Tata Consultancy Services (TCS), India’s largest software company, has introduced a new operating structure, the first significant step taken by CEO K Krithivasan since taking over on June 1.
TCS also restructured its senior leadership, hiring several new senior executives, global heads, and veterans with tenures ranging from 18 to 30 years.
On July 29, the company stated that, based on interactions with customers and associates over the last few months, TCS will be able to provide the best value to customers by integrating domain and contextual knowledge across units.
“In this context, we have announced a new operating structure that groups our existing Industry Solutions Units (ISUs) into key business groups based on industry segments.” “The changes mentioned above will aid in deepening customer centricity, which is critical to our growth,” a business spokeswoman said in a statement.
The plan appears to be a grudging reversal of TCS’s prior reorganization; while clients will still be divided into four buckets depending on account size, they will eventually be housed under industry verticals.
Former CEO and MD Rajesh Gopinathan revealed the prior reorganization plan in April 2022. Instead of sectors and geographies, the corporation grouped clients into four unique business groups based on their journey with it, according to the framework. This had become a major source of disagreement among senior leaders and vertical heads.
The acquisition group, relationship incubation group, enterprise group, and eventually business transformation group were among these structures. Each of these factions also had a distinct leader.
According to sources acquainted with the work, the concept of classifying clients based on relationship maturity is being kept in the new model, but under the cover of the verticalised business group. Aside from that, it’s a reorganization of tasks at the highest level. The structure of the Industry Solutions Unit (ISU) and the customer-facing layer have not been altered.
Because of the prior group-wise restructuring, many TCS senior executives were hesitant to take ownership of an account for fear of it slipping out of their hands once it became large. This infuriated senior executives, particularly vertical heads who had no control over their PnL (profit and loss).
Krithivasan had kept his banking, finance, and insurance (BFSI) vertical separate from the previous structure. BFSI accounts for roughly 35-40% of the company’s total revenue.
Sources spoke with analysts who praised the move since it returns TCS to its original operating structure and empowers industry leaders who were dissatisfied with the reorganization.
New appointments have been made.
TCS also made various leadership changes and appointments. Rajashree R, the company’s chief marketing officer, will leave her senior management personnel (SMP) post on July 31. According to her LinkedIn profile, she has advanced to the position of Vice-President.
Abhinav Kumar, a TCS veteran of over 21 years, will take over as the company’s new chief marketing and communications officer for its global markets. Prior to this, he held the same position but was only responsible for the European market.
K Ananth Krishnan, the company’s chief technology officer, is leaving on July 31.
In addition, SMPs Harrick Vin, Shankar Narayanan, V Rajanna, Siva Ganesan, Ashok Pai, and Reguraman (Regu) Ayyaswamy will be appointed beginning August 1. They have all been with TCS for between 18 and 32 years.
A difficult business environment
All of these changes come at a time when the corporation is already struggling with a number of issues, including macroeconomic uncertainty and a recruitment bribery case.
A few weeks ago, Krithivasan stated that reaching double-digit growth this year may be difficult due to clients’ caution in an uncertain demand environment.
TCS fired six employees and banned six major staffing firms last month after it was discovered that the employees were receiving bribes by offering preferential treatment to particular staffing firms while hiring subcontracted employees. Following this occurrence, the corporation is also evaluating its entire supply management system.
TCS was once again in the spotlight after it was discovered that it had delayed onboarding of over 200 lateral hires by more than three months.
Despite a challenging climate, TCS landed back-to-back big agreements worth more than $700 million in the United Kingdom, including renewals and new clients.
