Margin game

Writing this blog from Istanbul Ataturk International airport. (Having my favorite Starbucks coffee while I write this). It’s a different experience to visit a different country, which has loads of history. I was first amazed by the cultural mix of this city.


Back to business, TCS has toppled Relience Industries as number one in terms of market capitalization. Given the global economic situation, the kind of growth TCS has reported is tremendously impressive. Not long ago, many investors believed, even within Information Technology sector, that rival Infosys has bright future. Though TCS was always ahead in terms of revenue, Infosys got all the attention. Over the years, not only it has reversed but TCS is the biggest company in India in terms of market capitalization

While the two successive downturns of 2008 and 2011 in the US and Europe- from which Indian IT companies earn the bulk of their revenues- ravaged rivals like Infosys and Wipro, TCS has held its grounds. The TCS scrip, at 526.80 RS on Jan 1 2008 (Adjusted to bonus issue in June 2009) gained 147% since then to 1305 RS on October 18, 2012.

Since 2009, TCS has more than doubled the revenue gap over Infosys. Infosys is always known for its better margins but in recent years TCS has bridged the gap as well.

Imagine improving the operational efficiency while managing close to $ 11 Billion revenue.

What TCS have done correctly?

• It focused on infrastructure management much earlier than its peers and that is the fastest growing service line in the Industry. This clubbed with business transformation deals pushed TCS ahead of curve. Customers just seem to love the pro-activeness TCS brings in to its engagements.

• It has been able to maintain leaner cost structure than Infosys/Wipro. That has helped it maintain profitability despite getting into low billing contracts in emerging markets or running infrastructure systems. This is what its rivals call ‘Under Cut’. But amazing part is, even if playing cost game the profitable numbers look good because the attention to cost angle.

• It has been aggressive in investing in new growth geographies such as Latin America and parts of Asia Pacific and Europe. Clearly understanding the difference between cost and investment.

Another angle to this whole story is the management and the leadership. It’s extremely important to have a clear strategy and work towards that with great amount of energy and passion. TCS seems to have done exactly that while Wipro and Infosys struggling to align their management structure. TCS restructured to position itself to serve customers better, constantly focusing on customer needs and reinventing itself to make business simple for customers; doing all these while focusing on delivering the quality services and adding value.

This strategy seems to be working for now.

Pain-Gain of reorganization

The company where I used to work earlier, used to get reorganized on regular basis; then it didn’t hit me much because reorganizations doesn’t really change how a junior management guy works.


But, I am experiencing yet another reorganization now and I was thinking about the difficulty of this whole process. Every reorganization seems to be aimed at ‘better alignment with customer needs’ and ‘to become more nimble and responsive to customer needs’.

However, imagine a major structural change at the top will have eventual impact at the operational level. New guy, different strategy, middle management have to align themselves to this need and it all takes little bit of time.

And top leadership do matter, I have been advocating this aspect since for a while now. Change in CEO/top management can change fortunes for company (Look at Geometric, it seems to have completely transformed with new leadership)

Question really is how much customers will be impacted by all this? Any changes done without impacting the operation and for better focus towards customers will be appreciated largely. However, what if customers have to adjust to new way of working regularly?

Answer is not simple.

But, reorganization done at correct way, brings lot of energy, brings competition & focus. This also allows executives to re-align, refocus and re-prioritize themselves.

A Journey called life

We have celebrated our company’s 9th anniversary, on 6th October.


We have gone through many milestones, metamorphosed ourselves, made mistakes; learnt from them; started many initiatives, as management team made some decisions; most importantly we grew; in business, in size and in experience.

Personally speaking this also marks my three years in SPAN (Earlier IONNOR); incidentally I gave interview on this very day. It has been a satisfying, rich experience so far. Started with a Norwegian company, (I had to admit, I didn’t know about Norway before this) started working on IT Operation kind of business (I again need to admit, I didn’t know about IT Operation work, never heard about ITIL and never knew there is some business to do with servers/networks/storage; looks quite funny now); met some wonderful people who only enriched my experience.

Most importantly it gave me an opportunity to build a business from scratch. It was wonderful experience, setting up processes, business models, offerings, presetting to prospects (Without getting disappointed), sales processes and importantly start working towards winning business, making partnerships and creating customer base and don’t get defocused when criticisms were made. It all seems now as if it just happened during the course.

I need to admit, the team made all this possible and I am just a medium to do my part of the job. However, what is important is the experience I personally gained during this journey; which can’t be matched.

These last three years also marks my new stage of life, more exploring, more passionate, and more intense. Started looking life with different perspective, built passion on many new things and started dreaming again. In this journey called life, you meet some people whom you think are just made to share your dream, vision with. It’s all about finding those wow moments in life and I think I found my wow in last three years.

Incidentally, until now I am not able to come to a conclusion as how did I make this decision to come all the way to Chandigarh? What is that connecting the dot moment?

Our life has so many dots, which we never understand when we go through that phase. But, if we think back and try to connect the dots, the meaning comes out, the clear path comes out, and then we understand why those dots came in our life at first place. Simply put we will understand all these dots contributed to what we are today.

I am sure the future looks even brighter, even more interesting and canvas is even bigger now. Sky, it seems, is only the limit.

But, I felt of stopping for a moment, look back at life; smile and then move forward, in this beautiful journey called life!