We asked what is the one thing he wants to change about TCS. MD and CEO Rajesh Gopinathan was prompt in his reply: it's all about showing more aggression in participating in new opportunities. He said staying relevant in an ever-changing world is the key to making your presence felt. ETNow's Nikunj Dalmia also spoke to Ajoyendra Mukherjee, EVP & Head – Global Human Resource.
Congratulations on another sterling quarter. I am frankly running out of words now to congratulate your performance. It has just been excellent. I mean it is so heartening to see what you have indicated a couple of quarters ago. You have actually delivered that. Where do we go from here?
Rajesh Gopinathan: It is exactly like you said what is best about this years performance. It is not just the numbers, but it is a fact that all elements of a strategy have come together nicely, whether it is our focus on business for automation.
Even more importantly, our talent strategy and confidence in doubling down on our talent. Each and every TCS staffer should be really proud of this performance because it is TCS' core performance and we are proud of each of our people and the passion. That is what has stood out in this very nicely. That is because the strategy is working, the team is fully charged up.
We have shown that we have in it to transform from in-site and TCS pride and fashion is coming out. On top of it, we have the numbers because the exit on a constant currency basis is at about 3.6 per cent, which is almost a percentage point higher than what it was same time last year.
If you look at segments, we had a wide variation in performance. BFSI was very weak, retail was very weak and North America operations were very weak at the beginning of the year. Every line is doing very well, they are close to the average. Some are slightly below, some are slightly above, but you know the whole portfolio is stable and we are very confident of taking on whatever is ahead of us.
The word cautiously optimistic is officially out of your dictionary now. It is the word confident which is back.
Rajesh Gopinathan: Confident and yet cautious.
I am just not forcing to choose words, but I am trying to gauge your body language and your body language is now not starting with cautiously optimistic. It is starting with confidence and for me, that is a clear indication of what you see forward.
Rajesh Gopinathan: Absolutely, as I said everything both from a strategy perspective, from the team perspective, from the opportunity side, it is out there and it is up to us to execute and capture it.
This must be an emotional day for you. I have been interacting with you for about 15 years. Now you have been with TCS for nearly three decades and you have really managed to build a world-class team and an institution itself.
Ajoyendra Mukherjee: Almost four decades yes and we have been interacting for so many quarters. It has been a great experience as far as I am concerned. I joined as a kid when I was 21 years old directly from BITS Pilani. I came into TCS as a trainee and it has been a fantastic journey. Each and every day has been great, great learning from the kind of people we have had in TCS. So, it is amazing.
The productivity numbers are showing. Three years ago, you were looking at investing in reskilling and rekindling your workforce. Are the numbers looking that strong because of the large investment which TCS decided to park with their employees when everybody was in a sense downsizing? TCS was hiring and when everybody was retraining, you were actually reskilling.
Ajoyendra Mukherjee: See, our whole philosophy or faith from the very beginning has been that it is technology that becomes legacy, people never become legacy, right? Chandra articulated it once. See from where we started. It was mainframe from where we went into networks, from there we went into Unix to PCs, then Internet and all that. Technology has been changing over a period of time.
If you look at TCS investment, core belief in its own people has been solid and there is a business reason for it because if you are working for a customer and in an industry you get to understand what that customer does, how that customer works and what that industry is doing. You get a lot of knowledge which probably you cannot really document it somewhere. So, it is something that is inherent in you. That is very difficult to let us say replace.
You will find technically an equivalent person, but you can never replace a TCSer who has gone with let us say seven or eight years of experience. That is critical and that is the reason why we planned our strategy and everything looking at the way digital was coming in. We knew it is going to be digital. As a result, we had no option but to invest. That definitely is the strength.
I am just looking at data. What we got at the press conference, which is that your order booking now is north of $20 billion which is more than what you have actually done for the full year, which means if you execute this order book double digit growth is not only bagged but it is here to stay. I am putting 2 plus 2 together. Is my arithmetic right?
Rajesh Gopinathan: The numbers are right in the sense that this quarter we are close to TCV of $6.2 billion which is our highest ever. One quarter of very large deals is reflecting. How this translates and how this plays out, I do not want to get drowned into it.
As I said in the beginning, we are confident, well positioned and we intend to maximise the opportunity in front of us and the core of it is what Ajoy said and what he epitomises. It is not about this year or quarter or so. When we think about technology, this rate of change of technology will only keep on accelerating. That will actually make us even more relevant to our customers because of the contextual knowledge that Ajoy spoke about and our ability to continuously retrain our people.
Ajoy himself over 39 years has seen the kind of different areas that have been worked on. That is the core belief that we have. More importantly, we have to make technology work in the context of the customer and that is the magic sauce of TCS. Ajoy as I said epitomises what TCS is all about 39 years of continuous relevance.
The digital business is growing at 50 per cent. $6 billion is broadly where TCS is sitting at, which means by 2021, it should be nearing $10 billion. What happens when that becomes $10 billion?
Rajesh Gopinathan: In fact, we are now starting to think about so, even talking about digital going forward and this year is over, it is now broad based, it is almost a third of our revenues. We need to start thinking about how we think of some other constructs to describe it, but to your question what happens when it is $10 billion or $15 billion, it is the same question as to when the Web is growing strongly. After the web saturates, we are betting on human ingenuity.
I am sure that you know this is not innovation that will happen. There will be something new that will come about, there will be new business models, there will be new exploitations of new technologies to re-imagine existing industries and business models. Our positioning is to ride each wave, our positioning is not to ride an SAP wave or an ERP wave or a Web wave or digital wave.
Our positioning is to make technology work for companies, societies, people and therefore, we are technology agnostic and that is where the training and talent strategy is so critical. I am sure that something new will come around and we need to be disciplined, we need to be focussed to capture that and that will carry on in the same way.
You also mentioned in the press conference that the wage inflation this year is going to see a hike for employees. It would be good which in my terms I would use the word, wage inflation. Could you throw some more light on it, what exactly are you trying to imply here? Is there is something which we should take real note of in terms of cost planning for the next year?
Ajoyendra Mukherjee: As far as the increment numbers are concerned, which I mentioned in the press conference, it will be varying from country to country and it depends on inflation and the country. It depends on the benchmark that we do in our compensation vis-à-vis the market and where we stand and based on the competence.
On average, it will be 2 per cent in some country, 4 per cent in some and 6 per cent in others. That is the kind of wage hike that will be there and it takes into account business unit performance. It takes into account individual performance.
Now, this wage hike will definitely result in an increased employee cost, but then there are various ways of taking that into account. One is of course the business mix, one is the way you are managing the whole let us say operational efficiency if you want to term it that way and then on the other side is also an expectation in terms of the overall macroeconomic point of view, the way the currency would react. All that are factored in.
As a result, actually it is a challenge I am leavinRead More – Source