Friday, September 04, 2009

TCS: N. Chandrasekaran to succeed S. Ramadorai as CEO, S. Ramadorai to take over as Vice-Chairman in a non-executive role

In a report in the Business Line today, “Mr N. Chandrasekaran will take over as the Managing Director and Chief Executive Officer of Tata Consultancy Services effective October 6. He was the Chief Operating Officer of TCS for the last two years.

Mr Chandrasekaran takes over from Mr S. Ramadorai, who has been designated as the non-executive Vice-Chairman and Additional Director

Mr Ramadorai has been associated with TCS for the past 36 years. He took over as the Chief Executive Officer of TCS in 1996 and has been instrumental in building TCS to a $6 billion global IT services major.”

According to the Economic Times:
"India's largest IT company, Tata Consultancy Services (TCS), has put in place a new management team to steer the company in these tough times. TCS announced that S Ramadorai would take over as vice-chairman in a non-executive role, while N Chandrasekaran would be the new CEO and MD with effect from October 6, 2009.

Mr Ramadorai has been CEO and MD of the Tata group’s flagship software arm since 1996. Mr Ramadorai, who turns 65 in October, will relinquish executive powers in line with the group’s retirement policy. This announcement is in step with Tata Sons’ — the country’s oldest conglomerate — decision to introduce a non-executive VC for Tata Steel and Tata Motors earlier this year.

Tata Motors went through a change when former MD Ravi Kant was made VC and Prakash Telang succeeded him. Tata Steel, too, saw a similar change, with B Muthuraman being made the non-executive VC of the company and COO HM Nerurkar taking over the reins of the country’s largest steel maker.

These appointments are in keeping with the succession policy at the group, which has stipulated 65 years as retirement age for its top brass, which covers executive director and above. Those given an extension are inducted as non-executive board members and can continue till they turn 75. The group had created the COO post in 2007 for grooming future CEOs.

In some ways, Mr Chandrasekaran’s career is comparable to that of Mr Ramadorai. Both began as software engineers and started their career with TCS. Mr Chandrasekaran, too, began his career at TCS and moved up to head the firm’s Santacruz Electronics Export Processing Zone (SEEPZ) operation which used to be its biggest development centre in the late 1990s, before becoming the global head of sales.

In 2007, he, along with three other senior executives, was elevated to the position of executive director. The significance of the SEEPZ unit lies in the fact that the GE account used to be serviced from this unit. GE accounted for as much as 10% of TCS’ revenues some years ago.

At a time, when the company is coping with a falling demand in its core overseas market, this move is seen as positive. However, analysts tracking the company said it was ‘status-quo’ and the announcement was along expected lines. "

1 comment:

  1. Well, they have made their intentions pretty clear ;-) No sense in hiding it. I think there's a time for this type of attitude. When a business is acquired by another, there is often uncertainty among customers. This type of confidence from professionals inspires confidence in return from customers.

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