Indian Enterprises Are Under-invested in IT: S. Ramadorai

By Sneha Jha Apr 19th 2012
Indian Enterprises Are Under-invested in IT: S. Ramadorai
TCS is India’s largest software services company and its Vice-Chairman, S. Ramadorai shares some of the decisive moments of that journey and his thoughts on other issues.

Summary

TCS is India’s largest software services company and its Vice-Chairman, S. Ramadorai shares some of the decisive moments of that journey and his thoughts on other issues.

A business’ executive management should be closely involved in IT initiatives and should champion the cause of IT within enterprises.

S. Ramadorai needs no introduction. As the man responsible for putting TCS on the map, and taking it from an unknown company to one of the world’s Top 10 IT software and services companies, Ramadorai has beaten a path that few leaders can match. In this interview, he shares some of the decisive moments of that journey and his thoughts on other issues.

TCS has grown from $400 million to $6 billion on your watch. What’s your secret sauce?

To begin with, I focused on building a great team around me, with people who aligned seamlessly with our organizational vision and were ready to fire on all cylinders to fructify that vision. We’ve always had passionate people, people who are all willing to roll up their sleeves and get down to brass tacks. They’ve performed relentlessly to help TCS reach milestone after milestones. I also empowered individuals and functional departments to take decisions at all levels and supported that by making information available on demand. The digitization of the organization and its’ IT enablement helped our efforts to keep processes transparent and maintain robust channels of collaboration. And that translated our vision into reality. 

I have always believed that it’s companies that build the right team with right execution capabilities that emerge as market leaders. This holds true for TCS. We have always dug deep and wide to find the right talent, which would fortify the foundations of our organization. We got that right talent onboard, identified the right window of opportunity, and chased the dream of big growth.

In your book, you talk about the Top-10-by-2010 vision. What’s the story behind it?

I’ll have to go back in history, so I’ll quote my book: We started as a division of our corporate parent, Tata Sons, to serve in-house electronic data processing needs. Later, as TCS sensed the business opportunities in the software industry, it began chasing the IT dream. TCS made good profits riding the Y2K bug but we were still a minnow in an industry dominated by giants such as IBM, Accenture and EDS. At the same time, younger competitors mushroomed and soon it became impossible to ignore them. To take stock, I set up a corporate think-tank at TCS, which met at least once a week at my Mumbai residence, to set ourselves a new vision and that would rally the organization towards something audaciously big. 

One of our first ideas was to get to Rs 2,000 crore in revenues by 2000, simply because it looked achievable and had a nice ring to it. Soon, we realized it was too short a target. Then emerged a new rallying point for the company: To become a Top-10 IT software and services company by 2010. I believe that if we had set a qualitative vision—to be the best in the industry, for example—it would have been ambiguous and hard to sell internally. But, ‘Top 10 by 2010’ was pretty straightforward. The more we looked at it, the more we liked the sound of it.

How did that vision change TCS’ story?

That simple message became the driving force for TCS and the motivator for each employee. As we embraced the vision internally, we mobilized our forces, and helped them understand what they needed to do within their teams to make it happen. Every part of TCS started out by deciding what Top 10 meant to them, picking those ideas first that would immediately make sense. Open houses, which were convened regularly, helped us define four key ‘Top 10 by 2010’ success parameters: Revenue, profitability, number of employees, and market capitalization.

That vision set in motion a series of landmark changes and new initiatives to build excellence in quality, delivery, and collaboration. It eventually paved the way for perhaps the most dynamic period in our history. By 2003, we became India’s first US$ 1 billion-a-year IT services company. Only six years later, in 2009, we had grown to a $6 billion company and had achieved our target to become a Top-10 player in the global IT software and services industry. We had done it and we had done it in style! It’s been an exciting and incredible journey.

How does TCS handle scale inherent to such growth?

One step at a time. We have built robust back-end capabilities to handle scale. I strongly believe that you have to constantly keep your systems, processes and procedures intact. And I think IT plays a very important role here. Without a digital framework to support growth, you can’t get anything practically done.

What do you think had been your best business decision?

I believe that the best business decisions are those made with plenty of judiciousness, conviction, courage, and passion. Our best business decisions have been taken at different times. In 1999-2000, it was the decision to set up a Y2K factory in Chennai that would address a demand that would soar quickly. The second was to retain our key people during the Internet boom. 

We also got into the mode of identifying opportunities in advance and proactively investing in business avenues before demand actually hit. Proactive investment increases the velocity of decision-making when a business opportunity presents itself. Chance always favors the prepared. Hence, our decision to be ever prepared has been our best across timelines.

Is the rising price of Indian talent nudging TCS to change its business model?

No. Our business model will change only when we create a different way for our clients to reach out to their customers. Price may drive new frontiers of operational efficiencies but business models will change only when there is a disruption in delivering a service to customers. And changes in business models will be largely dictated by how IT can be proactively aligned to fulfil customer needs.

Are Indian organizations under-invested in IT?

I couldn’t agree more. Indeed, Indian enterprises are under-invested in IT. There is definitely a tremendous scope for improvement. Since IT spawns transformation, Indian organizations need to invest more in technology to better their own businesses, to accelerate growth, and provide service of a higher order to their customers. In my opinion, organizations should increase their use of devices such as tablets and mobiles to make their users more productive, and analytics in the backend to make far more sense of their data. I also believe that all IT initiatives should be driven from the top. A business’ executive management should be closely involved in IT initiatives and should champion the cause of IT within enterprises.

What changes would you like to see in IT?

As I said earlier, I strongly believe that organizations should be investing heavily in IT. They should also train their employees to be IT savvy. The third thing I would like to see improved is IT-business alignment. CIOs should work relentlessly to align IT with business effectively so that businesses, in turn, incorporate IT seamlessly.

What is your personal level of excellence for CIOs?

I believe that CIOs should be extremely business savvy. They have to invest significant amounts of time and effort in understanding business operations. They should work closely with the business and understand the processes of every functional department. Only a CIO possessing business acumen can navigate executive committees to the right decisions about IT within an enterprise.

Looking back, what would you have done differently?

I wouldn’t do anything differently (smiles). I am so satisfied that I would like to re-live my life if given the opportunity. The journey has been exciting, challenging, exhilarating, fulfilling and satisfying all the way.

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