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The Rediff Business Interview/S Ramadorai

'We're not going public. I don't think high stock valuation will put an attractive spin on TCS in US'

On March 25, Thursday, Tata group chairman Ratan Tata inaugurated Tata Consultancy Services's world-class mega software development facility in Madras, the largest of its kind in Asia. The facility will cater to the upper-end software spectrum and can house over 1400 professionals.

The facility is expected to enhance the capabilities of TCS -- it is a division of Tata Sons Limited, the holding company of the Tata group -- to offer high-value solutions to its world-wide clients. Ratan Tata said the Madras facility would stand out as the flagship of TCS.

About a third of the TCS software professionals are now devoted to solutions in India at about one-fourth the return per employee working for overseas clients from Indian shores, he explained.

For S Ramadorai, chief executive officer of TCS, the Madras facility is one more feather in his soft(ware) cap. He has spent 27 years with TCS, the last two as head of its overall operations. During his career at TCS, Ramadorai has been responsible for the company's entry into many new and diverse markets.

In the early '80s, Ramadorai launched TCS's US operations, besides bringing about the TCS partnership with Tandem, Oracle, Microsoft and Ernst & Young. Recognising the need for the integrating the IT industry with the academia, he played a key role in establishing collaborations with leading American universities.

In a recent interview with Sunita Wadekar-Bhargava, Ramadorai shared his vision for TCS. An excerpt:

You must have got tired of this question by now, but what is the latest on TCS going public?

I don't think that we have any current plans. TCS's current model is fairly successful. And it will continue to be.

But other IT companies have plans to go public primarily because stock options help retain existing employees and attract new ones, especially if the company wants to attract foreigners for global marketing?

The nature of the assignments and projects, the commitment to professional development and environment, the experience building... all are extremely important to a professional. TCS will ensure that we contribute to the professional development of every single individual we take in and help him or her to grow to full potential. All our decisions, investments, all our commitments are to the people who make it happen. And we will take care of their professional well-being whatever it takes.

Wouldn't a high stock valuation put an attractive spin on TCS in the US market?

No, I don't think so. So long as we take care of compensation in multiple forms, in addition to the performance for professional building, we believe that we have a good model and we will continue to look at that model on an ongoing basis. But, we are not against any change and we will be exploring all possible options which make sense.

Who do you see as your competition in the future? Is it the Indian players like Infosys, Wipro or is it global IT services companies like Andersen, Keane, EDS?

Our competitors are global players like the big six firms, some of the major outsourcing vendors, main systems integration companies and some of the hardware solutions vendors like IBM Global Solutions.

What does TCS bring to a project as against these other players?

Our track record, our ability to handle complexity, our ability to look at end-to-end solutions which may involve supply of hardware, software, facilities management, operational support, systems support -- it's a combination of these things.

What do you foresee as your next big business opportunity once the Y2K boom begins to ebb?

TCS is in other vertical market segments whether it is in finance services, banking, insurance. TCS will have solutions or products plus solutions in this space. Y2K is a very short-term opportunity.

Do you see TCS hiring significantly in China, the Philippines, Russia just as other IT companies are planning to do?

We will go to markets wherever there are opportunities. For the sake of entering a market, we won't enter that market. We will assess the capabilities in the market. But our resources today are coming completely from India and will continue to be from India.

Are you concerned about programmer salaries in India being too high vis-a-vis those in countries like China or Mexico? The CEO of a software company recently warned about competition from these countries where Indian programmers were considered cheap at one point in time?

TCS looks at the total value proposition. We are not here to say that we are the only programmers to the world or we only can do these kind of things. We quantify our value proposition and accordingly price our service offerings.

China, Mexico... what about them?

How we will deliver that will be completely different. We may automate certain pieces of the project. We may give certain parts of the project to somebody else. It could be any combination of these.

What, according to you, are TCS's major weaknesses?

Our worries, not really our weaknesses, are to continue to excel in the things we do with regard to training, with regard to continuing education, with regard to customer focus, with regard to accelerated marketing. And the challenges posed by the world which is full of players. The other continuing worry is absorption of technology which is hitting you much faster, and updating technology on a continuous basis.

How would you summarise TCS's major achievements?

I think it is successful deliveries based on some of the basic value systems which we hold. And technical people managing projects and continuing to stay focused in learning and taking risks.

Photographs: Jewella C Miranda

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