Very unfair criticism to call TCS one-trick pony: CEO K Krithivasan – The Economic Times

Tata Consultancy Services (TCS) chief govt K Krithivasan cites world macroeconomic uncertainty that has made purchasers cautious on spending for the IT business bellwether final week posting a fall in greenback income for the third consecutive quarter. Talking to ET’s Beena Parmar, Himanshi Lohchab and Surabhi Agarwal, Krithivasan dismisses issues concerning the firm’s development being hinged on its community cope with BSNL, saying TCS shouldn’t be a “one-trick pony”, and stresses that the $30 billion agency shouldn’t be shedding market share to anybody. Edited excerpts:

What triggered the income to shrink for 3 consecutive quarters, one thing extraordinary within the case of TCS?

Our worldwide income was nonetheless constructive final quarter. I am not being defensive about this however the scenario has been unsure out there. A number of the indicators you see — client confidence and uncertainty index — all of them aren’t trending in the proper course. The airline and the retail business are struggling. And the auto business shouldn’t be doing effectively, due to the confusion over EVs (electrical automobiles). The way in which it was supposed to select up, it hasn’t. There have been a number of of those elements, and a few of them come from commerce discussions. Due to the uncertainty, prospects are attempting to hit the water dry… Presently the main target is on programmes that would cut back prices; basically value optimisation programmes.

I’m not glossing over the truth that worldwide (income) has not grown quick sufficient. I’m simply correcting issues that worldwide final quarter (January-March) had minor development, this quarter (April-June) had a minor degrowth. Basically, it’s been that worldwide (income) has been very static. And home (income) has been topic to no matter occurred in BSNL.

Is it truthful to say that TCS has depended an excessive amount of on the BSNL deal over the past two years; it is like being a one-trick pony?

It is a very unfair criticism to name TCS the one-trick pony, as a result of our annual income is now above $30 billion. And BSNL might be about $1 billion or one thing. So, calling $1 billion out of $30 billion and saying TCS is a one-trick pony is a disservice. If TCS is getting impacted, different gamers are additionally getting impacted. It isn’t that anyone is rising at 10% and we’re rising at 1%. On the identical time, we aren’t shedding market share to anyone. We’re doing fairly effectively and we’re taking part in nearly all of the alternatives out there.

You stated you count on the worldwide enterprise this 12 months to be higher than final 12 months. So, what offers you hope? How do you proceed to maintain the corporate rising amid this uncertainty?

One of many massive strikes that we did not too long ago is to align a few of our service strains round our massive bets. After which we spruced up our administration group round that with our COO (chief working officer) coming in, focusing particularly on service strains. After which desirous to infuse AI in each a type of service strains and attempting to go together with the built-in options to our purchasers. So, we’re taking quite a few steps and dealing with our key prospects to extend the adoption of AI and different applied sciences.

Additionally Learn: Can TCS overcome short-term challenges to achieve its FY-26 growth targets?

TCS has a brand new COO in Aarthi Subramanian, and she or he is new service strains. How will there be a cut up of duties, and can there be extra senior stage adjustments?

As for Aarthi, presently she is concentrated on service strains and attempting to see how do you sew these multi service line alternatives, and the way do you ship profit to the shoppers, leveraging new applied sciences. And in addition growing the entire functionality and expertise inside the organisation. So, her strategy presently will likely be from a service line perspective. However in any other case, organisational change is a steady course of. We additionally bought Mangesh (Sathe as chief technique officer), the place we thought we have to have somebody who will deal with operating a Technique Workplace.

Are you seeing new competitors coming from smaller corporations bringing in newer fashions? How do you see the IT companies mannequin to evolve within the subsequent two years with AI?

One, undoubtedly newer competitors will come. And lots of of them consider that they’ll present the identical service at a unique value level or totally different productiveness varieties. On the identical time, corporations like TCS have an inherent benefit as a result of the expertise by itself would not provide the outcomes. We’d like the contextual understanding of what works for a given buyer since you’ve been seeing this AI wave for nearly the final two and a half years. However nonetheless we’re asking questions on the place is our return on funding? It hasn’t actually scaled. That is as a result of organisations have a legacy and there are particular methods they work. So, it takes time.

And firms like TCS have a significantly better understanding on methods to work with enterprises to ship the outcomes. It is simply not the expertise answer alone. In order that’s the place we are available in. However on the identical time, from time to time, new competitors retains arising, anyone might have a fantastic answer, anyone might have a fantastic methodology. And once more, a few of them you compete with, a few of them you’re employed alongside as a result of there might be a complementarity the place you may work with.

Do you suppose the general mannequin goes to get disrupted in a short time?

I do not know in a short time. However there might be a disruption. I might slightly name it a transition or a metamorphosis or evolution, like corporations say 20% or 50% code is machine generated. In order that quantity will preserve growing. However on the identical time, instantly all of the programmers won’t go away as a result of anyone has to validate the code generated by these machines as a result of they aren’t 100% correct each time. So, there are such a lot of different alternatives that may preserve arising. Sure, the standard SDLC (software program growth life cycle) that we’re used to seeing by way of anyone doing a design, anyone doing coding, anyone doing testing, it is going to evolve; it is going to change and new roles might come into play.

What are your ideas on the BPO consolidation? What do you suppose are the probabilities there with AI?

We introduced quite a few brokers that we’ve got developed that we’ve got additionally deployed. In reality, I known as out two years in the past that BPO is among the industries that will get disrupted even earlier than the standard coding. As a result of there are plenty of alternatives of making AI brokers or agentic AI. Each of them have a really sturdy function right now. You’ll see that enterprise evolving quicker (than others).

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