TCS Revamps Organization Structure to Leverage Domain Knowledge

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(Bloomberg) — Tata Consultancy Services Ltd. revamped its organization structure as it seeks to leverage the business expertise of its senior executives to win higher margins from services such as artificial intelligence and cloud. 

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The company has aligned itself along seven business groups that cover banking, financial and insurance industries to healthcare to energy to retail, Chief Executive Officer K. Krithivasan said in an internal email seen by Bloomberg News. Each group will be headed by a senior executive. The company said Saturday it’s appointing six executives as senior management starting Aug. 1.

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The new operating structure will regroup existing so-called industry solutions units into key business groups, the company, Asia’s biggest outsourcer, said in an email statement. “Based on the discussions with customers and associates over the last couple of months, we believe, TCS can deliver the best value to the customers by synergizing its domain and contextual knowledge across units.” 

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Krithivasan took over at the start of June after his predecessor Rajesh Gopinathan resigned in March in a surprise move. India’s software services sector, led by TCS, is facing a slowdown as customers across industries curb spending to cope with higher interest rates and elevated inflation. TCS is among companies trying to expand to higher-margin services powered by technologies such as artificial intelligence to fuel growth.

The Economic Times earlier reported the revamp, saying Krithivasan scrapped the organization structure set up by Gopinathan on the basis of size of the clients. 

The changes “will help in deepening customer centricity, which is pivotal to our growth,” the company said in the statement. 

Earlier this month TCS reported profit climbed 17%, beating analysts’ estimates, and sales rose 13% in the first quarter ended June 30. Harrick Vin, who is part of the senior management personnel, has been appointed chief technology officer starting Aug. 1, according to the internal email. 

—With assistance from Rakesh Sharma.