TCS Boss Spots Thorns In Green Shoots

In less than two months, Subramaniam Ramadorai will step down as the supreme commander of the country’s largest software services company. The managing director of Tata Consultancy Services shared his views on a host of issues with Abhijit Kumar Dutta and Sambit Saha of The Telegraph during his visit to Calcutta last week. Excerpts from the interview:

Q: There’s a general feeling that the economic recession is tapering off and experts, here and abroad, are talking about green shoots sprouting. Do you subscribe to this view?
A: There are certain visible signs of improvement but there will be still some glitches. Some sectors have started doing well. But whether the exuberance is sustainable or not is to be seen. In some sectors there will be a lag effect and they will benefit once consumer confidence picks up. We, however, need to watch out. The mood is certainly better than before. I won’t call it optimism but certainly some positive feeling.

Q: But TCS as a company did well during the last quarter.
A: Yes, I think we focused on certain things. We demonstrated value proposition to our customers and, in the process, recorded volume growth. We took a hard look at our cost parameters to improve margins as well as benefit customers. Overall internal efficiency also helped us.

Q: What about achieving the $10-billion revenue target? Now you are $6 billion…
A: It will happen some day. For that, growth has to come. Right now, it’s not a growth market. We will see some more quarters of challenges.

Q: So you see more pains remaining. It’s not just one way up?
A: Maybe we won’t suffer the same drastic pain that we went through last year. But there will be some shocks, some bankruptcies and some consolidation. Economic activity will be a lot more unpredictable. I think the road ahead will be one of recovery but a slow one. And the process of recovery will be completed anywhere between the end of this year and 2011.

Q: So far, the US, in terms of geographies, and banking, in terms of verticals, have been the key drivers of software growth. Do you see a shift in this pattern?
A: America will continue to be the largest market — in terms of size, spend and absorption of technology. Other than that, Europe and the UK have huge potential. Emerging markets where we see scope are India and China because of the sheer size of their population. We have to segment the market as the level of complexities changes with countries. Like in China, language is a problem. You have to localise.

Q: Are you working with Corus or Jaguar?
A: Yes, we are working with Corus and Jaguar. We are doing some application maintenance and rationalisation of application for Corus.

Q: What is your hiring plan this year? How will it be different from last year?
A: We are going to recruit 18,000 people from campus, which is about the same as last year. There will be no lateral hiring, which was more than 10,000 last year. We have also got 13,000 people by acquiring the Citi BPO last year.

Q: What about the unique ID card project that the government has announced. Will you bid for it?
A: We will certainly bid. When it was being conceptualised, we did some prototypes and pilot projects. The domestic market for TCS is always very important.

Q: There’s a feeling that the acceptance of Indian players in the domestic IT market is low. What’s your view?
A: I would put it differently. The problem lies in the way the country has evolved with regard to IT procurement. Earlier, everything, whether it was hardware, software or services, was thought of as a commodity. But now things are changing. It’s the solution which is dictating the choice of the hardware or software.

Q: You have a plot in Rajarhat. How soon do you see work starting there?
A: We have made it clear that because of the economic situation we have deferred some of the capital expenditure plan. We are building facilities in Pune and Gandhinagar. Calcutta is now in the architectural phase. It’s possible to start work by 2010, but it will depend on the demand recovery.

Q: How will your life change after October 5?
A: Very little I believe. My appointment diary is full till December.