Tata Consultancy Services System Review - Case Study Example

of the Company: Tata Consultancy Services Website of the Company: http www.tcs.com/homepage/Pages/default.aspx General Overall of the Company: Tata Consultancy Services Ltd, established in the year 1968 and based in India is the biggest software services and consulting company in Asia. The company is the part of the largest and the oldest conglomerate of India: the Tata group. The company started for the purpose of providing computer services to other arms of the conglomerate as “Tata Computer Center”. The company faced extreme problems in the early years of its operations because of the license raj and unfavorable government regulations. The company’s management although strived hard to keep it afloat. They invested in upgrading of skill sets, technology and infrastructure of the organization. The company went public in the year 2004. Recently, on 6th October 2009, Mr. N Chandrasekaran replaced Mr. S. Ramadorai as the CEO and Managing Director. Products and Services: The company is primarily into providing computer software development, IT consulting, Business Process Outsourcing, re-engineering, Infrastructure services, and other IT related services. The company has products catering to the requirements of verticals such as: banking, financial services and Insurance (BFSI); Telecom, Manufacturing, Media, Entertainment, Transportation, Retail, utilities, hospitality etc. BaNCS: The company is considered a pioneer in its financial solution. TCS BaNCS is the company’s benchmark solution for the financial services industry and is used in many major financial services companies throughout the world. The suite has been ranked No 2 best selling Universal Banking Solution by International Banking Systems (IBS). ERP Packages: The company has expertise in providing SAP, PeopleSoft, Oracle Apps and other ERP package customization, implementation and support to its clients. Other Products: The company has also products catering to the data management needs of organizations. The company has systems in the field of CRM, database integration, knowledge management, business intelligence and analytics. The company has also products in the field of e-governance. For the entire gamut of services, the company provides its clients with the entire IT project management from the analysis of the business process, to consulting, development of the system or customization, implementation and support. The competition: The company is in the field of IT service provider’s category which has serious competitors in India. The biggest competitor of TCS is Infosys. The company is a close second in terms of its size. Other Indian companies that are a competition to TCS are Wipro, HCL Tech, Tech Mahindra and Patni Computer amongst others. The company has also competition from foreign MNCs such as IBM, Accenture, Competitive Situation Analysis Expertise and knowledge: Most of the Indian IT companies are having almost similar expertise. They specialize in providing low-cost IT systems development, support and implementation. Most of the revenues for these companies is from the banking and the financial sector. Pricing and Costs: The Indian IT companies in general provide low-cost services to the client. The major benefits of a company such as TCS are the availability of a large pool of skilled human resources and low-cost. With the world just recovering from a recession, the company has been facing pricing challenges. The IT spends of various companies in US and UK has gone down resulting in price pressures to the company. At the same time, human resource management is the biggest cost center for the company. The company has to continuously invest in training its employees and the problem of attrition is quite high in the industry. The company has also to keep investing in new technologies, and research and development. Target Markets: The company has its clients in countries such as US, UK, Australia, Japan, France, Canada and Germany. Because of the tight market situation in majority of the developed countries, the company is expanding its target market reach to developing countries. The company has expanded its reach in the Indian market considerably. Financial Performance to date and future prospects: The company has been at the forefront of the Indian IT industries in terms of its financial performance. The company’s net profit in Q2, 2010 stood at Rs 1642 crores. The same was Rs 4508.76 crores in the year 2007-08. The graph in figure 1 shows the stock price movement of the company. The company has clearly outperformed the broad benchmark sensex. This is in-spite of the fact that US and UK (which contribute about 60% of the company’s revenues are reeling under recession. This has been possible by achieving greater operational efficiencies and greater cost control management programs. The company is also favored by a strong dollar. The company management states that the global market is improving considerably and things will soon get back to normal. However, the dollar is showing negative movements with respect to the past levels, and the company’s revenue may take a toll on account of this. Corporate Social Responsibility The Tata group has always been known for its high fair, transparent and highly ethical standards. The company has an elaborate Code of conduct for all the employees. The company has various committees that take care of the various aspects of Corporate Governance. The company has an extensive Maitree Program through which, the company encourages its employees to spend time on community initiatives such as community initiatives such as education, healthcare support, training differently-abled people. SWOT Strengths: The company has the lowest attrition rates in the Indian IT industry (Reuters, 2008). The company has got presence across the entire gamut of applications. Weakness: The company has the largest number of employees in the private sector. This leads to majority of the costs for the company. The company is overly dependent upon the US and UK companies for its business. Threats: The company has considerably higher fixed price projects as compared to its peers. This is a threat to the company as it would have to bear the increase in the costs due to time overruns. The macro-economic scenario has led to a decrease in the IT spend of clients overseas. Opportunities: The macro-economic scenario also presents an opportunity for the company. With most of the organizations in the developed work working to cut costs, the usefulness of IT tools can’t be neglected in achieving the same. Summary and Conclusions To sum it all up, TCS has been amongst the growth drivers for the Indian economy. The company has continued giving stellar performance in-spite of touch economic situations. There are challenges ahead, but the management of the company is well-equipped to take care of any such issue. References Moenycontrol.com. 2009. Historic graphs. [Online]. Available at: http://www.moneycontrol.com/stocks/companydetails/hist_graph.php [Last accessed at: 23rd October 2009] Reuters. 2008. TCS Delivers Growth, Maintains Operating Margins in Q1; Revenues at $1.5b, Up 21% Y-o-Y. [Online]. Available at: http://www.reuters.com/article/pressRelease/idUS143871+16-Jul-2008+PRN20080716 [Last accessed at: 23rd October 2009] TCS Annual Report 2009. [Online]. Available at: http://www.tcs.com/investors/financial_info/Pages/default.aspx [Last Accessed at 23rd October 2009]. Read More