This article – brought to you by Tata Consultancy Services – focuses on TCS’s six-year involvement with ex-F1 racer Satoru Nakajima’s team, and examines the giant IT company's relationship with motorsport.
The Tata Group, which is India's leading conglomerate, was founded in 1868 by 29-year-old Jamsetji Nusserwanji Tata and has continued to grow steadily. It currently comprises 29 listed companies in 10 industries, doing business in more than 100 countries. It has a total workforce of over 800,000 employees.
The industries cover almost anything you can think of: Trade, power generation, steelmaking, chemicals, machinery, consumer goods, IT, telecommunications, finance, travel and more. It is also home to well-known car manufacturers such as Jaguar Land Rover.
The Tata Group, with total revenues of USD 103 billion and a market capitalization of USD 314 billion for its 29 listed companies (as of 31 December 2021).
By way of comparison, 70% of this revenue is generated by the group's Information Technology services company, TCS. So what exactly is it? What kind of business does it operate? Before we look at the facts, let us first profile the four leaders who have led TCS over the past 50 years.
Four elite leaders
TCS was established in 1968 as a business unit of Tata Sons (the holding company of the Tata Group). The first CEO was Faqir Chand (F.C.) Kohli, who was general manager when TCS was founded, demonstrated unparalleled foresight and can-do attitude – he expanded the business both domestically and internationally, making TCS India's premier IT services company.
During his 28-year tenure, Kohli has provided services and solutions in business, engineering and other fields using IT and digital technology, and is still revered by the Indian public for his work in developing IT into a major national industry, for which he is known as the 'father of the Indian software industry'. In 1987, when Kohli was CEO, TCS entered the Japanese market.
Subramaniam Ramadorai succeeded Kohli as the second CEO. He expanded the company's global business and listed its shares, capturing the ever-increasing need for IT services against the backdrop of the global spread of the internet and other factors. As a result, in the 13 years he was CEO, TCS's annual turnover grew rapidly from USD 140 million to USD 6 billion, ranking it among the top 10 IT services companies in the world.
The third CEO is Natarajan Chandrasekaran, who took over in 2009. His achievements were the expansion of business through mergers, acquisitions and partnerships, as well as the active development of social action programmes.
This activity was in keeping with the founding spirit of the Tata Group. He also grew annual sales from USD 6.3 billion to USD 16 billion and became the first non-Parsi (non-Zoroastrian) Chairman of the Tata Group in 2017.
In 2012, during his time as CEO, he established TCS Solution Centre Japan in a joint venture with Mitsubishi Corporation in Japan, and in 2014, three companies – IT Frontier (an IT services company within the Mitsubishi Corporation Group), Tata Consultancy Services Japan and TCS Solution Centre Japan – merged to form Tata Consultancy Services Japan K.K. (TCS Japan) was formed.
In 2017, when Chandrasekaran was appointed Chairman of the Tata Group, he was succeeded by Rajesh Gopinathan as TCS CEO, aged just 46. In the same year, TCS came forward as title sponsor and technology partner to Nakajima Racing in the All-Japan Super Formula Championship.
This decision was supported by Chandrasekaran. The following April 2018, TCS became the second Indian company with a market capitalization of over USD 100 billion.
In the 50-odd years since its inception, TCS has continued to grow at a high rate, driven by these four CEOs, and in FY2022, the company recorded revenues of USD 25.7 billion. It employs approximately 600,000 people worldwide, 70% of the Tata Group's total workforce. It operates in 46 countries.
In addition to TCS, there are other giant IT services companies in the world, such as IBM, founded as a computer hardware manufacturer, and Accenture, founded as an accounting consulting firm, but TCS differs from these two companies because its starting point is IT-based engineering and systems TCS differs from these two companies in that its starting point has been consulting using digital technology in the form of IT engineering and systems development.
Currently, IBM and Accenture, like TCS, are steering in the direction of providing consulting services that incorporate IT or digital technology, but TCS is unique in that its starting point is IT using digital technology.
Limitless gateway to customers
So what exactly does TCS do? It is a consulting service on how to utilize IT technology in business. In an age when consumer needs are shifting from “tangible” to “intangible”, TCS helps businesses to provide these “intangibles” as sustainable products.
It is quite difficult to treat these formless “intangibles” as products. Therefore, companies need data acquisition and sophisticated analysis of data. However, to link these to business, it is also very difficult to achieve this using only in-house resources. This is where TCS can help.
As mentioned earlier, TCS does not manufacture hardware; it does not have tangible products such as PCs or mobile phones. If it is asked whether this is why it is able to provide consulting services, it is precisely because of this that it is able to provide the support its customers require.
First, it is not overrun by hardware. This means that it is open to customers and partners. And with regard to the software provided as a service, TCS has developed some of its own software, while other companies' existing software is sometimes used. In other words, as long as the software meets the needs of the customer, it can be adapted flexibly, regardless of which product it is from.
For this reason, it is always keeping an eye on what services and solutions are available on the market. TCS is constantly thinking about what kind of consulting can deliver value for its customers, a method it calls vendor-neutral or technology-neutral. Vendor-neutral and technology-neutral mean that they are not dependent on any specific product or technology.
So what makes TCS consulting unique? It is a method of building a specialised business in a specific area. We understand whether it is the core system or the application that needs to be addressed, and then provide consulting services based on our understanding of the customer's issues.
This requires understanding the challenges of the industry in which they are involved and providing solutions. For example, the financial industry, where TCS has long been involved in consulting. Finance is a very large market business in a global sense. However, it is not a simple matter, as laws and regulations differ from country to country and business forms differ from country to country.
Therefore, it builds systems based on an understanding of the financial systems in each country and region first, and then solve problems in the best possible way for clients. This flexible approach is one of TCS's strengths.
In the second part of this series, we will focus on the Tata Group's social contribution activities and contribution to sporting events, as well as TCS's activities in Japan. Specifically, we will look at what TCS offers and gains from its collaboration with Nakajima Racing.
