SVKMs NMIMS University School of Business Management MBA (First Year) Trimester II, Session 2013-2014

Assignment for the Course Group Organization and Dynamics

Report on

IT and ITeS Industry

Assignment submitted by: Nalin Balooni A008 Dushyant Bhatia A010 Ashwin Doke A017 Mukund Kabra A022 Ojas Lokhande A030 Yogesh Mundada A031 Rahul Potti A040

Table of Contents
Abstract/Executive Summary........................................................................................................................ 3 Industry Profile.............................................................................................................................................. 4 Company Profile............................................................................................................................................ 5 Caselets and Analysis .................................................................................................................................... 6 # 1.............................................................................................................................................................. 6 # 2.............................................................................................................................................................. 7 # 3.............................................................................................................................................................. 8 # 4.............................................................................................................................................................. 9 # 5............................................................................................................................................................ 10 Conclusion/Observations ............................................................................................................................ 11 Bibliography and References ...................................................................................................................... 12

Abstract/Executive Summary
IT industry registered a growth of 1.2% since it forayed into the Indian business domain and since then has grown exponentially over the years. It has become synonymous with the Indian growth story currently contributing around $100 billion in revenues to the Indian Economy. TCS is an IT services giant in this industry, which generated about $11.6 billion dollars revenue in 2013 and has an employee base of 2.85 lakh over 44 countries. Through our report, we examine how the practices followed by the company help it grow and adapt flexibly in various situations. We analyzed various factors like Conflict resolution approaches Analysis of hierarchical boundaries Change implementation methodologies Interview insights from senior management Level of Power and politics employed in the organization

The above mentioned factors were used to deduce the strength, weakness and areas where potential improvements could be made to improve efficiency in the company.

Industry Profile
Indian IT services exports are estimated to have grown by only 10 per cent in 2012-13, as against robust growth of 19 per cent in 2011-12. The slowdown in volume growth surfaced in the second half of 201112, as macroeconomic uncertainties intensified. In 2012-13 too, uncertain global macro-economic conditions adversely affected volume growth. Indian IT services companies have not been able to raise their billing rates over the past couple of years. Billing rates remained almost unchanged since the financial crisis in 2008-09. In fact, billing rates declined by 1-2 per cent in the first half of 2012-13 as a result of pricing pressure from BFSI clients and rise in share of lower-value services like business process outsourcing (BPO). Consequently, higher volumes were the only driver for revenues. However, as per disclosures made by tier-1 IT companies, even volume growth (in terms of man-month billing) has slowed significantly since the second half of 2011-12. However, few early signs of recovery in volume growth are visible in the results of companies in Q3 2012-13. Since the second half of 2011-12, Indian IT services vendors have witnessed a slowdown in revenue growth. However, companies could see some silver lining in 2012-13, after a prolonged negative phase. Revenue growth for tier-1 companies improved in the third quarter, despite several days of billing losses caused by occurrence of the Sandy hurricane in North America. However, few mid-tier companies faced client losses and a slowdown in their focus verticals. IT services exports have been slowing down over the last 4-5 quarters due to the difficult global macroeconomic environment. Indian IT services exports are estimated to grow by 13-15 per cent in 2013-14, reflecting a significant improvement over the estimated 10 per cent growth in 2012-13. Over the long term, (2013-14 to 2017-18) exports are expected to grow at a 14 per cent CAGR in US dollar terms. Key growth drivers would include a mature global offshore delivery model, higher ability of Indian vendors to execute bigger projects, increased focus on newer markets, better capabilities in non-traditional service-lines, process innovation and cost optimization by clients. Additionally, focus on service offerings via new technologies such as the Cloud and related applications, mobility services and non-linear business models, will also drive growth.

Fig: Volume Growth (Y-o-Y)

Company Profile
Tata Consultancy Services (TCS) is an IT services, consulting and business solutions organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT, BPO, infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata group, Indias largest industrial conglomerate, TCS has over 285,000 of the world's best trained consultants. The company generated consolidated revenues of $11.6 billion for year ended March 31, 2013 and is listed on the National Stock Exchange and the Bombay Stock Exchange in India. The business values provided through the Human Resource Services include: Consolidation and transformation of multiple disparate HR systems and processes on TCS Global HR Platform, resulting in up to 50% increase in productivity, over 30% reduction in costs and real-time HR insights and analytics Up to 40% cost savings on in-scope processes combined with 100% compliance to agreed service standards Significant measurable improvements in employee satisfaction within 6-12 months

TCS has twice seen a change in its top brass in the last decade; S. Ramadorai became the CEO in 2004 and 5 years later N. Chandrasekharan took charge of the company in 2009. Presently having employee strength to about 2.85 Lakhs, the company won 'Recruiting and Staffing Industry Leader of the Year' and Best Employer Brand awards at the World HRD Congress' annual meet in 2012. As of March 2013, TCS has 199 offices across 44 countries and 124 delivery centers in 21 countries. Their mission reflects the Tata Group's longstanding commitment to providing excellence: To help customers achieve their business objectives by providing innovative, best-in-class consulting, IT solutions and services To make it a joy for all stakeholders to work with us

Their values include Leading change, Integrity, Respect for the individual, Excellence, Learning and sharing.

Caselets and Analysis

#1
With the advent of information systems management as an independent entity in the organization, the concept of Chief Information Officer (CIO) came into existence. He/she was typically responsible in ensuring smooth functioning of all the IT elements in the organization, flow of information across integrated systems, formulating policies for information security and ensuring implementation for the same. The CIO directly reports to the Chief Executive or Finance Officer. The hierarchy followed in the organization under consideration is TM TL PL PM AM GL Acc Head ISM ISM India. The Information Security Manager for India region reports to Global CIO of the client organization. During the migration from Access 2003 to Access 2010, the CIO was directly involved with the team handling the conversion. Members in this project were directly reporting to CIO over the duration of the project. The supervisors who were bypassed were kept in mail chains for updates. But the decision making solely rested on the team driving the change during the entire project (barring a couple of instances where huge costs were to be incurred). This ensured quick decision making and implementation wherein time and effort was saved because of absence of hierarchy trickle down. Analysis: The team comprised of associates from different project groups with varied work specialization. This particular cross functional team had no formal structure within the team. The entire team was reporting to the client (CIO). Thus, the chain of command did not exist as the team members were on the same level and reporting was only to the client CIO. Further, the decision making was not concentrated at single touch points but was decentralized across the team. The team had a simple structure with a single point of contact on the client side. This team was empowered to take decisions out of the purview of the account/department thus removing the vertical boundaries and flattening the hierarchy. The team comprised of project leads, module leads and team members of different projects who were at the same level in the decision making process thus minimizing status and ranks within the team. Overall, the team was a boundaryless organization (to some extent). The composition of the team and its simple structure was in place to achieve objectives which required formulating new and breakthrough solutions. The key determinant involved in this case was the innovation strategy since out-of-the-box dimensions had to be explored and implemented real-time.

#2
Clients and business users were situated in the US whereas near-shore operations were carried out at Mexico. For an associate involved in coding and implementation of systems, working from US and Mexico was an important career goal. Also, the associates were billed on the account level (which was typically formed on the basis of a geographic region of the world eg: Americas, EMEA etc). The account budget was the most important aspect in determining the overall profitability of the organization. In the wake of this information, the associates travelling to US and Mexico were billed to the parent account but according to the local currency. Naturally, US dollars increased the budgeting when an associate worked from onsite. In order to gain competitive advantage in all spheres, there were measures being taken in order to cut costs and increase profits, both at the client end as well as the organizations end. The client requested for associates to work from US and Mexico but since there were stringent cost cuts at the organization end, account managers were not willing to approve the requests. The associates started getting restless and frustrated at the delay in decision for approval. This resulted in lower levels of motivation and decreased efficiency. Account Manager assured them of travel but at a later point in time. They were given monetary benefits in the meantime, some received early promotions while almost all of them were given additional managerial responsibilities which would help them leapfrog in their career growth. Analysis: Associates generally agree to internationalist view of conflict because it drives the team to exceed expectations and achieve results and targets well in time. The above situation can be analyzed using the b. Step 1 The associates and managers are aware of the stringent cost cutting measures prevalent in the organization. Minus the designations and hierarchy, the associates and managers share a healthy and friendly association. The stakes for both the parties involved are high; for associates it is their career goal while for the manager it is a target which needs to be completed. Step 2 Both the entities involved are aware of the conflict now; career goals versus cost cutting. This awareness and knowing is defined as cognition and personalization. Step 3 Intentions were mainly driven by professional goals and responsibilities. This situation can be categorized as compromising as the both the parties were moderate on assertiveness and cooperativeness. Some costs were incurred by the manager on his books by providing monetary benefits, while associates accepted the additional managerial responsibility in the meantime. Step 4 The behavioral aspect remained close to the no conflict end of the scale with minor disagreements and misunderstandings tending towards overt questioning. Step 5 The decision was acceptable to all stakeholders involved and hence did not deter associates morale and motivation. Thus, it can be classified as a functional outcome.

#3
One of projects was nearing its end and hence there was restructuring (and also downsizing) of teams. The project wrap-up involved only 2 associates while one of the associates was appointed the Project Lead for the next project. The new project kicked off with 3 associates in full swing. The new project had a rolling plan for 3 associates in the first month, 6 in the second and then a full strength of 9 associates in the third and final month. The project wrap up for the older project suffered a roadblock when 1 of the 2 associates was transferred to other location because of family emergencies. In the wake of these events, the Project Lead of the new project had to shoulder double responsibilities of wrapping up the earlier project making sure that the new project targets were also met as decided. Also, the new team went through transitions according to the rolling associate plan over the subsequent months as new members joined in and had to pick up the pace of the project. With proper planning and team work, both the teams were able to achieve their targets and completed the projects successfully. Analysis: This case focusses on the 5 stages in the group formation model. The new project kick off involved forming of the team. The system design and architecture was achieved through storming process where ideas were discussed and their corresponding impacts were analysed. The team structure was decided during the norming stage and ground rules were set regarding the hierarchy. The team had very specific and well defined objectives which were achieved in the performing stage. The project closures saw the adjourning of the teams. An important drawback of the 5 stage formation model can be highlighted. The overlap of the project ensured that the associate who was involved in both had to encounter different stages of the formation model at the same time instance. While one project was in the performing stage moving towards adjourning, other was in the storming stage moving towards norming. Additionally, since it was a rolling associate plan, the group had reached the performing stage towards the end of the first month. With new associates adding to the group, the group had to go back to the norming stage. Thus, it is not necessary that the groups follow the sequence of the five stages.

#4
When an associate is not allocated to any project, then the employee is said to be on-bench. During the appraisal, the default rating (on a scale of 5) given to the employee who is on bench is 2. An associate, who was the son-in-law of the North India HR Head of TCS, got an appraisal rating of 4 despite being on bench. Furthermore, this particular associate argued with the HR personnel and demanded a rating of 5/5 (which was only given to star performers in the organizations). In the light of this situation, the manager of the HR personnel asked him to revise the associates rating to 5 due to his personal contacts and their influence in the organization and upsetting the employee could have serious consequences for the HR. Analysis: This incident is a classic case of Coercive Power, where the employees father-in-law wielded Legitimate Power as the North India HR head. Because of his father-in-laws power, the employee sought to leverage upon this by virtually forcing the HR into giving him a much higher rating than what he actually deserves. Out of the fear of negative results, the HR personnel revised the rating of the employee. Another type of power that prevails in the IT industry is Expert Power. This is substantiated by our primary data research survey, according to which about 89% of the people working in TCS believe that having Technical Expertise is very important to grow in the Organization. The remaining 11% believe that it is of moderate importance. Possessing technical expertise in a particular technology would give an employee Expert Power in the organization, which will help him exert influence in his workplace.

#5
An organization may undergo many structural changes, and a huge organization like TCS usually does experiences structural modifications. The Group Leader (GL) is an associate who leads multiple projects. All the project managers of the projects under a Group Leader, report to that GL. TCS was serving a Public Sector Unit (PSU) client but apparently the client was unhappy with TCS on a certain parameters. As a consequence of this, there were delays from the clients end to release the payments of TCS, the backlog of which extended to more than 6 months. This resulted in heavy losses from this project for TCS. In order to minimise this loss, the GL decided to reduce the cost of the project, for the same he released senior associates from this project, which included the project manager as well. The team members, who earlier reported to the project manager, were now required to report directly to the GL. In the aftermath, loads of issues were faced by the team members. Most of the associates complained that the GL did not empathize with the grievances of the team members as he was operating from some other location. Team members also complained about the management style of the GL, saying that it put them under additional stress. Also there were concerns regarding the appraisals, as the GL had limited visibility about the individual performances of the team members. In order to overcome this situation, the GL took certain steps like holding regular team meetings with the project team members, trying to instrument the changes in a transparent manner, building trust among the team. These measures worked wonders and the team gradually accepted and molded as per the new structure. Analysis: When the GL decided to release the project manager and take up his responsibilities, it resulted in huge structural changes in the project. This was the Cost minimization strategy adopted by the GL. There is a tendency of resist change when the stakes involved are high. In this case also, the stakes involved the jobs of the employees and hence they resisted the change in the working environment. The GL then conquered this resistance to change using following tactics Education and Communication: It is important to communicate the logic and reasoning behind the change to reduce the employee resistance, and that is what the GL did in this situation. He held a team meeting in which he explained the rationale behind the changes to the team members Implementing changes fairly: The changes need to be implemented fairly in order to minimize the negative impact. The GL also did the same and ensured that employees did not perceive the outcomes as negative by carrying out the changes in an equitable manner Develop positive relationships: The GL developed a positive repertoire among team members by empathizing with the team grievances which helped him gain the trust of the team members

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Conclusion/Observations

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Bibliography and References

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