The story of the Indian pioneer in the information technology (IT) space is one of hard-fought victories against heavy odds. But it is also a story of how the same odds shaped it differently from others in the industry.
The popular storyline of the Indian IT industry's saga attributes its grand success to the dismantling of the Licence Raj in the early 1990s. But if you ask S. Ramadorai, vice-chairman of Tata Consultancy Services (TCS), a company that is widely regarded as the pioneer in the Indian IT services space, you get a completely different take.
Mr. Ramadorai's book, The TCS Story… and Beyond (published by Portfolio, Penguin India), chronicles the difficulties of a constrained economy, but points to the enormous “positives that we carried from that era”. To get a sense of what he is trying to say, one has to appreciate that TCS, unlike most of its other peers today — Infosys, Wipro, HCL Technologies and many more — was not a child of the outsourcing boom that peaked in the last decade.
Deep domestic focus
TCS is not only the largest Indian IT services company but is also probably the one with the deepest domestic focus among the Indian IT majors. Mr. Ramadorai, who has been with TCS for nearly four decades, says the environment in which the company began its journey in 1968 conditioned both these crucial facets of the company.
The common narrative of TCS often misses the role that the Tata Group played in building the company. The fledgling company began its journey in 1965 as a centre that processed data for the group companies in the Tata fold. It then rented an IBM 1401 for its data centre operations.
Mr. Ramadorai makes the interesting observation that the tight controls on imports (there were good reasons for these in a newly independent country seeking self-reliance, but these are not part of Mr. Ramadorai's narrative) resulted in a computer hardware shortage even as software professionals were relatively easy to come by. This situation has been completely reversed today, he notes.
With the Burroughs
Mr. Ramadorai's narration of TCS' engagement with Burroughs, one of the big-three in mainframes in the early 1970s, is interesting because it provides an account of how TCS used the prevailing import restrictions to venture into new areas of expertise.
Burroughs Corporation, which in 1986 merged with Sperry to form Unisys, suggested a joint venture with TCS. TCS was to help the foreign company wade through the regulations covering imports into India.
In fact, TCS had to make a commitment to the Government that it would export twice the value of the import (at that time $30,000) over a five-year period.
This deal provided TCS with an opportunity to provide software services to Burroughs and help it upgrade its platform. “It also provided us with an opportunity to send our people overseas to implement similar changes at client locations,” observed Mr. Ramadorai in his book.
Burroughs, he pointed out, asked TCS programmers to help its clients in Europe and America who wanted to migrate from rival platforms such as IBM to its own systems.
Mr. Ramadorai lists three important “positives” from the so-called Licence Raj era that helped TCS. “It nurtured in us the ‘can do' attitude, which enabled us to surmount the odds against us; second, it taught us to do more with less, making us optimise the use of resources because they had cost and time implications; and three, it taught us to create disruptions that laid the road for the IT industry in India.”
TCS' other big strength, its domestic focus, is also the result of it being steeled in the cauldron of a “closed economy”. “From the beginning, we knew we lacked technology of any sort, but we always believed that what we did in our own country will have an impact on our business,” he said. “The Indian market was extremely important because it was our home base.”
The “head start” that it gained within India was what enabled the company to establish platforms and design solutions in several key segments that required a well-developed IT infrastructure — for banks and insurance companies, the stock exchanges and in areas such as online processing of passport applications. “What we have built means that today a majority of financial transactions in India go through TCS-built systems,” he observes.
Mr. Ramadorai's rich narrative binds his own personal story with that of the company that he was closely associated with. But unlike the many other smug narratives of those in the IT industry, it offers food for thought, especially in terms of how the policies of the past ought not to be pejoratively dismissed as a burden on the entrepreneurial spirit.