social responsibility and community initiatives.
What about your brand-building initiatives?
The recent TCS New York City Marathon comes to mind immediately in this context. In broader terms, we have a marquee ‘US Summit’ for our top customers every September. This takes place in wonderful settings and features thought-provoking, high-profile speakers. This year’s event was held at Huntington Beach, California, and featured the likes of Jochi Ito, director of the Massachusetts Institute of Technology’s Media Lab, acclaimed actor Kevin Spacey, Dan Gilbert, professor of psychology at Harvard University, and talk show host and comedian Jay Leno.
Other brand-building initiatives include our annual innovation forums, which are focused on the latest technical advancements and future changes. TCS is also playing a prominent national role in addressing the STEM skills gap in North America, especially the United States. While we entered such initiatives for the right societal reasons, we’ve also gained from further exposure for our brand and our values.
What benefits does TCS stand to gain from supporting events such as the New York Marathon?
TCS became the title sponsor of the TCS New York City Marathon for several reasons. First, it is the largest and most prestigious long-distance athletic event in the world. As such it offers a high-profile platform to elevate the TCS brand and generate broader awareness of our business values and technical offerings. Second, we are committed to giving back to the communities where we work and live, and New York is a critical city in our global operations.
The latest edition of the marathon, held on November 2, 2014, had the largest-ever number of race finishers, at 50,564. The race weekend witnessed a sea of TCS and Tata blue, which was inspiring, and we received wonderful feedback from many of the runners, race officials and New Yorkers, several of them TCS customers and prospects. Furthermore, the race app, created by TCS in partnership with New York Road Runners, was downloaded by more than 260,000 people (130,000 people on race day alone).
Could you touch upon TCS’s sustainability-related activities?
TCS embodies the Tata group’s philosophy of building sustainable businesses that are firmly rooted in the community and demonstrate care for the environment. Our approach to corporate social responsibility is driven by the philosophy of ‘impact through empowerment’. Our employee volunteers serve local communities through partnerships and initiatives that reflect pressing national issues in the United States and Canada.
We use a four-tier engagement model: we utilise IT to solve large-scale societal problems; we work with local communities on issues that affect them; we partner nonprofits, governmental bodies and clients; and we support disaster relief efforts. On the environmental front, we design sustainable infrastructure and run efficient operations, and we engage with our supply chain partners in green procurement and disposal activities. TCS takes a holistic approach on reducing its consumption of energy and water, on waste disposal and on minimising its carbon footprint.
What was the idea behind the STEM education project? Are you happy with the progress made?
About five years ago we identified several STEM and computer science programs in the United States; they were isolated pockets of excellence, starved of industry support and with little technology infrastructure. We committed to investing our capabilities in thought leadership, technology, volunteering and philanthropy to create a pathway for students, from STEM education to careers, with a special focus on girls, minorities, and low-income groups. Overall, we are happy to see the STEM discussions across America shift from problem definition to action orientation, which further validates our cross-sector, consensus-based approach.
Fact file: Tata Consultancy Services
|This article is part of the cover story chronicling the Tata group's history of doing business in North America, featured in the January 2015 issue of Tata Review:|
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