Tata

Chapter- 1 Industry profile
1.1 Preface The Indian Information Technology industry accounts for a 5.19% of the country's GDP and export earnings as of 2011, while providing employment to a significant number of its tertiary sector workforce. More than 2.5 million people are employed in the sector either directly or indirectly, making it one of the biggest job creators in India and a mainstay of the national economy. In 2010-11, annual revenues from ITES sector ( includes BPO ) is estimated to have grown over US$76 billion compared to China with $35.76 billion and Philippines with $8.85 billion. India's outsourcing industry is expected to increase to US$225 billion by 2020. The most prominent IT hub is Bangalore. The other emerging destinations are Chennai, Hyderabad, Coimbatore, Kolkata, Kochi, Pune, Mumbai, Ahmedabad, national Capital Region of India. Technically proficient immigrants from India sought jobs in the western world from the 1950s onwards as India's education system produced more engineers than its industry could absorb. The key segments that have contributed significantly (96 percent of total) to the industry’s exports include – Software and services (IT services) and IT enabled services (ITES) i.e. business services. Over a period of time, India has established itself as a preferred global sourcing base in these segments and they are expected to continue to fuel growth in the future. India’s IT Services industry was born in Mumbai in 1967 with the establishment of Tata Group in partnership with Burroughs. The first software export zone SEEPZ was set up here way back in 1973, the old avatar of the modern day IT Park.

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More than 80 percent of the country's software exports happened out of SEEPZ, Mumbai in 80s.Each year India produces roughly 500,000 engineers in the country, out of them only 25% to 30%possessed both technical competency and English language skills, although 12% of India's population can speak in English. India developed a number of outsourcing companies specializing in customer support via Internet or telephone connections. By 2009, India also has a total of 37,160,000 telephone lines in use, a total of 506,040,000 mobile phone connections, a total of 81,000,000 Internet users—comprising 7.0% of the country's population and 7,570,000 people in the country have access to broadband Internet— making it the 12th largest country in the world in terms of broadband Internet users. 1.2 History Formative years (till 1991)The Indian Government acquired the EVS EM computers from the Soviet Union, which were used in large companies and research laboratories. In 1968 Tata Consultancy Services - established in SEEPZ, Mumbai [3] by the Tata Group - were the country's largest software producers during the 1960s. As an outcome of the various policies of Jawaharlal Nehru (office: 15 August 1947 - 27 May 1964) the economically beleaguered country was able to build a large scientific workforce, third in numbers only to that of the United States of America and the Soviet Union. On 18 August 1951 the minister of education Maulana Abul Kalam Azad, inaugurated the Indian Institute of Technology at Kharagpur in West Bengal. Possibly modeled after the Massachusetts Institute of Technology these institutions were conceived by a 22 member committee of scholars and entrepreneurs under the chairmanship of N. R. Sarkar.

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Between 1986 - 1987, the Indian government embarked upon the creation of three wide-area computer networking schemes: INDONET (intended to serve the IBM mainframes in India), NICNET (the network for India's National Informatics Centre), and the academic research oriented Education and Research Network (ERNET).

The United States’ technological lead was driven in no small part by the brain power of brilliant immigrants, many of whom came from India. The inestimable contributions of thousands of highly trained Indian migrants in every area of American scientific and technological achievement culminated with the information technology revolution most associated with California’s Silicon Valley in the 1980s and 1990s.

1991–2001 In 1991 the Department of Electronics broke this impasse, creating a corporation called Software Technology Parks of India (STPI) that, being owned by the government, could provide VSAT communications without breaching its monopoly. STPI set up software technology parks in different cities, each of which provided satellite links to be used by firms; the local link was a wireless radio link. In 1993 the government began to allow individual companies their own dedicated links, which allowed work done in India to be transmitted abroad directly. Indian firms soon convinced their American customers that a satellite link was as reliable as a team of programmers working in the clients’ office.Videsh Sanchar Nigam Limited (VSNL) introduced Gateway Electronic Mail Service in 1991, the 64 k bit/s leased line service in 1992, and commercial Internet access on a visible scale in 1992. Election results were displayed via National Informatics Centre's NICNET.

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The Indian economy underwent economic reforms in 1991, leading to a new era of globalization and international economic integration. Economic growth of over 6% annually was seen between 1993-2002. The economic reforms were driven in part by significant the internet usage in the country. The new administration under Atal Bihari Vajpayee - which placed the development of Information Technology among its top five priorities - formed the Indian National Task Force on Information Technology and Software Development. Within 90 days of its establishment, the Task Force produced an extensive background report on the state of technology in India and an IT Action Plan with 108 recommendations. The Task Force could act quickly because it built upon the experience and frustrations of state governments, central government agencies, universities, and the software industry. Much of what it proposed was also consistent with the thinking and recommendations of international bodies like the World Trade Organization (WTO), International Telecommunications Union (ITU), and World Bank. In addition, the Task Force incorporated the experiences of Singapore and other nations, which implemented similar programs. It was less a task of invention than of sparking action on a consensus that had already evolved within the networking community and government. The New Telecommunications Policy, 1999 (NTP 1999) helped further liberalize India's telecommunications sector. The Information Technology Act 2000 created legal procedures for electronic transactions and e-commerce. Throughout the 1990s, another wave of Indian professionals entered the United States. The number of Indian Americans reached 1.7 million by 2000. This immigration consisted largely of highly educated technologically proficient workers.

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Within the United States, Indians fared well in science, engineering, and management. Graduates from the Indian Institutes of Technology (IIT) became known for their technical skills. Thus GOI planned to establish new Institutes especially for Information Technology to enhance this field. In 1998 India got the first IT institute name Indian Institute of Information Technology at Gwalior. The success of Information 2001–present India is now one of the biggest IT capitals in the modern world. The economic effect of the technologically inclined services sector in India— accounting for 40% of the country's GDP and 30% of export earnings as of 2006, while employing only 25% of its workforce—is summarized by Sharma (2006):The share of IT (mainly software) in total exports increased from 1 percent in 1990 to 18 percent in 2001. IT-enabled services such as back office operations, remote maintenance, accounting, public call centers, medical transcription, insurance claims, and other bulk processing are rapidly expanding. Indian companies such as HCL, TCS, Wipro, and Infosys may yet become household names around the world. Today, Bangalore is known as the Silicon Valley of India and contributes 33% of Indian IT Exports.

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 Exports (In Billions) Domestic (In Billions) 17.7 4.8 23.6 6.7 31.1 8.2 40.4 11.6 47 12.6 55 14.7

FY2011 64.4 17.2

Table 1.1 Industry Performances

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Graph 1.1 Industry Performances

1.3 Indian IT-BPO sector in India Strategic Review 2011: NASSCOM When it rains, it pours as they say, and so it did in 2010. The global economic downturn of the past year had a lingering effect on the GDP growth and employment in developed markets. However, based on pent-up demand from the corporate sector and return of discretionary spending, there was a surge in IT spending across markets, both traditional and emerging. And not all of it was customer-led – service providers did their part too, by providing new business models that encouraged first time buyers, and re-invented value propositions for existing ones. Further, with sector focus shifting from basic outsourcing advantages of cost and talent, to higher value added services, innovation and transformation, global sourcing is now evolving from being tactical to being of strategic benefit to clients.

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The IT- BPO sector has become one of the most significant growth catalysts for the Indian economy. In addition to fuelling India’s economy, this industry is also positively influencing the lives of its people through an active direct and indirect contribution to the various socio-economic parameters such as employment, standard of living and diversity among others. The industry has played a significant role in transforming India’s image from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a global player in providing world class technology solutions and business services. The industry has helped India transform from a rural and agriculture-based economy to a knowledge based economy. The efforts of the industry towards the holistic development of the Indian economy and society will continue making a positive impact and changing lives as it has done so far. Further, the industry has acted as socially responsible corporations playing an active role in regional development across India, empowerment of diverse human assets, driving technology and innovation to transform client businesses, and enhancing the overall brand image of India. On its part, since 2009, as a result of an altered demand landscape, the sector had begun to transform itself by actively diversifying beyond core offerings and markets through new business and pricing models, specialize to provide end-to-end service offerings with deeper penetration across verticals, transform process delivery through re-engineering and enabling technology, innovate through research and development and drive inclusive growth in India by developing targeted solutions for the domestic Indian market. When demand returned in 2010, the combined effect of all these factors helped India grow faster than its competitors, accounting for almost 90 per cent of incremental growth in the global sourcing market.

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1.4 Global sourcing trends Worldwide technology products and services related spend is estimated to reach USD 1.6 trillion in 2010,a growth of 4 per cent over 2010, with emerging verticals and emerging geographies, in addition to US, driving growth. Worldwide hardware spends increased by 6.4 per cent on the back of a global refresh cycle. IT services spend increasing by 1.4 per cent in 2010, within which IT outsourcing grew by 2.4 per cent. Continuous ROI focus led to BPO growing by 4 per cent, while software products rose by 3.7 per cent led by increased focus on security, storage, and application development. Within IT outsourcing, global sourcing grew by 10.4 per cent in 2010, validating the industry’s integral position in service delivery chain. The year saw wide ranging contract restructuring exercises, and deal size reductions as buyers came to terms with new business models and budgetary constraints. However, multi-sourcing saw higher adoption, precipitated by the increased maturity of Indian providers. Recent global M&A activity in the sector indicates select acquisitions by established service providers to enhance skill and scale. While cost and talent still remain essential considerations for global sourcing, savvy customers are constantly demanding more – growth markets, flexibility and innovation. With customers demanding more immediate value from IT and forward-looking strategies that support growth and innovation, service providers are adopting agile methods focusing on operational excellence through ongoing innovation, diversification, renewed partnerships/alliances and new business models. 1.5 Indian IT-BPO performance The sector is estimated to aggregate revenues of USD 88.1 billion in FY2011, with the IT software and services sector (excluding hardware) accounting for USD 76.1 billion of revenues.

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During this period, direct employment is expected to reach nearly 2.5 million, an addition of 240,000 employees, while indirect job creation is estimated at 8.3 million. As a proportion of national GDP, the sector revenues have grown from 1.2 per cent in FY1998 to an estimated 6.4 per cent in FY 2011. Its share of total Indian exports (merchandise plus services) increased from less than 4 per cent in FY1998 to 26 per cent in FY2011. • • Exports market: Export revenues are estimated to gross USD 59

billion in FY2011 accounting for a 2 million workforce. Geographic focus: The year was characterized by a consistent demand from the US, which increased its share to 61.5 per cent. Emerging markets of Asia Pacific and Rest of the world also contributed significantly to overall growth. • Vertical Markets: While the sector’s vertical market mix is well balanced across several mature and emerging sectors, FY2011 was characterized by broad based demand across traditional segments such as Banking, Financial Services and Insurance (BFSI), but also new emerging verticals of retail, Healthcare, Media and Utilities. • Service Lines: Within exports, IT Services segment was the fastest growing segment, growing by 22.7 per cent over FY2010, and aggregating export revenues of USD 33.5 billion, accounting for 57 per cent of total exports. Indian IT service offerings have evolved from application development and maintenance, to emerge as full service players providing testing services, infrastructure services, consulting and system integration. The coming of a new decade heralds a strategic shift for IT services organizations, from a ‘one factory, one customer’ model to a ‘one factory, all customers’ model.

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Central to this strategy is the growing customer acceptance of Cloudbased solutions which offer best in class services at reduced capital expenditure levels. The BPO segment grew by 14 per cent to reach USD 14.1 billion in FY2011. The year also witnessed the next phase of BPO sector evolution - BPO 3.0 - characterized by greater breadth and depth of services, process re-engineering across the value chain, increased delivery of analytics and knowledge based services through platforms, strong domestic market focus and SMB centric delivery models. During the year, the BPO sector growth was affected by delayed decision making and deal restructuring in the first half of the year, though it picked up momentum in the second half. Changing demand pattern led to revamp of operations for service providers high focus on client relationships, mining existing clients and restructured operations to provide focused vertical solutions. Further, the industry focused on achieving excellence in business process management, and delivering strong transformational benefits creating revenue impact for clients. The engineering design and products development segments generated revenues of USD 9 billion in FY2011; growing by 13.6 per cent, driven by increasing use of electronics, fuel efficiency norms, convergence of local markets, and localized products. Increasing confidence in relationships between customers and service providers successfully executing a variety of activities across low-medium-high. Complexity projects have led to increasingly larger sizes of projects being sourced from India. Domestic market: Domestic IT-BPO revenues excluding hardware are expected to grow at almost 16 per cent to reach 787 billion in FY2011. Strong economic growth, rapid advancement in technology infrastructure, increasingly competitive Indian organizations, enhanced focus by the government and emergence of business models that help provide IT to new customer segments are the key drivers for increased technology adoption in India.

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IT services is one of the fastest growing segment in the Indian domestic market, rising by 16.8 per cent to reach 501 billion, driven by localized strategies designed by service providers.

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Domestic BPO segment is expected to grow by 16.9 per cent in FY2011, to reach ` 127 billion, driven by demand from voice based services, in addition to adoption from emerging verticals, new customer segments, and value based transformational outsourcing platforms

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Indian software product segment is estimated to grow by 14 per cent to reach 157 billion, fueled by replacement of in-house software applications to standardized products from large organizations and innovative start-ups.

1.6 Future Outlook The underlying theme of 2010 has been the steady recovery from recession. Worldwide GDP, which had declined by 0.6 per cent in 2009, grew 5 per cent in 2010 and is expected to stabilize at about 4.4 per cent in 2011. Developing nations continue to grow faster than the developed countries by at least three times. IT spend is directly linked to growth in GDP and in line with this trend, IT spend in 2011 is expected to grow nearly 4 per cent. Worldwide IT spending will also benefit from the accelerated recovery in emerging markets, which will generate more than half of all new IT spending worldwide in 2011. In 2011, growth will reflect new demand for IT goods and services, not pentup demand from prior years. 2011 will also see a major surge in the use of private and public cloud and mobile computing on a variety of devices and through a range of new apps. Hardware is likely to grow the fastest at about 7 per cent, led by the refresh cycle in the Government sector. Shipments of app-capable, non-PC mobile devices (Smartphone, media tablets) are expected to outnumber PC shipments.

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IT services is expected to grow by about 3.5 per cent in 2011 and 4.5 per cent in 2012. While focus on cost control and efficiency/productivity remain, customers are also evaluating how investments in IT impact can further business goals - ROI led transformation - leading to an increase in project-based spending. Services such as virtualization, consolidation, and managed services that focus on ROI in the short term will drive opportunities in the market. Emerging Asian enterprises across multiple industries will continue to accelerate services spending in their efforts to challenge existing global MNCs. Organizations will look for alternative IT models - Cloud, on-demand services and SaaS - in order to reduce hardware infrastructure costs and provide scalability on demand. Worldwide packaged software revenue is estimated to reach USD 297 billion in 2011, a Y-o-Y growth of over 5 per cent, led by emerging regions, such as APAC and LATAM. These regions are expected to invest heavily in enterprise software initiatives as they continue to round out the IT infrastructure necessary to do business. Business Process Outsourcing spending is expected to be driven by analytical services, F&A and industryspecific BPO solutions. In the future, the global IT-BPO industry is likely to go through a paradigm shift across five parameters: • Markets: Growth will be driven by new markets – SMBs, Asia, public sector and government-influenced entities which will become a priority customer base. • Customers: Customers will demand ‘transformative’ value propositions, that go beyond lower-cost replication; as technology creates virtual supply chains, customers will require a seamless experience across time zones and geographies; increasing demand for innovation and end-to-end transformation.

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Service Offerings: Offerings that are high-end deeply embedded in customer value chains will emerge. Services and delivery will become location-agnostic leading to new opportunities such as design services in manufacturing, Remote Infrastructure Management (RIM), etc. Solutions for the domestic market will be a key focus are

Graph 1.2 History of Indian software product business

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1.7 Software and Services Exports FY 2011 The information technology (IT) and IT-enabled services (ITeS) sectors in India have become crucial growth catalysts for the Indian economy. The ITBPO sector is estimated to grow to US$ 88.1 billion in FY2011, with the IT software and services sector (excluding hardware) aggregating US$ 76.1 billion of revenues, according to a report ‘The IT-BPO Sector in India: Strategic Review 2011', released by software industry body National Association of Software and Service Companies (NASSCOM). It has analyzed that the IT-BPO sector's revenue as a proportion of India's gross domestic product (GDP) has expanded from 1.2 per cent in FY1998 to an estimated 6.4 per cent in FY 2011. Further, the sector's share of total Indian exports (merchandise plus services) has increased from less than 4 per cent in FY1998 to 26 per cent in FY2011. According to the report within exports, IT Services segment was the fastest growing segment, growing by 22.7 per cent over FY2010. The sector aggregated US$ 33.5 billion in export revenues, accounting for 57 per cent of total exports. Meanwhile, the BPO segment increased by 14 per cent to reach US$ 14.1 billion in FY2011.The engineering design and products development segments garnered US$ 9 billion in revenues in FY2011, on the back of fuel efficiency norms, increasing use of electronics, localized products and convergence of local markets.

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1.8 The NASSCOM – McKinsey report on India’s IT Industries According to NASSCOM-McKinsey report, annual revenue projections for India’s IT Industries in 2008 are US $ 87 billion and market openings are emerging across four broad sectors, IT Services, Software Products, IT Enables Services and e-Businesses thus creating a number of opportunities for Indian Companies. In addition to the export market, all of these segments have domestic market components as well. Other key findings of this report are: • • • • • Software & Services will contribute over 7.5% of overall GDP growth of India. IT export will account for 35% of the total exports from India. Potentials for 2.2 million jobs in IT by 2008 IT Industry will attract FDI of US $ 4.5 billion. Market capitalization of IT shares will be around US $ 225 billion.

The NASSCOM-McKinsey report, 2005, titled ‘Extending India’s Leadership of the Global IT and BPO Industries’ has been extensively used till yesterday showing in a poor light the quality of Indian engineering graduates. The genesis of this report is the McKinsey Global Institute study which states that “only 25 per cent of engineering graduates in India have the skills to be employed in IT jobs without prior training.” The extent to which this finding has been used is an area of critical concern. A little background to the study. This characterization and universalization of Indian engineering graduates based on a study that captured the experiences of a diminutive HR fraternity needs a complete overhaul.

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A detailed study involving substantive number of IT recruiters and only relevant engineering disciplines is NASSCOM’s need of the hour. Many issues need to be answered in this study beginning with the scope of engineering graduates and graduates in general in the IT industry. This is crucial at a time when India is poised for tremendous growth in key areas like manufacturing, biotechnology, financial services, etc India has been the fastest and the first country to recover from the global recession. Manpower, a leading workforce solutions provider, in its quarterly Employment Outlook Survey has rated India’s hiring outlook as the most optimistic among 36 countries. ASSOCHAM estimates 87.73 million new jobs by 2015 out of which 32 per cent will be in the manufacturing sector as India is the world’s manufacturing hub. According to UNIDO International Yearbook of Industrial Statistics 2010, India is among the top ten producers of manufacturing output in 2009 overtaking countries like Canada, Mexico and Brazil. The global auto sales are expected to grow at 4.3 per cent and this growth is mainly due to the accelerated growth of Indian and Chinese auto industry. The expected growth rate of the Indian auto industry is 11.8 per cent followed by Chinese auto industry which is estimated to grow by 9.9 per cent. Prime Minister Manmohan Singh has called for doubling infrastructure investments to a trillion dollars in the next five-year plan. The investment will be in the areas of road, railway, airports, energy, etc, to accelerate economic growth with increased private participation. The Indian pharmaceutical industry which ranks fourth in terms of volume (with an 8 per cent share in global sales) and 13th in terms of value (with a share of 1 per cent in global sales) will see massive investment coming in.

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A huge pipeline of blockbuster generic drug patents will expire for some of the major drug companies opening up a $100 billion generic drug market. With 30-40 per cent cost-competitiveness in pharmaceutical manufacturing and excellent intellectual capital capable of conducting worldclass research, the future of Indian pharma companies is bright. The NASSCOM study also fixes 10 per cent employability for the nonengineering graduates. There is a tremendous growth in Indian banking and financial services, retail, industry, tourism and hospitality, real estate and construction, etc. The Indian banks are expected to add an additional 6, 00,000 jobs in the next three to four years which is a 66 per cent jump from the existing 9, 00,000 employed in this sector. The Indian retail industry, which is currently the fifth largest in the world, is expected to move from its current business size of $700 billion to $833 billion by 2013 and $ 1.3 trillion by 2018. These statistics form an ideal background for NASSCOM to ask itself the question, whether engineering graduates need to be trained exclusively for the IT industry? The emerging opportunities for non-IT engineering graduates are plenty and there is no need to ring the alarm bells with the ‘25 per cent syndrome.’ There has been considerable progress made by academic institutions in collaboration with the industry between 2005 and now. The need of the hour is a comprehensive study on the employability of the popularly called ‘circuit branch engineering graduates’ in the IT industry. With a reduced relevant population size, the resultant statistic will definitely boost the image of engineering graduates in the global landscape. We cannot afford to proliferate the ‘25 per cent syndrome’ with a possibly outdated report. The NASSCOM - McKinsey report (2005) needs a 2011 version.

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1.9 Growth Projection FY2012 Indian IT industry exhibits spectacular rebound in FY2011 but it is projected to grow at a rate of approx. 17% in FY2012.

Graph 1.3 Growth Projections FY2012 (Amount specified is in Billion US $)

Category IT Services BPO S/w Prod and Eng Total % change

FY2010 27.3 12.4 10 49.7

FY2011 33.5 14.1 11.3 58.9 18.51107

FY2012 39.2 16.5 13.2 68.9 16.97793

Table 1.2 Growth Projections for FY2012

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1.10 Promotion of IT – Government Incentives: With the formation of new ministry of IT, Govt. of India (GOI) has taken a major step towards promoting the domestic industry and achieving the full potential of the Indian IT entrepreneurs. Constraints have been comprehensively identified and steps taken to overcome them and also to provide incentives. Recently, an IT committee was set up by the Ministry of Information Technology, GOI, comprising of non-residential Indians (NRI) professionals from the United States to seek expertise and advice and also to step up U.S. investments in India’s IT sector. The committee is chaired by Minister of Information Technology, GOI, and the members include Secretary, Ministry of Information Technology and a large number of important Indian American IT entrepreneurs. The group will: • Monitor global IT development and refine Indian IT policy to meet global requirements. Specifically, this will help angel investors, venture creators and incubation • • Promote the growth of human resource development in the IT sector with the aim of creating quality-based education. Promote R&D in the sector by identifying thrust areas and drawing up a blueprint for action. India’s most prized resource in today’s knowledge economy is its readily available technical workforce. India has the second largest English-speaking scientific professionals in the world, second only to U.S. It is estimated that India has over 4 million technical workers, over 1832 educational institutions and polytechnics, which train more than 67,785 computer software professionals every year.

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Graph 1.4 Software companies distribution across India: NCR and Bangalore have around 60% of the Digital Companies

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Graph 1.5 Number of Company established in India Software product business

India’s software product companies have been innovating for both domestic and global markets.

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Graph 1.6 Innovations for domestic Market

All the market indicators are leading Indian Software product industry towards an inflection point in its evolution curve.

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Graph1.7 Indian Software Product business evolution curve

1.11 NASSCOM’S Role That is where NASSCOM needs to step in. It needs to nurture the next generations of Indian entrepreneurs and help grow the companies that will be its next clients. Here are my recommendations on what it needs to do: 1. Teach entrepreneurship: Indian entrepreneurs are no different from their American counterparts. They primarily come from the workforce; have ideas for technologies that can be built; and, when they get tired of working for others and want to build wealth, develop the motivation to start companies. What stops them is the lack of knowledge on how to do it and fear of failure. You can’t teach people not to be fearful, but you can educate them in the principles and basics of starting businesses.

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2. Facilitate seed financing: Work with the government and private organizations to provide professional mechanisms through which entrepreneurs can obtain seed financing for their ventures. There are many models from Silicon Valley that can be emulated. 3. Research global trends and technology needs: In addition to researching the big picture for the IT industry, NASSCOM needs to provide research to fledgling Indian entrepreneurs, on the needs of India and of the developing world. There is adequate information on US technology trends and markets, but little information about social needs in emerging markets. 4. Import global entrepreneurs: Many in Silicon Valley would welcome a chance to work in Bangalore or Delhi, at least for short periods. They benefit by learning about India’s culture and markets. In return, they teach locals about western markets and ways. What is needed is for NASSCOM and the government to provide the space, infrastructure, and visas and to connect entrepreneurs with their local counterparts. a) India has the potential to become a world leader in innovation . It can be solving not only its own technology problems but also those of the developing world. And it can also give Silicon Valley a run for its money. What are needed are the right support and nurturing of entrepreneurs. The fourth wave has the potential to be the largest.

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1.12 Current structure of Indian IT industry As mentioned earlier in this report there are hundreds of IT firms across India and so with abroad. TCS being the largest Indian company the discussion of industry structure will be restricted to India. Although there are hundreds of IT firms, the major market is captured by the big 5 or 6companies. Smaller firms have had a positioning problem. So far they have kept projecting themselves as smaller versions of large firms like TCS, Infosys, and Wipro etc. This has worked against their efforts to scale up.

Graph 1.8 Relative market shares of Major companies

The diagram shows the relative market share of major companies in the IT industry. AS seen TCS is the company has the largest market share .Although the share of others appears to be huge, the in dividing this segment into hundreds of companies one will understand that the relative share of each company in this segment will be small. Companies like Infosys and Wipro are giving good battle to TCS; Cognizant has also emerged as tough competitor in the recent times.

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Till the year 2007 IT industry was booming. Everyone, right from companies, clients, employees, shareholders, students, was gaining. But with the advent of global financial meltdown, the growth in revenues of these industries went down drastically. However this has changed in the last year and continued to grow bigger this year as well. And the now industry has been watchful due to the meltdown in the US economy, but this seems highly unlikely that the same misfortune we witness couple of years would revisit the near future. Clients are becoming increasingly unwilling to offer higher prices for software support as in the past. As per the recent article, it’s stated that Indian Tech firms will be facing decrease in margins over the next 2-3 years. The article explicitly stated that despite of the growth in revenues, the profit margins will be under pressure. However as per the article this was not at all a cause of worry, Apart from this the article also stated that the corporate clients are increasingly shifting from heavy implementation projects to a SaaS (Software as a service) model. Thus though the future offers lots of opportunities they won’t come without the challenges for this industry .Having said that this industry’s one phase has reached the maturity and now another phase is all set to start from the introductory stage. One more challenge for each firm will be to take care of the high attrition rate of the entire attrition rate that has plagued the entire industry. Each firm will have to review its HR strategy in the light of new developments. 1.13 Industry Analysis It is extremely difficult to ascertain the exact future demand for IT services as the industries across the world are immense and their services requiring IT support galore. But the present status of the demand can be ascertained by knowing the exact number of clients of different companies.

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TCS has a client base of 1034 active clients, Infosys which is the next biggest software service provider has an active client base of 575, Wipro has a client base around 350, HCL technologies has a client base of around 300. These 4 are the top IT services providers of the country. They offer software services and consulting services. However Wipro and HCL also offer hardware which neither TCS nor Infosys offer. But as per the international norms hardware as well as software is a part of Information Technology. Apart from these 4, several other companies such as Mahindra Satyam, Patni Computer Systems, i-flex Solutions, L&T InfoTech etc are also some of the big names of the Indian Information Technology industry. The technology in the IT industry is a fast changing one as it acts as a way of unique positioning by different companies. One more thing worth mentioning is that starting an IT firm is not at all difficult from the technology point of view. Any person with a bit of computer knowledge can start an IT firm and can then scale the way up. This has been precisely the reason for so many garage startups of IT firms all over the world. Even from investment point of view starting an IT firm is not at all difficult, as all one requires is a room and some computers. But once started, the scale up does require lots of investments. These investments arise due to marketing, adapting to the latest technology, surviving in a highly competitive industry etc. It is because of this reasons that only a handful of companies have become a force to reckon with. 1.13.1 External Environment - PEST Analysis Political • Political stability: Indian political structure is considered Stable enough expect the fact that there is a fear of hung Parliament (no clear majority). (Positive) • U.S. government has declared that U.S companies that Political outsource IT work to other locations other than U.S. will not get tax benefit. (Negative)

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Government owned companies and PSUs have decided to Give more IT projects to Indian IT companies. (Positive)

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Terrorist attack or war. (Negative)

Economical • • • Global IT spending (demand): Global IT spending demand have resulted in more expenditure relatively.(Negative) Domestic IT Spending (Demand): Domestic Market grows by 20% & reach approximately USD 25 billion in 2010-11 (Positive). Currency Fluctuation: Currency fluctuation have resulted in inconsistent market results.(Negative) • Real Estate Prices: Increase in real estate prices has resulted increasing the rental expenditure (Negative). • Attrition: Due to booming global economy, the higher requirements of Human resources have resulted in higher attrition rate (Negative). • Economic attractiveness: Due to cost advantage and other factors (Positive) Social • • • Language Spoken: English is widely spoken language in India. English medium is the most accepted medium of education.(Positive) Education: Large number of technical institutes and universities over the countries provide IT education. (Positive) Working age population: Maximum working age population being youth, its gives great future outlook for the Indian IT Industry. (Positive)

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Technological • • • • India has the world lowest call rates India has the second largest telephone network after china. Enterprise telephone services, 3G, Wi-max, VPN, poised to grow Internet backbone: Due to the IT Revolution in 90’s India is well concerned with undersea optical cables. • New IT technologies: Technologies like SoA, Web 2.0, High Definition content, grid computing. Cloud computing and innovation in low cost technologies is presenting new challenges and opportunities for Indian IT industry.

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Chapter- 2 Company Profile
2.1 Statutory Data

Name Legal status Year of Establishment Date of Incorporation Corporate Office Address Phone Fax Email Web site Registered Office Address

Tata Consultancy Services Limited Public Limited company and member of the Tata Group. 1968 ((as a division of Tata Sons Ltd.) 19 January, 1995 ((Tata Consultancy Services Limited) Air India Building, 11th floor, Nariman Point, Mumbai 400021, India +91 22 6750 9999 +91 22 6750 9344 [email protected] www.tcs.com Bombay House, 24, Sir Homi Modi Street, Mumbai 400001, India

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CEO and Managing Director Total Associates (Inclusive of subsidiaries) Total Associates (Excluding subsidiaries) Data Communication links with Intl Locations Aggregate Bandwidth Offices Worldwide (Section 5) Locations Worldwide (branches/cities) Regional Delivery Centre Nearshore Delivery Centre Global Delivery Centre Dedicated Training Facilities Countries operating in Countries we have offices in Total Clients ODC Clients Alliances

N Chandrashekhar 198,500 188,755 100+ 500x256 KBPS 179 108 2 8 61 3 51 39 809 36 56

2.2 Short Profile Tata Consultancy Services Limited (TCS) is the world leading information technology consulting, services, business process outsourcing and engineering services organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value. TCS achieved this by creating and perfecting a unique method of global deployment and delivery of high quality, high value services and products in IT consulting and business process outsourcing. Known as the “Global Delivery Model,” this strategic services delivery concept has reshaped the IT services industry. More than 95% of TCS customers reward the company’s reliability, passion, creativity, and unique ability to handle the broadest range of their IT needs by continually extending and deepening their partnerships with TCS. With over 198500 of the world’s best trained IT consultants located in 51 countries, TCS is uniquely positioned to deliver its flexible world class services seamlessly to any location. TCS reported consolidated revenues of
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USD 6.49 billion in the fiscal year 2010-2011. The company is listed on the National Stock Exchange and Bombay Stock Exchange in India.

2.3 Financial Data (Total Revenue)

Financial year March 1997 March1998 March1999 March2000 March2001 March2002 March2003 March2004

Revenue in INR Crores 721 1,083 1,690 2,115 3,142 4,187 5,012 7,122

Revenue in USD million 204.62 291.65 402.06 489.30 688.59 879.61 1040.48 1560.02

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March2005 March2006 March2007 March2008 March2009 March2010 March2011

9,727 13,252.15 14,939.97 18,533.72 22,404.00 23,044.45 29,275.41

2169.55 2991.92 3400.45 4029.07 4766.81 5009.66 6434.16

2.4 Associates Data March 1997 March 1998 March 1999 March 2000 March 2001 March 2002 March 2010 9,500 10,500 12,100 14,300 16,800 19,000 141,962 March 2003 March 2004 March 2005 March 2006 March 2007 March 2009 March 2011 22,000 30,000 40,992 62,832 79,755 105241 198500

2.4.1 Country-Wise based associates

Argentina

71

Greece

1

Oman

9
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Australia Austria Bahrain Banglades h Belgium Brazil Canada

533 8 21 4 144 1429 301

Hong Kong Hungary Iceland India Ireland Israel Italy

93 278 15 56823 72 1 39

Philippines Portugal Saudi Arabia Singapore South Africa Spain Sweden

5 13 91 307 129 37 85

Chile China Czech Republic Denmark Egypt Finland France

1526 675 1 91 1 78 51

Japan Korea Kuwait Luxembourg Malaysia Mexico Netherlands

259 23 17 45 25 108 407

Switzerland Taiwan Thailand Turkey United Arab Emirates United Kingdom United States

70 4 3 7 63 3843 11043

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Germany Ghana

242 1

New Zealand Norway

4 11

Uruguay Venezuela

647 1

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2.5 Quality Standards/Level
Quality and Standards/ Levels First Company in the world to be assessed at Level 5 for integrated enterprise-wide CMMI and PCMM Standards Branch Date First Company in the world to be assessed at Level 5 for integrated Enterprise Wide August, 2004 enterprise-wide CMMI and PCMM ISO 9001:2000 Enterprise Wide February, 2006 BS 7799 Enterprise Wide February, 2006 BS 15000 AS9100 TL 9000 Enterprise Wide Enterprise Wide TCS Nortel ODC Qwest Centre (Chennai) HP Centre (Chennai) SEEPZ (Mumbai) Shollinganallur (Chennai) Kolkata Lucknow Bangalore Hyderabad SEI–CMM Level 5 Ambattur (Chennai) Global Engineering Devp Centre (Chennai) Ahmedabad Gurgaon II Noida Delhi (PTI Tower) Pune Montevideo (Uruguay) Brasilia (Brazil) Hangzhou ENVIRONMENTAL STANDARDS ISO 14001 ISO 14001 Shollinganallur Noida II February, 2006 July 2006 April, 05 April, 1999 July, 1999 August, 1999 November, 1999 January, 2000 March, 2000 March, 2000 May, 2000 July 27, 2000 July 28, 2000 November 10, 2000 February 17, 2001 March 30, 2001 January25, 2002 April 19, 2002 October 31, 2003 June 18, 2004

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2.6 Alliances a) Strategic Partner 1. IBM - GlobalSystem Integrator Partner 2. HP - Global System Integrator(GSI) Partner, Global Influencer Partner 3. Oracle - GlobalCertified Advantage Partner 4. Microsoft - Global System Integrator Partner b) Growth Engine Partners 1. SAP - Global Consulting Partner 2. Siebel - Consulting Partner 3. WebMethods - Global System Integrator, Preferred Offshore Partner 4. BEA - TCS is BEA’s Strategic Partner 5. Sun - System Integrator Partner, GSS Partner c) Solution Partners 1.Pragma Systems Solution Partner 2.Salesforce.com Strategic SI partner 3.CollabNet Solution Partner 4.Adobe Tier 1 Global Solution partner 5.Business Objects Global Startegic Partner 6.Clarify/Amdocs System Integrator / Consulting Partner 7.Cognos Global Strategic Consulting Partner, Cognos Certified Implementation Partner 8.Cordys Global Strategic Consulting Alliance Partner 9.CR2 (Doc 49 kb) Global SI Partner 10.C - SAM (Doc 34 kb) Strategic Business Partner 11. Documentum (Doc 62 kb) Global Strategic Service Partner

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12. Hyperion (Doc 50 kb) Preferred Consulting Reseller Partner 13. (Doc 72 kb) Global Premier Partner 14. Intel(Doc 59 kb) Global Technology Partner 15. IRIS(Doc 48 kb) Global Business Partner 16. Mercury Interactive (Doc 66 kb) Global Strategic Partner, Global Titanium Partner 17. Teradata (Doc 157 kb) Consulting Partner 18. Tibco (Doc 385 kb) Consulting Partner 19. Vignette (Doc 72 kb) Global Strategic Consulting Partner 20. SAS (Doc 57 kb) Silver Consulting Partner 21. China Systems Banking Domain Alliance 22. CG Tech Manufacturing/Product Alliance 23. Dassault Systèmes Developmental Service Provider alliance 24. Datasweep Consulting Partner 25. Datasynapse Global Consulting Partner 26. eAsia Finance Banking/Product Alliance 27. ESRI Business Partner 28. i2 Consulting Partner 29. FNS Banking/Product Alliance 30. Indus Banking/Product alliance 31. Instantis Consulting Partner 32. MatrixOne Global System Integrator Partner 33. Moldflow Product Reseller and Solution Implementation Partner (India) 34. Oniqua Analytics Implementation Partner 35. Red Hat System Integrator Partner 36. Retail Pro Retail/ Product alliance 37. Retek Retail/Product alliance 38. Rockwell Automation Technology Integrator Program Partner

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39. SalesLogix Consulting Partner 40. ANSYS Solution Partner 41. Siemens-Simatic IT Global Implementation Partner 42. UGS Reseller, Consulting and Implementation Partner 43. AgileIT Business Partner 44. Microfocus Business Partner 45. Web Health Systems Healthcare/Product alliance 2.7 University Alliances • • • • • • • • • • • • Stanford University - Data security and privacy Massachusetts Institute of Technology (MIT) - IT governance and organization, risk management Georgia Institute of Technology, USA - Software testing University of California, Riverside - Security, networking and data dissemination University of Wisconsin, Milwaukee - Component based technologies and web services Carnegie Mellon University, Pittsburgh - Secure, trustworthy computing and communication systems Singapore Institute of Manufacturing Technology-Product development in embedded systems IIT Mumbai - VLSI Design, Intelligent Internet IIT Chennai- Academic COE in Computational Engineering Indian Institute of Science (IISc), Bangalore - Advanced product design and prototyping centre University of York and King’s College, London - Model Driven Architecture workbench University of Aalborg, Denmark - 4G mobile technology.

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•

There are multiple Indian Universities like Alliance which has strategic ties up for the recruitment of the management graduates.

2.8 Subsidiaries
Country of Origin India India India UK Canada USA Singapore Belgium Germany France Netherlands Sweden Singapore Germany Australia Uruguay India India India % Holding 89.00 51.00 51.12 76.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Company Name AP Online Limited C-Edge Technologies Limited CMC Limited Diligenta Limited Exegenix Canada Inc. Tata America International Corporation Tata Consultancy Services Asia Pacific Pte Limited Tata Consultancy Services Belgium S.A. Tata Consultancy Services Deutscheland GmbH Tata Consultancy Services France S.A. Tata Consultancy Services Netherlands B.V. Tata Consultancy Services Sverige AB Tata Infotech (Singapore) Pte. Limited Tata Infotech Deutscheland GmbH TCS FNS Pty. Limited TCS Iberoamerica S.A. WTI Advanced Technology Limited Airline Financial Support Services (India) Limited Aviation Software Development Consultancy India Limited

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2.9 Organization Structure

Fig1.1 Organization Structure

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2.10 Organization hierarchy

Fig 1.2 Organization hierarchy

2.11 Vision, Mission & Values Vision To be Global Top 10 by 2010 ( This is statement is being reworked as TCS is one of the global Top 10). Mission To help Customers achieve their business objectives, by providing Innovative, Best-in-class Consulting, IT solutions and services. We shall make it a joy for all stakeholders to work with us.

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Values Leading change, Integrity, Respect for individual, Excellence, and Learning & Sharing. 2.12 TCS Ranking

Parameters By revenue By net income By market Capital By Employees

Rank 11 3 6 5

Table1.3 TCS Ranking 2.13 Diverse Workforce Number of Nationalities of our Employees – 64 Gender Mix Males - 71% Females - 29% Work Experience Greater than 3 Years - 52% Less than 3 Years - 48%

2.14 TCS Offerings

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TCS has many offerings out of which IT Infrastructure Services has been chosen as area of interest.

2.15 IT Infrastructure Services Today’s business environment makes it imperative that the dynamic infrastructure requirements align with customer’s business needs. TCS’ IT Infrastructure Services (IS) /Infrastructure Management Services (IMS) deliver end-to-end, effective and reliable solutions that can transform customers’ business operations. With “optimal shoring,” we help enhance business performance, improve margins, align technology with business priorities, reduce costs, improve service speed and flexibility, and achieve long-term success. Client Challenges • • • • Higher IT infrastructure spends with reduced budgets. Lack of transparency in infrastructure managed services. Service management integration within a multi- sourced IT environment Inability to effectively respond to the changing infrastructure

environment. • Latency in information access and reduced reliability and scalability due to multiple locations across the globe. What TCS Provides TCS’ IT IS solutions provide customers with superior service delivery and are aligned to customer’s business metrics through The White Box engagement model. These are delivered by leveraging TCS’ Centers of
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Excellence (CoE), proprietary automation and innovation frameworks, and TCS’ proven Global Network Delivery Model (GNDM) and Full-Services-Play synergy. The complete spectrum of services help customers build and manage a highly available, reliable IT infrastructure that is capable of meeting the dynamic

needs of customer’s businesses in multi-sourcing scenario. The offerings are based on the assess, build, manage and transform framework. The offerings include the following: 2.15.1 IT Service Desk We define a service desk (SD) as the single-point contact for all ITrelated issues for the clients. The geographic spread and thorough understanding of IT Infrastructure technologies helps us provide customers with quick turnaround solutions from concept to service delivery in 30+ local languages, with certainty of cost, quality and schedule.

Client Challenges • With an ever-changing environment today, clients want to focus on their core businesses and seek to mitigate the following challenges: • • • • • High costs of ownership. Lack of access to world-class facilities and skilled resources. High attrition levels for Service Desk positions. Difficulty in coordinating between the different support groups. Lack of service and continuous improvement.

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•

Inability to cope with the rapid technology transformations and provide a competitive advantage.

What TCS Provides TCS, with over 20 IT Helpdesk centers across the globe, enables its customers to positively influence user-experience by being the single-point contact across the organization for all IT-related issues and function as an Enterprise IT service desk. We leverage industry best practices and domain experience to provide cost advantages and process efficiency using the following:

•

Optimized Total Cost of Ownership (TCO): The solution provides cost effectiveness and operational efficiencies through a combination of the “right shoring” approach and realignment with customers’ tools and licenses to minimize the total tool cost.

• • •

ITIL process-based delivery model Risk-free transition: We adopt a phased approach with the anticipated risk and mitigation strategies. Business continuity and disaster recovery: We provide a blend of offshore and near-shore delivery centers with built-in Business Continuity Plan (BCP).

•

Service response, quality and coverage: We ensure that the service response, its overall quality as well as user experience is similar across all shifts, locations and languages.

•

Leveraging best practices across engagements with other customers: We leverage the knowledge of the best practices gained from The engagements with other customers to bring in technical, automated and process improvements to provide customers with tangible benefits.

•

Operational excellence: We help customers achieve operational excellence and change management with the following services.

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• • •

L0 improvements: Increased awareness and adoption of the self-help user portal. L1 Service Desk: Remote support and improved service responsiveness. L2 delivery groups: Well-defined SLAs, complete ownership of applications, increased stability through incident and problem reduction and improved time-to-market for new changes and upgrades.

Business value A vendor-neutral alliance with the best toolset providers, flexible engagement models and capabilities to quickly ramp-up or ramp-down, makes us the preferred partner of choice. We bring in value by focusing on the following; • • • • • • • Business alignment Robust risk management Reduced Total Cost of Ownership (TCO) Ability to attract and retain talent Risk-averse transition approach Metrics-based governance Tailored service delivery model

2.15.2 Data Center Services

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TCS’ Data Center Services offer comprehensive data center support. They help design and manage data centers across heterogeneous platforms and support these with global hosting capabilities. The solutions optimize and consolidate the data center and its res Theses, leading to improved service levels and reduced cost of ownership. Client Challenges • Inadequate IT infrastructure footprint in data centers with higher consumption of power, space and cooling • • • • • Low utilization of IT infrastructure in data centers Long provisioning times High operational costs Complex IT Infrastructure management Large expenditure on vendor-specific point products

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What TCS Provides TCS’ industry knowledge and technical expertise will help customers harness the best from customer’s IT investments, by creating a reliable and future proof “business-effective” IT infrastructure. TCS’ Global Network Delivery Model (GNDM), which leverages the global scale and coverage, encompasses the pool of associates and experts across countries, bringing localized knowledge to grow customers’ business effectively. We assure quality services within time and budget. The following offerings address today’s data center needs: • • • • • • Proactive monitoring and management services. Data center consolidation, migration and automation services. Virtualization and Cloud services. Hosting services. “Green” data center services. TCS’ Data Center Services address customer’s needs with customized options and solutions to provide the following: • Agility to migrate to advancing technologies, accelerated time-tomarket and greater operational efficiencies with optimization. • Innovative datacenter IT Infrastructure services and transformation solutions aligned to customers’ business objectives. • Opportunity to leverage TCS’ proprietary tools and methodologies like e-Transform and readiness to help standardize, virtualize and optimize customer’s IT infrastructure and assistance toward adopting cloud technology. • • Proven and robust transition and deployment methodology. Proven experience of tools deployment.
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Certified and competent data center SMEs. Improved transparency with the tools framework.

• • • • • • • •

ITIL framework-based delivery approach. Best practices enabled by the Data Center CoE.

Business Value Benefits with consolidation and virtualization Streamlined incident and event-handling processes Increased responsiveness Scalability, flexibility and transparent solutions Low operational costs Total Cost of Ownership (TCO) reduction with offshore leverage

2.15.3 End User Computing Services TCS’ End User Computing Services (EUCS) provide services to seamlessly transform the end-user computing landscape from its current state to a world-class environment by utilizing an analytics-based transformation approach to enhance end-user productivity and save costs. The following offerings address the critical needs of end-user support today: • • • • EUC Design EUC Support EUC Optimization EUC Transformation

Client Challenges

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• • • • • •

Operating in the absence of highly secure desktop environments. Adhering to industry-standard security guidelines and compliance frameworks. Managing time-consuming and complex management lifecycles. Coping with high ownership costs. Simplifying the rigid support structure to meet the SLA requirements. Tackling technology stagnation.

• •

Sourcing the expertise to build enterprise-specific systems. Managing complexity and high overheads of multiple vendors.

What TCS Provides We offer flexible, transparent and high-quality service, and innovations and transformations. Partnering with us has the following advantages: • • Anywhere, anytime access for increased mobility. Enhanced security and compliance to accommodate the dynamic IT environment. • Converged technologies that address the need for a single device for voice, video and data. • Effective migration and management solutions to adapt to emerging technologies. • Private and public cloud offerings to reduce Capex costs and provide seamless scalability. We add value to the engagement with the following: • Centralized Remote Management Services: With the application of this service, we manage customer’s entire end-user infrastructure remotely,
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from The delivery centers, allowing customers to focus on core business development. • In-house Tools and Solution Accelerators: We have developed several automation tools and solution accelerators, which reduce customer’s TCO as well as the time taken for the resolution process like TCS ZTM and ACF for Windows 7 OS migration, analytics-led refresh through iPredict and iTransform, and Integrated Managed Print Service Solution, etc. • Dedicated Centers of Excellence (CoEs): The end-user computing CoE leverages strong alliances with partners like Microsoft, Intel, Dell, Citrix, VMware, etc. to provide an entire spectrum of end-user computing services, thereby leveraging their tools and technologies.

•

White-Box Service Delivery Model: A customer-centered IT service model, designed to be "focused, agile, transparent, inspiring and strategic," provides customers with end-user support services.

Business Value • • • • • • • • Increased remote manageability Reduced TCO Increased responsiveness of the IT infrastructure Decreased implementation / resolution time with TCS’ solution accelerators Enhanced flexibility in ramp-up / ramp-down to accommodate the dynamic business requirements Increased transparency in service delivery Seamless integration of the emerging end-user solutions within the existing end-user landscape User-preference-based service support (Designated Tier-1 / VIP Support)
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•

Increased visibility into security, compliance and operational issues.

2.15.4 Application Management Services Growing application dependency and dynamism of the enterprise’s business environment require organizations to derive more out of its IT investments in its endeavor to align IT to business objectives. In this context, the need to ensure that customer’s applications are at their peak performance with minimum downtime becomes critical. TCS’ Application Management portfolio, by leveraging The vast experience in the application space, ensures that customer’s enterprise has a reliable and available application eco-system through proactive 24X7 monitoring and performance tuning.

Business Value TCS' Application Management Services ensures increased productivity and Return on Investment (RoI) by consolidating support activities. It leverages Application Development experience as a part of providing Level 3 Application Support to resolve complex application issues. It includes performing Application Sizing to help avoid costly retrospective changes in production. Other benefits include: • • Low services downtime; Optimized application performance through centralized capacity and availability management; • A consolidated view of application management and supporting infrastructure; • • Optimal infrastructure sizing for application support; Accurate change assessments through consolidated configuration information.
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What TCS Provides TCS brings customers this distinct offering that makes operations efficient by streamlining customer’s application management processes. The extensive domain experience strengthens the ability to successfully cater to customer’s needs. The competency in providing IS helps us understand the E2E services and the interlacing components of infrastructure and application to provide these services. We also add value to the engagement by: • Leveraging synergies between ADM and IS. The experience in Application Development enables us to support and manage L2/ L3 applications, thus improving the turn-around time of problem resolution. • Integrated Service Management Framework. We align the deliverables to business objectives. We use ITIL for process maturity, COBIT for process governance and Six Sigma for continual service improvements

to make customer’s processes business centric rather than technology centric. • Unified process platform. The service delivery is based on ITIL framework, serving as a unified process framework to manage all IT applications and related infrastructure. • Service-centered Application Management. We provide comprehensive E2E services, rather than merely managing the individual components that constitute them. We evaluate customer’s perceptions and incorporate improvements based on it. 2.15.5 Managed Security Services TCS’ Managed Security Services help customers with comprehensive and cost-efficient security solutions that enable customers to meet customer’s regulatory compliance and data integrity needs.

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The solutions ensure the following: • • • • • • • • • • • • Data and infrastructure security. Integrity and confidentiality. Increased responsiveness through defined service levels. Enhanced flexibility, as is required in the changing environments. Client Challenges. Increase in complex and dynamic security threats. Lack of expertise to build systems specific to customer’s enterprise. Difficulty in meeting the highest security standards. Lack of communication and correlation between the multiple IT security tools and their consoles. High costs of manual security management and monitoring. Inadequacy of resources to comply with regulations. Large expenditure on vendor-specific point products.

What TCS Provides TCS’ Managed Security Services, delivered through The Global Network Delivery Model (GNDM), address the critical needs of security implementation and operations. Key offerings include the following: • • • • Security Device Monitoring and Management Vulnerability Management Security Information and Event Management User Provisioning and Management

These offerings, along with the Security Operations Center, are based on specifications that cater to customer’s needs. We co-create security strategies
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leveraging the expertise, tools and processes while ensuring privacy and building flexibility and scalability. Mentioned below are a few highlights of The services. • A centralized Security Operations Center that offers seamless service and maximizes the support. • A leveraged and optimized operation team, leading to effective day-today operations and governance. • • • • • • Proven and robust transition and deployment methodology. Proven experience with tool deployment. Reduced Total Cost of Ownership (TCO) through offshore leverage. Access to certified and competent information security analysts. Multi-level security support (Service-centric to integrated) approach. Continuous support for security audits and enhanced regulatory compliance. • • • Improved visibility of security posture. An ITIL Framework-based delivery approach. Best practices enabled by the Security Center of Excellence (CoE).

Business Value • • • Streamlined security incident and event-handling processes. Increased responsiveness, scalability and flexibility. Enhanced data privacy and integrity.

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• •

Increased visibility into security, compliance and operational issues. Reduced operational costs.

2.15.6 Enterprise System Management TCS’ IT IS Enterprise Systems Management (ESM) services focus on addressing the critical needs of customer’s enterprise toward ESM tools implementation and operations. We collaborate with customers to create an ESM tools services strategy that addresses the specific needs of customer’s organization, ensures data and infrastructure availability, increases responsiveness and improves reporting and real-time dashboards. Client Challenges • • Increasingly complex infrastructure and manageability. Inadequate expertise and management skills in order to build systems specific to the enterprise. • Lack of communication and correlation between the multiple ESM tools. • • Acquisition of tools from vendors and end-of-life product support. Lack of time and resources to implement and utilize the various features of the tools. • Duplication of investments due to the limited reusability of tools and vendor-specific products. • Lack of transparency in infrastructure operational issues.

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What TCS Provides TCS provides ESM tools transformation strategies leveraging its experience, expertise and alliances with ESM Original Equipment Manufacturers (OEMs) and utilizes a large pool of ESM certified consultants who are also familiar with ITIL processes. We aim to provide reliable and cost-effective ESM solutions that will help customers improve customer’s business uptime and reduce support cost. The key offerings include the following: • ITSM-based tools (Service-desk, Discovery and Configuration Management) . • • • • • • Network Management Tools (LAN, WAN and VoIP). Servers, Applications and Database Management. ESM Consulting and Assessment Services. ESM Implementation Services. ESM Post-Production Support Services. ESM Infrastructure Shared Services.

Highlights of The ESM services include the following: • Distributed ESM Center of Excellence (CoE) teams and labs that offer seamless service and maximize the hours of support. • • • • Proven and robust transition and deployment methodologies. Proven experience of ESM tools deployment in 50+ projects. Reduction in Total Cost of Ownership (TCO) with offshore leverage. Access to certified ESM tools consultants across all ESM OEMs.

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•

Multi-level approach.

support

(Assess,

Design,

Implement

and

Manage)

• • •

Continuous support for audits and regulatory compliance requirements. Improved visibility of business infrastructure. ITIL framework-based design and deployment approach.

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• •

Effective use of knowledge base and best practices. Access to better support with the utilization of the alliance partnerships with major OEMs.

Business Value • • • • • • • • Streamlined IT operations like incident and event-handling processes. Increased responsiveness and better mean-time-to-resolve. Increased scalability and flexibility of IT infrastructure to cope with the changing business dynamics. Increased transparency in IT infrastructure, compliance and operational issues. Reduced operational costs and faster Return on Investment (ROI) on ITSM investments. Effective business-IT resource alignment. Better uptime for business services. Integration of business processes and applications, which aids governance. 2.15.7 Converged Network Services TCS’ Converged Network Services offer a robust data network backbone that helps customers converge customer’s voice, data, video and other multimedia communication applications. It increases customer’s operating efficiencies, reduces expenditure and promotes business interactions among employees, partners, customers, and any other internal or external agencies, thereby powering customer’s processes and functions. Client Challenges • • • Disparate voice and voicemail infrastructure. Traditional call routing (Based on time division multiplexing). Traditional endpoints (Digital and analog endpoints).
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• • • • •

Standard voice mail (No unified messaging). Lack of system integration. Complex site-specific trunking, dial plan and user features. Decentralized monitoring and management. Quality-of-Service (QoS).

What TCS Provides TCS’ Converged Network Services provide distinct advantages by bringing together several operational benefits, which result in the following organizational benefits. • • • • • • • • Total Cost of Ownership. Bandwidth optimization and traffic consolidation over a single converged network. Reduction in management and support costs. Reduction in the cost of system integration and integration. Unified Communication. Communication through any device, anywhere, anytime to improve productivity and reduce communication costs. Complex to Simple Communication. Elimination of multiple complex networks and simplification of communication infrastructure to a single common infrastructure and reduction in operational costs and improvement in efficiency. • • • • • Scalability and Flexibility. Globally scalable network and communication infrastructure. Uniform end-user devices and management tools. Secure Network and Communication Infrastructure. Improved network security.
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Secured communication infrastructure.

Business Value TCS, with its strategic alliances and business relationships with leading vendors in the converged network space (including Cisco, Alcatel-Lucent, and Avaya), leverages its capabilities and enhances customer’s network and communication requirements. The Converged Network Services add value with the following: • • • • Higher operational efficiency. Reduced converged infrastructure management costs. Transformed network and communication infrastructure. Improved network availability and service level management.

2.15.8 IT Service Management The recent economic challenges have thrown the IT industry open to new arenas such as the migration to a Cloud environment, adoption of Software as a Service (SaaS) models, IT management by leveraging multiple suppliers and so on. TCS’ IT Service Management offers a comprehensive solution to help its customers establish a strong governance and setup a unified and standardized operating environment. Client Challenges • Lack of visibility and ability to control due to the flexibility offered in a Cloud environment. • • Lack of a consolidated and unified view for the CIO on IT operations. Inability to standardize tools and processes.

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•

Lack of integration and strong governance models to manage multi Negativendor environments.

• •

Inconsistent service quality due to the varied SLAs across vendors. Complexities in monitoring / extracting compliance and audit requirements.

•

Low satisfaction of and lack of transparency in IT services.

What TCS provides • We provide the following services in the IT Service Management space: • Professional services: The Consulting services assess process maturity and operating models against ISO20000 / ITIL best practices. • Service transition and standardization: This facilitates a standard operating model and process platform based on ITIL. We help customers design and implement ITIL V3 compliant processes and tools platform with clear ownership and accountability. • Service assurance and transformation: We setup a process

sustenance model

and quality assurance

framework including

transformational initiatives. • Service management integration: We setup a robust service

management integrator framework to provide insights to monitor and track SLA, process and security adherence, build mechanisms for process governance across suppliers on customer’s behalf, and implement and sustain robust ESM tools platform to support multitenancy models.

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•

Customer experience management: TCS’ proven quality of experience framework and scientific approach to understand customer’s expectations bridges the invisible gap between the quality of service and quality of experience.

We leverage the following assets and capabilities to support the abovementioned services: • Pre-built ITIL V3-based process models based on The experience and best practices. • A unique service management integrator framework to support multiNegativendor governance.

• • • •

Proprietary toolkits to assess process maturity and health checks based on the ITIL V3 framework. Niche tools to deliver and sustain process governance. Excellent analytical models and methodologies to identify the scope of improvement. Highly qualified ITIL consultants to manage and support customer’s ITSM initiative.

Business Value • • • Noticeable improvement in customer satisfaction across the IS service lines with a unique service culture. Access to a road map / quick win solutions to resolve issues and achieve compliance / maturity through gap analysis. Enhanced ability to achieve industry standards and comply with the minimal investment and TCS’ best practices.

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•

Greater process efficiency and effectiveness, thereby improving business SLAs and overall performance on multi-supplier interoperability.

2.15.9 Transformation Solutions TCS’ Transformation Solutions focus on the optimization and transformation of enterprise IT infrastructure through its analytics-led Enterprise Transformation Framework. They transform customer’s traditional computing environments, which are plagued with poor utilization, high complexity and high Total Cost of Ownership (TCO), into highly efficient, agile and optimized infrastructure, capable of meeting business goals effectively.

Client Challenges • • Increased infrastructure complexities. Elimination of a siloed approach, which results in redundant infrastructure. • • • • Increased time-to-market. Limited reusability of infrastructure components. Expensive vendor-specific point solutions for transformation. Reduced risk during transformation process.

What TCS Provides At TCS, The customer-centric transformation offerings and solutions help customers migrate from the current, as-is IT infrastructure to a more efficient and optimized IT infrastructure. We add value to the solutions with the following:
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• • • • • • • • • • • •

The analytics-led Enterprise Transformation Framework. Best-of-breed industry standard products and accelerators. Operational excellence with a next-generation delivery model, which has an integrated service management ecosystem. The Co-Innovation Network (COIN) as well as The strong strategic alliances. The solutions focus on the following: Cloud Solutions: Cloud Readiness. Migration Services to a Cloud Environment. Infrastructure-as-a-Service (IaaS) . Platform-as-a-Service (PaaS). Software-as-a-Service (SaaS). On-demand Environment Build and Managed Services (EBMS).

• • • • • •

Hosted Enterprise System Management (ESM). Managed Services for a Cloud Environment. Enterprise Solutions: Data Center Consolidation and Optimization. Virtual Desktop Infrastructure. Enterprise Configuration Management Database (CMDB).

Business Value Transformation Solutions enable customer’s infrastructure to be aligned with customer’s business goals and objectives. We help customers derive the following benefits:

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• • • • •

Improved resiliency and disaster recovery. Improved customer experience. Lowered operating risk with reduced complexities. Reduced TCO . Reduced infrastructure footprint with optimum utilization of the IT resTheces .

• •

Increased agility and time-to-market through on-demand capacity. Improved financial management of IT services.

2.16 Human Resources Services

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Volatile global economy and dynamic market conditions have impelled HR functions to reduce costs, maximize operational efficiency, and focus on strategic Human Resources (HR) initiatives. Organizations today outsource HR services as one of the levers in achieving these business objectives. However, to ensure that you benefit optimally from outsourcing your HR function, you seek an able partner to provide innovative and multi process HR services with substantial experience and comprehensive capabilities.Backed by TCS process and technology knowledge and expertise across industries, and in the HR domain, we, at Tata Consultancy Services (TCS), offer complete Human Resources Services.

Fig 1.3 An overview of Human resource services

2.17 TCS Marketing Solutions Today, marketers are deploying cutting-edge technologies along with innovative strategies, business processes and performance metrics to increase revenues and enhance their customer engagement on an ongoing basis. In a wired, digital world, businesses must be technology savvy in order to compete successfully.

Client Challenges
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As consumers embrace new technologies and emerging channels, these provide newer means for marketers to connect with them. The key challenge for today’s marketers is to provide the right message at the right time through the right channel. Maintaining brand consistency, coordinating with multiple internal and external service providers, developing actionable insights that reflect a complete and accurate understanding of the customers and speed-to-market are clear challenges. In a highly competitive business environment and rapidly changing customer behavior, companies need optimized and integrated marketing processes, systems and innovative platforms that will deliver customer-centric interactions. Today’s marketers face the following challenges: • • • • • Reducing cycle times for campaigns, product launches and content production. Making the right decisions by leveraging large amounts of data and preparing a comprehensive snapshot of the customer. Creating enhanced customer experiences, which foster loyalty and help the brand stay ahead of the competition. Managing global as well as local marketing campaigns efficiently. Increasing transparency and demonstrating returns on marketing investments. What TCS provides TCS Connected Marketing Solutions aim to bridge marketing and IT, providing reality-based innovations—delivered in partnership with our customers’ marketing organization, leveraging global best practices and deep domain expertise, thus enabling you to engage, measure and optimize interactions with target audiences across all the touch points.

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The solutions allow for enhanced marketing velocity, an overall increase in Return on Marketing Investment (RoMI) and enable you to tap the evolving digital channels such as mobile and social media marketing. Our solutions include consulting services, business solution frameworks and cloud-based platforms, all of which are backed by strong domain and delivery expertise in areas including enterprise marketing management, interactive marketing and marketing analytics. Our global delivery capabilities and industrialized approach to technology solutions delivery and management greatly enhance productivity and ensure discipline, reliability and risk reduction—leveraging our vast experience across diverse verticals and alliances to deliver solutions. Our offerings include the following: • • • Interactive Marketing Solution. Enterprise Marketing Management (EMM) Solution. Advanced Marketing Analytics Solution.

Business value TCS Connected Marketing Solutions enable the following: • • • • Increased responsiveness. Improved turnaround times. A culture of continuous innovation. Enhanced ability to engage, measure and optimize interactions with customers by delivering connected digital brand experiences. With extensive global experience across multiple industries, we are best placed to offer your business the mix of skills required to innovate and significantly impact your customer interface, be it individual customers or other businesses. We can help you achieve greater business agility by optimizing your processes to achieve marketing operational efficiencies and harness our innovation and delivery capabilities to generate value from your investments.

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2.18 SWOT Analysis of TCS 2.18.1Strengths • • • It's highly professionally managed IT consulting and services company under the belt of TATA. Company has performed consistent year on year with weak economy conditions of world. Company has capabilities to deliver new as well as legacy application. It is in space of services as well as products and high value chain consulting. • It has fragmented IT services and SDLC cycle into minute grains such as S/w testing and grown that business to more than 250million USD. This is the testimonial of efficient management. • • It is the only company initiating Earned value based profit center for evaluating their performance. HLL is the first company to do so. It is the only company that has survived and surprised investors with its fixed cost Project delivery model and still making phenomenal profit despite overloading the project with 10 t o15 % in terms of resources. Part of the Tata group, which helps it gets more international business. Cases in point: the $1.2-billion Nielsen deal, Ferrari, and now JaguarLand Rover (bought over by the Tata group) 2.18.2 Weakness Lack of scale compared to global competitors like IBM, HP (which bought EDS), and Accenture. • Needs to establish a track record when it comes to large deals Consulting accounts for less than 4 per cent of global revenues; IBM, Accenture score on this count.

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•

Needs

to

strengthen

other

service

lines

besides

application,

development and maintenance (ADM) that accounts for nearly 48 per cent of its revenues. • • Man power strength is more than 10,000 employees and thus, it is challenging to get personalized career development. Bad real estate : The growing real estate price have become real threats and resources are not willing to locate remote ,far from city location. 2.18.3 Opportunities • Change in consumer lifestyles: Change in consumer lifestyle makes TCS to grab all the opportunities as they have a parent company in TATA which is salt to software conglomerate. • • • Acquisitions: As TCS has acquired phoenix global, and its large capital power makes it ideal for acquisitions. Available Governmental support: TCS has a great government support as TATA group is most respected names in India. Available technological innovations: TCS has been innovating technologies for long and the new horizons at the technical industry, makes TCS’ future more lucrative than ever. • • • • Growth of the industry of operations: TCS has been consistently beating the industry expectations in terms of growth. Decrease in taxation: Tax slabs are increased and make TCS to have the best opportunity for the profit margin growth. Entering niche markets. Strategic alliances & joint ventures.

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2.18.4 Threats • Financial slowdown, of US economy. : made TCS worry about the future. • • Labor challenges, globally: Increasing labor demand has resulted in high attrition rate and left companies wanting more. Competition from foreign markets: China stands better in terms of ma power and TCS and India is experiencing severe challenges to battle it out. • • • Innovative products/services of competitors: Innovations from the competitors has made it tougher for TCS to breathe easy. Changing technology: Technological obsolescence is a cause of concern. New competitors entering the market. Weak marketing department. As most portion of TCS’ business comes from US, the recent fears of slowing economy has

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Chapter-3 Research Design
3.1 Introduction Although it has become a cliché, it is nevertheless true to say that the volatile environment in which modern organizations find themselves today mean that the ability to manage change successfully has become a competitive necessity Organizational change is usually required when changes occur to the environment in which an organization operates. There is no accepted definition of what constitutes this environment, however, a popular and practical working definition is that the environmental variables which influence organizations are political, economical, sociological and technological. Change has been classified in many different ways. Most theorists classify change according to the type or the rate of change required and this is often referred to as the substance of change (Dawson 1994). Bate (1994) proposes a broad definition for the amount of change which he argues may be either incremental or transformational. Bate maintains that incremental change occurs when an organization makes a relatively minor change to its technology, processes or structure whereas transformational change occurs when radical changes programmes are implemented. Bate also argues that modern organizations are subject to continual environmental change and consequently they must constantly change to realign themselves. Information systems are inherently socio-technical systems and, therefore, many of the theories and frameworks espoused by the social sciences for the management of change have been adopted by the IS community.

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Change Management

Anticipated Change

Emergent Change

Opportunity-Based Change

Conceptual

Process

Fig 1.4 Principal Change Management Models

Environment Stable Planned Approaches to Change Turbulent Emergent

Fig 1.5 The Change Management Continuum

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Fig1.6 Change Management process flow

3.2 Statement of the Problem As we stand in the new era of economic challenges ,there can be little doubt that successful organizations of the future must be prepared to embrace the concept of change management. Change management has been an integral part of IT infrastructure services’ theory and practice for a long time, however, many theorists and practitioners now believe that the rate of change that organizations are subjected to is set to increase significantly in the future. Indeed, some even go so far as to suggest that the future survival of all organizations will depend on their ability to successfully manage change.
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It could be argued that the study of organizational change management should be the preserve of the social scientist or the business manager. After all, much of the theory has evolved from social and business studies and not from the field of computer science. However, information systems do not exist in a vacuum and It is widely accepted that technology, particularly Information Technology (IT), is one of the major enablers of organizational change .The successful development of any information system must address sociological issues including the effects of the system itself on the organization into which it is introduced. Many maintain that information systems must be developed specifically for change as they must constantly undergo change to meet changing requirements. Clearly, IT change management is an important issue for the information systems researcher. The problem is in being consistent and reliable when it comes to IT infrastructure environment performance and it is to be seen if IT change management can be utilized effectively for the achievement of the goal of stable infrastructure environment. It is to be seen through IT change Management, can the Service level agreements be met efficiently. 3.3 Title of the project A study on “Effectiveness of IT change Management in IT Infrastructure perspective”. 3.4 Objectives of the Study • • To analyze the cost to benefit effectiveness of the IT change management implementation in the project To analyze the number of failed changes from improved testing.

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To analyze the number of effectiveness of the IT change management in terms of reducing emergent changes and maintain the infrastructure environment stable.

3.5 Scope of the study This study focuses on the topic of Information technology change management from an information systems perspective. The study will examine the issues raised during a review of the change management of an organization that experienced a number of IT-enabled changes. As in the Management, a very broad definition of the term IT is used to include: computers of all types, hardware, software, communications networks and the integration of computing and communications technologies. 3.6 Operational Definitions Anticipated Change: Anticipated changes are planned ahead of time and occur as intended. For example the implementation of e-mail that accomplishes its intended aim of facilitating improved communications. Opportunity-Based Change: Opportunity-Based changes are not originally anticipated but are intentionally introduced during the ongoing change process in response to an unexpected opportunity. For example, as companies gain experience with the World Wide Web they may deliberately respond to unexpected opportunities to leverage its capabilities. Emergent Change: Emergent changes arise spontaneously from local innovation and that are not originally anticipated or intended. For example the use of e-mail as an informal grapevine for disseminating rumors throughout an organization.

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3.7 Research Methodology 3.7.1Sources of Data Primary data: This is the first hand information that is collected by the researcher. The data will be collected from various employees/Tools employed in the organization in the form of Questionnaire/analysis which will be structured. The researcher would also collect information through interviews with Project Managers and Project head of the Project. Secondary data: To know about the studies conducted and their outcomes, articles in journals, the internet and print medium like magazine and news paper where used in which the detailed analysis were published. 3.7.2 Research Method or type of study: The type of study conducted is mainly exploratory . A grounded theory research method was adopted for this dissertation and the phenomenon studied was IT-enabled organizational change. 3.7.3 Sampling Plan 3.7.3.1 Sampling unit and sample size It was necessary to identify a sample population from the 50 TCS personnel that would permit the collection of data within the limited project time constraint and would also minimize any possible bias. The chosen population spanned all vertical levels and functional groupings and included: the delivery manager, Service management, project managers, IT specialists, Quality Assurance specialists and administration staff.

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3.7.3.2 Sampling plan The method of random sampling will be used in the research. This is because employees working in various of the ITIL framework will be selected at the researcher’s convenience and at random. 3.7.3.3 Contact Method Personal interviews with prior appointment were conducted to find the first hand information from the people surveyed. 3.7.3.4 Data Collection Method Data collection at the TCS was conducted by a single researcher over a two week period and involved the use of document reviews, a questionnaire, semi-structured interviews and observation document reviews, a questionnaire, semi-structured interviews and observation.
Table 1.4 Data Collection Method by Function/Level

Function/level Delivery Manager Project Managers IT Specialists QA Specialists Total

Questionnaires 1 20 15 14 50

Interviews 1 20 15 14 50

Observations 1 4 4 2 11

3.8 Limitations of the Study • • The size of the sample is small due to time constraints. Research findings may be biased as it depends on the perception of the sample. • The strategies suggested in the research are not exhaustive to retain the Change Management in the organization. These are just the basics and if implemented in a proper way can give good results.

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Chapter- 4 Analysis & Findings
4.1 Initial Data Analysis An iterative approach to data collection and initial analysis was used which focused on the phenomenon of IT-enabled organizational change within the TCS. To enable a contextual evaluation of any organizational changes to be made, initial data collection and analysis directed the research towards comparing the TCS’s experiences with the main issues raised by ITIL Change Model. 4.2 Costs Investment is often necessary. We have discovered that with limitations, ITIL can deliver service improvements, but at what cost? The survey looked at costs incurred for support tools, headcount, external consultants and external training providers, and in each case how satisfied was the paymaster.

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Question 1: Are you satisfied with the investment in tool i.e., IT Change Management? Not applicable / no comment Significant reservations Fairly satisfied Did what it was supposed to Very satisfied 24 2 10 3 11

Table 1.5 Investment Satisfaction

A deployment of new support tools often projects a major consideration of process, such as that of an ITIL process –Change Management project. The average investment in software tools was £123 per user or £1,818 per IT head. Around half of all adopters were satisfied to some extent with the results of that investment, with the other half largely making no comment on the investment.

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Graph1.9 Investment satisfaction analysis

Question2: Are you satisfied with the Investment in Manpower in implementing the IT Change Management?

Not applicable / no comment NO - Consumed way too much manpower NO - Some reservations about manpower YES - Hardly noticed manpower effects YES - Manpower consumption tolerable

31 1 2 1 4

Table 1.6 Satisfaction with Manpower investment

Graph 2.0 Satisfaction with Manpower investment

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Question 3: Are you satisfied with the external training Providers?

Actually added complications Could have managed without it Not applicable / no comment Useful to the project Crucial to project

1 1 28 6 14

Table 1.7 Satisfaction with the external trainers

Graph 2.1 Satisfaction with the external trainers

Training is often crucial, as certification provided by training providers constitutes in effect a record of the readiness of the corporation for ITIL implementation and adherence. 2% feel they could have managed without it,
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and a further 2% believe it actually added complications. The 40% of projects willing to comment found it useful or crucial. Training costs were on average £930 per IT head.

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4.3 Before and after the implementation of the change management

Month (2010) July August September October November December

No of changes reported 357 386 425 598 576 213

No of changes implemented 357 386 425 598 546 216

No of success 198 203 286 398 357 143

No of failure 159 183 139 200 189 73

% age success 55.5% 52.6% 67.3% 66.6% 65.4% 66.2%

%age failure 44.5% 47.4% 32.7% 33.4% 34.6% 33.8%

Reported to implemented ratio 100.0% 100.0% 100.0% 100.0% 94.8% 101.4%

Table 1.8 Before the implementation of the change management

Graph 2.2 Before the implementation of the change management

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4.4 After change management Implemented

Month (2011) January February March April June July August

No of changes reported 853 591 676 695 526 510 479

No of changes implemented 527 429 410 496 496 498 473

No of success 350 320 329 429 430 460 461

No of failure 177 109 81 67 66 38 12

% age success 66.4% 74.6% 80.2% 86.5% 86.7% 92.4% 97.5%

%age failure 33.6% 25.4% 19.8% 13.5% 13.3% 7.6% 2.5%

Reported to implemented ratio 61.8% 72.6% 60.7% 71.4% 94.3% 97.6% 98.7%

Table 1.9 After the implementation of the change management

Graph 2.3 After the implementation of the change management

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Findings from the observations 4.4.1 Before Change Management was implemented. a. In almost all the cases more than or all the changes reported are implemented. This is because there were no change assessments done before the implementation. On investigation, there were instances which are implemented without being reported to management. a. Success percentage of the reported changes are pretty ordinary i.e, % age success 55.46% 52.59% 67.29% 66.56% 65.38% 66.20% % age failure 44.5% 47.4% 32.7% 33.4% 34.6% 33.8%

Table 2.0 Success percentage of reported changes

The result of the poor success percentage is losing of more and more users from the connectivity. 4.4.2 Example of a Poor change implementation and its adverse affects on the infrastructure. An application on a Linux server needs to be running at the time 3.00 am PST as there are jobs scheduled for it and has 300 users dependent on it.

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One of the infrastructure Agent sees the maintenance requirement for it and goes ahead with the maintenance activities which requires server reboot.

Without the information of job scheduled, the agent goes ahead with the reboot without having tested the plans. Unfortunately, the server does not come up and it takes next 3 hours to get it running up. This results in cancellation of job scheduled and disconnection of 300 users from the infrastructure, resulting an effective loss of US$20 million. This is the result of the poor management of the change. The case not only talks about effective communication and also , need of test and back out plans. After change management Implemented It can be seen that after the change management comes into existence, the number of implementation to reported ration is not higher than 100%.This shows that, all the changes reported are not necessary for the Infrastructure environment. A careful examination would ensure the reliability without actually implementing all the changes reported. Trend of planned and emergent changes as per the client perspective As we have studies earlier, the number of planned changes per month is directly related to the stability of the government. In this part we shall see what are the changes in the environment before and after the business outsourced. Point is to be noted that only after the business was outsourced, IT change management was applied.

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4.5 Before the process was outsourced to TCS

Year

Total number of changes/ month 650 700 710 728 750 760

Number of emergent changes/ month 300 338 341 358 378 378

Number of planned changes/ month 350 362 369 370 372 382

%age emergent changes to total changes 46.15% 48.29% 48.03% 49.18% 50.40% 49.74%

%age planned changes per month 53.85% 51.71% 51.97% 50.82% 49.60% 50.26%

January, 2010 February,201 0 March, 2010 April, 2010 May, 2010 June, 2010

Table 2.1 Before the process was outsourced to TCS

Graph 2.4 Before the process was outsourced to TCS

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It’s observed that, the emergency changes relatively at a higher percentage and it leads to highly turbulent environment within the company. This has lead to multiple millions of losses to the organization. This has made the board to decide on outsourcing the IT Infrastructure to TCS. The SLA for the Emergent changes for the organization was 15%. 4.6 TCS has agreed on the SLA and the results are shown as below As a result of the SLA agreed, TCS was given 6 months’ time to transition the whole infrastructure process. Within the transition period, TCS had to not only transition the business aspects but also maintain it efficiently, however the SLA part of the agreements for the business would only come to effect only after the 6 months period. Its TCS’ challenge that they had to prove themselves that, they are good enough and their choice as partner is justifiable. Clients are already happy with the improvement in the business.

Year

Total number of changes/ month 527 429 410 496 496 498 573 519

Number of emergent changes / month 100 75 60 64 68 48 39 25

Number of planned changes /month 427 354 350 432 428 450 534 494

%age emergent changes to total changes 18.98% 17.48% 14.63% 12.90% 13.71% 9.64% 6.81% 4.82%

%age planned changes per month 81.02% 82.52% 85.37% 87.10% 86.29% 90.36% 93.19% 95.18%

January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011

Table 2.2 After the change management came into place

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Graph 2.5 After the change management came into place

Findings from the studies of emergent and planned changes tables It’s clear from the tables that, the emergent changes have gone down to less than 5% from over 45% emergent changes. Result of such a less percentile of emergent changes, the environment is stable and there are no significant monitory or users reported. And moreover, the emergent changes have gone down to less than 5%, that means the project has exceeded the expectation from all the aspects.

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What made the difference? • IT change management ensured that nothing in the infrastructure is unimportant and every alteration is taken into consideration and discuss with the all the stakeholders of the business. • All the changes are discussed with the business and the stake holders and the changes are implemented during already existing outage window. • Ensured all the changes are implemented during off business hours of the client, so that whenever the business goes live, the changes are implemented and the environment is stable. 4.7 Cost-benefit analysis for change management When evaluating whether or not to undertake an effort, many leaders and decision makers conduct a cost-benefit analysis. This process involves identifying and listing out the potential costs of the undertaking and the expected benefits of the undertaking. When discussing the value and importance of change management, a cost-benefit analysis can be a powerful framework. Below is a simple table showing likely costs and five different perspectives on the benefits of applying change management on projects and initiatives. Costs for applying change management • Dedicated resource(s) on project team. For a small change to a change-ready group, the project manager may take on the responsibility. For a large change to a change-resistant group, this might be a team of people with supporting sub teams. In either case, there needs to be someone dedicated to the people side of change working on the project. • Procurement of methodology and tools for use by change management resource(s)

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• •

Purchase of source materials for use by managers and supervisors in their coaching exercises. Training time and costs for everyone involved - managers and supervisors as coaches of change, senior leaders as sponsors of change, change management resource(s), project teams

Benefits from applying change management • Perspective 1: cost avoidance - poorly managing change is costly to the project and the organization; change management is a cost avoidance tactic. • Perspective 2: Risk mitigation - individuals, the project and the organization are all put at risk when change is poorly managed; change management is a tool to mitigate risks. • Perspective 3: benefits realization insurance - consider how much of the value of the project ultimately depends on people doing their jobs differently; insurance. • Perspective 4: probability of meeting objectives - data shows that projects with effective change management in place are more likely to meet objectives, stay on schedule and stay on budget; change management increases the probability of meeting objectives Benefit perspective 1 - cost avoidance When changes are poorly managed - there are real and tangible costs to the organization. When change management is applied effectively, these costs can be avoided or minimized. Some of the costs are difficult to quantify such as morale declines - but some of the costs are very concrete and easily quantified. One way to characterize the benefits of change management is as a cost avoidance mechanism. change management provides benefits realization

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Cost to the organization if change is poorly managed (Those that can be more easily quantified are italicized.) Productivity plunges (deep and sustained)
• • • • • • • • •

Impact on customers Impact on suppliers Loss of valued employees Morale declines Decline in quality of work Resistance (both active and passive) History of failed change Stress, confusion, fatigue Change saturation

Costs to the project if change is poorly managed
• • • • • • • • • •

Project delays Missed milestones Project put on hold Resources not made available to project team Budget overruns Obstacles appear unexpectedly Rework required on project design Project fails to deliver on objectives Project is fully abandoned Loss of work by project team

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Costs to the organization if the change is not implemented
• •

These costs are tied directly to what the change was aiming to do. These costs could include: expenses not reduced, efficiencies not gained, revenue not increased, market share not gained, waste not eliminated, regulations not met resulting in fines/penalties, etc.

•

Additionally, the organization loses the investment made in the project when the project does not deliver results.

Benefit perspective 2 - risk mitigation Another perspective, similar to the cost avoidance perspective, is to outline the potentials risks to the project and the organization associated with the people side of change. Risk management on projects is a well-developed discipline. The Project Management Institute even has a PMI Risk Management Professional credential completed with an application, audit and examination process. If your organization already conducts extensive risk assessments on projects, work to position "people-side risk" as one of the risks that is considered along with other risks like financial risks, technology risks, schedule risks and dependency risks. If a project is being planned and has a high "people-side risk" component, then applying a structured approach to change management is the right risk mitigation technique. Benefit perspective 3 - benefits realization insurance The fourth perspective is benefits realization insurance. Here, the context for showing the value of change management is tied to an examination of the potential benefits the project is working to achieve. The objectives of the project - as outlined in the project Figureer, business case or project plan - are a good starting point. For each objective, ask yourself, "is meeting this objective dependant on people doing their job differently?"

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For some of the questions the answer might be "no" - such as lower maintenance contract costs for a new piece of technology. But, many of the objectives will be tied directly to the people side of change. For these objectives, you can ask the follow up question of, "what percentage of these benefits result from people doing their jobs differently?" This is the amount of benefit you can "insure" by applying a solid change management approach and the amount of the benefit you are leaving uninsured by not investing in change management. Benefit perspective 5 - probability of meeting objectives The final benefit perspective is probability of meeting objectives. This is tied to the growing body of data which shows that more effective change management results in a higher likelihood of delivering intended results. A 2002 McKinsey Quarterly article titled "Helping Employees Embrace Change" shows a direct correlation between value delivered to the organization and the effectiveness of change management - with projects featuring effective change management delivering five times the value of projects with poor change management. Projects with "excellent" change management in place were six times more likely to meet objectives than those with "poor" change management - and even that using "good" change management were five times more likely to meet objectives

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Chapter - 5 Recommendations
• Though the marketing department is at large ,at TCS its not making use of its full potential. People at remote areas do not know about TCS and they are well aware of InfoSys or Wipro. TCS are not into marketing may be they think about only short term earnings. But for the long term sustainment and profitability, it will good for TCS to make use of its Marketing and make it more clear with the public. Moreover, most its employees are clueless about the functioning of Marketing department. • TCS needs to focus more on delivering SaaS based IT solutions, since its going to be the next big thing according IT Trend Analyst firm Gartner. • • It must increase breadth of its offerings, to serve new set of clients in different industry segments. TCS must enter into new markets. Expanding its base in Europe, North America, and Asia-Pacific region has to be done at the earliest. • • should focus more on growing its partner‘s network to strengthen its distribution channel for Education ERP. The IT change management works on the principle that the infrastructure environment should be stable every instant of time. Resulting in the continual functioning of the business. • However, this also discourages innovations and their implementations. I recommend there must be a clear brain about the encouragement on the innovation and a test environment should be kept ready and it should be replica of the production environment.

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•

There must be dedicated resources on the Post Implementation review of the change implemented, to ensure any hiccups in the changes implemented.

•

Careful examination should be made before okaying any change and there must be good knowledge on the breakdown forecasting.

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Chapter - 6 Conclusion
TCS is the leader of Indian IT industry. Already it has served more than 1000 clients globally starting from individual entrepreneurs, small and medium scale enterprises to fortune 500 companies. Still, it‘s a long way to go for TCS. Company should strengthen its competitive position by Research & Development to have unique selling proposition. This project gave me business acumen about the IT industry and the responsibilities I have given made me industry ready by providing me an opportunity to handle marketing activities like client presentations, interactions with clients. And it gave me a great realistic outlook towards ITIL and change Management Process. Driving conclusion as a result of change management is not an easy task. There are a lot of things to take into consideration that will lead to the eventual creation of conclusions that transpired during the change process. There are 3 Ps to take into account. These are the people, policies and processes. These key ingredients determine how change management can directly impact the organization. a. People It is indeed given that this is the most important aspect of the change process. It is because people working on a certain project are considered the front liners, making decisions and plans to ensure success on every phase of the change process. Though it is hard at times to unlearn old behaviors and techniques, it is still a must to embrace changes happening in the organization to focus more on what can be contributed rather than resisting team efforts on what needs to be done.

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b. Policies If we are talking about changes in an organization, this means that there are certain policies that need to be revisited to determine if these still apply to the new goals and objectives of the company. Though policies are governed by company rules and regulations, there are still some exceptions that should be taken into consideration to decide if these hinder the change process from successfully implemented. c. Processes As mentioned, old habits are hard to break and so are old processes. But then again, with the introduction of advance tools and equipment, new processes can easily be carried out. Though there are some previous processes that should be kept, change is still inevitable as finding simpler means of doing work is still a top priority. This project has helped me understand the importance and significance of consumer satisfaction and has given me exposure to the practical side of IT industry and at the same time enhanced my knowledge by applying theory learnt in class to practice.

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Chapter-7 My learning
Four truths about change 1.Change is constant. 2. Change is necessary. 3. Change is a catalyst. 4. Change is unpredictable. 5. Change is a pervasive part of today’s business. Necessary for 1. Growth 2. Renewal 3. Invention 4. Creativity 5. Can bring opportunity or risk. 6. At the outset it is very tough to predict what more changes one change can trigger off. 7. Even a desirable change has unpredictable outcomes Common misconceptions about change 1. Change is a reaction to problems. 2. It only affects organizational structure. 3. System adapts to change in the same manner. Which is not conducive. 4. Long – standing misconception about change Organizations bring in a change to counter a problem although usually it is the other way around which is an organization brings in a change for the betterment of their present set up.

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Change is dynamic Now usually the reason behind change does not pervade down to the front line employees in a company, which indeed is the reason for the workforce to think on negative terms. Apparently the market is so dynamic that when a particular company is confronted by a market challenge the company takes necessary measures to counter those challenging situations. And usually those necessary measures are some changes again. The understanding here required is that to pre-empt or preclude an adverse situation a change was made. So this is again a reiteration of the argument that change is healthy. Unfortunately this understanding does not reach the front level employees. Change affects the system differently Some System adapt to it quickly some take a lot of time usually System take time which is somewhere in the middle of these two streams. Different System need different assistance and support too. Change is different from transition Change is a more explicit phenomenon then transition. It is an external event which has a definite pattern chalked by the organization leaders. Change events are usually marked by a specific time, such as the date when say two companies are formalized. On the other hand Transition is an internal process something like a reorientation. Basically reflects the period of adjustment System come to terms with the consequences of change events. The time period for transition is less precise than change. The timing in transition is governed by the positioning of System in a process & not by the logic propounded by a change.

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Three ways in which System respond to change are 1. Innovators - They adapt naturally in fact usually they are the System who initiate change. 20% of a company comprises of innovators 2. Traditionalists - They prefer life to be simple and predictable. They find it hard to adapt to change. They account for 20% of the System in an organization 3. Adaptors - They use a wait and see approach. At first they are hesitant, since they understand the value of tradition. But ultimately they manage to adapt. They account for 60% of the System in an organization. Since this is big percentage we can divide them on basis of how easy it is for them to deal with change. 1. Early 2. Middle 3. Late - They have considerable trouble completing transition.

Alliance Business Academy

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