in a Dynamic Environment - Tata Consultancy Services

Corporate Governance practices and strict
adherence to the Tata “Code of Conduct”
governs all actions and decisions made by
the officers in the Company. We believe
that these practices minimize ‘Reputation
risks’.
2.5 Operational Risks
2.5.1 Business Model Redundancy Risks
� Increased competition could result in
pressure on pricing and commoditisation
of some services
� TCS is focusing on addressing the risk of
commoditization of its business model by
focusing on innovations in resourcing
models as well as developing and
proposing new business models and value
propositions to our clients.
2.5.2 Innovation related risks
� The Company is focused on innovation.
Innovation initiatives are in multiple
forms, but all of these are focused on
better productivity through continuous
improvement in processes, systems,
methodologies and capabilities. Emphasis
on innovation also helps the Company in
moving up the value chain
� Innovation in the Company is practiced by
adopting ‘derived’ innovation that seeks
continuous improvement in every area
and by ‘platform’ innovation, whereby
multiple capability and skill teams engage
to develop innovative ideas
� The risks associated with translating all
the investments that the Company is
making in Innovation into successful
business opportunities for its future
growth are high. These risks of
investments in innovation projects are
addressed by structured periodic reviews
of all programs and investments by senior
management.
2.5.3 Resource risks
� The movement of people between
nations for providing the high-end
technical and business services skills
required by the global customer
organizations in the developed markets
including USA, UK, Europe, Australia,
Japan are governed by procedures and
legislation in each country and may result
in delays in procuring visas and work
permit on occasions.
In order to address this risk TCS has adopted a
number of strategies:
� It has strengthened its efforts to identify
and train local recruits in all these markets
� It has strengthened its Global Compliance
Process for ensuring strict compliance
with Visa and work permit requirements
and regulations.
The Company is also working closely with all its
global customers and monitoring and planning
in advance the need for such resources, to
ensure smooth conduct of business.
2.5.4 Security Risks
� The terrorist attacks in Mumbai during
Nov 2008 highlighted the need for
companies to adopt systems and process
to safeguard its people and assets as well
as ensure business continuity
� To mitigate these risks surrounding
security, TCS has a comprehensive security
plan in place which is preventive in nature
and aims at protecting its facilities from
the various risks observed from time to
time. The plan uses a blend of people,
process and technology to ensure that the
security levels are maintained at all times
in line with the risk landscape. Following
last year’s attacks, additional security
measures have been put in place,
especially to enhance the perimeter
security
� The overall security deployment is
governed by a Corporate Committee
which looks at the integrated security
requirements across the organization
globally. Periodic audits are conducted by
a group of experts, which helps validate
the deployment strategy and the need
to reinforce any of the existing controls,
etc. Concerted efforts have been made
to create greater awareness amongst the
associates.
2.5.5 Executing M&A Transaction’s risk
� Ensuring successful integration of the
inorganic growth opportunities that the
Company undertakes in line with the
goals and the underlying premise for
these transactions is a risk
� Risk mitigation action includes well-laid
out integration plans and close
monitoring and review of these
transactions to ensure that the goals and
milestones related to the transactions are
achieved.
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