Macro-environmental opportunities and threats for Tata Consultancy Services

Tata Consultancy Services

The more complex and challenging global business becomes, the greater the demand for unique and highly specific expertise. Given the accelerating pace of change regarding compliance, cost reductions and efficiency strategies, lean manufacturing and process improvement, many organizations do not have the internal resources to meet these challenges alone. The rapid rise of outsourcing providers is being fueled by these developments, leading to one of the fastest growing consulting and services industries globally (Pandit, 2005). Tata Consultancy Services is one of the leaders in the area of business process management (BPM), business process outsourcing (BPO), information systems development, and the relatively new areas of outsourcing research & development (R&D) (Oshri, van Fenema, Kotlarsky, 2008). The intent of this analysis is to evaluate the macro-environmental opportunities and threats for the company.

Evaluating Tata's Macro Environmental Opportunities and Threats

Tata Consultancy Services was established in 1968 as the main services component of the Tata Group. In 1995, TCS America was launched to seek out BPO and BPM projects throughout the North American markets. Tata Consultancy Services operates today in 42 countries, with offices in 140 cities, and is managed primarily on a geographic basis. The four geographic divisions in place today include the Americas, Europe, India and rest of word or other countries. Tata has also found that defining their most dominant industry segments as verticals is very effective. As a result, they operate verticals in banking, financial services, insurance, manufacturing, retail and distribution, and telecom (Sharma, Siddiqui, Sharma, Singh, Kumar, Kaushal, Banerjee, 2007). Over the last two decades Tata has emerged as a leader in the areas of consulting, IT services, infrastructure services, BPO and BPM outsourcing. They also have extensive experience in outsourcing R&D projects as well, having worked with IBM, Microsoft, oracle and others on future development initiatives (Oshri, van Fenema, Kotlarsky, 2008). Based on this unique combination of strengths and talents the company has, they have a unique set of strategic or macro-environmental opportunities and threats. The intent of this analysis is to evaluate each of these from the context of Tata's core capabilities today and the ones they are in the process of improving for the future.

Assessment of Threats

Tata is in one of the most competitive areas of the BPO market today, often facing price and schedule competition from Infosys, HCL and other global leaders in BPO and BPM outsourcing. The strategy Tata relies on to compete against the intense level of price and time-based competition they face is to focus on personalizing the outsourcing process as much as possible, creating unique and highly skilled teams to partner with customers. Tata also believes in dedicated, exclusive project managers for each specific area of large, complex projects (Oshri, van Fenema, Kotlarsky, 2008). This approach to ensuring a high level of ownership is also what sets the Tata approach to managing complex projects apart from their competitors who primarily focus on quickly interchanging experts across projects to maximize billable hours (Pandit, 2005). Additional threats include the prolonged recovery to the global economy and the frequent exchange rate fluctuations that often plague all global companies. These are minor compared to the need for managing client projects to results more effectively than competitors are, and striving to deliver measurable results.

In conclusion, Tata's ability to withstand threats and size opportunities is deponent on how effectively the company can manage the growth while focusing on client expectations and delivering excellent results over time.