TCS Devising Plan For Higher Revenue Growth

Bengaluru: India’s largest IT services provider, Tata Consultancy Services (TCS) is looking at a strategic overhaul for increasing its revenue base through more capacity-led initiatives. According to industry experts, recent appointment of Chief Operating Officer & Chief Strategy officer is seen as a step in that direction as the company eyes next phase of growth after crossing $30 billion revenue mark in FY25.

“TCS needs a strategic overhaul or new strategic direction given the high revenue base. Recent appointments for CXO level roles have come from outside, which is very rare for the company. It indicates that the company may be focussing on new capacity building on the back of development in the AI space. This can also be seen as a step in succession planning,” Pareekh Jain, an IT outsourcing advisor & Founder of Pareekh Consulting, told Bizz Buzz.

Last week, TCS announced the appointment of Aarthi Subramanian as its new President and Chief Operating Officer. Subramanian moves to TCS from Tata Sons, where she served as the Group Chief Digital Officer. It has also appointed Mangesh Sathe as Chief Strategy Officer (CSO). Sathe has been the CEO of Tata Strategic Management Group with focus on strategic initiatives of the group. He was earlier with Boston Consulting Group (BCG) & PRTM Management Consultants.

These two appointments are being seen as a move to give strategic direction to the company as AI-led development poses risks to traditional business models.

“The COO role is likely to be focussed on new capability development. As she used to head the retail vertical in TCS and has exposure to digital initiatives of the Tata group, the company will focus on more generative AI-powered solutions under her leadership,” Jain said.

With the appointment of a Chief Strategy Officer, sources in the know said the company wants to go back to the drawing board and devise plan that can take the firm from current $30 billion towards a $50 billion mark in coming years. To achieve this, the Tata Group company may focus on more acquisitions, joint ventures and related steps, which has traditionally been not followed by the firm.

“The company may focus on joint ventures, M&As and other capacity-building initiatives in the future as the company needs a different script for accelerating the revenue base from $30 billion to $50 billion level. And delivery-led transformations are likely to be on company’s radar,” Jain added.

Meanwhile, sources in the know said that more Indian IT firms are likely to brainstorm and devise plans to navigate the business risks arising from AI and generative AI applications & solutions.

“Indian IT firms understand that they have to be ahead of the curve to cash in the emerging opportunities in the AI space. They need different strategy for achieving this. More companies are likely to follow suit after TCS’ such moves,” said an industry source.