With digital strength, Gopinathan gears up for TCS' next journey

The centrepiece of TCS' new push is its executive briefing centre

Rajesh Gopinathan, the designated CEO and MD of India’s largest IT services provider Tata Consultancy Services (TCS), is not in a hurry as he explains the company’s digital roadmap to Business Standard.  

He is attentive, listening to all the questions and prefers to go into details while showcasing the company’s executive briefing centre (EBC). The interview was conducted in December, when he was the CFO and VP of TCS.

"The digital story is still very vague... it’s like the tale of 'Five blind men and the elephant'. This gives a physical space to showcase our play. It puts a structure and communicates to the client our capabilities," says Gopinathan while referring to the facility which showcases the company's expertise in a visual form.

TCS is perhaps the only IT services firms within India to have such a high-end EBC. While it does sound mundane, the EBC is nothing short of a sci-fi movie where TCS showcases its journey, strength and expertise in the digital services.

With motion-sensing walls, high-definition glass walls that work as projectors, touch screen tables and LED LCD display walls, the EBC is a one-of-its-kind salesroom for customers.

The facility is nestled in the western suburbs of Mumbai is the Banyan Tree complex of TCS. Spread over 22 acres, the complex has over 1,400 trees and, in particular, a banyan tree that is over 100 years old. The complex has 51 species of butterflies and houses 2,500 bats.

The western suburbs of Mumbai, a concrete jungle and notorious for traffic jams, hardly has areas that can boast of such green cover. The centre is in stark contrast to its surrounding.

For TCS, the centre is much more than a wooded wonder or the heritage status that the complex has. The centre, just like it stands in contrast to its surroundings, is also the place where TCS is showcasing its digital strength. 

Digital's contribution to its revenue is 16.8 per cent; this grew by almost 30 per cent on a year-on-year basis in the third quarter of FY17. It is hoping that the IT industry would see double digit growth soon as there is pent up demand from banks to shift towards new technology adoption.
 

TCS' executive briefing centre

The EBC also shows TCS in a different light. It is no more about grabbing market share on price points or by the number of employees you can deploy over a project but the technical expertise that the company has in the digital environment. This is a significant move as there is a general feeling that global MNCs might take away market share from Indian IT services players due to their legacy presence in the technology space.

Since it was opened in early 2016, the ECB has seen over 100 client visits. And these vary from CXO-level officials to CTOs and teams of technical experts from the client side. State Bank of India, India’s largest public sector bank and also a key client of TCS, was also one of the visiting customers and got a bus load of its technical team to visit the centre.

While Gopinathan did not comment or give details on what has been the impact of the ECB on new business, he agreed that it would bring about a perception change about what TCS can do and the capabilities it has in the digital space.

"The first milestone has been a huge success, which has been to communicate in this space in an integrated manner. This has also helped in driving co-innovation work. This centre is focused on showcasing on client activity. We are talking about stuff which is already implemented (real customer projects) or in the process of getting implemented," said Gopinathan.

Take the instance of US-based Home Depot. TCS developed a mobile app for the retailer which allowed them to bring in seamless integration of mobile and in-store experience. While several Indian e-commerce players are still planning or experimenting with features such as augmented reality, that allows user to visualise how an item might look in their hands; visual search that allows users to take pictures of the product using their mobile phone and search for similar or same products at the store; measurement tools for different items; and geo-location; TCS has already used these for Home Depot in providing a better customer experience.

Home Depot’s example, which is showcased at the EBC, also has potential to get implemented at other retailers.

This is not the first ECB by TCS as it did have a smaller version of the facility up and running in the US, but there are bigger plans going ahead. Gopinathan explains that going ahead there are multiple horizons, as innovation at TCS is happening at various levels. The co-innovation network touches about 1,300 start-up companies across multiple technologies, academic collaborations focused on pure science research, and innovation and research happening at the CTOs lab.

"We are experimenting with customers, and works in the CTO labs, etc. The next milestone we are planning is to make this EBC a funnelling point to talk about what we are doing... We are building the framework for this," added Gopinathan.

The perception change is already evident among the analyst community which saw the centre for the first time and also got a peek into TCS' digital strategy. "The analyst meet has boosted our confidence that TCS will successfully navigate the trends of digital and automation while continuing to gain global market share in a fragmented market," said an Ambit Capital Research note after the analyst meet last year.

"Given its 'business first' (or stay close and stay relevant to customers) approach, it had made significant progress in taking in-house lab innovations to clients and converting them into successful real-life projects,” said a report from Kotak Institutional Equities.

Gopinathan points out that this is getting woven into all-out large deal wins and large customers. "We are putting the EBC visit into the client's schedule. The intent is that this centre will touch everything that is large and digital," he said. 

"Part of this is logical evolution," said Gopinathan. He further said: "This is the first evolution or technology change where we are part of it from the ground up. Earlier, when the web came we were still trying to prove our credibility to customers. Now, we have to show our capabilities... Our opportunities were limited because of our size earlier. The context is different now,” he added.

Gopinathan, like his predecessor N Chandrasekaran, is not looking short-term when it comes to digital. "In the next four or five years, digital will be 50 per cent of the business and in 10 years it will be 100 per cent but then we will have another technology shift we will be facing. What matters is customer confidence. At a time when the market is not doing too well we have taken market share practically every year in the last five year in every industry segment. As long as you are able to take market share that’s what matters,” concludes Gopinathan.