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tata.jpg (4947 bytes)What do you
need to remain the software supremo of India? A lot of expertise, experience with
cutting-edge technology, and FC Kohli. So much has Kohli dominated the software scenario
in India that he can be called the Grandfather of Indian software. Amongst Kohli’s
contribution to Indian IT are not only a strong global brand called India Inc. but also
legions of managers who have been trained under him and are currently leading the Indian
bandwagon, primary amongst them are Tata’s own managers-Nirmal Jain of TIL, and Ramadorai
of TCS. While the latter continues to drive the export initiative at TCS assiduously, Jain
at TIL is blazing new trails of performance and is well on his way becoming a ‘platinum’
collared manager.
There is a real magic in being a Tata company. There are several things that are taken for
granted. For one, stability. In fact, Kohli is easily one of the longest-serving
professional managers in Indian IT, perhaps in corporate India. Second, a
sense of financial solidity, and third, a very strong sense of ethics and fairplay that
Tatas are almost legendary for.
A 30-year history behind them, TCS this year has achieved the ambition of becoming the
largest independent IT company in Indian IT industry. Don’t look at the fact that it took
them 30 years to do so, but look at the fact that finally a purely software-only company
has made it to the top, keep in mind the fact that software is today India’s biggest
competitive advantage, and keep in mind the fact that unlike hardware vendors, there is no
traditional BOM to boost up the topline of the revenues. TCS’ performance has to be seen
from the angle of what it means to the Indian software industry and could serve as the
benchmark for other companies, which are nudging TCS in this area. TCS has been able to
achieve this by balancing out the traditional cost advantage with a clear skills
upgradation path thus ensuring that not only is it able to price itself competitively, but
is also able to offer cutting-edge technology solutions to its customers across the world.
An example well emulated by Tata Infotech Ltd. Eschewing the traditional lure of the box,
TIL has managed to sidestep an imminent downfall and has literally clawed its way back to
the honors list. A complete reorganization of the company, slowing down of non-profitable
businesses, strategizing a long-term vision with near-term milestones and an amazing
appetite for new technology has made this company a favorite in the stock market. What
Jain has also courageously done is the jettisoning of Unisys, which while adding
little value to the JV was a millstone around the company’s neck, preventing it from
undertaking any non-Unisys software development. With the departure of Unisys from the JV,
TIL has aggressively followed up on other platforms, notably NT. In fact, in the current
year, NT will become a significant part of the total revenues of TIL, while Unisys will
continue to be a constant source of development and cash flow in TIL.
The JV with IBM is another feather in Tatas cap. While the JV has made tremendous inroads
into the Indian hardware market, last year also witnessed the creation of the software and
services entity. IBM Global Services will tap the services market and will have the entire
IBM Corp. worldwide as the primary market to tap into. However, as expected, Tatas do not
have a 50 percent equity in this entity. In fact, even in the hardware business, despite
having a 50 percent equity, there is precious little that is Tata. The product, the
management, and the culture is all IBM.

S T R A T E G Y

  • To remain the largest software and services
    company in India, catering to both the Indian and the overseas markets.
  • To penetrate the entire global markets and
    play those markets as a global player.

T A C T I C S

  • To retain the technological advantage that
    comes from over 10,000 Group employees.
  • To use the Group stature to gain entry into
    new markets and retain them by demonstration effect.

O B J E C T I V E S

  • To remain the largest IT Group in India.
  • To become the first and preferred stop for
    any hardware company that enters India for solutions integration.
  • To be the biggest domestic player, in the
    non-generic solutions business.

So where is the synergy? On the one
hand, Tatas have got a bearhug on the software and services market in its entirety. On the
other, in the hardware side, Tata-IBM and Tata Liebert, while being significant players in
their market niches, do not really contribute to any great congruence of ideas and
businesses. In fact, more synergy is brought to table by Tata Technologies-a fledgling
outfit, which has been created out of TELCO’s Management Services Division (MSD). Tata
Technologies is an ERP implementer and has already clocked close to Rs 29 crore of revenue
in the first full year of existence. Tata Tech ties in rather neatly with TIL’s domestic
SI business and TCS’ domestic custom software solutions business by bringing the ERP angle
to the whole thing and by satisfying the need of the Indian industry for integrated
solutions. Similarly Nelito, which is dedicated to banking and financial industry, has
significant complementarities with TIL and TCS. While it may be questioned as to the
necessity of Nelito, the fact remains that between the three companies, Tatas will end up
having a better batting average than any other Group as far as implementing solutions in
this segment is concerned. This synergy is likely to be extended to the entire financial
services segment as and when the demand from this area strengthens.
Quite obviously, some degree of consolidation is called for. One solution may be to
realign the group companies (TCS, TIL, TTL, and Nelito) along Lines of Business. While
this may be useful prima facie, structures like TIL etc. are created to cater to
multifarious needs of varying user segments. The second level of consolidation may be
along technology or application lines. Tatas currently have three companies catering to
niche applications-Nelito for banking and finance, TTL for ERP, and Tata Interactive for
multimedia and web solutions. Similarly, while TIL has across-the-board expertise, as does
TCS, some degree of maneuverability might be necessary for planning future growth.
The second area of concern is the web strategy of the Group. While each of the Group
companies may have their own individual strategies, the Web has forced us to think
differently with regard to tapping its resources for marketing and solutions. For
instance, Tata Interactive is involved in creating and hosting web pages for customers.
However, as and when ecommerce opens out and actual business is transacted over the Net,
the paradigm could call for massive restructuring within the Group. It is in this sense
that a cohesive web strategy is called for dispensation of e-solutions at the dawn of the
e-market.
Having said that, the Tatas have demonstrated time and again how they can pull off
strategies that few could dream of. With a lineage sans any parallel in Indian corporate
history, a few twists and turns will ensure that the hallowed name of Tatas remains
entrenched amongst the Indian IT industry’s hall of fame.

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