Discussion: Boosting Revenue Growth
Discussion: Boosting Revenue Growth
In this matrix structure, each project has two managers equally responsible for the project in a location. One manager is in India and the other is at the client site. They work out among themselves how and when to deal with issues. And both managers are equally responsible for customer satisfaction, project deadlines, and group revenue. The new structure (Figure 3.1 ) enables Cognizant to work more closely with its clients to focus on improving operations. That is, the new matrix structure makes it possible to build IS that the cus- tomers wanted.
During the same time period in 2008, the largest outsourcing company and software exporter in India, Tata Consultancy Services (TCS), also found that growth led to problems. “As we scale up over 100,000 employees, TCS needs a structure that allows us to build a nimble organization to
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56 Organizational Strategy and Information Systems
capture new growth opportunities,” said then TCS CEO and Managing Director S. Ramadorai.1 Growth led to a high volume of issues that needed the attention of the CEO and COO, and eventually it was difficult to keep up. At the same time, there was a need to spend significantly more time investigating new potential markets and new strategic initiatives than the CEO/COO could spare. In 2011, the new TCS CEO N. Chandrasekaran modified the structure and added a new layer of leaders to oversee the businesses and free up their time to work on strategy (see Figure 3.2). The new layer focuses on customers and aims to boost revenue growth.2
While both Cognizant and TCS are large Indian outsourcing companies that found they needed to reorganize to respond to problems resulting from growth, their problems were profoundly different. Cognizant’s main prob- lem was its lack of necessary information flows between the software engineers in India and the customer service managers on the client location. Its complex problems resulted in a correspondingly complex matrix structure. It focused on the delivery of information systems that reflect refined technical solutions to their problems to its cus- tomers. Its new organization structure both improves customer responsiveness and necessary information flows. It focuses on system development and delivery and seeks to address the information flow problem that Cognizant previously experienced in building systems.
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