Information technology companies always had to be agile to survive in a fast-changing world. As they seek to stave off a mid-life crisis, these firms are rearchitecting everything, starting with their offices, to ensure employees can collaborate better and keep clients happy. Tata Consultancy Services is one company that is at the forefront of this evolution. Based in Mumbai, TCS was spread across buildingsover the city. It is now building a 15 acre, 2 million sq ft office on the outskirts.
Named Olympus, after the home of the Greek gods, TCS is attempting to change the very nature of an IT office. In an industrysuccess was seemingly determined by the size and scale of your sitting space, the new office would be colourful and without cubicles — muchthe office of a startup. Olympus will change the working model of an industry that took root in an era when ties were mandatory and hoodies were frowned upon. For much of the past three decades, India’s IT outsourcing units have been reliant on a linear development mechanism to ship software to their clients. But this mode is showing signs of wear and tear. It is time for a change.
A framework called agile is replacing the older waterfall method of software development. To put it broadly, the older process had a linear systemthe development of software happened in stages. It was more rigid and based on documentation. The client got to see the product only at the delivery stage. Agile is a more collaborative approach. Work is incremental and the focus is on rapid delivery. The client is involved throughout the project development stage. “The speed required for concept-to-commercialisation requires the agile model of software development. The older waterfall model is too slow,” says R Ray Wang, CEO, Constellation Research.
The Indian IT industry has come a long way since the 1990s. Revenue soared $100 million to $150 billion, it entered Europe, Japan and Latin America. The jargon changed. E-business was replaced by digital. But as margins become thinner, Indian outsourcers are betting the agile model will balance their profit motive with the evolving business needs of customers.
India’s largest IT company, TCS, is trying to adapt to this change and wants to move to the new way of working by 2020. “We are trying to figure out how to transition our regular, current cubicle kind of workspace to a more collaborative workspace,” Rajesh Gopinathan, chief executive officer at TCS, tells ET Magazine. “Anyone can build a cool office. You can take 5,000 sq ft and do it. But the point is if you have 33 million sq ft, how do you convert that without having to sell the company?” The person leading this conversion is TCS President Krishnan Ramanujam. Brightly coloured offices with bean bags, high wooden tables and bar stools are among the bells and whistles. Then there is the writing board. “If you write on it here, people in New York can see what you are writing and collaborate real time,” says Ramanujam, who heads business and technology services.
Adopting this model, however, has its own challenges. Pari Natarajan, CEO of outsourcing consultancy Zinnov, says: “Companies have to retrain a lot of engineers. In agile teams, there is no concept of project manager. This would require a massive overhaul to the middle management.” The agile model uses project leaders who can code and test and contribute to the process. Just managing people is not enough. Mid-level people managers will have to go back to the classroom to brush up their skills.
TCS, for example, has already trained nearly half of its 4 lakh employees in agile delivery and is in the process of creating new workspaces for them. The tech major has about 400 agile development zones and expects to have 600 by the end of the year. About 75,000 employees will move to newer workspaces. “This a staggering amount. TCS will be one of the largest companies in the world, perhaps the largest, which will be going through this kind of agile transformation,” says Ramanujam.
At Cognizant, cubicles have given way to offices with open kiosks, play areas and flexible seating. “We continue to invest in workspace retooling. With so many emerging tools and technologies that enable virtual teams, workspace retooling is a continuous journey for us,” says Pradeep Shilige, executive vice-president of digital systems and technology at Cognizant.
The agile way is aimed at taking away the uncertainty around the end product, by deploying software in stages. For example, a company wants a transportation solution. In the old model, it would spend years building the entire car and then giving it to the client. Then comes feedback, adjustment and realigning. In the agile way, the engine and seats would be made first. The cushions, windshield wipers and other add-ons come later. The basic goal would be met at each stage, called a sprint, which can last as little as a week. Each version is deployed so that clients can see what they are getting at an earlier stage, and need not wait for the end result. The process is expedited as everyone in the team works closely together.
TCS is starting to see better results because of its agile platform. An internal project to adapt to regulatory changes was completed in nine months, says Ramanujam. It would have taken three years in the old model. “The benefits are also due to what you don’t have to do than what you have to. It eliminates a lot of work. Things such as management communication, PowerPoint presentations andof that are not required because everyone knows everything,” Ramanujam adds. TCS says its model will be far more efficient and, therefore, cheaper.
Moving to an agile way of doing business also requires IT companies to change how they look at future revenues. These projects are funded not by long-term contract outcomes but by the number of teams working on a project. This removes a built-in certainty of large deals that the stock markets tend to reward.