TCS top bench may thin out in post-Chandrasekaran era
As CFO, Gopinathan does necessarily have the kind of client connect that any of TCS' five geography heads and its industry and service line heads – would possess.
Of all the possible candidates, the credentials of TCS' N Chandrasekaran was hard to be ignored for panel. Chandrasekaran, 53, popularly called Chandra, heads the group's most valuable company.
And of all the chiefs of Tata companies, which is present in around 100 businesses, perhaps only JLR boss Ralph Speth, 61, a German, can claim to rival Chandra's performance.
TCS along with JLR are not only the cash cows of the group, but also the only two consistent performers in the group.
BENGALURU: Tata Consultancy Services' sudden leadership change last week has left industry experts and analysts concerned that there could be a few senior-level exits at what is the most stable management bench in Indian IT.
Unlike its rivals Infosys and Wipro, TCS has not faced high-level exits and the company has one of the most enviable top-level talent benches in the country. But the elevation of CFO Rajesh Gopinathan over the company's geography and industry leaders could spark some change, analysts said.
"We can expect a modest amount of senior turn over as new winners and losers become apparent. However, TCS has an exceptionally deep bench, and I do not see this impacting TCS' performance in a significant way," Peter Bendor-Samuel, chief executive of IT advisory firm Everest Research, said.
Part of concern was that, as CFO, Gopinathan does necessarily have the kind of client connect that any of TCS' five geography heads and its industry and service line heads – would possess.
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"We've been talking to each other, and no one thought it would be Gopinathan. It is typically an operations or a sales guy. Now we have to watch and see how that choice shakes out," a senior executive at a rival IT firm said.
Equity analysts have been saying that given the challenges facing the IT sector, it would have been better not to expose the Tata Group's money maker to such changes.
TCS CEO N Chandrasekaran who will take over as Tata Sons chairman in February, addressed concerns about TCS' management bench and the potential for people to leave to get a shot at the title elsewhere.
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"We have two people for every role at TCS. Rajesh will be working with the top IT team in the country. Each of them could be a CEO and run a multi-billion dollar IT company. Which is currently what they do at TCS anyway," Chandra said on a call with TCS analysts on Thursday.
Chandra was alluding to TCS' decentralised strategy of creating units with mini-CEOs. The units are not only responsible for profit and loss but also for metrics like cash-flow generation and collection of outstanding sales. For example, Amur Lakshminarayanan joined TCS in 1983 and helped build its UK business. He is now building TCS' big bet in Japan. Ravi Viswanathan, president of growth markets, joined TCS in 1990 and helped the company boost scale in Europe.
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Pratik Pal, who heads retail, travel and consumer goods, manages over $2.5 billion in revenue, more than the revenue of India's mid-cap companies.
Chandra also elaborated on his choice for the top job.
"You know Rajesh as a finance guy but he is a rare combination of business and finance. He helped me build the e-business vertical in pre-sales. That business went from $0 to $500 million in about five years," Chandrasekaran said.
TCS also named NG Subramaniam as it chief operating officer, a departure from its normal operating procedure where the COO was appointed as heir apparent to the top job. Industry sources said that COO appointment was likely a way of adding sales and operating heft to the top rung.
Chandrasekaran also lavished praise on Subramaniam, who he said had an 'extraordinary set of credentials.'
"He has done every piece of business that a software leader should do — from operations to sales. He led the financial services vertical and helped build our strategic relationships with clients such as Deutsche Bank and American Express," he added.
"This is not an "overhaul" change at the top, unlike Wipro and Infosys, which both needed to take a new direction. Solid, stable leadership has always been the hallmark of TCS and I do not expect them to change this now, especially as the firm is still on a very solid financial footing," Phil Fersht, CEO of HfS Research, said.
Meet the man who will helm Ratan Tata's $116 bn group
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Of all the possible candidates, the credentials of TCS' N Chandrasekaran was hard to be ignored for panel. Chandrasekaran, 53, popularly called Chandra, heads the group's most valuable company.
And of all the chiefs of Tata companies, which is present in around 100 businesses, perhaps only JLR boss Ralph Speth, 61, a German, can claim to rival Chandra's performance.
TCS along with JLR are not only the cash cows of the group, but also the only two consistent performers in the group.
Of all the possible candidates, the credentials of TCS' N Chandrasekaran was hard to be ignored for panel. Chandrasekaran, 53, popularly called Chandra, heads the group's most valuable company.
And ..
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Under his watch, TCS has jumped three fold from Rs 30,000 crore ($6.34 billion) in 2010 to Rs 1.09 lakh crore ($16.5 billion) in FY16. Profits also jumped more than three times from Rs 7,093 crore to Rs 24,375 crore.
TCS now accounts for 60% of the Tata Group's combined market cap of $116 billion, besides contributing 70% to Tata Sons’ revenue, which comes from dividends of its listed entities.
Under his watch, TCS has jumped three fold from Rs 30,000 crore ($6.34 billion) in 2010 to Rs 1.09 lakh crore ($16.5 billion) in FY16. Profits also jumped more than three times from Rs 7,093 crore to..
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Chandra has also proved to be an able leader, often departing from established norms.
For instance, he broke down what was once a monolith into 23 business units to make service delivery, operations and execution work smoothly for the company. Later, he consolidated the units under eight groups, the heads of which report to him.
The strategy of creating small, focused business units was replicated by competitor Infosys this year.
Chandra has also proved to be an able leader, often departing from established norms.
For instance, he broke down what was once a monolith into 23 business units to make service delivery, operations..
Read More
Chandra also has international exposure and familiarity with global economic conditions, according to Tata insiders. TCS counts some of the largest global companies among its clients such as GE, JP Morgan, Wal Mart, Home Depot, Quantas, Electronic Arts, ABB, Cisco and Vodafone, among others.
For a sprawling business group like Tata, for which the international market still accounts for two third of overall revenues at $70 billion, that could be handy.
Chandra also has international exposure and familiarity with global economic conditions, according to Tata insiders. TCS counts some of the largest global companies among its clients such as GE, JP M..
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Chandra, who is a regular at many global marathons, is also a hands-on leader and has a reputation for a sound cross-industry, cross vertical grip. Starting as a software programmer in 1987 at TCS, he has risen steadily at TCS. He was elevated to the TCS Board and named COO in 2007.
He led the company to one of its largest acquisitions—Citigroup’s back office— for $500 million in 2008. He remains one of the youngest CEOs of the Tata Group.
TCS, whose exports reached landmarks of $10 billion and $15 billion under his watch, is set to scale $20 billion sales in the next few years. In September 2014, Chandra got a five year extension as TCS boss.
Chandra, who is a regular at many global marathons, is also a hands-on leader and has a reputation for a sound cross-industry, cross vertical grip. Starting as a software programmer in 1987 at TCS, h..
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And despite his hectic schedule at TCS, Chandra has emerged as an statesman of the IT industry in India.
During his chairmanship of industry lobby group Nasscom in 2012, he set the industry's vision 2020. Sangita Gupta, senior VP, Nasscom, says Chandra has the perfect combination of operations and vision.
"Despite a demanding schedule at TCS, he made himself frequently available for industry activities."
And despite his hectic schedule at TCS, Chandra has emerged as an statesman of the IT industry in India.
During his chairmanship of industry lobby group Nasscom in 2012, he set the industry's vision..
