Business Today

Universal Reinventor

Under Rajesh Gopinathan, TCS has integrated a wide cross-section of automation products to create the machine first delivery model
twitter-logoNevin John | Print Edition: January 10, 2021
Universal Reinventor
Rajesh Gopinathan, MD and CEO, TCS - Photograph by Mandar Deodhar

On January 12, 2017, N. Chandrasekaran walked in late for the third-quarter earnings conference call of Tata Consultancy Services (TCS). The group had announced his appointment as Chairman of Tata Sons just a few hours before the call. Chandrasekaran's elevation as the top boss of the group was a proud moment for TCS' top management, but they had no clue about who was going to step into his shoes to lead the IT bellwether, the most profitable firm in the Tata bouquet and a major source of revenue for Tata Trusts.

Chandrasekaran, fondly called 'Chandra' by his colleagues, turned to Chief Financial Officer Rajesh Gopinathan and made a startling announcement that the board had appointed the then 45-year-old CFO as the new MD and CEO of TCS. Describing Gopinathan as "a rare combination of business and finance," Chandrasekaran said, "He has an end-to-end perspective of the business, not only in terms of operations and numbers, but also in terms of the strategic options in hand."

As in a Formula 1 race, Gopinathan strapped himself in, got the pit stop down to the minimum possible and drove TCS back on track smoothly. From an IT services supplier the company transformed itself into a business solution provider -offering services in marketing, merchandising, finance, risk, digital and people management, among others.

During Gopinathan's tenure, TCS focussed on deepening its relation with customers beyond technology and created business teams with contextual knowledge. A pool of 10,000 contextual masters was formed to provide expertise and solutions for expansion of businesses and help clients implement the same, without compromising on quality and scale.

In the last three-four years, the company has aligned itself with two themes - agility and automation - which Gopinathan believed would fundamentally alter the traditional operating model. So, TCS opted for the 'Enterprise Agile by 2020' vision. Automation was no longer perceived as a threat, but an enabler for transforming businesses, which helped the company stay ahead of the curve. "We invested in integrating a wide cross-section of automation products and creating an operating model, the Machine First Delivery Model, putting automation at the core of service delivery," says Gopinathan. The company also invested massively in IP creation.

At a time when customers were struggling to decode digital technologies, TCS invested in Business 4.0, a framework built on four pillars - Cloud, agility, automation and analytics. The company backed it with personalisation and user segmentation, reemphasising its focus that the customer is the king. "If institutions transition from an inside-out approach to outside-in, businesses will evolve with the changing external environment. Given the new realities, purpose-centric, adaptive and resilient institutions are the need of the hour. But for that transformation, there's a huge amount of investment required in people skills," adds Gopinathan.

In the last three financial years, under his leadership, TCS' revenue grew at a CAGR of 12.74 per cent to Rs 1,39,388 crore, despite the slowdown in key operating sectors, including banking, financial services and insurance (BFSI) and retail. Net profit increased 12.03 per cent toRs 33,260 crore. It distributed nearly Rs 94,800 crore to shareholders (72 per cent of TCS is held by Tata Sons) as dividend and for buybacks. The share price surged over 120 per cent and the company's market cap stands second to Reliance Industries (RIL) at Rs 10.7 lakh crore as on December 18.

An avid reader of books ranging from Emperor Asoka to citizenship laws to the future of work, Gopinathan recalls, "The first year was about making sure that we keep the race going. There was me and COO N.G. Subramaniam in new roles. The rest of the crew was same. That was a big benefit. The second and third years were about pulling ahead for a longer race without slacking the pace. We executed many things and delivered almost 12 per cent growth," he adds.

TCS has been moulding transformation across all dimensions- technology, service delivery, people delivery, people skill and business models - and continuously pushing the boundary for customers, he adds.

In fact, the company has been at the forefront of economic recovery - retaining its workforce and helping clients tide over the storm. "In retrospect, I think it went better than the worse we had anticipated. Without notice, we had to shut down all offices, move everybody back home and halt all travels. In my wildest imagination I wouldn't have thought that we would've been able to react this way," says Gopinathan.

TCS, he adds, is at the beginning of a new cycle of tech transformation, where Cloud and borderless workspace will be the new themes. The company had already invested in Cloud collaboration platforms pre-Covid.

"Suddenly when you removed the office out during the pandemic, the digital collaboration layer became the fabric that holds the teams together, and the virtual team room replaced the office collaboration room," says Gopinathan.

The pandemic has accelerated Cloud adoption. "We believe this positive cycle of migration to the Cloud and the potential it offers - the reduction in capital expenditure as it frees up investments in new technology projects and the speed to market so that value recognition can be accelerated - is huge and we are betting on that. We are restructuring our organisation to fully participate in it," says Gopinathan.

This move towards borderless agile workspaces has been there even before Covid, and that helped the company shift almost the entire workforce of around 4.5 lakh people to the work-from-home (WFH) mode without even a single day of delivery failure. The Secure Borderless Workspaces (SBWS) model was built immediately after Covid hit India, enabling remote access to employees and protecting them with a cybersecurity framework. SBWS ensures that work allocation, monitoring and reporting continues as usual.

TCS has so far enabled remote working for 95 per cent of its employees and established Cloud-based governance of over 23,000 projects, enabling high volumes of digital collaboration - 35,000 online meetings, 406,000 calls and over 3 million messages. "We never thought of SBWS. But, like the saying goes, necessity is the mother of all invention. When suddenly the rug got pulled from under our feet, we realised that we were already sitting on what was required. We only had to scale it up," says Gopinathan.

With the success of SBWS, TCS was also among the first to announce the 25x25 work model, which envisages that by 2025, not more than 25 per cent of its employees will need to work from office at any given point in time, and any employee will need not spend more than 25 per cent of their time in office.

According to Gopinathan, TCS is well positioned for a double-digit growth, beginning next year. "BFSI and retail segments, which together contribute 40-45 per cent of TCS' business, are on the revival path. Banking, capital markets are also recovering fast and we should see continuing momentum in the near future. We believe retail and consumer product sectors will turn bullish, making the entire financial year net positive," he adds.

Though he has worked directly only with Chandrasekaran, Gopinathan has fond memories of his predecessors late F.C. Kohli and S. Ramadorai as well.

"All three of them were razor focussed on customers. They had absolute conviction that there was nothing that we could not do. They heavily invested in learning and training. Kohli was a dreamer, took up ideas and professionalised and industrialised it. The real scaling happened with Chandra, with the first $100-million deal and the first $1-billion deal, among others," he says.

The TCS CEO and MD is now ready for the next race, and there won't be too many pit stops in between.


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