Strategic management TTS Essay Example
Strategic management TTS Essay Example

Strategic management TTS Essay Example

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  • Pages: 15 (3889 words)
  • Published: May 12, 2018
  • Type: Case Study
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The employee head count foots is over 276,000. It has offices in 44 countries. Mission and Values Mission 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.

Values Leading change integrity Respect for the individual Excellence Learning and sharing These values, known as LIRE in TTS parlance, are the core values which resonate through the organization. The employees are expected to imbibe these values.

In fact, during the II_P conducted for new joiners, TTS recognizes one trainee from each learning group with a LIRE award. This effort and impetus ensures that any new joined of TTS is sensitizes towards its core aloes before he becomes a formal part of the organization pos

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t training. One glaring aspect about TTS in this section is the absence of a Vision Statement.

Prior 2010, TTS had a Vision which said it wanted to be among the top 10 technology firms in the world by 2010. It achieved its vision. Post this however, there has not been a vision statement released by the organization.

This may not have affected the organization in anyway and could have been a conscious decision on part of the management. However, we feel that having a Vision statement always provides better direction to the organization in the long run.

Structure TTS, an organization which is roughly 45 years old, has grown over the years. It is an organization that could be classified as being in its mature stage. The headcount currently is 276000. A strategic concern with this increasing number is that the agility of

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the organization could be affected.

It may not be able to respond quickly to the changing environment.

Another concern is whether the organization will be able to focus on the right sectors for future growth and how it will undertake this challenge. Both these concerns are addressed by TTS' organization structure which is designed to enhance customer focus, accountability and agility. TTS is organized into many small operational units, each with 4,000-15,000 employees, aligned to the different industry verticals. Each market-facing Business Unit owns its own resources and pursues growth in its respective domain at the best possible pace that the domain can support, with all the agility and focus of a smaller company.

We see that the present structure of TTS is vertically differentiated, depending on the Industry Solution Units (Isis). These Sills include Manufacturing, Banking and Financial Services, Insurance, Hi-Tech, Telecoms amongst others. This enables each unit to function independently and respond to the changes and challenges of its sub-environment. To that extent, each SIS is isolated from the ups and downs of other Isis. At the helm of affairs, is the corporate governance, which comprises Corporate Finance, HER and Corporate affairs.

These divisions report directly to the CEO.

The industry verticals are supported ably by the organizational infrastructure which achieves much needed horizontal linkage. This includes the Technology Centre of Excellence, the Resource Management Group, Global Consulting practice, Business Excellence and Shared Service. There is also a distinction in terms Of geographies, where the major markets Of North America, UK and Europe have been grouped as one.

Similarly, new growth markets like India, OPAC and the Emerging markets have been grouped as

one. This ensures clear focus areas for the organization to identify growth and expansion opportunities.

TTS works on the principle of "Customer Eccentricity'. The structure also enables TTS to focus on its customers. With the environment of each industry changing continuously, the customer needs dynamic solutions which would meet his requirements. The decision making n the vertically differentiated structure would be relatively easier since each SIS needs to consider its own resources and scenario before coming to a decision.

Since each SIS has its own customers, delivering the communicated value to customers becomes that much easier.

As part of strategic initiatives, TTS has units for the BOO Segment, Financial Solutions and Small and Medium Business Solutions. These have helped TTS diversify, to cater to small and medium businesses; cater to the BOO segment. On a financial front, the initiatives have helped TTS achieve non-linear revenue growth. In terms of hierarchy, TTS is a tall organization.

There is a definite hierarchical model that is followed. The team members and project leaders are generally concerned with the technology aspects of a project. The managers are concerned more with the delivery aspect.

The account heads under each SIS report to the SIS head. The SIS heads report to the CEO.

TTS being a large organization, with more than 276,000 employees, requires clearly defined policies and procedures to ensure that the functioning and administration of the organization is uniform. This means that TTS has a high degree of formalization. There is a code of conduct that has been documented. The degree of formalization sometimes makes paperwork cumbersome and tedious- the proverbial bureaucratic "red-tape". However, much of this paperwork is

actually done online.

The TTS internal portal "Ultimatum" is indeed a multi-dimensional service that takes care of most routine processes- like leave approval-to relatively critical processes like employee appraisal.

Thus, TTS has tried to figure out a way, through technology, to reduce manual effort in the implementation of formalization. Due to the SIS based division of the organization, each Industry unit works as a separate division. The units ay take their own decisions, in alignment with the overall goal of the organization. This ensures a degree of decentralization at the top level of the organization.

TTS also ranks high in terms of specialization. The employees specialist in different technologies depending on their domain, industry verticals and the account they are servicing. TTS gives an opportunity for employees to switch technologies, but this is only after they prove themselves in the technology they're working on. The sheer size of the organization could be the only factor, in terms of the structure, that could actually affect the organization. As the organization gets bigger, managing the man-power could be an issue.

This would mean more professional managers need to be hired.

Hiring professional managers could mean increased spending on resources, which may not have a direct bearing on the core processes of the organization namely technology. This could impact the revenue of the organization in the long run. However the fact that TTS has been managing the headcount so far, with a record of not firing employees even during the 2008 recession, speaks of the robust human resource management mechanism in place. It is also a testimony to the value system in place.

The structure has a strong

co-relation with the mission of TTS. The organization aims to provide "innovative, best-in-class consulting, IT solutions and services". This promise can be delivered only by having a structure which can give wholesome attention to the client's needs. The division of the organization in terms of Isis is aimed at achieving this client intimacy.

Client focus is high. This also makes it easier for the client to reach out to the vertical in question. Thus, the value communicated to the customer is delivered most times.

Corporate Governance Strong corporate governance oversees business strategies and ensures fiscal accountability, ethical corporate behavior and fairness to all stakeholders customers, employees, investors, vendor-partners, the governments of the countries in which TTS operates, and the community creates conditions necessary to foster sustainability. TTS has inherited a strong legacy of fair, transparent and ethical governance. At the top of the governance structure is the Board of Directors representing the shareholders; and various Committees on the Board which oversee the Executive Management.

TTS has unitary board structure consisting 4 of 1 1 members of whom 10 are Non- Executive Directors (including the Chairman and Vice-chairman) and 6 are 5 Independent Directors. TTS believes that a strong corporate governance is critical to enhance and retain investor trust. IT Strategy The order of the day is "summarization of IT". Businesses are increasingly using emerging technologies and finding innovative ways to manage the costs associated with these initiatives. TTS helps manage the clients business and IT priorities for the future while without disturbing current investment and technology architecture.

The consulting services at TTS are designed to communicate and deliver value to the clients. There is an

"optimized target model". This model ensures financial benefit and improved performance. This is accomplished through the following: -A systematic assessment of business and IT organizations; strategies; portfolio of applications, projects and resources; and an operating model to identify the opportunities for improvement -Designing target solution(s) incorporating industry best practices and TTS' experience with a view to reduce costs and business risk, while increasing agility, quality and capacity ;

Developing a prioritize pragmatic execution roadman with program management and benefits realization directives Corporate Strategy Sustainability of an organization can come from having long term strategies that complement the structure, mission and goal of the organization.

To this end, TTS' long term strategy is revolves around the following: -Customer Eccentricity -Non-linear Business Model -Full Services Capability -MIND -Strategic Acquisitions Each of them is explained as follows: 1) Customer eccentricity This is one of the main tenets foots and has been one of the cornerstones of TTS' success over the decades.

In fact, the mission and structure of the organization seem to revolve around this central theme of delivering value to the client, every single time. Each time, specialized services and solutions are built around the customer requirements. The industry focus of the organization makes this easier. This customer eccentricity ensures that the flow of repeat business. This is important in an industry environment which is extremely dynamic and has many major competitors along with minor ones that mushroom every day.

If the customer is dissatisfied with the service at any point in time, there is every chance he may opt for a competitor the next mime. ) Non-linear Business Model TTS being a major service oriented

organization, the revenue is directly linked to its headcount. However, this cannot happen in the long run- as the employee number would then reach unmanageable proportions. To counter this, TTS developed a non-linear Business model, where it focused on technology development. In existing businesses, Nan-linearity comes from productivity enhancing tools, frameworks solution accelerators and managed services engagements. In addition, TTS is pursuing three strategic initiatives for non-linear growth: Software Products (Asset Leveraged Solutions).

Platform-based BOO services (Process Clouds). Ion -? an IT-as-a-service solution for small and medium businesses. 3) Full Services Capability Clients used to reach out to TTS for a part of the solution or a dimension of the solution. Over the course of its business, TTS recognized that it would be more advantageous to have a portfolio Of services which would help the client view TTS as a one stop solution for all his requirements. This strategy helps TTS gain market share in the long run. The full services capability ensures that TTS is not just a vendor to clients, but more of a partner.

This helps in alluding lasting customer relationships. ) Global Network Delivery Module (MIND) TTS major serves clients around the world. Majority of the clients are based out of the US and the KICK. The essence of IT Service is support and maintenance of applications that needs to be done round the clock- 24/7. This is done by TTS by using a unique Global Network Delivery Module.

The MIND provides real time collaboration. Teams are deployed across time zones to ensure seamless integration, maintenance and servicing of applications. 5) Strategic Acquisitions Domain expansion and geographical expansion is vital to

sustain growth and velveteen over a long term.

TTS achieves this through strategic acquisitions which are carefully planned and executed. This enhances the services capability of TTS across industries and verticals. The environment for IT In this section, we try to use the PEST model to analyses the environment for Information Technology.

Political Environment -The US immigration policy has been a lot more tight of late. This means that lesser HIP Visas are issued to Indian IT companies. This affects the number of technology professionals who can be deployed on site. This could affect the revenue of the organization.

The Indian Government and other Isis are making most processes online. This opens a plethora of opportunities for the Indian IT companies. Two examples Of this are the Diehard and passport Save Kenned. In fact, ASK is handled by TTS.

This ensures revenue and partnership with the government. In fact TTS is increasingly looking inward, toward domestic markets, to tap many such opportunities. Economic Environment -The global and domestic spending on IT by clients affects the size of the projects and the revenues that can be garnered from these projects. -Indian's IT/TIES sector seems to have shown resilience to challenging market indention.

The IT spend of this sector continues to rise, as existing players expand aggressively and newer players break into the market. The domestic market for IT is fast growing. Most companies thus have aggressive growth and expansion plans in place for next year. -The attrition rate at TTS is presently 10. 6%. This is the lowest among the industry giants like Informs, ACTS and Wiper.

Low attrition means lower cost of hiring new resources

and training them. Promotions could be made from the inside - saving costs for the organization. -The currency fluctuation of the rupee versus the dollar is a actor that is affecting the strategies of TTS.

The depreciation of the rupee against the dollar would mean higher revenue. However, giants like TTS and Informs reduce their pricing in a bid to counter competition.

The increase in revenue is also offset by an increase in salaries and variable pay. Social Environment -Hundreds of institutions and colleges have come up in India over the last decade. This means that lacks of engineers graduate every year. This gives an opportunity for companies to hire from a large pool of talented youngsters. Fresh talent is always easy to mould and comes at a lesser cost in comparison tit talent with experience.

The average working force in TTS is around 28 years. This is a relatively young workforce. The average experience, considering the minimum qualification is a B. Tech, is around 5 years. This experience would indeed help the organization. Technological environment -IT is a field that is subject to constant change in the technological environment.

It is a field characterized by constant innovation and dynamism. The competing firms innovate on a regular basis to come up with new technology. Technology like cloud results in a paradigm shift in the way the whole industry functions.

Thus an organization like TTS needs to be nimble and agile to adapt itself to these changes.

TTS has actually been slow in adapting to cloud, in comparison with other organizations. A SOOT Analysis of TTS Strengths Strong Ethics and Code of conduct TTS being an

organization under the renowned DATA Group, has a strong grounding in values and ethics. There is a lot of respect for the government policies- both national and local. "The DATA Code of Conduct' clearly lays down the guidelines for the employees, in terms of what the organization expects when it comes down to values and ethics.

New joiners are required o attend sessions which sensitive them on the code of conduct expected of them. This ensures that a sync with the values and ethics when the joined formally becomes a part of the organization. Extensive global reach TTS has a global footprint. It has 1 99 offices in 44 countries.

This global presence ensures market penetration. TTS can reach out to clients based out of major markets like the US; It can also reach out clients based out Emerging markets like Africa. This way, there is always a cushion in the sense that an economic or political crisis in a market may be offset by robust growth in there markets.

Thus the impact of a downturn is on the revenue is low.

Strong brand equity: Data Group operates in 80 countries across 6 continents. In whichever country it operates, the name DATA resonates Trust and Excellence. This ensures strong brand equity, making it a lot easier for TTS to enter into a new country. Consistent Financial Performance The hallmark of TTS has been a consistent financial performance over the last 5 years. This is significant, considering the fact that the IT environment faced a severe jolt during 2008 and is still recovering.

The consistency has been achieved by staying relevant to the changing customer needs

and requirements. Market Leader TTS is among the top 10 technology firms in the world. It is the top IT Services firm in India. It has a substantial market share of 29. 96% of the top 5 IT companies. The tag of a leader means that it can attract the best talent from across the country.

The best part about TTS is that it is able to attract and retain the best talent. The market leader tag makes this a lot easier. Innovation Labs TTS has 19 Innovation Labs with strong links to start-ups, academia and alliance partners.

This ensures that there are continuous attempts made at innovation. Innovation is indeed a critical factor fifth has to stay ahead in the IT race.

Employee Management Skills TTS has an attrition of 10. 26%. Counterparts Informs and ACTS have attrition rates Of 16. 9% and 12. 3% respectively. This is a reflection of the excellent employee retention ability of the organization.

Excellent employee management ensures that the best talent is available to be leveraged as per client requirements. Weaknesses Consulting capabilities The consulting capabilities of TTS are not on par with the best consulting arrives in the world.

TTS has a long way to go if it has to match the ability of an IBM. TTS has to look out for more best-in-class consultants to challenge the leaders in the league. Significant exposure to financial services TTS has a significant dependence on the IFS sector. The IFS sector contributes to 45% of the overall revenue of the organization.

This could prove to be a drawback in the long run. In case of an economic downturn, like

the one in 2008, the financial institutions would be the first ones to be hit. And if the financial institutions are hit, it is going to directly affect the revenue f TTS.

This is a weakness of TTS which it has tried to address by diversifying to different industries. However, fact remains that IFS remains the major focus area of TTS and its major source of garnering revenue.

Focus on Service and not on products Product focus is one way of achieving non-linear revenue growth. However, this area is receiving more attention only of late in TTS. The product offerings of TTS need to be developed so that they contribute significantly to the revenue. An excess dependence on service would necessitate more headcount- which could affect the revenue.

Huge bench strength The headcount of TTS being more than 276000, at any point in time, there are tallest 10-12% employees on bench.

This translates to roughly 30000 employees on bench. However, the fixed salary for these employees has to be paid out. This directly affects the revenue of the organization. Also, long bench periods could contribute to employee frustration and dissatisfaction, which could reflect negatively on the human resource management in the organization. Opportunities Growing Small and Medium Businesses TTS could look to focus inwards, towards the domestic markets.

There are undress of small firms which are looking for service providers.

Offering to serve these customers would ensure a steady source of revenue and greater market penetration. This would provide a cushion when the global scenario is uncertain. Focus on Innovation The IT environment being extremely dynamic and innovation oriented, it offers a lot of opportunities

for firms which have the ability to bear the risks and costs of innovation. TTS has plenty of opportunities in this regard. TTS has recognized this and has established 19 Innovation Labs for R&D. In fact, it spent 2% of its overall revenue on R&D in fiscal 2013.

Operations in China Though there are entry barriers in China, it is an abundant market for an organization like TTS with plenty of untapped opportunities. TTS could venture into the Chinese IT market on a larger scale and increase its operations in China. Product and services expansion in advanced analytics Many markets are now mature, with shrinking decision cycles and short time- to-market. Threats Employee costs TTS is presently hiring employees on a large scale. With inflation, the salary expectations of the employees are bound to rise.

Thus, TTS would have to spend more if it were to hire more employees.

Somewhere along the line, it becomes imperative for TTS to rethink its hiring strategy. Global Entrants TTS faces stiff competition, both in India and at a global level. Informs and ACTS keep pushing TTS constantly in India and outside. Globally, firms like IBM and Accentuate are a significant threat to TTS because of their superior offerings, especially in high-end consulting. TTS will have to continuously strategies, improve and upgrade to match these competitors.

Low-wage countries The advantage India had in the early years of the IT boom was the fact it is a source of free labor.

It was an ideal destination for outsourcing, especially for the US, UK and other North American and European countries. This advantage is now getting reduced due to the emergence

of new low-wage countries in the global IT map. Countries like China and Philippines are all set to eat away into the market share of Indian IT companies. India would now have to compete with these countries, in terms of pricing and also the quality of offering. New legislations and VISA policies Tax regulations in India and also the host country for which TTS is providing services affect the operations and revenue of TTS.

The stringent VISA policies of certain countries have forced TTS to rethink its hiring strategies onsite and also the onsite-offshore distribution of personnel. Analysis of TTS using Porter's five forces The Threats of new entrants In recent days, the number Of Startups and freelancers that Offer strategic consulting for information technology services have gone up because of the lucrative market and the ease of setting up a business given the technical know- how. Even though their cumulative effect will not match the economies of scales achieved by TTS, it is significant enough to eat away the market share.

Thus the threat of new entrants could be classified as moderate to high. The Power of suppliers TTS has gained competitive advantage by establishing long term strategic alliances and partnerships with organizations like Oracle, SAP and Infra.

TTS with its alliances provides enterprise solutions to complex business problems faced by the clients. Due to the uncertainty in the economy, the partners could demand for a higher share which can affect the revenues of TTS. TTS being a service organization, thrives on abundant human capital. They major recruit from engineering colleges for their entry level roles of

Assistant Systems engineer-Trainee.

They do recruit from

esteemed business schools where they offer managerial roles. Due to the vast talent pool and strong strategic alliances, the power of suppliers could be termed low. The Power of buyers Banking and Finance services constitute a major portion of TTS' revenue as the market is dominated by the large banks and insurance companies. If it caters services to a bank which is heavily into mortgage business can have a huge impact in case of any crisis, as was evident during the recession.

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