Strategic Management - Tata Consultancy Services
Case Analysis: Moving Tata Consultancy Services into the “Global Top Ten”
S. Ramadorai (Ram) was the current CEO of Tata Consultancy Services. The innovator behind this successful development and his predecessors had built TCS into India’s largest software services outsourcing firm. (Table 2, attached at the end) It began in 1968 as an in- house division of its parent firm, which was a member of the Tata group, India’s largest conglomerate. TCS was the 19th largest software services provider in the world (but was still in the process of striving to be better). But while the software industry was blooming, Ram had another vision in mind to add on to his success, he wanted to enter into the Business Processes Outsourcing (BPO) industry.
Ram and his advisors had been discussing there options but there are conflicts between staying within the software business versus the BPO industry. As Ram asserts, “One group argued that TCS should stick with the software-related businesses and work to move up the value chain” (pg. 518 Dossani/Kenney). They argued that the software arena was their core competency and that it was higher value- added than BPO. TCS also had developed its expertise in managing engineering projects teams, but not on the daily routine management that was necessary in the BPO area. Another disadvantage is if TCS does not focus and expand in their software industry they could fear of loosing to their competitors (i.e. Wipro and Infosys). Although they are still dominant in the software industry one careless mistake can mess everything up, a problem which they could not afford. Also, TCS entry means that it would need much management time and capital to catch up, which in a way, is a bad idea to enter because if it doesn’t works out as planned, conflicts could arise within the software industry because they would have fallen so behind.
Whereas on the other side of the group, Ram asserts, “Another group of managers countered that BPO was growing
S. Ramadorai (Ram) was the current CEO of Tata Consultancy Services. The innovator behind this successful development and his predecessors had built TCS into India’s largest software services outsourcing firm. (Table 2, attached at the end) It began in 1968 as an in- house division of its parent firm, which was a member of the Tata group, India’s largest conglomerate. TCS was the 19th largest software services provider in the world (but was still in the process of striving to be better). But while the software industry was blooming, Ram had another vision in mind to add on to his success, he wanted to enter into the Business Processes Outsourcing (BPO) industry.
Ram and his advisors had been discussing there options but there are conflicts between staying within the software business versus the BPO industry. As Ram asserts, “One group argued that TCS should stick with the software-related businesses and work to move up the value chain” (pg. 518 Dossani/Kenney). They argued that the software arena was their core competency and that it was higher value- added than BPO. TCS also had developed its expertise in managing engineering projects teams, but not on the daily routine management that was necessary in the BPO area. Another disadvantage is if TCS does not focus and expand in their software industry they could fear of loosing to their competitors (i.e. Wipro and Infosys). Although they are still dominant in the software industry one careless mistake can mess everything up, a problem which they could not afford. Also, TCS entry means that it would need much management time and capital to catch up, which in a way, is a bad idea to enter because if it doesn’t works out as planned, conflicts could arise within the software industry because they would have fallen so behind.
Whereas on the other side of the group, Ram asserts, “Another group of managers countered that BPO was growing