Tata Consultancy Services (TCS) has restructured its industry solutions units (ISUs), setting quarterly revenue targets and giving control to almost 200 employees.
The strategy of India-based IT services company is to free up senior executives to focus on long-term strategy, Economic Times reported.
TCS first broke up its business into smaller units in 2008 to drive growth in revenue that reached $19 billion plus in FY 2018 from $6 billion in FY 2009.
TCS reported revenue of Rs 36,854 crore (+20.7 percent) and net income of Rs 7,901 crore (+22.6 percent) with operating margin of 26.5 percent (+1.4 percent) for the quarter ended September 30, 2018.
TCS said revenue growth increased in BFSI (+6.1 percent vs +4.1 percent in Q1) and Retail & CPG (+15.6 percent vs +12.8 percent in Q1) in Q2. Energy & Utilities achieved +22.2 percent and Life Sciences & Healthcare gained +14.7 percent growth.
Growth was led by UK (+22.8 percent), Europe (+17.4 percent), and Asia Pacific (+12.5 percent). Revenue growth in North America accelerated to 8.1 percent, versus 7 percent growth in Q1. TCS India grew 7.4 percent.
TCS CEO Rajesh Gopinathan said — after the company’s second-quarter earnings on October 11 – that TCS had worked for two years to return to double-digit growth rates and the management would step back to look at crafting a strategy for the medium and long terms. The second round of restructuring will help the company’s senior executives — from the CEO to the EVPs – focus on delivering the future plans.
“We actually doubled down on our earlier strategy of ISUs and have created sub-ISUs. We pushed it one level down. We now have about 150 sub-P&L (profit & loss) heads who have been set up the same way the old ISUs were set up,” Rajesh Gopinathan said.
TCS has about 200 people who have direct line of sight into the business. This will assist TCS to free up more senior level talent to look at the medium to the longer term.
TCS CEO, presidents and EVPs will focus on creating three- and five-year strategy plans. TCS’s plan could include entering new markets and new service areas focused on different customers.
TCS could focus on moving beyond the enterprise IT function and look to serve stakeholder groups such as the CFO, engineering and marketing.
“This strategy will take time to unfold but lays a foundation for growth well beyond the current scale of TCS,” said Peter Bendor-Samuel, CEO at IT consultancy Everest Research.