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The Pulse of Multinationals

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The Pulse of Multinationals

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Casting an eye across the globe, there is nowhere its shadow isn't cast. Its services may just lie behind that ATM card you use or that express delivery package you received. How does India's biggest information services concern intend to expand its presence in the Taiwan market?

The Pulse of Multinationals

By Hsiao-Wen Wang
From CommonWealth Magazine (vol. 437 )

It's possible that Taiwan's closest contacts with India run through that ATM card in your wallet.

Behind each deposit or foreign exchange transaction at Cathay United Bank, Chinatrust or Taihsin Bank lurk the faces of the Indian programmers who wrote each line of code for the account services software program those institutions use. When you fly EVA Airways on business or holiday you are likely unaware that the engine maintenance software the airline uses is provided by Tata Consultancy Service (TCS), India's biggest information services concern.

And when you track a package on the DHL website, it can pop up to inform you of that package's whereabouts and estimated time of arrival courtesy of TCS, the US$6-billion company that calls 49 of the Fortune 100 as its customers.

TCS's rise took a different route than that of Taiwan's IT industry, but to similar ends.

Taiwan's industry rode the 1980s wave of vertical division of labor and outsourcing in the personal computer industry to kick-start a 20-year golden age for the island's semiconductor and OEM/ODM personal computer manufacturing industries as well as the IC design sector of the last decade.

India looked to its vast reservoir of engineering talent and relative familiarity with the English language, as well as a fortuitous time difference with the United States, the world's biggest economic entity, to move from software contracting into information services, creating a new commercial paradigm for outsourcing information services that would rock the global tech sector.

"We know how to serve our customers with lower cost and provide seamless experience without any time lag," says Girija Pande, regional chairman for TCS Asia.

Indispensable Artery for Multinationals

Casting an eye across the globe, there is nowhere TCS does not cast a shadow, having become an indispensable artery within the physical structure of giant multinational conglomerates.

Take British Airways, the world's second-largest air carrier serving 28 million passengers annually, for example. TCS created a custom made customer relations management software package for the airline, providing integrated analysis of its Web portal, ticketing systems and customer data regarding holiday travel packages. This helped British Airways to ferret out and secure customers and redesign its marketing strategy to tremendous success, resulting in an additional five million passengers within two years.

Indian management guru C.K. Prahalad heaps praise upon TCS as representative of an enterprise that had entered "the Age of Globalization, 3.0."

The first phase of globalization occurs when multinationals physically hit the shores of their global markets, establishing subsidiaries in the image of the parent company in various major economic entities around the world. Although smaller, these subsidiaries are like microcosms of the parent company, with full-sized production, marketing, human resources and financial organs of their own.

The second phase of globalization is when multinational giants begin integration with resources in various localities, relocating manufacturing to countries with cheap labor,and concentrating sourcing, accounting and personnel recruiting in the most appropriate areas, as if transferring some of the giant's internal organs elsewhere to allow it increased agility.

The third phase of globalization looks much as TCS does today with operations in 42 countries across the globe, its massive army of 140,000 engineers dispatched individually or as consulting teams to serve client corporations on-site. At this stage, those engineers or consulting teams are more analogous to the white blood cells and red blood cells circulating through the body of the giant.

Decade of Quiet Cultivation

In Taiwan, TCS has quietly been cultivating its market for a decade. Taiwan Semiconductor Manufacturing Corp., EVA Airways, Taiwan High-Speed Rail and Far EasTone are all current or former clients. The success of TCS has always been predicated on its last successful job and previous satisfied client, from which it continued to snowball.

When Cathay United Bank, Chinatrust and Taihsin Bank sought to update their internal information systems from mainframes to a more open system, they looked to TCS products for their banking systems platform because TCS had already done the same for the State Bank of India, an institution with more than 100,000 branch offices knowing that the system had proven solid, mature and highly reliable.

Having smoothly ridden out the global financial firestorm, the next step in the TCS strategy is to focus on Asia.

With the U.S. accounting for half of TCS operating revenue, and financial services accounting for between 40 and 60 percent of that, TCS now plans to make a big push into the Asian telecom, technology and environmental protection markets.

How can Taiwan join forces with India's brainpower to create Asia's next new growth model? The answer to that question will be jointly explored when Mr. Girija Pande, the chairman of TCS Asia Pacific, arrives in Taiwan for the CommonWealth Magazine Economic Forum.

Translated from the Chinese by Brian Kennedy

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