Tata Consultancy Services (TCS), India’s largest software company, has rolled out a new operating structure, the first significant move by CEO K Krithivasan after he took charge on June 1.
TCS also rejigged its senior leadership, adding several new senior executives, global heads and veterans who have spent over 18-30 years with the company.
On July 29, the company said that based on the discussions with customers and associates over the last couple of months, TCS will be able to deliver the best value to the customers by synergising its domain and contextual knowledge across units.
"In this context, we have announced the new operating structure, which regroups our existing Industry Solutions Unit (ISUs) along industry segments into key business groups. The above changes will help in deepening customer centricity, which is pivotal to our growth," a company spokesperson said in a statement.
The move appears to be a grudging reversal of the reorg that TCS unveiled earlier; while clients will still be grouped into four buckets based on their account size, they will ultimately be housed within industry verticals.
According to an internal memo sent by Krithivasan that Moneycontrol has accessed, the new operating structure will have the following business groups- BSFI Americas led by Susheel Vasudevan; BFSI UK, Europe and Australia led by Shankar NS; Communication, Media and Information Services led by Akhilesh Tiwari; Life Sciences, Healthcare, Energy, Resources and Utilities led by Debashis Ghosh; Manufacturing led by Anupam Singhal, Retail, CPG, Travel, Transportation and Hospitality led by Krishnan Ramanujam; and Technology, Software and Services under V Rajanna.
All the ISU Heads will report to the respective business group heads with no other change in the ISU structure. All the RIG (relationship incubation group) accounts will also be moved under the appropriate ISUs.
TCS has also created an Enterprise CBO (cognitive business practices) unit focussed on enterprise functions such as F & A (Finance & Accounting), HR procurement etc. This unit will also own TCS Cognix platform and will be led by Ashok Pai.
Further, another unit called TCS AI Cloud has been created combining all its public cloud units and Al initiatives. This unit will be led by Siva Ganesan with Krishna Mohan as the Deputy Head. In terms of functions, while Harrick Vin takes charge as CTO, Abhinav Kumar will take charge as CMO.
All of these roles are effective August 1 and will report directly to Krithivasan, who believes that the above changes will help in deepening customer centricity, crucial to the company’s growth amid a uncertain demand environment.
The previous restructuring plan was unveiled in April 2022 by former CEO and MD Rajesh Gopinathan. As per the structure, the company divided clients into four distinctive business groups depending on a client’s journey with it instead of verticals and geographies. This had become a major bone of contention for senior leaders and vertical heads.
These structures were the acquisition group, relationship incubation group, enterprise group and finally business transformation group. Each of these groups had a different head too.
People familiar with the development said that the concept of grouping clients based on the relationship maturity is being retained in the new plan, but under the umbrella of the verticalised business group. Beyond that, it's a reshuffle of responsibilities at the senior-most level. The Industry Solutions Unit (ISU) structure and customer-facing layer have not been touched.
As Moneycontrol had earlier reported, the previous group-wise restructuring had left many TCS' senior executives loath to take ownership of an account because of the likelihood of it going out of their hands once it becomes big. This caused unrest among senior executives, especially vertical heads who had no power over their P&L (profit and loss).
Krithivasan himself had kept his banking, financial services and insurance (BFSI) vertical out of the previous structure. BFSI accounts for nearly 35-40 percent of the company's overall revenue.
Analysts Moneycontrol spoke to welcomed the move, since this is closer to TCS' previous operating structure and empowers industry heads who were unhappy with the reorg.
New appointments
TCS also made several leadership appointments and changes. The company's chief marketing officer, Rajashree R, will be stepping down from her senior management personnel (SMP) position on July 31. According to her LinkedIn profile, she has transitioned to become a Vice-President.
Sources told Moneycontrol that Abhinav Kumar, a TCS veteran who has been with the company for over 21 years, will be taking over the role as the new chief marketing and communications officer for its global markets. Prior to this, he was in the same role but focussed only on the Europe market.
Company's chief technology officer (CTO) K Ananth Krishnan is retiring on July 31.
Apart from this, Harrick Vin, Shankar Narayanan, V Rajanna, Siva Ganesan, Ashok Pai and Reguraman (Regu) Ayyaswamy will be appointed as SMPs effective from August 1. All of them have been with TCS for over 18-32 years.
Vin takes over as the CTO post Ananth Krishnan's retirement from August 1.
Challenging business environment
All of these changes come at a time when the company is already weathering multiple challenges including macroeconomic uncertainties and dealing with a recruitment bribe case.
In a post earnings interview with Moneycontrol a few weeks back, Krithivasan said that achieving double-digit growth this year could be challenging as clients remain cautious in an uncertain demand environment.
Last month, TCS had sacked six employees and banned six major staffing firms after the employees were found to be taking bribes by giving preferential treatment to certain staffing for recruiting subcontracted employees. The company is also investigating its entire supply management following this incident.
TCS was again in the eye of storm when it was found to be deferring onboarding of over 200 lateral hires by more than three months.
On the deal win front, despite a challenging environment, TCS bagged back-to-back mega deals of over $700 million plus in the United Kingdom, including both through renewals and new clients.
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