by Velu and Elias
TCS and Infosys both the companies are in IT segment and have similar growth opportunities. In the year 2009, Infosys financial performance was much better than that of TCS. However 10 years later in 2018, TCS has surpassed Infosys’ performance by multiple times. We provide below an interesting insight into why and how TCS could achieve it
How it was possible?
Common Thread between TCS and Infosys
A common thread or shall we say, the link node running across the strategy of both TCS and Infosys, is the focus on business transformation, both within and also for their clients. Secondly, both the companies are focused on newer technologies – digital, cloud, data analytics, cyber security, Internet of Things (IoT) and end-user experience. Both are also focused on large deals and winning them.
At a very broad level, there are some no-brainer management lessons that were reaffirmed. First, a stable leadership helps. Very important lesson for the leading Indian IT players, where in most cases, about 19 to 20 per cent of revenues come from top 10 players. Turbulence at the top (CEOs and key vertical heads) is not good news in such cases, especially in a services industry.
Nonetheless, while all software exporters from India struggled amid changing client requirements and protectionist policies in the US, one thing set TCS apart: leadership.
Consistency in Leadership at TCS
The consistency in leadership and smooth transitions between CEOs are among the reasons why it has overtaken Infosys, considered the IT sector bellwether until a couple of years ago.
“TCS has been able to stay focused in terms of strategy and identify its niche with the clients”. While TCS is out and out a professionally run company, Infosys is still having teething trouble as it comes out of the arms of its founders. Infosys has a great example in TCS to learn how to build a strong second-rung leadership that can hold the fort if things go wrong at the top-level.”
TCS Being nimble and quick to grab new opportunities
It always makes sense to have a portfolio that is well spread out geographically. It is good to have a high share of US but it is important to expand in other regions, too, as TCS shows. Being nimble and quick to grab new opportunities helps – be it IMS (infrastructure management services) and BPO earlier and now digital. Both the companies have grabbed these opportunities; but TCS was a bit ahead of the curve.
Pick the stars of tomorrow and invest into them (digital, for instance) but do not lose focus of the bread and butter sectors (sectors such as BFSI, retail, communication). Start investing more in the support infrastructure for digital.
Changing to customer requirement
There is perhaps also some learning from the efforts taken in recent years in the two companies. Over the last three years, Infosys has been transforming itself gradually and trying to align more to the client requirements. For instance, it has changed its delivery structure with increased investments in near shore and onshore, and increased the number of experts present onsite. TCS, which has also been transforming itself, has focused on changing itself to suit customer requirement. TCS has revamped marketing and sales function to articulate the strengths better.
In a market filled with intensive competition there is no room to make blunders. Even a small mistake will help the competition to crab the market and leap ahead of you. Success of a business is purely dependent on strong leadership. Strong & visionary leaders take the company to higher levels with consistent growth and performance. Channelizing the resources and having strong sales and marketing focus provides the strong push to the growth engine.
What we can do:
We would like to partner with you and work together in making strategic plans, continuously assess the changes in the internal and external environment and have action plans to outsmart the market. While you focus on your core business we will focus on processes for running the business in a robust manner.,