3Ps to power new business model of TCS


BENGALURU | MUMBAI: India’s top IT services provider Tata Consultancy Services is betting on the three Ps — patents, products and platforms — to create a new business model and power its next phase of growth, chief executive Rajesh Gopinathan said, a business shift that will need changes to the company culture.

The push for the three Ps is still a work in progress, but the bet is set in stone, Gopinathan said. “How we leverage knowledge in a systematic way is a big issue. We have been doing it intuitively — we need to do it systematically. That is the big focus area for the senior people,” Gopinathan told ET in an interview. In October, TCS moved routine responsibilities around quarterly growth targets to its next rung of leaders, freeing up top management to chart the new growth trajectory.

The company has world-class capabilities and is also the best in pockets, but the business model of the future depends on converting knowledge into assets that can be licensed, he said. “In multiple industries, we are trying to see how we can build products, how we can build platforms and how we can set ourselves up as an ecosystem,” Gopinathan said.

To get to a future defined by products, TCS is working to change its culture — from one that focuses purely on services-led thought to one on understanding what part of its work is repetitive, what is the ‘creative’ aspect and then patenting those solutions, and crafting products and platforms. This cultural shift is being driven by Ravi Viswanathan, its chief marketing officer.

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“The important thing is that we are going through a process that enables people to identify the creative part of what they are doing, rather than the repetitive part,” said NG Subramaniam, chief operating officer at TCS. The idea is to identify unique TCS solutions and then work to recognise their value. To get employees to think about the creative, patentable parts of their job, TCS is creating forums, and placing patent walls in delivery centres that will list the number of patents from each centre. “The idea is to celebrate knowledge,” Gopinathan said.

To be sure, TCS’ strategy is not unique. IT services companies have been looking at platforms and products as a way to grow in a non-linear manner, as they try to decouple revenue and headcount growth and boost margins. However, TCS’ way of achieving the goal is different. Rather than creating product groups or bringing in product experts, TCS believes it can tap internal expertise to achieve its target.

The No 2 software services firm Infosys, under former CEO Vishal Sikka, also wanted to create a product-led strategy. That, however, caused significant issues within the company as existing employees felt devalued with the entry of a large number of talented people with product experience.

TCS has filed the most number of patents (4,596) till date, compared to peers Wipro (over 2,200) and HCL Technologies, according to research by ISG, a global technology research and advisory firm. A majority of its patents are in big data and analytics, followed by machine learning and intelligent computing. The company has also been adding patents for the iON platform, it said.

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The shift in strategy to streamline its IP-creation process will help the company, according to analysts. “A player as large as TCS may have best practices followed by different teams in silos often failing to consolidate those approaches, resulting in disparity in servicing clients. This is a great approach to consolidate best practices within the firm and focus on protecting critical TCS IP as well as provide specific solutions,” said Mrinal Rai, principal analyst at ISG.





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