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

A business’ executive management should be closely involved in IT initiatives and should champion the cause of IT within enterprises. S. Ramadorai Vice Chairman , Tata Consultancy Services

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.

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

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. 

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.

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. 

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.