PDF

From the editor
T
he weather in Mumbai has been damp for months now; equally
dampening has been the volatility in the stock market, the rise in
inflation and the free fall of the rupee. In the chaos that characterises
the Indian marketplace, how do companies manage to stay strong? We
looked at one enterprise that has been resilient for 110 years now, Taj Hotels,
the Tata group’s oldest surviving brand, one that dates back to 1903.
Managing director Raymond Bickson and the team at Indian Hotels
tell us that keeping a brand resurgent and sustainable through the myriad
ups and downs of the business cycle involves some simple but solid
rules: keeping customers delighted, keeping the organisation nimble and
contemporary, keeping your people engaged and happy.
The Indian Hotels cover story is about growth in terms of footprint and
market penetration. It details how the hospitality pioneer’s small business
units are tackling operational efficiencies and how they have invested in
sustainability measures whose impact goes way beyond the corporate
ecosystem and deep into the community. Many lessons there on how to keep
a brand alive and vibrant while markets heave and hustle, change and evolve.
The community is the protagonist in our special report on the skills
development programme undertaken by the Tata group. This is an effort in
which several Tata companies have invested time and resources. The big
idea is to develop India’s young talent pool to meet the growing demand
for key skills in the organised sector. This is a win-win scenario for the
community and the corporate world.
Another touching community-focused endeavour is the Uttarakhand
narrative, which explains how the Tata group rallied around the call for
help when that state reeled under the onslaught of heavy rains, floods
and landslides. The Tata Council for Community Initiatives, the Tata Relief
Committee, Sir Ratan Tata Trust and individual Tata companies have not only
provided immediate help and medical aid, but have crafted a long-term plan
for rehabilitation and revival.
These aside, there is plenty else on offer in this issue — business
stories on Tata Communications, Tata Consultancy Services, Titan Company
and Tata Power Solar; an in-depth interview with Veermani Shankar,
managing director of Rallis; and the usual thought-provoking pieces on
strategy, intellectual property rights and the economy.
So, for a while, take your eyes off the meandering of the Sensex and
the rupee-dollar tango and look inside this issue.
Warm regards,
Christabelle Norohna
Contents
VOL 51 | Issue 3
October 2013
Cover story
6
A century of
service, style
and substance
The story of how Indian
Hotels has kept the Taj
brand strong, viable and
sustainable in the face of
myriad challenges
— Cynthia Rodrigues, Gayatri
Kamath and Sujata Agrawal
36 Titan Company:
42 Tata Interactive
passion for precision
Systems: where
defence is the key
— Vibha Rao
— Sangeeta Menon
39 Tata Consultancy
Services: Click here
44 Tata Power Solar:
for efficiency
A new dawn under
— Gayatri Kamath
the sun
— Vibha Rao
Special report
In conversation
The case for skill care gets a boost
A group-wide skills-building initiative is taking shape at the Tata group to
28 living out the
make a larger national impact. A detailed report on the efforts of the eight
studied life:
Tata companies involved in the project.
V Shankar speaks to
— Sangeeta Menon
Nithin Rao
47 Overview of the skills building agenda
Business stories
51 Interview with S Ramadorai
33 Tata Communications:
53 Interview with Dr Mukund Rajan
in through the
digital door
— Nithin Rao
55 Highlights of the skills-building initiatives of some Tata companies
Editor
Christabelle Noronha
Email: chris@tata.com
Assistant editor
Sujata Agrawal
Editorial team
Anjali Mathur
Cynthia Rodrigues
Gayatri Kamath
Jai Madan
Philip Chacko
Photofeature
Sangeeta Menon
Shilpa Sachdev
Shubha Madhukar
63 Titan company: creative high
— Vibha Rao
Contributors
Kiron Kasbekar
Marketing
68 Tanishq: The glam
quotient
— Vibha Rao
Community
80 Tata Relief Committee:
Nithin Rao
Vibha Rao
Design
the tragedy and after
Abraham K John
— Cynthia Rodrigues
Shilpa Naresh
85 Sir Dorabji Tata Trust:
trained to tackle life
— Jai Madan
Strategy
88 Tata Strategic
Management Group:
Production
Mukund Moghe
Edited and created by
in association with
The Information Company
Email: grouppublications@tata.com
Website: www.tata.com
Making each CSR rupee
count contact
— K Raman and Manjula Sriram
Tata Sons
Bombay House
Perspective
24, Homi Mody Street
Case study
71 F1 at the speed of light
— Srinivasa Addepalli
92 Tata Management
Training Centre:
74 Getting India
IPR ready
— Subramaniam Vutha
A winning strategy
— Rahul More
Book review
77 Can India avoid the
middle-income trap?
— Govind Sankaranarayanan
96 breakthrough story
— Kiron Kasbekar
Mumbai 400 001
Phone: 91-22-6665 8282
disclaimer
All matter in Tata Review is
copyrighted. Material published
in it can be reproduced with
permission. To know more,
please email the editor.
COVER STORY
A century of service,
style and substance
Indian Hotels opened its hospitable doors to the public 110 years ago.
Today its four brands — Taj Hotels Resorts and Palaces, Vivanta by Taj,
The Gateway and Ginger — are market leaders in India and are exploring
new frontiers in business and beyond. Cynthia Rodrigues, Gayatri
Kamath and Sujata Agrawal report on a leader and its evolution.
6 Tata Review
n
October 2013
COVER STORY
W
hen the Taj Falaknuma Palace
in Hyderabad opened its doors
two years ago, it marked several
milestones. It underlined the
success of the coup that the Taj brand has staged
when it acquired permission to adapt the Nizam
of Hyderabad’s residence as a hotel. It was the
culmination of a 10-year restoration effort that
today allows guests to experience the Nizam’s
love for luxurious living. And it was a gleaming
new jewel in the crown of grand palaces that
form the essence of the Taj brand.
The Taj Falaknuma Palace is one of the 122
hotels managed by Indian Hotels (IHCL), which
was set up 110 years ago with the Taj Mahal
Palace in Mumbai, a much-treasured heritage
structure that occupied the Mumbai skyline
years before its famous sea-facing neighbour, the
Gateway of India. IHCL is the Tata group’s oldest business, the
only surviving organisation set up by Founder
Jamsetji Tata himself. And the company’s biggest
and oldest brand — the Taj — is stronger and
more vibrant than ever. Along the way, IHCL
has grown into Asia’s largest hospitality business,
with an international footprint that spans
Europe and America, Africa, the Middle East
and Australia.
The company’s long-serving managing
director, Raymond Bickson, says that the Taj
brand’s long and successful run is thanks to its
people, the evolution of the mother company as
a contemporary organisation, and the focus on
providing quality at all customer touch points.
IHCL has evolved in many ways over recent
years, mostly in sync with the Indian economy
and the needs of the modern-day traveller. Since
the 1970s, when the iconic Taj Mahal Palace in
Mumbai was its only property, the company has
added more than a hundred hotels to the chain,
with half of these coming up in the last decade
alone. Mr Bickson has a remarkable statistic
to share: “Over the last 10 years we have been
launching new hotels at an average of one every
eight weeks.”
Apart from dominating the domestic
landscape, IHCL has established its presence in
select international locations. In recent years the
The Taj’s long and successful
run is thanks to its people, the
evolution of the company, and
the focus on providing quality.
Raymond Bickson, managing director, Indian Hotels
company has cast its acquisition net overseas,
picking up well-known properties like the Blue
in Sydney and The Pierre in New York. Included
in this portfolio are the Taj properties in the
United States, Britain, South Africa and the
Middle East, and the exotic resort destinations
of the Maldives and Langkawi, Malaysia.
The assembly line of new hotels is now
hitting top gear. IHCL has plans to open more
than 30 new properties in the next three to four
years. What’s driving this growth frenzy? Simply
put, it’s seemingly insatiable demand.
India represents a huge growth opportunity
for the hospitality industry. The country’s
inventory of 250,000 rooms is miniscule
compared with China’s 3 million and the 5
million of United States. Also, there is the need to
cater to travelling Indians, whose numbers have
shot up from 4 million in 2003 to 15 million in
2012, and are expected to touch 50 million by
2022. Those 50 million represent the pot of gold at
the end of the hospitality rainbow. But, as always,
the gilded rainbow is accompanied by clouds,
dark and otherwise, of all kinds.
market door swings open
For years the Indian domestic hotel sector
had grown in isolation, with a handful of
hospitality chains — the Taj, Oberoi, Leela,
Ashok, Ambassador among them — laying
claim to the organised market. When the
doors of this market swung wide open, India
became a favoured destination for as many as 47
international brands, ranging from the luxury
Four Seasons to the budget Super 8.
The intense competition in the marketplace
has led to IHCL evolving what Mr Bickson
calls “a two-pronged strategy”. The company’s
most significant move was the creation of a new
brand architecture, where the single Taj brand
October 2013
n
Tata Review
7
COVER STORY
Gateway and Ginger ... do not
need the Taj endorsement; they
have the strength to stand alone.
Deepa Misra Harris, senior VP (sales and marketing),
Indian Hotels
was supplemented by new brands. In 2008, the
company started carving up its hotel portfolio
into four unique and distinct sub-brands that
have clearly differentiated brand propositions
across all price segments of the market.
At the very top is the Taj Hotels Resorts and
Palaces brand, a luxury offering that covers ultra
premium hospitality experiences, ranging from
heritage palaces to exotic safaris. Straddling the
four- and five-star categories is the premium or
‘upper-upscale’ Vivanta by Taj. The three-star
business traveller looking for quality comfort is
the target of the Gateway brand and the budget
sector is occupied by the Ginger chain of hotels,
the one-star offering from IHCL subsidiary
Roots Corporation.
“Taj had to stand out as the luxury brand,”
explains Deepa Misra Harris, senior vice
president (sales and marketing). “Vivanta by Taj
is an offering in the premium segment and that’s
why the name is an extension of the Taj brand.
Gateway and Ginger are not luxury brands and
they do not need the Taj endorsement; they have
the strength to stand alone.”
increasing share of wallet
The move was crucial, as Mr Bickson explains,
to increase ‘share of wallet’. As a result of the
brand restructuring, Vivanta by Taj today has the
highest number of hotels under its banner. The
next most widespread brand is Ginger, followed
by Gateway and the luxury Taj brand. The missing
piece in the map is the two-star space, a segment
IHCL is exploring.
The new architecture enables IHCL to
be more nimble and to maintain its market
leadership position with each sub-brand
mapping its growth plan. And that’s what is
happening on the ground. “We intend to remain
the dominant player in the domestic market,
8 Tata Review
n
October 2013
and to build up our international presence
significantly,” says Abhijit Mukherjee, executive
director, hotel operations.
The coming months will see a slew of new
launches by the company. At least nine Vivantas,
eight Gateways and one Taj hotel are slated to
throw open their doors in India. Vivanta by Taj
is especially worth watching here. “We have
an aggressive growth strategy,” says Veer Vijay
Singh, the chief operating officer of the Vivanta
business unit. “The brand aims to have hotels
across India and in international markets.”
Gateway, too, has ambitious plans. “The
current emphasis for the Gateway brand is to
grow in the domestic market, where the bulk of
opportunities exists in the newer micro-markets
of metro cities and tier-II towns, and new
leisure destinations dominated by unbranded
competition,” says the business unit’s chief
operating officer, Prabhat Verma.
But the biggest growth will be in the Ginger
chain, which will outrace the others with 14
new launches expected in the next few years.
The reason is simple: not including cost of land,
it’s far cheaper to roll out Ginger hotels, and
this is where IHCL hopes to add the maximum
number of rooms in the near future.
PK Mohankumar, managing director and
chief executive, Roots Corporation, is upbeat
about Ginger’s prospects: “We plan to increase
to 80 hotels and 8,000 rooms,” he says. “Apart
from metros and smaller cities, we are looking
at high-transient destinations such as Goa, hill
stations and pilgrimage destinations.”
Clearly, a large part of IHCL’s domestic
dominance plan will be carried out by the
Ginger and Gateway brands. Yet internationally
it is the high-end Taj brand that is taking the big
strides. “The expansion blueprint is to be present
in key gateway cities of the world — such as
Singapore, Melbourne, Shanghai, Paris, Rome,
Madrid and London — occupy the Indian
Ocean rim and be present in leisure destinations
like Mauritius, Seychelles and the Caribbean,”
says Yannick Poupon, chief operating officer,
international operations, Taj Luxury Hotels.
The action is likely to be just as frenetic on
the domestic front. Many international chains
COVER STORY
Indian Hotels in numbers
Taj Hotels Resorts and Palaces (luxury)
Vivanta by Taj (upscale)
lNo
of hotels: 23
lNo
of hotels: 40
lNo
of rooms: 2,933
lNo
of rooms: 5,450
lUpcoming
lUpcoming
lAverage
lAverage
hotels in
the next two years: 1
cost to set
up a new room:
`10 million
the Gateway (mid-scale)
hotels in
the next two years: 9
cost to set
up a new room
`8.5 million
Ginger (economy)
(economy
Ginger
lNo
of hotels: 29
lNo
of hotels: 28
lNo
of rooms: 2,200
lNo
of rooms: 2,633
lUpcoming
hotels in
the next two years: 8
lUpcoming
lAverage
lAverage
cost to set
up a new room
`5 million
coming to India are focusing on the business
traveller and setting up hotels in clusters such
as the Bandra Kurla complex in Mumbai,
Noida in Delhi and similar areas in Hyderabad,
Bengaluru, Chennai and Pune. IHCL is looking
at across-the-board growth; in Bengaluru and
Delhi, for example, it has Taj, Vivanta, Gateway
and Ginger hotels straddling all the price points.
expanding with caution
The expansion spree is being orchestrated with
a high degree of caution, though. IHCL has
burned fingers with high-value properties and
is now consciously following a policy of assetlight growth. Instead of outright purchases,
it is increasingly looking at leased properties,
joint ventures and management contracts,
domestically as well as internationally. Six of
the company’s seven new properties slated to
open in India this year will be operated through
management contracts instead of the traditional
ownership or investment model.
Supporting the growth programme is a
series of new sales and marketing initiatives.
IHCL is using the alliances-and-partnerships
route to grow its brand visibility. It has tied up
hotels in
the next two years: 14
cost to set
up a new room
`2 million
with American Express in a loyalty programme.
Similar loyalty tie-ups are in place with some 20
airlines and one of the world’s leading cruise lines,
Silversea Cruises. The company is also partnering
other hotel chains in regions where it does not
have a presence, such as the Okura Hotel in Japan
and the Victoria Jungfrau in Switzerland. Besides,
IHCL has beefed up its own loyalty programme,
the Taj Inner Circle, which pulls in 12 percent of
the company’s revenues.
Although growing its visibility and
footprint has been a big factor in the evolution
of the company, IHCL has focused its business
lens internally, with the emphasis on delivering
a hospitality product that stands out in a
crowded market. One of the key marketing
pillars has been the creation of high-grade,
clearly differentiated guest experiences.“The
Taj’s biggest trump cards have been its suite of
heritage palaces, such as the Taj Lake Palace in
Udaipur, Umaid Bhawan in Jodhpur, Rambagh
Palace in Jaipur and Falaknuma in Hyderabad,
which offer guests a genuine maharaja-styled
stay,” says Jyoti Narang, chief operating officer,
India operations, Taj Luxury Hotels and Taj
Safaris. “The group is fortunate to have 14
October 2013
n
Tata Review
9
COVER STORY
Excellence to the fore
In the hotel business, excellence
means getting it right the first time,
every time. Vida D’Souza, director
(business excellence), explains why
Indian Hotels defines excellence
through customer touch points:
“Typically, a customer interacts with one of our
employees 41 times in any given day. Every act of
delighting the customer helps to institutionalise
the philosophy of excellence in the company. Our
employees are brand ambassadors for the Taj.”
No wonder then that IHCL has the best employee
engagement scores in the industry globally.
IHCL’s commitment to excellence has been
proven by the company winning the JRD QV award
for 2012. The award recognises Tata companies
that achieve high scores in the Tata quality
framework called the Tata Business Excellence
Model (TBEM). In 1995, when the quality movement
began in Tata, Indian Hotels became one of the
first Tata companies to join it. The quality exercise
was first undertaken individually by five hotels.
In 1996, the Taj Residency in Bengaluru (now
rebranded as Vivanta by Taj) scored 411 points,
the highest score by any Tata company in its first
attempt. The score highlighted the Taj’s processes
and brought to the fore one of its central tenets:
the guest as the focus of all endeavours. In the
years that followed, the individual small business
units (SBUs) of IHCL (luxury, leisure and business)
started applying for the JRD QV assessment.
“Business excellence became the
responsibility of our general managers since the
metrics, including employee satisfaction, revenues,
process efficiency and costs, are all data-driven,”
says Ms D’Souza. Since the guest is the focus
of the business, the company sought customer
feedback as a means of learning.
IHCL has now set the bar higher. Its next goal,
project 700, is an attempt to be the industry leader.
Through its business excellence initiative, IHCL
aims to be the hospitality partner of choice on the
global stage. ¨
10 Tata Review
n
October 2013
authentic palaces, ranging from small to grand,
which add immensely to the mystique and aura
of the Taj brand.”
After working to recreate the grand palace
experiences for its guests, IHCL is now focusing
on other customised hospitality offerings. “We’re
looking at creating similar unique experiences
around the smaller palaces and some of the
forts,” says Ms Harris. It has already launched its
luxury nature-and-wildlife experiences under
the Taj Safari brand. Another new offering is the
Jiva Spa, a unique-to-Taj experience that attracts
guests in search of wellness holidays.
Hospitality is a people business and the
Taj’s standard of service is so high that it has
become the subject of several management case
studies. As Mr Bickson explains, technology can
be used to improve efficiency and service, but in
the end it’s the personal touch that matters: “The
relationship that our front-line staff forges with
our guests — be it first-timers who walk into the
portals of the Taj or our longstanding customers
— it is this genuinely positive attitude towards
service that stays on with our guests, bringing
them back to the Taj, their home, time after time.”
41 is the interactions count
A Taj internal study shows that on an average,
a guest interacts with a member of the staff 41
times a day, starting with the wake-up call in
the morning to the housekeeping, the front
office, room service and restaurant staff, to
the doorman in the lobby. “All these touch
points and moments define your brand to that
customer,” says Mr Bickson. “This is the focus
of what we are all about. Each brand, in its own
way, has to deliver that consistent service and
message to the guest.” The company intensively
tracks guest satisfaction scores and conducts
external audits through mystery guests to ensure
that these standards are not diluted.
Needless to say, people training and
engagement activities are a big investment for
IHCL. Mr Mukherjee says that the organisation
has one of the best reputations in the market
from the human resources perspective. He says,
“The industry typically has high attrition rates
(about 30 percent) but at IHCL it’s 18 percent.
COVER STORY
The iconic Taj Mahal Palace in Mumbai remains the biggest revenue earner for Indian Hotels
We have been voted ‘best workplace’ by a Gallup
study for four consecutive years. We extend
several initiatives and programmes to ensure
that our people are looked after.”
IHCL has about 25,000 employees for its
14,000 rooms, but the number of people needed
to service one room is obviously much higher
at its luxury hotels than at a Ginger property.
The reality of the hotel industry is that personal
service delivery becomes critical in the luxury
segment and it is this segment that brings in the
serious money.
“Our biggest earner is still the flagship Taj
Mahal Palace in Mumbai,” says Mr Mukherjee.
In fact, the ‘big four’ — the Taj Mahal Palace
and the Taj Land’s End in Mumbai, and the Taj
Mansingh and Taj Palace in New Delhi — bring
in the lion’s share of the company’s revenues.
That said, Vivanta by Taj, Gateway and Ginger
are faster-growing brands.
IHCL’s increasing footprint has led to a
healthy top line. For the past five years, the
company has been focusing on improving its
bottom line through energy efficiency initiatives.
Mr Mukherjee explains that the drive is “not
about cost cutting but reducing wastage”.
Across the chain, hotels are bringing
down energy bills by turning off the lights in
empty rooms and generally being conscious
of the need to minimise power consumption.
High-value consumables such as imported food
items, butter and cheese are being scrutinised
for wastage. “We have to tread a fine line to
eliminate wastage without degrading the quality
of our service and guest deliverables,” says
Mr Mukherjee. “We talk to our staff and listen
to their suggestions because they know best.”
The company has also adopted internal
programmes that drive business excellence,
community development, environment
conservation, employee safety and health,
etc. Luxury with a purpose is now a central
theme for IHCL, which explains why the Taj
brand, has been working to preserve many of
India’s heritage structures. The company also
champions the cause of arts and artisans in each
of its locations to create a sustainable platform
for inclusive development.
IHCL has set its targets clearly. In the
near term the company, having crossed the $1
billion mark in revenues in 2007, wants to touch
$2 billion by 2017, with 25,000 rooms and 25
destinations. To do this it will have to become
more agile and nimble, and be able to adapt
quickly to changes in a volatile market.
“When the market turns positive, we have
to be able to quickly make up for those lost
revenues by looking at other ways of making our
offering attractive to the guest,” says Mr Bickson.
“Ultimately it is the loyalty of our guests that will
provide value to our brand, thus driving us into
the next century.” Therein lies the secret of an
enduring brand — the single-minded focus on
delivering quality service to the customer. ¨
October 2013
n
Tata Review
11
COVER STORY
‘The loyalty of our guests
will drive and sustain us’
Raymond Bickson has been
the managing director of
Indian Hotels for close to a
decade. In this interview with
Sujata Agrawal and Cynthia
Rodrigues, the consummate
hotelier speaks about his plans
to make the Taj a bigger global
brand, and his satisfaction in
heading an organisation where
employees feel a sense of
pride and ownership.
12 Tata Review
n
October 2013
Indian Hotels is looking to grow
significantly over the next few years.
What factors are driving this growth?
Our goal is that our brands must be in the top
three in the markets where we are present. We
have a two-pronged approach to our growth
strategy. The first is maintaining our domestic
leadership while addressing the challenges of the
international competition coming into India.
The second is taking the Taj brand to newer
markets outside India.
We have been proactive on the domestic
front. We restructured the brand architecture,
launching Vivanta by Taj and the Gateway
brands. Since the launch of Ginger in 2003, we
have opened one hotel every eight weeks.
In the last few years the Indian market has
seen the entry of 47 international brands. To
COVER STORY
compete with them we have looked at expansion
outside India in the key source markets of
business. Another factor is that the number
of Indians travelling abroad has gone from 4
million in 2003 to 15 million in 2012, and is
expected to grow to 50 million by 2022. It is,
therefore, important to unfurl the Taj flag in
markets abroad.
In America we would like to be in Los
Angeles and, in Europe, in Paris. We also aim
to be present in Singapore and Thailand. In
terms of emerging markets, sub-Saharan Africa
is crucial; we are looking at taking Vivanta by
Taj to at least 10-12 countries in Africa. We are
also interested in Myanmar; it has been a closed
market for many years and is now generating
interest among travellers.
What is your expansion strategy?
I think it will be a combination of acquiring
properties and executing management contracts.
We would like to be asset light and grow through
management contracts. We want to focus
our actual investments in a few markets, like
Singapore. In China and similar destinations, we
would really like to grow asset light.
What challenges does the Taj face in
the domestic market?
Today India has 250,000 rooms. Compare that
to the 3 million rooms available in China and
the 5 million that the United States can boast
of. While we plan to open more hotels, the
industry is subject to the cyclical nature of the
business. The important aspect is our readiness
to move with agility to reclaim lost ground,
in terms of increasing revenues, while at the
same time making the necessary changes to our
operations to serve guest categories that are
dissimilar and dynamic.
Ultimately, the lifetime of our guest is the
most critical factor in our existence. The loyalty
of that guest will drive the brand and sustain
us into the next century. We are a centuryold hospitality brand in India and our service
is known for its Asian spirit of warmth and
hospitality, which flows through and is very
much a part of the DNA of the Taj.
There has been a lot of work done on
restructuring the Taj brand. How has
the brand architecture evolved?
The Taj had grown organically for years. We
had a wide range of products, with a huge
discrepancy in the quality levels. From a midscale budget hotel to a palace, all were branded
as the mono brand Taj. With the new brand
architecture, we now have four brands: Taj
Hotels Resorts and Palaces (luxury); Vivanta by
Taj Hotels and Resorts (upscale); The Gateway
Hotels and Resorts (mid-scale) and Ginger
Hotels (economy).
This allows us to segment the market into
different product, service and price points. It
also lets us add hotels in new segments and at
different price points. So the rebranding strategy
will help us maintain market share and build
lifetime guests. It also puts us on an even playing
field with the international brands that have
entered India.
We use various benchmarks to measure
brand perception and Vivanta by Taj, Gateway
and Ginger have been well accepted as brands in
a short period of time.
What is the common factor with the
four brands?
The basis of welcoming someone is always the
same; it doesn’t alter because your price point
is different. So the ‘Taj warmth of hospitality’
— what we refer to as ‘Taj-ness’ — is always
the focus. Hospitality is primarily a people
business; the customer intimacy that you build
is extremely important. You can use technology
for efficiency and better service, but at the end of
the day what matters is the one-to-one personal
touch and the relationships you are able to build
with your guests.
Could you tell us about some of the
factors that negatively impact the
hospitality business?
India is still one of the most exciting destinations
in the world and people want to visit it. I believe
that the government and the tourism ministry
should work more closely with the private sector
to increase ‘ease on arrival’ and make India
October 2013
n
Tata Review
13
COVER STORY
bar as far as hospitality is concerned. Now our
products are globally competitive and the service
and hospitality that we are able to provide in
India makes the destination very competitive
and attractive. It shows the world that India is
a market to be reckoned with and that Indian
players can compete on a global scale.
What’s changing is the use of technology.
Modern-day travellers need to be connected
24x7. We need to seamlessly incorporate
technology into the guest experience without
making it intimidating for the guest.
In earlier days people stayed at hotels to
experience a lifestyle they probably did
not have at home. But guests now have
access to high-quality products in their
homes, so we have to keep raising the bar.
accessible to more people. They also need to
work more on tax transparency. And there needs
to be a stronger connect between the centre
and states to boost travel and tourism. The
government looking at the hospitality industry
as an easy target for taxation is really putting us
at a disadvantage when compared with other
destinations in this region.
We are engaging with the Ministry of
Tourism through our World Travel and Tourism
Council India Initiative, the Hotel Association of
India and the Confederation of Indian Industry
on these issues to ensure that the promise of
‘Incredible India’ is fulfilled.
How has the hospitality industry
changed in the last 10 years?
Earlier we were mainly a market dominated by
domestic players. International players have
opened up the market and made us aware of
our shortcomings. They have helped raise the
14 Tata Review
n
October 2013
Has the luxury segment also
changed? What are trends here?
In this segment we need to enhance the scale
of luxury. In earlier days people stayed at hotels
to experience a lifestyle they probably did not
have at home. But guests now have access to
high-quality products in their homes, so we
have to keep raising the bar. Also, guests travel
to key cities around the world, so they are more
discerning, and they look for the same level of
luxury everywhere.
The things that have changed are room
sizes and the expenditure on bathrooms.
Luxury-room sizes in a metro city destination
have become bigger than they were 10-20 years
ago and resort destinations are probably double
that size, because guests stay longer at those
destinations. These changes are reflected in the
Taj hotels, too.
What value does the portfolio of
palaces add to the Taj brand?
The palaces are the essence of the Taj spirit and
brand. The Taj has 14 authentic palaces, small
and large. They add to the mystique and the aura
of the brand. Our flagship hotel, the Taj Mahal
Palace in Mumbai, is the symbol of what palaces
represent. India is a land of palaces and forts and
there is scope to add more to our portfolio.
You offer a suite at 51 Buckingham
Gate that is designed by Jaguar...
That was an interesting project. The Tata group
has two luxury brands: Taj and Jaguar. With the
success of the first Jaguar suite, we hope to offer
COVER STORY
Set in the heart of Thimpu in Bhutan, the Taj Tashi is an example of the brand’s unique appeal
it in different destinations and to offer packages
where the guest can stay at a Taj hotel and drive
a Jaguar or a Land Rover. We also have tieups with lifestyle luxury brands such as Louis
Vuitton and Hermes.
Is it a challenge to find the right
people to run a hotel?
Finding the right people with the right attitude
is the most important part of being in the
hospitality industry. The attitude of the person
that you hire can aid in enhancing the guest
experience. We can train people to be waiters or
chefs, but we can’t train them to be nice.
If we want to maintain the culture and
spirit of the Taj, we need people who have this
genuine passion to ‘serve’ guests. The Taj-ness
comes from our people. Our business does not
close at 5:30pm; we have been open 24x7, 365
days a year, since 1903 and that will never stop.
The ethos of Taj-ness is built in through our
training programmes. We have a training model
that includes hotel orientation and a module we
call ‘building bridges’, which talks about the Tata
and Taj heritage: where we come from and why
we do things the way we do them.
Being global does not mean just a physical
presence; global means the integration of
different cultures into an organisation. It is
the cross-pollination of cultures that makes
a company or a brand global; the ability to
understand and appreciate a different culture
that guests are looking for, whether it’s taste in
food, service or aesthetic appeal.
These are things we have to deliver in our
different markets. So, whatever market we are
in, our Taj-ness will be reflected in our food, in
interiors, texture, artwork and in our service. All
of that put together makes our Taj brand stand
out anywhere in the world.
What has sustained Taj over the 110
years of its existence?
The Taj brand is the most visible brand of the
Tata group; it is an Indian brand with a culture
of service that is as good as or better than many
other hospitality companies. It is this pride that
has sustained it throughout its existence.
The success of the brand lies in the fact
that it has been able to adapt, over time, to the
different needs of travellers. What will never
change is our relationship with our guest. That
culture of serving our guests will sustain the
brand for the next 100 years. ¨
October 2013
n
Tata Review
15
COVER STORY
The Taj ... and more
About five years ago, the Indian Hotels (IHCL) decided to recast
its brand architecture and reorganise its portfolio of properties.
Where there was a single name — the Taj — there now are three
distinct brands, the Taj Hotels Resorts and Palaces, Vivanta by
Taj and The Gateway. Then there is Ginger, the budget hotel
chain launched by the company’s subsidiary, Roots Corporation
in 2004. Together these four brands now cover almost the entire
price spectrum in the market, making IHCL the biggest hospitality
enterprise in India, and in Asia.
16 Tata Review
n
October 2013
COVER STORY
Taj Luxury Hotels — India
T
he grandest brand in the Indian Hotels
(IHCL) showcase is Taj Hotels Resorts
and Palaces, which offers high-grade
luxury experiences built on the promise
of heritage and authenticity. “The portfolio has
a mix of hotels that range from palaces to jungle
lodges to city hotels,” says Jyoti Narang, chief
operating officer, India operations, for Taj Luxury
Hotels and Taj Safaris. Taj Hotels has been
divided into five big clusters. The most valuable
is the cluster of grand palaces and iconic hotels:
the Taj Lake Palace in Udaipur, Umaid Bhawan
in Jodhpur, Rambagh Palace in Jaipur, the Taj
Falaknuma Palace in Hyderabad, the Taj Mahal
Palace in Mumbai and The Pierre in New York.
Here IHCL plays the heritage card,
emphasising the history and provenance of
Family touch
It was a rainy day when Ada and
her husband checked into the Taj
Bengal along with another couple.
Hailing from Italy, the two couples
were in Kolkata to adopt children
from the Mother Teresa Missionaries
of Charity. Ada and her husband
adopted a boy and the other couple
adopted a baby girl. After three
days of visiting their children at
the centre, the couple brought the
children back to the hotel. Guest
relations managers Samarpita Nandi
and Anmol Ahluwalia helped the
new parents by providing children’s
cots, toys and chocolates. They
spent time with the couples, helping
them bridge cultural and language
gaps. When leaving the couples had
tears in their eyes as they hugged
the managers and thanked them for
the support and the special service.
The Taj signature experiences are
crafted in such a manner that our
guests get a holistic sense of the
place and its history.
Jyoti Narang, COO, India operations
each of its properties. “We consider ourselves to
be the custodians of this heritage,” says Deepa
Misra Harris, senior vice president (sales and
marketing). IHCL invests both money and time
in the authentic restoration of the properties.
The Nizam’s royal guesthouse in Hyderabad, for
example, took 10 years to open its doors as the
Taj Palace Falaknuma.
“The Taj signature experiences are crafted
in such a manner that our guests get a holistic
sense of the place and its history,” says
Ms Narang. Guests are picked up in horse
carriages or antique cars and offered champagne
on arrival. There are heritage walks, bespoke
dining experiences, royal high teas served by
butlers, signature treatments at the spas, etc.
The second cluster comprises the Taj
Safaris, luxurious jungle lodges that leave an
Umaid Bhawan (Jodhpur) is one of the Taj’s luxury properties
October 2013
n
Tata Review
17
COVER STORY
ultra-light ecological footprint. Cluster three
comprises the smaller palaces operated by
IHCL: the Usha Kiran Palace in Gwalior, the Jai
Mahal Palace in Jaipur and the Nadesar Palace
in Varanasi. According to Ms Harris, IHCL is in
the process of designing a new guest experience
platform built around these palaces.
The big city hotels come in the company’s
fourth cluster. This comprises names such as
the Taj Coromandel in Chennai, the Taj Bengal
in Kolkata, 51 Buckingham Gate in London
and the Taj Campton Place in San Francisco.
The fifth cluster is reserved for luxury resort
properties, which run under the brand
extension Taj Exotica. IHCL having exited
its contracts at Mauritius and Seychelles, the
Exotica footprint is limited to the properties in
Goa and the Maldives. ¨
Taj Luxury Hotels – International
T
he Taj brand has been overseas since the
1980s, when its first international hotel
came up at Yemen (no longer part of the
chain), followed by two hotels in Britain.
The United States is IHCL’s biggest source
market and also the region where it has the
biggest footprint, with three hotels: The Pierre in
New York, Taj Boston and Taj Campton Place in
San Francisco.
“The United States is an essential market
for luxury hospitality,” says Yannick Poupon,
chief operating officer, international operations,
Taj Luxury Hotels. “To continue our momentum
there, we will soon establish our presence in Los
Angeles, Hawaii, Chicago and Washington, and
in Mexico, too.”
The Taj’s international hotels blend the
essence of the brand with its inherent Indian
ethos of service and heritage, adding local
culture and ambience. Says Mr Poupon: “We
create a distinct Taj customer experience and
infuse what we term ‘Taj-ness’ in our product
and in the style of our service.”
The ethos gets translated as brand
experiences in the international hotels. There is a
presidential suite or a Tata suite in all hotels and
We create a distinct Taj customer
experience and infuse what we
term ‘Taj-ness’ in our product and
in the style of our service.
Yannick Poupon, COO, international operations
18 Tata Review
n
October 2013
The stunning Taj Exotica in the Maldives
new developments will have an Indian-themed
‘maharajah suite’.
Meanwhile, IHCL has tied up with Jaguar
to create suites in its hotels that are built around
the luxury car’s memorabilia. Each international
hotel will have, where possible, a signature
Indian restaurant (such as the Bombay Brasserie
brand). The luxury spa experience, branded as
Jiva Grande, will focus on the Indian wellness
COVER STORY
offerings of Ayurveda and yoga. At the same
time, all the hotels try to support local art and
culture initiatives, an example being the recent
coming together of The Pierre and Parsons
College of Fashion (to showcase emerging
designers), and the Taj Cape Town’s tie up with
Old Biscuit Mill, an old biscuit factory converted
into a hub for art, craft and fashion.
Then there is the emphasis on local
environment norms. Most of the international
hotels have EarthCheck silver certification. The
Taj Exotica in the Maldives runs a special coral
regeneration programme, through which coral is
moved from areas of the lagoon (where they are
under threat) to new spaces where they can be
monitored by the resident marine biologist. The
programme helps preserve biodiversity while
allowing guests to view the coral on snorkelling
trips. The Taj has also set up its own waterbottling plant (glass bottles), thus reducing the
load from plastic bottles.
IHCL is pushing for changes in its internal
operations just as much as it’s driving growth.
The focus is on streamlining costs and reducing
consumption. Payroll cost, for example, which is
the most significant in international operations,
is tightly controlled. “We operate with a roomto-staff ratio of 1.42, which is considered efficient
for the luxury category,” says Mr Poupon.
The hotels track and reduce fuel
consumption year on year. For example, LED
light retrofits have helped bring in substantial
Wardrobe malfunction
The Kutsak bridal party was starting
to assemble in the lobby of The
Pierre. It was almost time for the
wedding service, and one member
of the party was a little anxious
because he had lost his pocket
square. He asked Kevin, on duty at
the lobby, if the hotel had an outlet
that sold accessories because there
was no time to go out and shop for
it. Kevin, understanding the guest’s
predicament, headed quickly to the
uniform room, where Katalin was
on duty. Katalin cut pocket squares
from three different coloured fabrics
and pressed them so that, no matter
which one the guest chose, it would
be ready right away. The guest,
costume now complete, was very
appreciative and so were the other
members of the wedding party.
energy savings. The Taj Exotica in the Maldives
has installed a unique hot water system that
uses three DG sets (diesel generator cooking
paths) that assist in heat recovery and reduce the
consumption of diesel. ¨
Vivanta by Taj
W
ith a brand name that is a takeoff on
‘bon vivant’, it is to be expected that
Vivanta by Taj is the cool luxury
brand. Vivanta differentiates itself
through its ‘sensorial’ model, that is, making sure
the guest experiences the hotel in a totally new
way, right from the architecture of the property to
the aromas used in the public spaces, the music
to the menu design and other offerings.
“The brand was introduced in 2010 with
a unique promise, persona and philosophy,
which included visual, verbal, application and
behavioural codes,” says Veer Vijay Singh, chief
operating officer of the Vivanta business unit. “In
a cluttered and segmented market, Vivanta offers
a compelling and defined proposition.”
“The brand follows a new design
and service philosophy; very edgy, very
contemporary,” says Deepa Misra Harris, senior
VP (sales and marketing), Indian Hotels. Each
Vivanta property has a motif that is customised
for the site. At Coral Reef, Maldives, guests
October 2013
n
Tata Review
19
COVER STORY
A healing touch for body and soul in Kerala’s backwaters
As Akho’s hands work their massaging magic on
tired muscles, the aroma of ayurveda oils infuse
the air and soothe the mind. The Vivanta by
Taj’s Bekal resort is one of the latest spa-centric
resorts that the Taj brand is promoting. Located
about an hour from Mangalore airport, it sits
serenely in a spot where the slow backwaters
of the Kappil River merge with the white foamy
swirls of the Arabian Sea.
The spa is the ninth Taj property in Kerala
and covers 27 acres of green lawns, gently
swaying coconut palms, plenty of water bodies
and low-slung white buildings with touches
of palm-frond décor that evoke the traditional
Kerala houseboats. The backwaters of the
Kappil meander through gardens dotted with
Indonesian statuary. A small bridge that spans
the water takes guests to the Jiva Spa, located
across the river.
At Taj Bekal, the 16,000 sq ft Jiva Spa is the
centre of the hospitality experience. “Wellness
holidays are increasingly popular,” says Samir
Khanna, general manager of the hotel. “We are
getting a lot of interest from international markets,
with guests coming to experience our relaxation,
Wellness is the focus at the Taj Bekal resort
20 Tata Review
n
October 2013
detox or de-stress packages. These holistic
health holidays are also getting a lot of traction
with our domestic guests.”
The spa is run by manager and ayurveda
doctor Hemanth Kumar, who makes sure that the
Bekal spa experience delivers the best of health
and wellness for every guest who checks in. The
ayurveda oils are local, and others are imported
from Australia; the facial products come from
Britain; the pottery products are sourced from
Pondicherry; and the hand-combed, organic
dyed linen is Indian. “Most of our therapists
belong to India’s Northeastern states; they have
a natural knack for it and are really good at their
job,” says Dr Kumar.
Guests who want the complete health
package eat in a separate dining room where
special health meals are served. For others,
the hotel offers a culinary experience steeped
in the food heritage of the region. Assistant
restaurant manager Saurabh Rana tempts guests
to experience a saadya meal, a typically lavish
spread of Kerala food served on a green plantain
leaf. With 30-40 different items to sample, starting
with local pickles and jaggery-infused ginger
slices to coconut-based vegetable curries, fried
fish and chicken sukka, the saadya meal is a
gourmet experience.
Guests can work off the excess by kayaking
in the Kappil River or playing beach volleyball in
the warm sands. The resort offers every facility for
a complete holiday; swimming pools and fitness
centre aside, guests can opt for day excursions
to Kerala’s famous backwater houseboats, trek
through organic farms, walk around the Bekal
Fort, or even accompany chef Ashok Pillai early in
the morning to buy fresh fish.
Bekal’s amazing location — right on the
beachfront — is due to the Kerala government’s
desire to promote tourism at selected beaches.
With its unique hospitality experience — which is
a fusion of contemporary and tradition — the Taj
Bekal showcases how Indian Hotels has evolved
as an enduring, sustaining brand even while
staying true to its luxury lineage. ¨
COVER STORY
can go big game fishing or feed the smaller
fish; there’s a shipwreck for divers to explore,
an uninhabited island to visit, or a trip in a
submarine to look at the coral close up. At the
Vivanta in Coorg, the motif is built around the
180 acres of rainforest that surround the hotel.
At Kumarakom in Kerala, along with the local
cuisine, guests can watch women from the
community light a thousand lamps every night.
At the back end, the function is working
to reduce operation costs by monitoring
consumption of fuel and materials. “We are
looking at alternative sourcing for highconsumption items without compromising
on quality,” says Mr Singh. “Electricity usage
In a cluttered and segmented
market, Vivanta by Taj offers
a compelling and defined
proposition.
Veer Vijay Singh, COO, Vivanta business unit
is down and our hotels are using wind, solar
and even geothermal energy as sources. People
costs are being kept in line by having more
non-managers reporting to managers.” Vivanta
already has an international presence, with
hotels in Maldives and Sri Lanka, and it now has
Africa in its sights. ¨
The Gateway
T
he Gateway business unit performs
a vital role for IHCL by stretching its
reach to price points that would not be
possible for a luxury brand. By doing
this it helps maintain the company’s asset-light
strategy while expanding into key markets of
India’s metros and smaller cities. “This is the
segment where growth opportunities currently
exist and which will continue to fuel the
domestic demand for branded hotel rooms,” says
chief operating officer Prabhat Verma.
Mr Verma says that the Gateway brand has
been designed “keeping the modern nomad in
mind”. The service is crisp and hassle-free, the
quality is consistently high, and the welcome
as warm as the mother brand. The focus is on
creating sanctuaries that “refresh, refuel and
renew the modern-day traveller”. For example,
guests have the option of ‘active food’ menus and
in-room yoga.
Gateway uses a mix of short- and longterm brand-building initiatives. The long-term,
or strategic, brand-building efforts cover mass
communications, brand activation and events,
social media, etc. The short-term initiatives
are aimed at improving occupancies in the
lean season. “We do high-visibility media
campaigns, search engine marketing and
digital campaigns, and we use newer activation
opportunities with partners from airlines and
travel companies,” says Mr Verma. “These
result in generating immediate demand and
share-shifts from the competition.”
The Gateway brand is already present in
South Asia through the Airport Garden Hotel
in Colombo and IHCL has plans to increase the
brand’s international footprint. “The flexibility
of the model makes it adaptable to any market
Gateway hotels are for the modern-day nomad
October 2013
n
Tata Review
21
COVER STORY
This is the segment where growth
opportunities currently exist
and it will continue to fuel the
domestic demand for hotel rooms.
Prabhat Verma, COO, Gateway business unit
condition or consumer dynamic,” say Mr Verma.
Where Gateway is constantly innovating
is in streamlining operations and reducing
its operation costs. For example, fruits and
vegetable constitute about 18 percent of total
raw materials consumption.
In all the new Gateway projects, the
kitchen layout has been redesigned to include
a central area where all raw vegetables are
received and prepared. The vegetables are sent
to all the outlets as required. This allows better
monitoring by the chef, reduces wastage of
unconsumed vegetables and helps preserve
better hygiene in the food preparation areas.
Another change is that the all-day dining
kitchen and the banquet kitchen are placed
next to each other. The manpower and support
is shared and space required becomes much
less. Food, which is a big cost item, is closely
monitored to reduce wastage. There is strict
control on usage and inventory of high-value
items such as oil, butter, meat, seafood, cream
Peacocks on the lawn
In the famous temple town of
Madurai, Gateway is known not just
for its quality and ambience, but
also the peacocks that parade on its
lawns. Guests often wake up to find
them walking around outside their
rooms and some of the birds are so
friendly that children can play with
them. Another high point here is the
South Indian tiffin meal.
and cheese. In the buffets, especially, Gateway
has managed to cut wastage down from 20
percent of total to just 5 percent.
Gateway conducts regular energy audits
at its hotels. CFL bulbs have been installed in
all public areas, gardens, corridors and guest
rooms. There are light sensors in the public
area, and devices such as dimmers and timers
help cut down power usage.
Flowers are another big expense and
Gateway has changed the style of its flower
arrangements to use a mix of real and
artificial flowers. The rooms have live bamboo
arrangements that remain fresh for months. ¨
Ginger
T
Ginger is India’s only branded budget chain of hotels in India
22 Tata Review
n
October 2013
he Ginger brand is built around the
promise of ‘smart basics’, a design and
technology-led hospitality concept
that offers travellers all the important
facilities at affordable rates.
Ginger is India’s only branded budget chain
with a national footprint. Launched in 2004, it
has been steadily setting up new hotels, but of
late, the brand’s growth strategy has moved on to
the fast track.
Already 28-hotels strong, Roots
Corporation intends to increase its brand
presence in metros, large cities and popular
COVER STORY
holiday and pilgrimage spots. “The growth
challenge is to identify family-run, unbranded
hotels in the micro market, which means
cities, and on the high streets and in the new
townships coming up in the country’s tier I
and tier II towns,” says the managing director
and chief executive of Roots Corporation, PK
Mohankumar. “Like our parent, IHCL, we
intend to increase our footprint through assetlight growth, with models like franchising,
management contracts and ready shells.”
Since its inception, the brand has
continuously evolved in response to guest
feedback and market research studies.
“Ginger is currently in the process of
redesigning the product and its service offering
with the help of international designers,” says
Mr Mohankumar. “We are looking at better
utilisation of space and a more modern and
fresh look, with cutting-edge design elements
and technology that is cost effective and easy
to execute.”
With a brand that advocates value for
money as its unique position statement, Roots
Corporation uses innovative initiatives to keep
the payroll, energy, and repairs and maintenance
costs at each of its Ginger properties within
Smart hospitality
The guests had made a mistake;
six single rooms had been booked
instead of three double rooms.
The hotel was fully booked. Yet
something had to be done because
the group of guests consisted of
three senior citizens, one lady with
an infant and another lady with two
six-year-old kids. Duty managers
Nitin and Praveen took the trouble
to convince some of the existing
residents to vacate their rooms and
move into singles so that the families
could stay together. All was well that
ended well for that large group of
young and old.
Ginger is currently in the process
of redesigning the product and its
service offering with the help of
international designers.
PK Mohankumar, chief executive, Ginger
the designated limit. “Ginger is all about the
lean and mean structure and the smart way of
managing business,” says Mr Mohankumar.
The company has outsourced several
major back-end operations such as reservations,
infotech support, revenue management, sales,
training and accounts payable.
This is in addition to the restructuring
and revamping of outsourced services in
housekeeping, engineering, food and beverages,
laundry and security. Mr Mohankumar explains,
“This not only brings variability in costs but also
provides the platform for quick ramp up with
new hotels.”
Brand Ginger is the first Indian hotel chain
to operate on a SAP platform for management
of human capital, travel and expenses,
personnel administration and organisation
management. It was primarily intended to bring
in optimal operational efficiencies and lower the
requirement of manpower.
At Ginger, the procurement function plays
a significant role as roughly half of its hotel
operations are outsourced. The team has been
able to negotiate great deals, resulting in major
cost savings. Initiatives have also been taken to
offer co-branded guest amenities to partially
offset material costs.
Energy conservation is a big part of the
cost-management programme. Ginger has had
energy conservation agencies conduct pilot
studies and the recommendations are deployed
in all its hotels. Energy costs are strictly
monitored and the hotels use solar panels,
electric boilers and regular energy audits.
With a little tweaking, the Ginger brand
could easily be taken overseas. An international
foray is on the cards for the future, but the focus
right now is to address the exploding demand in
the domestic market. ¨
October 2013
n
Tata Review
23
COVER STORY
A net spread wide
The community, as much as the poor and marginalised, has
been the focus of Indian Hotels’ corporate social responsibility
programmes, which address an extensive variety of issues
T
he roots of Indian Hotels Company
(IHCL), the oldest company in the Tata
group, run deep. And these roots have
spread beyond business to touch the
lives of people young and old, from different
communities, cultures and backgrounds.
IHCL’s corporate social responsibility
(CSR) agenda was formalised like never before
in 2007, when the company decided on a theme
— ‘building sustainable livelihoods’ — for all
the initiatives that came under this umbrella.
This was in keeping with the United Nations’
millennium development goals and IHCL’s
own core competencies. “We were clear that
our efforts had to be measurable in terms of the
impact made on society,” says HN Shrinivas,
senior vice president, human resources. “We had
to build bridges with the community.”
One outcome of such thinking was the
Taj’s association with Pratham, a nonprofit,
to launch a programme to build the skills
of unemployed youth. This was introduced
The Taj has introduced many vocational training courses that come under the hospitality canopy
24 Tata Review
n
October 2013
COVER STORY
in Khaultabad, a village on the outskirts of
Aurangabad, Maharashtra, where Pratham had
a centre that trained local youth in vocational
skills. The Taj introduced courses in baking,
restaurant services, housekeeping, etc. It set the
curriculum, trained the faculty and provided
infrastructure and on-the-job training.
The programme made a significant
difference to the lives of many village folks. “We
have absorbed 97 percent of the total number of
students we have trained,” says Vasant Ayyappan,
director, corporate sustainability. At the end
of the course, the students receive certification
from the Taj under assessment criteria
defined by the Institute of Hotel Management,
Aurangabad. In similar vein, the Taj has tied up
with 40 industrial training institutes, including
an all-women centre in Channarayapatna,
outside Bengaluru. The biggest, in Lonavala,
near Mumbai, has the potential to train up to
4,000 youth in baking and cooking, besides
salon treatments, spa therapy, restaurant services
and various hospitality-related trades.
The model here is simple. “We train the
centre heads to teach our courses,” says
Mr Ayyappan, “and our own people lecture as
external faculty to enable students to get the
industry perspective.” About 10,000 people have
been trained thus in the last four years. And
the company is now looking to add to the list of
trades it imparts training in.
Support to weavers
Besides training youth, the Taj has also been
supporting craftsmen and women. Traditional
weavers from Varanasi, for instance, craft the
sarees that serve as uniforms for front office and
housekeeping staff at all the Taj properties in
India (see box: Saree story: Lending a hand to
help weave a silky future).
A child nutrition project undertaken, along
with participating partner, Bhavishya Alliance,
in the Nandurbar district of Maharashtra
in 2009-10 is another example of IHCL’s
commitment to the community. The district
has a high incidence of child malnutrition and
starvation deaths and interventions such as this
one are desperately required.
Our efforts had to be measurable
in terms of the impact made on
society. We had to build bridges
with the community.
HN Shrinivas, senior vice president, human resources
Under the government’s integrated child
development programme, midday meals were
served to schoolchildren of the area. These meals
were so insipid that the children would not eat
them and they ended up as fodder for cattle.
The government had allocated `5 per meal per
child under the scheme. Mr Shrinivas says, “I
went to our catering institute in Aurangabad
and challenged some of our chefs and trainers to
come up with nutritious meals for this amount.
They did just that, with interesting recipes that
used millets and maize, ingredients that were
inexpensive and readily available. And the dishes
were delicious.”
Additionally, people from the Taj trained
the teachers and the cooks of primary health
centres and childcare centres, numbering nearly
120 people, to cook nutritious food for kids
and lactating mothers. Later, the company,
with the help of faculty from the Tata Institute
of Social Sciences, tracked the success of the
programme over a period of a year. The results
were heartening.
“We realised that there was improvement
on every parameter,” says Mr Shrinivas. “School
attendance improved, the concept of basic
hygiene was imbibed by everyone and wastage of
food was eliminated. The children were looking
cheerful and healthy, a clear indication that the
effort had succeeded.” The company did not let
the meagerness of the resource allocation get in
the way of its effort to make the project a success.
The same level of dedication was on display
in IHCL’s attempts to make its operations
sensitive to the environment. Earlier, each
Taj hotel was doing its best to conserve
resources through its own initiatives. A more
coherent approach led, in 2009-10, to IHCL
launching a programme that would address
the environmental issues confronting it in an
October 2013
n
Tata Review
25
COVER STORY
Saree story: Lending a hand to help weave a silky future
Benarasi sarees have been cherished down the
centuries and treasured as invaluable heirlooms.
Unfortunately, in the last few decades, the
weavers who spin these gorgeous dreams in silk,
silver and gold have fallen on hard times.
The arrival of power looms and the
availability of synthetic Chinese textiles at cheap
rates, coupled with governmental apathy, had
made it difficult for the weaver community to
survive. This was when the Taj stepped in.
RK Krishnakumar, then vice chairman of the
Indian Hotels, and his wife, Ratna, were moved
by the plight of the weavers. Ms Krishnakumar
was involved with Paramparik Karigar, a
group that works for the welfare of traditional
craftsman, and was well aware of their problems.
Under her guidance, the Taj took up the cause.
As a first step, the Taj commissioned the
weavers to weave their magic on silk sarees for
its front office and housekeeping staff at all its
luxury and palace hotels in India. And exquisite
custom-made sarees began to be stocked and
Taj staff adorn the work of the Varanasi weavers
26 Tata Review
n
October 2013
sold at Taj Khazana outlets in select Taj hotels.
In Sarai Mohana and other villages in and
around Varanasi, where these weavers live, the
Taj has been working on many fronts to improve
their lives. Nutrition programmes are regularly
conducted for children. Medical and eye camps
are held; here, weavers with weak eyesight are
given spectacles, while those suffering from
cataract or glaucoma undergo surgeries.
Families forced to sell their looms (some
even ended up using these as firewood) were
given new ones and damaged looms were
repaired. The weavers were also given solar
lamps to cope with the frequent power outages
that Varanasi is subject to, and water pumps
were installed to ease the burden of the women.
“We invited fashion designer Jay
Ramrakhiani to design the motifs for the sarees
and silk yarn for the sarees was sourced from
Bengaluru,” says Ms Krishnakumar. “Today, each
saree yields the weavers an assured `2,300,
which is paid in full once the saree is delivered.
Barely a few years ago, each sari earned them
`200-300, a sum that they would get after
months of waiting, and in instalments.”
The Taj gives them the yarn dyed and coned,
ready for weaving along with the design, helping
them to stay debt-free. Each weaver makes
about three sarees each month. The sum of their
efforts creates about 1,000 sarees over a twoyear period.
The Taj has also taken up the responsibility
of educating the children of the weavers. “Our
only condition,” says Ms Krishnakumar, “was that
weaving should be a part of the curriculum. Strict
anti-child labour laws impose a fine on parents
who teach children the art. We didn’t want the art
form to go into a decline.”
In providing a viable source of income for the
weavers of Varanasi, the Taj initiative has performed
a vital service. “The greatest achievement of this
initiative is that it has restored the dignity and selfrespect of these people,” says Ms Krishnakumar.
“The looms are working again and their lives are
better than they have been in a long time.”
COVER STORY
integrated manner. The programme came to be
known as Earth (an acronym for ‘environment,
awareness, and renewal at Taj Hotels) and
Mr Ayyappan headed the initiative.
The Taj also tied up with Earthcheck, the
globally reputed environment certification
programme for the travel and tourism
industry. Based on the ‘agenda 21 principles for
sustainable development, endorsed by 182 heads
of state at the United Nations’ Rio Earth Summit
in 1992, Earthcheck’s prescriptions are followed
by more than 1,000 hotel companies.
“Earthcheck employs third-party auditors
to do on-site audits at every hotel in the Taj fold,
regardless of the brand,” says Mr Ayyappan.
They audit the hotel and give us a report and a
list of requirements. We then came up with an
action plan.”
energy for change
The positives from such engagement have been
many. Taj hotels in Chennai are using wind
energy, while those in Rajasthan are using solar
energy. The last two years have seen the Taj’s
use of renewable energy increase by over 100
percent. Thirty-three hotels do not discharge
even a drop of water into the municipal
sewage, and there has been direct and indirect
reduction in energy consumption. Greenhouse
gas emissions and the numbers on suspended
particulate matter have also come down.
Individual examples of interesting ideas
being translated into workable solutions abound.
The Gateway Hotel in Khajuraho has been
active in rainwater harvesting. Vivanta by Taj,
Kovalam, has been producing 40 cubic meter
of biogas per day since 2009. The digested
waste from the processing is used as manure in
the garden. Nineteen hotels have undertaken
composting of food and horticultural waste,
while two hotels have installed biogas plants.
The safety and the health of its employees
and guests are another top priority for the
company. A disparate approach to the triple
imperatives of safety, health and environment on
the part of IHCL’s properties will soon give way
to a holistic response.
The company has also shown its nimbleness
Our own people lecture as
external faculty to enable
students to get the industry
perspective.
Vasant Ayyappan, director, corporate sustainability
in responding to the needs of the victims of
the terror attack at the iconic Taj Mahal Palace
and other locations in Mumbai on the night of
November 26, 2008. The company set up the Taj
Public Service Welfare Trust to help all those
affected by the attack.
In recent times, the trust has also helped
people rendered homeless in the landslide in
Leh-Ladakh, and established a community
kitchen during the floods in Bihar. And it
is currently working with the Tata Relief
Committee in Uttarakhand.
Over the years IHCL has expended
tremendous energy on social causes and the
needs of the disadvantaged. The introduction
of the ‘give back’ programme encouraged Taj
employees to devote their time and talents
for a worthy cause. The company has selected
nine areas in which employees can volunteer.
These include teaching in a municipal school,
beekeeping and rural tourism.
The Taj’s hospitality is legendary; its CSR
initiatives deserve equal recognition. ¨
Many Indian Hotels employees devote their time to teach at
government-supported centres for women and children
October 2013
n
Tata Review
27
in conversation
Living out the studied life
The unassuming and affable Veeramani Shankar, managing director and
chief executive of Rallis India, opens up on his student days, the value
system that has sustained him and his career with the Tata group.
28 Tata Review
n
October 2013
in conversation
Veeramani Shankar was a chartered
accountant and a cost accountant
by the time he was 22, building on
the bachelor’s degree in commerce
he had acquired from Calcutta
University, where he stood third in the
examination. Accomplishing so much
so soon seems not to have been
enough for Mr Shankar, who then
added a law degree and a company
secretaryship to his academic
repertoire.
Asked whether he was equally
meritorious in school, the modest
Mr Shankar says he was “not a bad
student”. The affable and unassuming
chief of Rallis India says that his
character was in part defined by his
“humble middle-class background”.
Studying in the Calcutta of the mid1970s, when student unrest was
widespread and campuses were
riven with political strife, Mr Shankar
managed to stay focused on his
studies. “I was in a college where
there were no student problems.
My classes would begin at 6am and
by 9am I would be at work, pursuing
my chartered accountancy course at
an accounting firm.” Mr Shankar not
only completed the tough chartered
accountancy course at his first
attempt but also achieved a top allIndia ranking.
Mr Shankar started his career
with an Alcan subsidiary, Indian
Aluminium Company, prior to joining
Hindustan Lever in 1986. He would
spend the next 18 years there
before coming to Tata, where he has
served as a senior leader for almost
a decade now. In this interview with
Nithin Rao, he touches upon the high
points of his life and his career.
As someone who simultaneously
studied for three professional
courses while still in college, what
is your advice to youngsters today?
Life in the mid-1970s was different.
Distractions were few and one just focused on
academics. I do not think many from today’s
generation would be able to undergo the kind
of drill I went through or the rigour I followed.
On the flip side, we didn’t have the kind of
support available today: from the general
ecosystem, the internet, coaching classes, etc. I
did those courses without even having proper
books, by studying 10-12 hours a day.
My advice to youngsters is that there is
no shortcut to planning and commitment,
especially for courses such as chartered
accountancy. They should get more practical
training and spend time discussing issues
with seniors.
What were your goals and dreams
when you began your professional
career? Have events panned out as
you expected?
I trained as an accountant and dreamt of
making it big in the finance function. My
journey has taken me through different roles
and functions, and I have now donned the
larger role of a business head. It has been a
happy, challenging and fulfilling experience.
I’m fortunate to have worked with
enterprises that considered ethical standards
and their code of conduct to be supreme. I’m
grateful to have been associated with such
companies all through my career, as it syncs
with the background I come from. There is no
clash in the value systems and I get to sleep
peacefully at night.
How do you view the changes that
have occurred in India over the
past three decades: from an era of
shortages and restrictions to one of
a more liberalised regime?
When I began my career in finance, we used to
have a machine called the ‘comptometer’, which
today you may only find in a museum. It used
October 2013
n
Tata Review
29
in conversation
You were with the Unilever group
for 18 years. Could you share your
experience of that period?
I look back fondly at my association with the
Unilever group. During this tenure I moved
eight times, but the positive side was that it
gave me exposure to different businesses,
locations and people. I consider my big
break to be the Unilever corporate audit,
which exposed me to operations in about 20
countries. This stint was an eye-opener to all
aspects of the business, the value chain, team
cultures, etc. It gave me confidence to take on
the responsibility of running a business.
advancements. The latest food security
provisions will also require productivity
improvements and drive good agri practices
and infrastructure. In short, I think the best
times are yet to come for this business.
The migration to urban areas is leading
to a sharp increase in labour costs. This is
accentuated by schemes like the Mahatma
Gandhi National Rural Employment
Guarantee Act. But this also opens up
opportunities for new solutions in weedicides
and farm mechanisation. Equally, we also need
changes in our regulatory system so that there
can be aggregation of land, thus making it
conducive to deploying modern techniques.
We cannot live with stagnant agricultural
production, given that demand for food is
rising. The prices of agricultural products
are also shooting up, thanks to the demandsupply mismatch. Take pulses, for instance.
I remember paying `20 to `30 for a kilo of
pulses just a few years ago. But now they cost
`80-`100. This is a stark example of how
pulses production has stagnated in India, with
the result that we have to import them from
Canada and Australia. India’s requirements of
pulses will double over the next 10 to 15 years,
but there are no signs of a matching growth
in production. Our own study in the Tata
group shows that by allowing some shifts in
crop, farmers can grow more pulses. Through
our own ‘grow more pulses’ initiative we have
shown that farmers can improve productivity,
even doubling or tripling it.
You have been closely involved with
the agricultural business since your
days with Unilever. How different
is the business today from what it
was back then?
The major difference, as I see it, is that
agriculture has assumed centre stage now with
the declining availability of land for food, feed,
fibre and fuel. In India this sector is becoming
remunerative and farmers are willing to
invest in and adopt new technologies. There
are other sweeping trends such as labour
shortages, stricter norms and biotechnology
What do you see as the future
for a company like yours, which
concentrates its attention on the
agricultural business?
I see good times ahead for Rallis. It has a
strong footprint in rural India and a deep
connection with farmers that has been built
over a century. We have identified trends and
opportunities and have begun the journey of
transforming the company into a complete
agri-solutions provider.
Apart from the leading position we have
in the crop-protection space, we are steadily
to be a major exercise to tally a trial balance
and prepare a balance sheet. This machine
helped us in adding and collating data, which
we had to fill in manual ledgers. Today, life
is simpler as you don’t have to worry about
tallying and reconciling details. Yet in other
ways, things are more complex, with more
standards and norms to be followed.
In the past there were many restrictions
on expansions and foreign exchange. But the
market-facing situation was easier because of
the limited options before the customer. The
regime now is more liberal, but the market is
tougher. The customer has plenty of choice
and access to global brands and there is a lot
more transparency. As a listed company we
face investors every quarter and come under
the public gaze, with knowledgeable people
analysing our every move.
30 Tata Review
n
October 2013
in conversation
building our second pillar: a ‘non-pesticide’
portfolio that comprises business segments
such as seeds, plant-growth nutrients,
soil health, agri services and contract
manufacturing. This unique business model
has set a shining example in pulses through
the MoPu (more pulses) initiative, which
straddles the entire value chain. Rallis, at the
back end, guides farmers and grows pulses
while Tata Chemicals markets the I-Shakti
brand of pulses to retail consumers. This is
now well appreciated by all stakeholders,
including the government.
Genetically modified (GM) foods
have received a bad press in India.
From your perspective, what is the
best policy that the country can
follow in dealing with this issue?
GM foods have been available in many
developed countries for a while now. To meet
growing needs, we do need modern technology.
At the same time, the processes for regulatory
and safety clearances should be robust. In my
view, the way forward is to not create hurdles
or delay the introduction of GM technologies,
but to invest in effective and scientific processes
so that these technologies can be introduced
expeditiously and in a safe manner.
You have been heading Rallis
since December 2005. What have
been the most critical challenges
you have faced as a leader?
I have seen Rallis go through phases
of turnaround, consolidation and now
growth. Each of these phases requires a
different mindset and openness to change
— challenging the status quo, continuously
improving and recalibrating. I credit our
people for having the capability to achieve
all of this.
I think at one stage, when we had our
worst-ever loss of `1.07 billion in 2003,
there was a sense of despair in the company.
With the group’s support, the journey since
then to be recognised by all stakeholders has
been a rewarding one. While farmers have
I’m fortunate to have worked with
enterprises that considered ethical standards
and their code of conduct to be supreme.
expressed satisfaction with our solutions and
relationship efforts, our peers with our market
practices and presence, it is gratifying to
receive acknowledgement from investors, too.
In a decade, our market capitalisation, which
had hit a low of just around `300 million has
multiplied to the current `30 billion. The
company has gone from strength to strength
and a notable recognition was winning the
JRD QV Award in 2011 for business excellence
(on the Tata Business Excellence Model
platform). This meant a lot to us because it was
weak processes and controls that had let us
down previously. Above all, the morale of our
employees — as depicted by high employee
engagement scores and our ranking as a ‘great
place to work’ — is satisfying.
What are the long-term objectives
of the company? What do you see
as the challenges for Rallis in the
next five years?
We aim to enhance value for customers
through the agri solutions we provide.
October 2013
n
Tata Review
31
in conversation
V Shankar with his team at Rallis India receiving the JRD QV 2011 Award for business
excellence from the then Tata Sons Chairman Ratan Tata
A number of innovative initiatives are
progressing under our umbrella programme,
Rallis Kisan Kutumba (RKK). We have a
million RKK-linked farmers and our goal
is to double this number and eventually
connect directly or indirectly with more than
10 million farmers. With many of the highimpact services we offer to farmers, there
needs to be an ongoing connect.
A challenge we need to address effectively
is the necessary skill building, both in terms
of the workforce as well as information and
communication technology-led solutions.
What, in your opinion, are the
attributes of a good business
leader?
I believe that integrity is the core, both to
have and to demonstrate through action. The
ability to inspire your team with a vision for
the company is paramount, complemented
by robust communication skills. Strategising
well and the tenacity to execute successfully
will, of course, determine the success of the
enterprise.
How would you define yourself as a
person and as a professional?
By nature, I am an intense person and have a
32 Tata Review
n
October 2013
low profile. I tend to listen more than to speak.
Knowing its importance, I have tried to imbibe
some good practices in both written and
oral communication, and am still learning. I
am generally analytical and have a planned
approach to doing things. Impulsiveness is
not for me. I tend to be quite focused in what
I am pursuing, though this trait can also come
in the way sometimes. I like to arrive at a
consensus on most matters, but there are times
I take a call, relying on my judgement.
Who are your role models and
support systems in life?
In business, I admired Steve Jobs for being able
to hear more than the voice of customer. He
had the conviction to create new paradigms to
delight customers while changing the industry
— and he did this time and again.
In my personal life, my parents taught
me the values I live by, and so too my wife,
Padmini. A committed homemaker and
qualified teacher, she trained in Carnatic
music and Bharata Natyam. Padmini is my
real strength, enabling me to take risks and
challenges in my career. Of my two children,
Ajitesh is a chartered accountant and Radhika
is pursuing her management studies (she is a
dancer, too). ¨
business
Tata Communications’ Singapore data centre
In through the digital door
The newly established growth ventures group of
Tata Communications aims to make a decisive
play in spheres such as digitisation of media,
video over the internet and cloud services
R
angu Salgame was sitting
at home recently with
his family watching the
political drama series,
House of Cards. In an illustration of
the current trend in entertainment
consumption, the Salgames were
not watching television, but were on
their respective iPads, and not even
watching the same episode.
New media technologies
have disrupted traditional ways
of delivering and consuming
media and it is this space that
Tata Communications is mining.
Mr Salgame, the Princeton, New
Jersey-based chief executive officer
of the growth ventures group at
Tata Communications, points to
the tremendous levels of disruption
happening in technology, especially
in the field of entertainment video
and cloud services. Content delivery
is an important business opportunity
for Tata Communications, given that
many of the old media traditions
are poised to collapse. Take House
of Cards. An American political
drama series on the lines of The West
Wing or Britain’s Yes Prime Minister,
it represents a new generation of
entertainment video.
For one, it has not been
produced by an established TV
production house. The first 13
episodes of House of Cards, which
Everything digital will be cloud-based in
the future... The market will explode over
the coming years.
Rangu Salgame, chief executive officer, growth ventures group,
Tata Communications
October 2013
n
Tata Review
33
BUSINESS
premiered earlier this February,
were produced by Netflix, a
company that began operations in
the late 1990s as a subscriptionbased digital distribution service
but has since transformed itself into
an on-demand, internet-streaming
media company.
Second, House of Cards was
the first breakthrough achieved by
the nonlinear television business.
Viewers could watch the episodes at
their convenience, one at a time or all
13 together within the span of a day.
They could view it on mobile phones,
tablets, laptops, desktops or any
device connected to the internet.
Flexibility first
This flexibility shows up the
limitations of linear television, the
conventional television business
where viewers can watch a scheduled
programme only at a given time and
day and on a particular channel. In
other words, viewers get no say in
terms of viewing choices.
Netflix is not the only player
in the new space. BBC iPlayer, the
internet television and radio service
app developed by the British icon,
is premiering Car Share, a new
comedy featuring Peter Kay, by
uploading 40 hours of programming
on its streaming iPlayer service, even
before the new series is broadcast on
BBC One.
This is the content wave that
Tata Communications intends to
ride. The growth ventures group was
set up by Mr Salgame after he joined
Tata Communications about a year
ago. It comprises a small portfolio of
high-growth businesses in markets
undergoing transformation. These
include media services (media
management, video connect and
satellite broadcasting), services like
cloud and also new ones, including
healthcare, especially tele-radiology
(see box: Medical care through the
cloud).
In July 2013, Tata
Communications launched the
world’s first cloud-based broadcastquality video transcoding and
delivery service. The new service
offers content creators, service
Medical care through the cloud
Cloud technologies come into play in the health sector as
well and Tata Communications’ growth ventures business
is looking at developing its tele-medicine play. According to
chief executive Rangu Salgame, the challenge in a country
like India, with its fragmented health care sector, is how to get
more done with less, how to connect hospitals with doctors
and to ensure sharing of expertise.
For now, Tata Communications’ foray into health care
is focused on India. The company plans to come out with
offerings in the tele-radiology segment, supporting hospitals
with the movement of radiology data, later this year. Says
Mr Salgame, “It is a big opportunity to help the health care
industry become more effective.”
34 Tata Review
n
October 2013
providers and media professionals
an integrated, end-to-end workflow
method to move content files to
the cloud and transcode them
into broadcast-quality formats
ready for immediate delivery and
transmission globally. Viacom
18, a joint venture between
Viacom Inc and India’s Network18
Group, has already selected Tata
Communications’ new content
transformation service to provide
high-definition content transcoding
and delivery via the cloud.
change as inevitable
Explaining the significance of this
launch, Mr Salgame says digitisation
of media is inevitable, as viewers
(increasingly the young, who are
tech-savvy and want to watch
programmes on their tablets and
handsets) demand that content from
the past be brought alive on their
devices. Films and videos created in
the past are in formats that are not
compatible with new devices.
India, like the United States, is
a video-rich country, with several
decades of films (both Bollywood
and regional productions) and
television content being available.
Many of the old movies or television
serials are available only on tape.
“Many broadcasters, studios
and content companies realise
there is a huge amount of content
— films, soaps, sitcoms, news and
other entertainment — that is not
accessible on the new devices,” says
Mr Salgame. “These need to be
digitised and delivered through the
internet on to new devices.” Netflix,
for instance, has digitised The West
Wing, enabling viewers of House of
Cards to also watch the older series.
The media and entertainment
business of Tata Communications,
business
which was set up about four years
ago, helps transcode old films and
videos into modern formats and
deliver them through fibre, sky or
satellite. “One of our major offerings
is content transformation,” says Mr
Salgame. With the proliferation of
smartphones, tablets, laptops and
desktops, the demand for digitised
versions of old content is bound
to grow. “We are pioneers in this
segment (of media digitisation)
in India,” says Mr Salgame. “We
have learned a lot and built some
good capabilities. The right time to
capitalise is now.”
More significant, Mr Salgame
says that the digitisation of media
being witnessed is just the tip of the
iceberg. “Everything digital will be
cloud-based in the future: accessing
an app on a tablet or a smartphone,
viewing content, backing an
application or getting online, all of
these will involve the cloud. The
market will explode over the coming
years.”
infrastructure vital
With the cloud becoming widely
used for communications services,
infrastructure becomes critical.
Mr Salgame says that many of Tata
Communications’ clients, among
them multinationals, international
banks, manufacturing companies
and internet firms, are global and so
are their hosting requirements.
“We are well-positioned to
meet their need for a global cloud
infrastructure,” explains Mr Salgame.
“We offer and enable cloud-based
services. We put the hardware in a
data centre and offer it in a secure
way to our customers.”
All in all, these are exciting
times for Tata Communications,
which is geared to cater to the needs
Maximum kind of media
Digital Media Maximised (DMM) is the cornerstone of
the media services business, a fast-growing unit of Tata
Communications that is now part of the growth ventures group.
It enables customers to tap into enhanced creative reach and
profitability through services that drive efficient production,
management and distribution of digital media globally.
The unit helps its customers move ahead in the evolving
digital media economy, even while working across diverse
digital formats and developing delivery platforms. It provides a
suite of solutions that enable media management throughout
the value chain, including creation, movement, workflow, asset
management, security, storage and re-purposing.
By leveraging its media delivery infrastructure, comprising
media applications, network and managed services expertise,
DMM’s customers can take advantage of cost-effective
premium content management and distribution solutions.
of the entertainment video and cloud
services businesses. And the road to
this new paradigm has been paved
over the last few years.
According to Mr Salgame, most
of the technological disruptions
began to occur over the last three
to five years. But it is over the
last 12 to 18 months that these
two sectors have gained traction.
“These two sectors are witnessing
the biggest disruptions, which
will change the entire technology
industry,” he says. “And they present
tremendous opportunities for Tata
Communications to emerge as a
significant player in these sectors.”
The company is already in the
process of developing strategies for
the next five years. And while the
disruptions will be played out over
the next five years, their impact
could last for 30 years, according
to Mr Salgame. It’s a new era and
media digitisation is the order of the
present day. ¨
— Nithin Rao
October 2013
n
Tata Review
35
BUSINESS
High-precision manufacturing is what the
division’s technicians are best known for
Passion for precision
The precision engineering division of Titan
Company has risen from humble beginnings
to become a hothouse for innovation and the
crafting of cutting-edge products and solutions
T
itan’s precision engineering
division is the company’s
best kept secret. Established
in 1989 to build precision
assembly machines for the watch
division, it became an independent
entity in 2004, when Titan decided
to make the most of its engineering
capabilities in various manufacturing
spheres. The division now has three
state-of-the-art units: an automation
solutions centre in Hosur, Tamil
Nadu, the precision engineering
components and sub-assembly
business (PECSA) in Bengaluru
and Titan Time Products (TTPL) in
36 Tata Review
n
October 2013
Goa. Together these provide highprecision solutions to a range of
industries, among them automotive,
aerospace, medical and solar.
Says Sridhar NP, the business
head of PECSA: “As Titan grew,
a lot of initiatives were taken in
manufacturing to see how we
could do more with what we had.
We understood high-precision
manufacturing and not many
organisations had this capability. The
precision engineering division grew
out of this specialised capability.”
With 600 plus employees on its
rolls, the division has commissioned
several innovative projects in the
last few years.
“Innovation is the central
nervous system of the automation
business,” says R Vivekanandah,
business head, precision
engineering division. “We are
a business-to-business (B2B)
engineering solutions provider
and clients are always looking
for something new from us. Our
engineers constantly look for new
ways of thinking and doing things
to create value for our customers.”
At PECSA, innovation is
always process driven; it is about
different material experiences,
cost reduction and increasing
efficiency. “We have to innovate
to be competitive and relevant in
this business,” explains Mr Sridhar.
“We have cracked problems for
customers who themselves were not
business
able to solve these problems. We
developed a highly complex chassis
for a French company in the defence
systems industry. In the process we
disproved their notion that complex
products cannot be built in India.”
Engineers in the division are
encouraged to constantly upgrade
their knowledge and sent to trade
shows across the world to get
insights on what’s happening in
different industries. They regularly
brainstorm to come up with the
most innovative solutions and
are constantly upping the ante on
products, processes and technology.
customers to the fore
Along with innovation, customer
service is a key differentiator at
the precision engineering division.
Mr Vivekanandah says, “Our
international network has been
built, to a large extent, by positive
customer references. Every reputed
tier-I automotive player in the world
is our customer. In the electrical
industry and aerospace, the top
companies in the world are our
customers.” Mr Vivekanandah
believes that the division capability
in automation technologies will be
helpful for any Titan business that
is likely to emerge in the future.
“Strategically, it is a fit for Titan’s
emerging business,” he adds.
The only B2B unit in the Titan
stable, the precision engineering
division also caters to the needs
of the company’s watches and
jewellery divisions. “We have a
different working relationship.
We don’t look at it as a selling
proposition; we are facilitating them
to grow,” says Mr Vivekanandah.
The automation business started
off by building machines for Titan’s
watch plant in 1989, mainly as a
Our assembly lines are among the best in
the world. In the electrical industry and
aerospace, the top companies in the world
are our customers.
R Vivekanandah, business head, precision engineering division
way to circumvent the extremely
high import duty of the time. “The
automation business has built more
than 300 world-class machines for
the watches division at Titan,” points
out M Venkatesan, head, automation
business. “In 2004 we thought it was
time to step out into the world and
sell our capabilities to others.”
The initial target was the
automobile industry and the first
project — a robotic assembly line
for an automobile company — was
successfully completed the same year.
“Since then we have been growing in
the automation market,” says
Mr Venkatesan. “With more than
350 installations across the world
to date, we are considered the top
specialist automation solutions
provider in India.”
The automation business,
which is involved in building
assembly lines, caters largely to the
automobile sector. It also meets
the needs of the medical, solar and
electrical industries. The unit has
built assembly lines for 70 customers
in India. “Our assembly lines are
among the best in the world,” says
Mr Vivekanandah. “In India, about
70 percent of the parts that go into a
car, of any brand, are manufactured
from an assembly line built by us.”
Some of the automotive
assembly lines built by the unit are:
gear box assembly line, wiper motor
assembly, coolant system assembly,
clutch and brake systems, air
compressor assembly, vacuum pump
assembly, seat belt assembly cum
testing, and steering systems.
PECSA was formed in 2003,
when Titan decided to leverage its
core strength in manufacturing
high-precision components. “The
aerospace industry needed the
kind of capabilities we had,” says
Mr Sridhar. “We started in a small
way and soon many multinational
companies were our clients.”
After a modest beginning
— making small components
for top companies like Hamilton
Sundstrand and Pratt & Whitney
— the unit began making complex
components and sub-assemblies.
PECSA follows the ‘build to print’
business model, where the unit
makes components according to the
drawing provided by the client. “We
are slowly migrating up the value
chain, from ‘build to print’ to ‘build
to spec’, where the client gives us the
parameters that the component has
to meet,” adds Mr Sridhar.
flying high
One of PECSA’s showcase projects is
the lube nozzle manufactured for the
UTC Group, leaders in the aerospace
industry. Earlier, the nozzle was
built by brazing three individual
machined pieces, a process that is
avoided in the aerospace industry
due to the likely loss of material
integrity. “We told the client that we
could build it through an integral
construction,” says Mr Sridhar.
“We tested it as per specifications
October 2013
n
Tata Review
37
BUSINESS
and sent it out. They said your
product is giving a far greater flow
than required. We went back to the
drawing board and could not find a
single fault. Later, we realised that
the test bench they were using was
not according to specifications.
We proved that our product was
not only better in construction but
in function, too. Now the product
has qualified and we are beginning
production.”
The third unit operating under
the precision engineering division is
TTPL, Titan’s Goa-based subsidiary.
Started in 1992 as a joint venture
with the Goa government, TTPL
specialises in turnkey electronics and
micro-electronics manufacturing
services. Says Satish S, business head,
electronics manufacturing services:
“We have a comprehensive range of
skills in the design and fabrication
of printed circuit boards (PCBs) and
hybrid micro-electronics.”
Capabilities aplenty
TTPL has enormous capabilities
in the design and fabrication of
hybrids, including chip-on-boards,
sensors, optoelectronics, power
and special projects. The unit
manufactures a wide range of subassemblies, incorporating PCBs,
fabricated metal parts, machined
metal parts and plastic mouldings.
Innovation in automation
The automation business won the Tata InnoVista award two
years ago for its novel diamond bagging automation. A unique
process, it has revolutionised diamond bagging in the jewellery
division. “It was an extremely challenging project and a lot
of prototyping went into perfecting it,” says R Vivekanandah,
business head, precision engineering solutions.
The automation business also recently manufactured a
high-precision assembly machine for an American company.
“Many automation companies in the US refused to work
on this challenge due to its extreme complexity, yet we
manufactured it to perfection,” says Mr Vivekanandah.
“The ability to go beyond pure
PCB assembly to sub-assembly
and full system assembly is well
established here at TTPL,” says
Mr Satish. “We have secured
and fulfilled many high-profile
contracts for the manufacture
of critical systems in the
automotive, industrial controls and
communication sectors.”
TTPL aspires to emerge as a
trusted partner for high-reliability
electronics in sectors of strategic
importance. Its processes are aligned
to automotive quality standards of
TS 16949 and are driven by lean
manufacturing principles. The
unit has demonstrated remarkable
quality and service while supplying
electronic assemblies to critical
applications such as shift-by-wire,
sensors for engine control, GPSbased infotainment products,
and electromechanical speed and
positional sensors.
The precision engineering
division is looking at aggressive
growth in all the sectors that it works
in. “Five years on, we want to be a
`10 billion to `20 billion enterprise,”
says Mr Vivekanandah. Meanwhile,
the automation business is exploring
new avenues in modern storage
systems and warehouse automation
along with medical devices and
solar energy equipment assembly
lines. “We want to scale the business
up nearly 10 times in the next
five years,” says Mr Sridhar. “We
want to be a big player, one of the
biggest in the Tata group that is into
aerospace.”
Clear vision, ambitious growth
plans and high-end capabilities are
what the division is looking to bank
on to drive its growth. ¨
— Vibha Rao
38 Tata Review
n
October 2013
business
Click here for efficiency
Tata Consultancy Services’ e-governance solutions
have made the ordinary citizen’s interactions with
officialdom more transparent and less trying
A
s the deadline for filing
income tax returns
loomed on July 30, 2013,
some 600,000 Indians
sat at their computers doing their
bit as citizens for the Government
of India’s coffers. The Ministry of
Finance servers were hit by traffic
peaks of 85,000 returns per hour
but the system did not crash. At
day’s end the government issued
statements about the record number
of tax returns that had been filed.
The story with passports
follows a similar plot. Getting a
fresh passport has mostly been
a nightmarish experience in
India, yet last year more than 11
million Indians jumped on to
the e-bandwagon and applied
for passport services online. This
figure takes on huge significance
considering that till 2012 there were
only 50 million passport holders
in India. As thousands of citizens
received their new passports within a
few working days, the digital service
got rave reviews.
And here’s another example of
the improved efficiency of ‘official’
India. Setting up a new company in
the country used to be an experience
that could stymie the most
enterprising spirit, involving days of
queuing up, documents in hand, at
the Registrar of Companies, where
bureaucrats would struggle to make
sense of 45 million paper documents
filed with the Ministry of Corporate
Affairs (MCA). Today all the steps for
We wanted to change the way the
government deals with citizens. The TCS
philosophy is that IT is a great enabler in
addressing this challenge...
Tanmoy Chakrabarty, VP, government solutions unit, TCS
opening a new company, including
checking for free names, can be done
online through the MCA21 portal.
No queues, no paper.
In each of these instances,
e-governance is what has made life
a whole lot easier for India’s citizens,
bringing them closer, digitally
speaking, to their government
and its army of officials. This
digital revolution has had an
impact on the lives of common
Indian citizens, who are finding
convenient solutions at URLs
such as incometaxindiaefiling.gov.
in, passportindia.gov.in and mca.
gov.in. All these e-governance
solutions have been powered by Tata
Consultancy Services (TCS).
Small but impactful
IT solutions for governance is among
TCS’s smaller business verticals, one
that contributes less than a tenth to
its revenues, yet this business has
probably had the most significant
impact on the daily life of tens of
millions of Indians.
The government solutions
business at TCS was set up in
2007 to help resolve the challenges
faced by government institutions.
“We wanted to change the way the
government deals with citizens,” says
October 2013
n
Tata Review
39
BUSINESS
The e-governance solutions designed by TCS have had a significant impact on the everyday lives of Indian citizens
vice president Tanmoy Chakrabarty,
who heads the unit. “The TCS
philosophy is that IT is a great enabler
in addressing this challenge and good
governance is a desired outcome.”
TCS set out to devise
and develop platform-neutral,
technology-neutral solutions for
government institutions at the
central, state and local body levels.
Today they have built up a successful
portfolio of solutions that make
citizen-government interactions
smoother and more transparent.
TCS’s solutions are aimed at
resolving three key challenges faced
by government bodies:
Improving intra-government
efficiency (a challenge that’s
commonly vocalised as
‘Where’s the file?’).
Improving service delivery
to citizens (in other words,
ensuring they do not have
to ask questions like ‘Which
counter do I go to next?’).
Improving government
financial management (also
known as balancing the
accounts).
40 Tata Review
n
October 2013
Improving intra-government
efficiency implies making the actual
operation of government decisionmaking faster and more transparent.
TCS has developed a framework
called DigiGov, an IT platform that
brings in complete transformation in
the daily functioning of government
by digitising all files and operations.
“There are no paper files. All
files move electronically from
office to office, thereby increasing
transparency and reducing
discretion,” explains Mr Chakrabarty.
Advantages galore
The advantages of digital files are
evident: The physical stacks of paper
files that clutter government offices
become redundant. Electronic files
cannot be ‘lost’ and can, if necessary,
be recreated. The work becomes
person-neutral; if staff go on leave
files can be reassigned easily. All
operations are transparent and occur
in real time.
The DigiGov platform, as it is
called, is now in use in 10 state
governments, including Maharashtra,
Andhra Pradesh, Gujarat, Bihar and
Odisha. It is also being used at the
Central Secretariat, the Central
Vigilance Commission, the Ministry
of Commerce and Industry and
two departments of the Ministry of
Defence.
The DigiGov rollout was easy
for TCS as it followed a frameworkoriented approach in designing
the platform. This meant it could
be used for multiple clients with
minimum changes. “Our approach
allows us to build a solution once
and replicate often,” explains
Mr Chakrabarty. “The time and
cost involved in subsequent rollouts
becomes lower and lower, and best
practices get incorporated at every
stage, making the platform robust.”
DigiGov is a solution that
makes government functioning
more efficient, but TCS also
jumped into creating solutions
at the interface level between
government and citizen, making it
easier for people to access services
such as paying electricity, water
and telephone bills, applying for
birth, marriage or caste certificates,
getting a state service bus ticket
business
or amending a land entitlement
certificate. “We’ve created citizen
service delivery portals that offer
more than 100 services across
departments,” says Mr Chakrabarty.
The portals — APonline,
Mahaonline and MPonline (all
hosted on the ubiquitous gov.in
URL) — have been running for
years. According to Mr Chakrabarty,
while APonline, the first portal
to launch, took eight months to
develop, MPonline took six months
and the Maharashtra site took just
two months to deploy.
The digital interface is
supported by kiosks spread across
the state, run by entrepreneurs,
mostly educated youth, who
now represent the new ‘nonbureaucratic’ face of the
government. To illustrate, MPonline
has 12,000 points-of-presence
(PoPs), employs 15,000 people
and sees 3 million transactions a
month. Mahaonline, set up two
years ago, has the widest reach with
27,000 PoPs. These portals bring the
government to people’s doorsteps
and eliminate the “last-mile
connectivity” challenge.
The third category of TCS’s
e-governance solutions deals with
the financial side of government. Six
states in India have adopted TCS’s
Integrated Financial Management
System, an online platform that
captures the working of the entire
financial machinery of the state,
from allocation of funds to actual
dispersal at the local office. Each
voucher can be tracked and there is a
monthly reconciliation of accounts,
checked by an external auditor.
What is most impressive is that
the states’ chief ministers, finance
ministers and chief secretaries have
personalised dashboards on their
machines projecting a real-time
fiscal picture of the state: how much
money has come in till date, how
much was spent, resources available,
etc. The states with these IT-enabled
chief ministers include Andhra
Pradesh, Assam, Bihar, West Bengal,
Madhya Pradesh, Karnataka and
Punjab. TCS has also implemented
solutions for VAT administration in
15 states in India, which has helped
increase tax collections.
Health care advantage
The company has worked with other
state institutions in areas such as
health care, policing and the public
distribution system. In Tamil Nadu
and Gujarat, for instance, patients
need just an ID number to access
their medical records at any civil
hospital. In Andhra Pradesh, the
Aarogyasri scheme implementation
has made best-in-class health
care accessible to millions of poor
citizens. Another showcase project is
the Mahatma Gandhi National Rural
Employment Guarantee Act.
The impact of TCS’s many
governance solutions has translated
into tangible benefits and even won
the company awards and accolades.
MCA21, for instance, received
the Prime Minister’s award for
Excellence in Public Administration.
“We consider ourselves to be in
the business of democratising
information and transforming
governance,” says Mr Chakrabarty.
The e-governance business is,
by nature, less profitable than private
sector engagements. But what TCS
intends to do is leverage its basket
of solutions to generate revenues
from other countries. “Most
Commonwealth countries have a
similar government structure to
India and our solutions will be easily
replicable,” says Mr Chakrabarty.
“We are looking at Wales, Scotland
and African nations such as Uganda,
Kenya and Zambia. Solutions
developed in India are finding global
acceptability.”
TCS has a significant footprint
in the British public sector, with a
number of engagements involving
the Home Office, the Department
of Works and Pensions and
local governments in Wales and
Scotland. Besides, it works with the
Mississippi State Government in
the United States. The Government
Solutions unit is chasing 50 percent
growth year-on-year and expects
to derive at least half of its revenues
from overseas customers.
The e-governance solutions
of TCS are connecting the citizen
to the state and ultimately helping
improve the quality of life of every
Indian citizen. The success of these
new platforms will, it is hoped,
have a ripple effect, making the
state machinery move faster. The
government, ladies and gentlemen,
is at your service. Just click. ¨
— Gayatri Kamath
October 2013
n
Tata Review
41
BUSINESS
Where defence is the key
The large skills gap in cyber security is what Tata
Interactive Systems has identified and is drawing
up plans for as it targets the safeguarding of
under-threat companies and other institutions
A
bout four years ago, Tata
Interactive Systems (TIS)
began working on a project
to create a world-class
online training programme on
cyber security for the University
of Maryland University College
(UMUC), Maryland USA. The team
went on to create an award-winning
learning programme that was well
received by faculty and students alike
and others at the institution.
Armed with that experience
and learning — and backed by its
own formidable reputation in the
instructional design and training
42 Tata Review
n
October 2013
space — TIS has since spotted a
significant potential for business
in the area of cyber security. And
why not? As the world becomes a
massive virtual marketplace where
businesses vie with each other to
become more knowledge- and
data-centric, a new definition seems
to be emerging for the haves and
the have-nots in this grand, webenabled scheme of things: those
who have been hacked, and those
who have not been hacked (at least,
not yet).
Blame it on the internet, the
powerful enabler of contemporary
business: smart, savvy, cutting edge
and widely networked. The world
wide web, however, comes with its
own set of perils. Reports suggest
that the explosion of internet-based
platforms have seen a corresponding
spurt in cybercrimes.
According to the US
Government Accountability
Office, the United States Company
Emergency Readiness Team (USCERT) received almost 12,000
cybercrime reports in 2007; in 2012,
this figure was four times higher.
That is alarming.
technology and people
“There’s a technology aspect to
the problem of cyber security and
a people aspect too,” says Rajesh
Jumani, executive vice president,
Asia Pacific and Middle East, TIS.
“Companies acknowledge the
business
technology part of the problem by
putting in place high-end systems
for compliance. Unfortunately,
not many companies see how
grave the threat from employees
is, so they don’t do enough on the
people front. Interestingly, research
shows that more than 50 percent
of security breaches in companies
are caused through mistakes made
by employees.” Simply put, a great
deal of loss and anxiety can be
easily avoided if employees just
know better.
With work spilling over from
simple emails and transactions on
laptops and desktops to smartphones
and other devices, unsuspecting
employees make their companies
increasingly vulnerable to threats
from attackers who are getting more
innovative by the day.
“Companies end up losing a lot
of capital because their employees
are not trained or because they are
not at the right level of skills as far
as cyber security is concerned,”
says Preeti Jasnani, who heads
instructional design at TIS. “Insider
threats — where disgruntled
employees wilfully leak important
information — also constitute
a large part of the risk faced by
companies.” Clearly, if there was
ever a time for companies to
buckle up and reinforce their cyber
vigilance, it is now.
To enable companies to meet
this skills gap, TIS has created a
comprehensive framework for
cyber security training that can
be mapped to, and customised
for, specific requirements. The
framework allows companies to
choose from several modules,
ranging from a one-time service
to an extended partnership
where TIS offers sustained
More than 50 percent of security breaches
in companies are caused through
mistakes made by employees.
Rajesh Jumani, executive vice president, Asia Pacific and Middle East,
Tata Interactive Systems
learning and reinforcement. The
offering includes training needs,
consultancy, curriculum and
portal design and development,
and measurement of training
effectiveness.
Although it is still early
days of the journey, TIS already
has an impressive list of clients
across markets, both for its
cyber security proposition as
well as for information security:
Royal Mail UK, Mashreq Bank,
National Bank of Oman, Swiss
Re, Motorola, Credit Suisse,
University of Phoenix, Swiss Post,
Schweizer Mobiliar and Abu Dhabi
Commercial Bank, among others.
critical for all
“We are now rolling out the cyber
security proposition globally,” says
Ishrat Shums, vice president and
chief communication designer at
TIS. “Our focus markets are in all
the geographies that TIS is already in
— Europe, India, Middle East, North
America, UK.”
She adds that the company
sees its services being beneficial to
potential clients across industry
verticals such as banking and
financial services, telecom,
health care and life sciences,
manufacturing, hospitality, logistics,
airlines and transport, consumer
goods and retail, education and
government. The cyber security
curriculum developed by TIS
is delivered in extremely user-
friendly modules, using a mix of
web-based training, scenario-based
gaming, quizzes, assessments,
interactive simulations and TIS’s
proprietary ‘learning nuggets’,
which pack information into easilyremembered bits. The modules
are delivered across platforms and
devices to ensure that learning
becomes relevant, applicationoriented, fun as well as accessible at
any point in time.
For instance, TIS recently
created a mobile app for the World
Bank. This is meant to be a one-stop
ready reckoner for cyber security
content, so that employees can
quickly refer to updated information
at any time from their phones or
tablets. Finally, as the TIS team
points out, it’s not just the content
that matters — the key is to present
the information in formats that are
engaging and effective.
With growing awareness —
both within business enterprises
and among consumers — about
the security threats that imperil the
virtual world, the company believes
that they have a big opportunity
with their cyber security
proposition.
“Most companies have
experienced at least one security
breach so far, and it is only a matter
of time before they start investing
in adequate skills training for their
employees,” says Mr Jumani. ¨
— Sangeeta Menon
October 2013
n
Tata Review
43
business
A new dawn under the sun
A year has passed since BP’s
joint venture with Tata (Tata
BP Solar) ended and Tata
Power Solar Systems came
into being. Ajay Goel, the
chief executive of the new
enterprise, talks to Vibha
Rao about the solar energy
industry, the company’s new
business strategy and the
various challenges it faces.
Tell us about the Tata Power Solar
Systems journey since August 2012,
the time when it was recast.
We have transformed ourselves in many ways
to continue to stay on top of the fast-growing
solar energy market. We have reorganised the
company to sharpen our focus in each of the
three businesses we operate in: manufacturing,
projects and products. In each of these
businesses we have redesigned our processes and
approach to improve our customer centricity
and establish cost leadership in the marketplace.
Could you elaborate on the
company’s new business strategy?
On the manufacturing front, our focus is to
reestablish ourselves as a leading global player.
44 Tata Review
n
October 2013
business
This requires us to be cost competitive vis-a-vis
the Chinese, and that is what we have achieved
over the past year after a lot of hard work. We are
also actively working to build our brand and our
export channels outside India.
On the projects side, we want to lower
the cost of solar energy in India and make it
grid-competitive. We have built an ecosystem
of financing partners who can offer rooftop
solutions to our customers at a price that is
lower than what they are paying today. Many
clients, including Tata companies, have found
our solutions compelling. We want to help move
the market, reduce the reliance on subsidies and
provide the right quality at the right price.
On the products side, our strategy is to
bring the power of the sun to more people. A
large number of Indians still do not have access
to reliable grid power, which is unfortunate. But
this is also a tremendous opportunity for us and
we are launching innovative products to make
the most of it.
What about your export strategy?
We have a 20-year history of strong exports,
under the BP Solar brand, to the United States
and European markets. After BP exited the
solar business, we have been working actively
to rebuild our export channels and establish the
Tata brand in these markets. Given our proven
track record and bankability, many customers
and distributors are coming back to us. However,
with the overcapacity in the supply chain, we
want to be selective about how we grow our
exports. We are signing up with a handful of
strategic partners who will buy our modules on
an on-going basis.
Could you tell us about the new
products and solutions that Tata
Power Solar Systems has launched?
We are in the process of launching three new
products in the subsidy-free market. One is
SunJeevini, a solar retrofit for people who
already have an inverter-based power backup
system. Consumers can charge the inverter’s
batteries with free solar energy rather than
expensive grid power.
The second series of products to be
launched are LED-based solar home lighting
solutions, which we think will be a game
changer. Another new product is a consumeroriented solar power pack that consists of
batteries, solar panels and ‘intelligent power
electronics’. The batteries are charged by sunlight
and the entire household can be run using solar
power. It is a fully integrated solution and we are
working on an affordable version that people can
buy without any subsidy.
Our aim is to eliminate the dependence on
subsidies and make solar products affordable to
more and more people.
There are also some new projects...
We are executing about 100MW of projects this
year. The largest is for National Thermal Power
Corporation [NTPC], at an extremely attractive
SunJeevini: The charge is on
SunJeevini is a retrofit unit that allows conventional
inverter batteries to be charged using free solar
energy rather than expensive grid power. A zero
maintenance unit, SunJeevini can provide up to
three-and-a-half hours of additional power backup
in a day. With prices starting at an affordable
`11,000, SunJeevini is designed to be scalable
from 80 to 600 solar peak watts without any big
changes in the consumer’s existing system.
“SunJeevini is a uniquely innovative product
that lets people charge their inverters using free
solar power,” says Ajay Goel, Tata Power Solar
Systems’ chief executive. “It is the perfect example
of our commitment to Indian innovation and our
vision of enabling solar power everywhere.”
October 2013
n
Tata Review
45
business
cost of less than $1 a watt, which is close to `60
million per megawatt. We are also using our own
India-manufactured modules, demonstrating
the value of our integrated solution offering.
The project is being built to NTPC’s exacting
standards and we are working closely with its
engineering and design teams.
Furthermore, we are executing a 29MW
project in Maharashtra for Tata Power. This will
not only bring affordable solar energy to the
people of the state, but will also help Tata Power
take the lead in meeting its ‘renewal purchase
obligations’ as the largest private independent
power producer in India. These are showcase
projects to highlight our competitiveness.
Additionally, we are executing a series of smaller
projects, ranging from 1 to 10MW.
Manufacturing excellence has been
one of the strengths of the company.
Have there been any changes here
after the BP exit?
There are two parts to our manufacturing
business: capital-intensive solar cell
manufacturing and labour-intensive solar
module manufacturing. We are well established
as one of the most bankable tier 1 module
manufacturers in the world. To meet the
The company’s goal is to eliminate the dependence on
subsidies and make solar energy products more affordable
46 Tata Review
n
October 2013
growing demand, we are currently in the process
of adding capacity and upgrading equipment in
our module manufacturing lines.
On the solar cell side, the business is highly
capital intensive and the efficiency of the product
is driven by the type of equipment. While we
are competitive, we have not yet invested in
the latest cutting-edge machines, given the
overcapacity in the market. We continue to
evaluate the situation closely and will make such
investments at the right time.
Does the company have any
technical alliances?
We keep abreast of new technologies on a
continuous basis and we have made investments
in some promising technologies. For instance,
we have invested in Flisom, a Switzerland-based
company working on building flexible solar
modules; at the right time, we hope to integrate
its cost-effective products with our projects.
We are also looking at other opportunities in
modules, trying to drive innovation in each one
of them. We have reduced the weight of our
structures by 30 percent, which translates into
significant savings because of the lesser amount
of steel used. We are an end-to-end solution
provider and strive to innovate around the whole
system, rather than just with components.
Where do you see Tata Power Solar
Systems five years down the line?
Five years is a long time in the solar energy
industry. Five years ago this industry, not
just in India but worldwide, was at a nascent
stage. Today there is a lot more interest in and
acceptance of solar-powered products all over
the world, including in India, where solar energy
is destined to become the mainstream source of
power generation.
Our vision is to be one of the top companies
in the world providing integrated solar solutions,
but our growth depends on where and how
the market expands. The solar energy market
continues to be in a state of flux and is a policydriven market in the short-term. We have a fairly
ambitious vision, which we think is realistic
given the potential of solar energy. ¨
special report
The case for skill
care gets a boost
The scarcity of adequately skilled talent in India is the
concern that has prompted Tata companies to invest
resources, time and more in a group-wide skills-building
initiative that has the potential to benefit all stakeholders.
This special report details the Tata group’s skills-building
agenda, besides showcasing the skilling efforts undertaken
by a few Tata companies: Indian Hotels, Tata Advanced
Systems, Tata Chemicals, Tata Consultancy Services,
Tata Motors, Tata Power, Tata Projects and Titan Company.
By Sangeeta Menon
October 2013
n
Tata Review
47
special report
Where the collective
strengthens the idea
The pan-Tata effort to enhance the skills quotient of those coming
of working age will help India secure its demographic dividend
T
o harness the potential of millions
of Indian youth and give them an
opportunity to build their destiny —
that’s the nation-building idea taking
shape, and finding substance, at the Tata group.
Tata companies, big and small, are
collaborating on a group-wide, centrallycoordinated programme that will help scores of
Indian youth create livelihoods for themselves
by acquiring industry-relevant and quality
vocational skills. The Tata skills building
initiative aims to address the growing skills
deficit in the country, which has become a
national priority and a matter of concern,
especially over recent years.
Two-thirds of India’s 1.2-billion population
is under 35 years old, making the country one of
the youngest, from a demographic perspective,
in the world. The economic benefit of having
such a large working age population is obvious.
The bad news is that a significant number of this
population is unskilled or underskilled.
There are consequences here for everybody,
particularly Indian industry, which is faced with
a challenging shortage of adequately skilled
48 Tata Review
n
October 2013
employees for specific jobs, not to mention
the rising costs of retraining employees. The
government is understandably worried by the
situation, which is why it has set a target of
skilling 500 million people by 2022. The Tata
group has taken on the task of shouldering some
of that responsibility.
“It is a well-accepted fact at the government
level, both at the centre and in the states, that
skills development is one of the highest national
priorities if we are to meet the aspirations of
our people,” says S Ramadorai, vice chairman,
Tata Consultancy Services (TCS), chairman of
the National Skills Development Agency and
the National Skills Development Corporation,
and an advisor to the prime minister on skills
development.
Mr Ramadorai, the force behind the Tata
skills development initiative, says that, based on
India’s demographic profile, the need for skilling
the country’s youth for employability, leading up
to employment, is fundamental, “if we are to reap
the demographic dividend and keep social order.”
The skills-building agenda is not new to
Tata. For years individual Tata companies have
special report
espoused the cause in various ways: through
their captive training facilities, where they
trained people from the communities around
their factories; through partnerships with
nonprofits; and through collaborations with
government-run industrial training institutes
(ITIs). The results have been good, too.
What is new is the collaborative response
to the challenge at hand. Not satisfied with the
limited impact they have been making in the
lives of the local community, Tata companies
are now looking to make a bigger impact across
the country. That would mean scaling up their
activities manifold, which is best done as a
collective force rather than individually.
Dr Mukund Rajan, chairman, Tata Council
for Community Initiatives, who is leading
the group-wide initiative, explains the group’s
collaborative approach: “We want to make
sure that in corporate social responsibility
[CSR] there are a few initiatives where, if the
collective is greater than the sum of the parts,
we must embrace those. We must try and create
a national impact. Most of our companies will
have something to contribute and it is not
something removed from our core competency
or belief system. The scale that the companies
can create if they work together is larger than
what any industrial house can achieve in India.”
The benefits of a shared approach are
plenty. It will optimise utilisation of significant
skill assets for skills training that individual
Tata companies have built. Then there are the
advantages of shared costing, shared targets and
shared learning, all of which will help achieve
the large scale that the group aspires for in the
skills-building space.
The business case
Anita Rajan, a member of Mr Ramadorai’s office
and a part of the core team working on the
skills-building initiative, says there is a strong
business case for the project. “Companies need
skilled labour and spend considerable money
on skilling them,” she explains. “A group-wide
skilling initiative will allow companies to
share not just costs but also local community
intelligence. For example, Odisha, a state in
eastern India, has a large number of skilled
filigree craftsmen — a knowledge and a
community that Tata Steel in Odisha has access
to, whereas Titan Company in Karnataka has a
huge requirement for skilled artisans, but it has
no connect with the community in Odisha. Tata
Steel can help facilitate this valuable exchange of
knowledge and skills.”
To facilitate such seamless exchange of
intelligence and information on the skills
Taj Centre of Excellence, Lonavala (Maharashtra): Such centres will be the hubs for skills-development training
October 2013
n
Tata Review
49
special report
A Tata group-wide skilling initiative
will allow companies to share
not just costs but also local
community intelligence.
Anita Rajan, vice chairman’s office, TCS
building programme across the group and also
to institutionalise collaboration, a portal is being
set up with complete and updated information
on the initiatives being undertaken, facilities
available, contact people at each Tata company,
and so on.
The group will also draw from the huge
knowledge that resides within the Tata trusts,
which have partnered non-government
organisations (NGOs) in skills-building
initiatives across the country for several
years now. The trusts have for long nurtured
relationships with NGOs and local communities
in different parts of India.
“With their pan-India presence, the trusts
can bring in the experiences of different models
(of skills building) to help move towards better
delivery mechanisms and quality of training,
thereby building the ecosystem and influencing
robust policy development on skills,” says
Poornima Dore, programme officer, urban
poverty and livelihoods, Sir Dorabji Tata
Trust and the Allied Trusts. “To the extent of
commonality in terms of geography and target
group, there are definite synergies which are
possible with the group-wide initiative.”
The group envisages a multilayered,
multidimensional response mechanism for
the skills deficit problem facing India. A core
group with representation from various Tata
companies is working on creating a model that
combines the learning of all companies from
their individual skills-building experience.
While the group will continue to follow the
three basic models mentioned earlier — use
of captive centres, public-private partnerships
with ITIs, and NGO partnerships — the
key difference will be in the sharing of these
facilities and increasing the combined capacity
for training several times over.
50 Tata Review
n
October 2013
The plan is also to build in the targets for
another important Tata engagement: affirmative
action, or the programme for positive
discrimination aimed at the scheduled caste and
scheduled tribe people of India.
A hub-and-spoke structure will ensure
that the skills-training opportunities are
accessible to more people from a larger spread
of communities. Whereas the spokes, or the
smaller training centres, will provide basic skills
training in a range of vocations relevant to the
local community and industry, the hubs will
be the centres of excellence, where candidates
will receive more advanced training, delivered
through sophisticated infrastructure. The hubs
will design the curriculum in line with ‘National
Occupational Standards’, train the trainers at
the spokes and also manage the certification for
candidates enrolling in the courses at the hubs
and the spokes.
8 Sectors; 25-30 skills
The plan is to launch the programme with
three or four such centres of excellence in
place. The group will identify eight sectors and
25-30 skills in which training will be provided.
The cost of delivering a typical three-month
training programme will range from `3,000 to
`10,000 per person, depending on the skill and
the trade. While a significant portion of this
investment will come from the CSR budgets of
the companies, there is also an opportunity to
offset some of these costs by availing benefits
under various government programmes
and schemes that offer reimbursements for
providing training services.
Costs and other concerns notwithstanding,
the group is committed to making a success
of the skills-building agenda. The core team is
putting the final touches to the strategy and the
rollout plan. As Dr Rajan says, “Mr Ramadorai
believes this is a make or break situation for the
country. We have so many young people who
can be skilled to become productive citizens. We
need to grab this opportunity. Focusing on skills
building can create a huge talent pool that can
do for India what the IT industry has done for
the country in recent times.” ¨
special report
‘If anyone can pull this off,
it is the Tata group’
Tata Consultancy Services
vice chairman S Ramadorai
has been a key inspiration for
the group’s skills-development
initiative. Here, the chairman
of the National Skills
Development Agency and the
National Skills Development
Corporation talks to Sangeeta
Menon about the importance
of the project.
How successful has the national
skills-development mission been in
achieving its initial goals?
It is a well-accepted fact at the government
level, both at the centre and in the states, that
skills development is one of the highest national
priorities if we are to meet the aspirations of
our people. Based on our demographic profile,
the need for skilling the youth for employability,
leading up to employment, is fundamental, if
we have to reap the demographic dividend and
keep social order. The operating structure of
the government was through the National Skills
October 2013
n
Tata Review
51
special report
Vocational education has been a
neglected subject in India. We need
a massive publicity campaign for the
advocacy of vocational skills.
Development Council chaired by the prime
minister and the National Skills Development
Board, which was co-chaired by the deputy
chairman of the Planning Commission and
myself. Then there was the National Skills
Development Corporation [NSDC], a privatepublic partnership.
We have collapsed all these, with the
exception of the NSDC, into a single agency
called the National Skills Development Agency,
which has been set up with the mandate to
develop a strategy for skills development
at the national level, identify new areas for
employability, advise on remodelling of
existing skills-development programmes run
by various ministries, and promote greater use
of information communications technology in
the area of skills development. Structurally we
have consolidated everything such that only two
institutions will drive this programme from the
government’s side.
Another level of systems building we have
to do is through information management from
the labour market and transparent reporting
on labour supply and demand, so that we can
measure whether we are addressing demand with
the relevant supply.
What are the challenges faced by
the programme?
Vocational education has been a neglected
subject in India; every parent has been
conditioned into thinking that a paper degree
is the route to success. We need a massive
publicity campaign for the advocacy of
vocational skills, informing youth and parents
that doing something with your own hands is an
alternate route to fulfilling your aspirations. The
government is doing a number of things, such
as the National Skills Qualification Framework,
which will map the levels of competency and the
52 Tata Review
n
October 2013
occupational standards by job roles. This is much
like creating a uniformly understood language
for qualifications.
We want to start vocational training from
the secondary school system, from Standard
9 to 12, progressively leading to the industrial
training institutes [ITIs] and government
polytechnics and the university system. We
have already established clear pathways from
the vocational education system to the general
education system so that a student can take the
credits and go for a university degree or vice
versa. We have started some successful pilots in
Haryana, Assam and Karnataka. This will ensure
both lateral and upward mobility.
The Tata group has put in place a
programme for skills development.
What are the challenges and
opportunities there?
The Tata programme is essentially consolidating
all the capacity we have either created or will
create as a nation-building exercise. We are
looking at building scale and enhancing capacity
creation for outcomes. If 15-17 million youth
graduate in a year, what does it mean to build
capacity to skill them in the right way? The
capacity creation involves leveraging all the
physical infrastructure we have, be it ITIs,
polytechnics, public-private partnerships or any
other method.
We are looking at creating and sharing
huge capacities, aligned to government needs
and sectoral needs, and making this available for
the nation at large in a productive manner. We
must break down our targets into short term and
long term, define the areas and sectors we want
to be present in and the competencies we want
to build. We must have efforts like affirmative
action. We need to roll out and scale up quickly
to deliver measurable results. This is where
technology is critical and the Tata group has
enough expertise here.
It is always a challenge to bring so many
stakeholders on board, but with the support of
the group and our chairman we will make this
happen. It is a very ambitious programme; if
anyone can pull this off, it’s the Tata group. ¨
special report
‘The Tata group has always
believed in nation building’
Dr Mukund Rajan, chairman,
Tata Council for Community
Initiatives, speaks to Sangeeta
Menon on why Tata companies
are joining hands to address
the skills-building priority.
Tata companies have been involved
in skills-development initiatives of
their own. Why did the group feel
the need to take up this initiative
collectively?
One reason is the economic landscape that we
have in India today. We estimate that some 140
million young people will enter the workforce
over the next decade. The biggest concern is
whether these young people are going to have
the right skills. The industry finds that the people
coming into the workforce currently are not
always appropriately skilled; companies have to
invest a fair amount in retraining them.
If we don’t provide the right skill sets and
render people employable, then huge numbers
of unemployed young people could be on the
streets, in an environment where a fair amount
of affluence exists. So we run the risk of society
witnessing tensions. While it is a national issue,
it is also a need of the companies. One of the
October 2013
n
Tata Review
53
special report
system. Many of our companies are already
doing these things, but the impact is often only
local. The scale that the companies can create
if they work together is larger than what any
industrial house can achieve in India.
How will the group reconcile the
nation-building intent with business
benefit?
From our perspective there is no profit motive.
But what will certainly help the companies is
that they can meet their own requirement for
skilled labour. They can also share their training
facilities with other corporate entities and the
government, involve their employees in this
initiative including as volunteers, and achieve a
sense of satisfaction for giving back to society.
With some 140 million young people estimated to enter the
Indian workforce over the next decade, skills training is vital
most serious shortages faced by companies is
that of the right labour force, with the right skills
to deliver projects on time, even in basic trades
such as plumbing, welding and carpentry.
Mr Ramadorai has been a huge inspiration.
He is the advisor to the prime minister on skills
development and a lot of our focus on why this
is important for our country has come from him.
This group-wide activity was really triggered by a
presentation he made to Group Chairman Cyrus
Mistry. The Chairman immediately felt this
resonated strongly with all that our group stands
for, and it leverages very well the capabilities and
expertise of our group companies.
We are approaching this collectively
because we want to make sure that in corporate
social responsibility [CSR] we embrace a few
initiatives where the collective is greater than
the sum of the parts. We must create a national
impact. Most of our companies will have
something to contribute and it is not something
removed from our core competency or belief
54 Tata Review
n
October 2013
With skills development becoming a
major agenda, what impact do you
anticipate on the group’s CSR efforts?
I don’t see any significant realignment of
activities. What we would probably see is
a closer and more transparent link between
the CSR activity and the company’s core
business capability.
What challenges do you anticipate
with this initiative?
As we research the space, we are discovering
new things. For instance, it is not enough to
put up the necessary infrastructure for training;
driving traffic into those training centres
could be a challenge. Part of the problem lies
in poor communication and awareness. The
government needs to create awareness about these
programmes, that they could lead to potential
employment. That could encourage people to get
enrolled, even travel long distances to get skilled.
There are several incentives provided by the
government to make these programmes attractive,
but tapping them in the right way is important.
This programme will be a huge learning for
us because we are trying to significantly multiply
the capability we have created so far. But this is
something we are committed to doing. It speaks
for the ethos of the group, which has always
believed in nation building. ¨
special report
Indian Hotels company
A hospitable future
The Indian Hotels’ hospitality training centres offer skills-based
training to underprivileged youth, helping them find better jobs
and ensuring a brighter future for many
W
ith ‘enabling sustainable livelihoods’
as its corporate social responsibility
theme, the Indian Hotels (IHCL)
has provided skills training to India’s
underprivileged youth ever since 2009, when it
started its first hospitality training centre.
Set up in partnership with the nonprofit,
Pratham, the Khaultabad centre provides basic
training in hotel industry processes such as
food production, housekeeping and food and
beverage services to youth from the rural areas
of Maharashtra’s Aurangabad district. The 48th
batch of students has just completed training
from this centre. IHCL now runs 41 such skills
building centres and has trained more than
9,000 youth in this manner. Armed with basic
employability skills and backed by the Taj name,
97 percent of the students have found placement
in different companies.
Importantly, IHCL’s skills-building
programme focuses on many of the less
developed regions of India, including the
Northeast, Jammu and Kashmir, and many
tribal belts. “We provide training to the local
youth at our hotels in Srinagar, Chandigarh and
Delhi,” says Vasant Ayyappan, director, corporate
sustainability. “We have the highest number of
candidates enrolling for the ‘hunar se rozgar’
(skill-based employment) programme from
these places.”
The company’s Jiva Spa offers a threemonth training course in spa services to
candidates from marginalised sections,
especially from the Northeast. A spa training
centre has been set up at Dimapur in Nagaland
and work is on to establish another one (in
Guwahati, Assam). In April 2013, IHCL set
IHCL has planned many new hospitality skills training centres
up its first centre of excellence in hospitality,
at the industrial training institute in Lonavala,
Maharashtra, with funding support from the
World Bank and the state government.
IHCL has partnered other Tata companies
to set up hospitality skills training centres, at
Kolabera near Jamshedpur with Tata Steel, and at
Mithapur in Gujarat with Tata Chemicals. Plans
are afoot for another training centre, this one in
Behrampur, Odisha, with Tata Steel.
In the hub-and-spoke model envisaged
by the Tata group, the Lonavala hub should be
able to train 5,000 people annually over the next
four-five years. Over the next two years, IHCL
plans to set up more such hubs, in Mangalore
(Karnataka), Jabalpur (Madhya Pradesh) and
Guwahati (Assam) and other places.
“The group-wide skills-building initiative
is exciting because the scope is so large,” says
Mr Ayyappan. ‘If we have to make an impact
in this country, it has to be through skills
development.” ¨
October 2013
n
Tata Review
55
special report
Tata Advanced Systems
Giving wings to aspirations
When faced with a shortage of skilled personnel, Tata Advanced
Systems set up its own internal training centre. This module can now
be replicated and customised to suit other industries and needs
W
hen Tata Advanced Systems
(TASL), a company that
manufactures precision
components and structures for the
extremely demanding aerospace and defence
industries, was set up in 2009, it faced a serious
shortage of talent. Even the limited talent that
was available at the time in India was not of the
quality the company desired.
So TASL did the next best thing: it decided
to seed the skill sets it required by setting up
its own internal training centre. The company’s
‘advanced craftsmanship centre’ has been
benchmarked with some of the best training
institutes of its kind worldwide.
The centre’s structured training programme,
lasting about nine months, creates world-class
skilled mechanics out of fresh apprentices from
industrial training institutes. These are young
people who have probably never seen an aircraft
up close before they enrolled in the course.
The key vocations that they receive training
in are aerostructures assembly and aerospace
programming. Overall, the centre has trained
more than 600 people thus far, and all of them
are now employed with the company.
“We are completely aligned with the skillsdevelopment initiative of the group; we have
been doing it because we have a business need,”
says Masood Hussainy, head of aerostructures
at the company. “The modules we have created
can be easily replicated for the benefit of the
overall community and for the creation of job
opportunities that go beyond our internal needs.
We believe we have put together a robust model
of skills enhancement that can have multi-fold
applications, and this model is replicable on a
large scale.” ¨
Sharpening aerospace skills — at TASL’s Advanced Craftsmanship Centre in Hyderabad
56 Tata Review
n
October 2013
special report
Tata Chemicals
Crafted to provide hope
With their vocational training courses and skills-building initiatives,
Tata Chemicals has enabled people from the poorest sections of
society to earn their own living through a variety of ways
W
ith a deep commitment to creating
sustainable livelihood options, Tata
Chemicals’ employability initiatives
seek to develop skills that fall into
three broad categories: those that address the
needs of the community or the region, those
that meet a business requirement, and skills that
reflect national growth aspirations.
The company’s rural BPO projects in
Mithapur in Gujarat and Babrala in Uttar
Pradesh, under the Uday Foundation, skills
rural youth for BPO work to meet the growing
need for trained staff. This has, in a small way,
also helped stem the migration to urban areas.
In Babrala, the Tata Chemicals Society for Rural
Development (TCSRD) tied up with Larsen &
Toubro (L&T) to train youth from neighbouring
villages to learn the skills required for various
aspects of the plant’s expansion. Some of them
have also found employment with L&T.
Other vocational training courses on offer
include masonry, fitting, welding, carpentry,
mobile repairing, accounting, basic computers,
desktop publishing and garment making. Tieups with L&T, the Indian Hotels Company, the
National Institute of Fashion Technology and
others have helped bring in the right kind of
expertise and industry intelligence.
These non-farm livelihood courses,
conducted around the company’s plants in
Babrala, Mithapur and Haldia (West Bengal),
have so far trained 8,500 women and youth.
Over the last five years, close to 6,000 rural
people have benefitted from the company’s
farm-based livelihood initiatives, in pond
management, agricultural services, seed
production, dairying, food processing, etc.
A Tata Chemicals workshop to promote handicrafts
Promoting handicraft skills has been
another successful endeavour at Tata Chemicals.
Its famous Okhai model empowers local
artisans, providing them with design, marketing
and enterprise management support. Okhai
is now a separate trust and an umbrella brand
under which all handicrafts and livelihood
programmes of TCSRD are managed.
Working closely with local communities,
the company is set to play a meaningful role
in the group-wide skills-building programme.
“This will help us scale up in a big way,” says
Alka Talwar, head of corporate sustainability at
Tata Chemicals. “It will also help Tata companies
learn from each other’s experience, besides
improving the quality, depth and reach of the
group’s skills-building efforts.” ¨
October 2013
n
Tata Review
57
special report
Tata Consultancy Services
Enabling a better future
Coming under the corporate social responsibility rubric, the
skills-creation programmes seeded and nurtured by Tata
Consultancy Services cover many different spheres
T
ata Consultancy Services (TCS) has
included skills building within its
corporate social responsibility focus
areas. The company’s skills-building
initiatives span BPO training, partnerships with
industrial training institutes and train-thetrainer programmes, among others.
TCS’s BPO employability programme
reaches underprivileged rural youth in the states
of West Bengal, Odisha, Maharashtra, Gujarat
and Tamil Nadu, providing free training in
English, corporate etiquette and computer skills.
Since 2010, the company has trained 22,236
youngsters, of which 7,681 are from affirmative
action groups. More than 1,800 of the trainees
are today TCS-BPO associates.
Through the Udaan initiative, TCS partners
the National Skills Development Council to offer
Kashmiri youth a 14 week-training programme
designed and developed by the TCS Foundation.
The course focuses on soft skills and BPO
processes. Of the 97 candidates trained last
year, 67 joined TCS. The company also offers
A soft skills programme being conducted at a training centre
58 Tata Review
n
October 2013
infotech-enabled vocational courses. Since
inception, 117 students have been trained and 70
students have received job placements, of which
17 work with TCS.
With its computer operator-cumprogramming assistant course, the company
conducts workshops for instructors at industrial
training institutes (68 instructors have been
trained and certified in Kolkata, Bengaluru,
Mumbai and Lucknow). Its InsighT programme
imparts technical as well as soft skills to students
of class 12, and has trained close to 3,000
students in three years.
Through its ‘academic interface
programme’, TCS seeks to develop faculty for
academic institutes, improve the employability
of students and develop curricula as per industry
requirements. A total of 616 institutes in India
and 288 institutes overseas have benefitted from
these activities.
In collaboration with the Government
of Karnataka’s Department of Information
Technology, TCS started India’s first rural IT
quiz in year 2000 to enhance awareness about
information technology. The quiz now covers the
states of Madhya Pradesh, Gujarat, Maharashtra,
Jharkhand and Rajasthan. Last year alone nearly
14.5 million students from more than 8,000
schools participated in the quiz.
“Assisting youth to become employable is
TCS’s impact through empowerment,” says
Dr Joy Deshmukh, global head, corporate social
responsibility. “The group-wide programme will
have a larger impact; the scale allows backward
and forward linkages. The different strengths of
Tata companies can be harnessed to collectively
work for the social good.” ¨
special report
Tata Motors
Driven by commitment
The skills-development initiatives at Tata Motors have translated
into business gains for the company, while also improving the
employability and income-earning capacities of beneficiaries
E
mployability is a key aspect of the
corporate social responsibility agenda
at Tata Motors (TML). From helping
farmers practice new methods of farming
to training women in handicrafts and imparting
basic vocational skills to youth, the company
engages with various groups to improve their
employability and income-generation capacity.
The TML skills-development programme
covers three broad areas:
Skills building in trades related to TML’s
business: motor vehicle mechanics, diesel
mechanics, drivers, etc. The company
sees a direct link here between the
community’s employability needs and its
own business requirements.
Skills building in other industrial
spheres: bar bending, scaffolding, the
retail trade, etc.
Skills building in agriculture and allied
industries, such as dairy, poultry,
pisciculture and apiculture.
The company’s apprenticeship programme
offers youth a chance to improve their technical
and vocational skills, and some 7,000 people
benefit from this programme every year. TML’s
partnership with 135 government-run industrial
training institutes across the country — 31
under the public-private partnership model —
can train nearly 10,000 youth every year.
In August 2011, TML launched a driver
training programme to counter India’s poor
record in road fatalities and create a trained
pool of people who can drive the company’s
commercial vehicles. TML currently runs eight
driver training schools and plans to start six
more in the near future. The driver training
Young students receiving skills training in motor mechanics
programme trains close to 600 drivers annually.
The company also works with nonprofits
and skills-development agencies like the
Ramakrishna Mission and Pratham to provide
training to youth in other relevant trades, as
mechanics, welders, electricians, carpenters,
health workers, etc. Over 70 percent of youth
receiving training under TML’s various
programmes find employment in the company.
Armed with such experience, TML is now
looking to take an active role in the groupwide skills initiative. “Our skills-development
initiatives are in line with the group’s focus,”
says Vinod Kulkarni, deputy general manager,
corporate sustainability. “There is good scope
for cross-learning and mutually beneficial
partnership in the future. The challenge lies in
developing synergies and platforms where we
can learn from one another.” ¨
October 2013
n
Tata Review
59
special report
Tata Power
Independence is the elixir
Tata Power’s community development programmes are aimed
at inculcating a sense of self-worth in the underprivileged
communities being served, and in ensuring their self-reliance
L
ivelihood (samriddhi) and employability
(daksh) are the key words in Tata Power’s
community development lexicon.
Through industrial training centres
(ITCs) at locations such as Mulshi (Maharashtra)
and career development centres (CDCs) in
Odisha and Maithon (Jharkhand), the company
provides skills-building opportunities for
youth and women in various vocational trades,
including nursing, call centre management and
incense-stick making. The training incorporates
soft skills in communication and teamwork.
Some 650 youth are currently being trained
at the company’s ITCs and CDCs; in the last
four years more than 1,200 have successfully
completed the training and found employment
in various sectors.
Tata Power, along with Tata Business
Services (TBSS), has set up a rural BPO in
Khopoli (Maharashtra) to enhance employability
of youth in the region and also to create a talent
pool for the future needs of the industry. More
than 1,000 young men and women have trained
Tata Power’s career development centre in Maithon, Jharkhand
60 Tata Review
n
October 2013
as call centre executives this year, many of them
finding employment with TBSS at entry-level
salaries of around `6,000 a month.
Another focus area for Tata Power is
micro-enterprise development through selfhelp groups (SHGs), comprising predominantly
women in urban and rural habitats. Around
200 SHGs have been formed, with 2,672 women
members, across four states in the country.
From inculcating saving habits to accounting
and bookkeeping, these women are now
demonstrating leadership capacity and also
identifying new avenues of income generation,
receiving loans to initiate small businesses and
earning respect within their families and society.
Tata Power also reaches out to other Tata
companies to seek and support initiatives.
A skills-building initiative with Tata Steel in
Tiruldih (Jharkhand), focusing on vocational
training for project-affected youth, demonstrates
an inclination to engage with the local
community in greenfield projects. Tata Power is
also planning to strengthen the capacity of youth
in some aspects of its business, such as power
generation, transmission and distribution.
“Power is important for the growth of the
country, the community and of industry,” says
Avilash Dwivedi, head of community relations
with the company. “While Tata Power continues
with its business pursuit in challenging
circumstances, it also becomes imperative for
us, as a neighbour of choice, to ensure inclusive
growth and make citizens more prepared and
responsible towards nation building. This can
be accomplished through these skills-building
initiatives. Our journey to excel as a responsible
organisation will continue.” ¨
special report
Tata Projects
The approach is integrated
Tata Projects has partnered government and private agencies to
formulate initiatives targeted at enhancing the livelihood-generating
capabilities of people from disadvantaged communities
T
ata Projects has played an active role
in the skills-building space since
2007, when it started engaging with
youth around its project sites and
regional offices, encouraging them to acquire
employability skills that could eventually
give them access to mainstream employment
opportunities. This has been done as part of its
corporate social responsibility agenda.
Through tie-ups with government-run
industrial training institutes (ITIs), private ITIs,
other training partners and the company’s own
training facilities, Tata Projects offers six-month
residential courses in vocations such as welding,
bar bending, tower erection, plant maintenance
and construction supervision.
Candidates are recruited from the
disadvantaged strata aged 17-25 years, with 25
percent of the trainees coming from affirmative
action groups. The company also partners
nonprofits and other Tata companies such as
Tata Housing.
The six-month accelerated programme
gives trainees the benefit of on-the-job training,
provides a stipend during the training period as
well as minimum employment for six months
post-training. So far, the programme has trained
more than 600 people, with an average of 90
percent finding employment after completing
the course. These courses are certified not only
by the ITI but also by clients of Tata Projects
and by the Government of India’s ‘modular
employable skills’ test.
Tata Projects offers skills training, through
its nonprofit partners, in areas such as mobile
repairs, fabrication, painting, plumbing and
basic computing. A majority of the beneficiaries
The courses run by Tata Projects provide on-the-job-training
belong to the disadvantaged scheduled castes
and scheduled tribes.
Tata Projects also partners government
ITIs to enhance skills in the welding and fitter
trades in Andhra Pradesh. The company now
plans to train 6,000 people every year in the
skills required for tower erection and stringing,
in Nagpur (Maharashtra) and in Hyderabad
(Andhra Pradesh).
“In line with the group-wide skills initiative,
Tata Projects intends to play a bigger role in
view of the experience gained over the years,”
says B Sudhakar, the company’s chief human
resources officer. “We can integrate with other
group companies in the skills-building sphere,
besides leading the skills development hub in
Hyderabad. This is a great initiative which will
help in reducing the gap between the shortage
of skills [in India] and industry requirements. It
will also help group companies synergise with
one another in skilling and placements. And will
help in nation building.” ¨
October 2013
n
Tata Review
61
special report
Titan Company
Timed to seize the day
The advantages that accrue to those who have come through
Titan Company’s training courses seem a cut above anything
similar on offer, and that has been a boon for the Hosur region
T
he Titan Company began its skillsdevelopment journey in 2005 with a
three-year basic training course at its
watches division in Hosur in Tamil
Nadu. The course teaches fitting as a vocational
trade to youth recruited, after standard 10, from
backward rural schools in and around Hosur
and Krishnagiri. Roughly 25 percent of the
candidates belong to affirmative action groups.
Besides exposure to industrial environment
and technology, the free course also provides
these youth with on-the-job-experience and
a stipend. Some 155 students have passed the
course so far, with almost all of them finding
employment, quite a few with the Tata group,
including with Titan. The average entry-level
compensation of these people is `200,000250,000 a year.
Titan also offers a one-year jewellery and
precious metal worker course to economically
disadvantaged youth who have completed class
8. The course, delivered by Titan’s own trained
staff at the company’s jewellery manufacturing
Students attend Titan’s training course in Hosur
62 Tata Review
n
October 2013
unit in Hosur, has so far skilled 117 apprentices,
with close to 100 percent employment rate.
Last year, the company partnered a
nonprofit to sponsor a Chennai-based vocational
training centre that trains rural youth — a
large number of them school dropouts from
the scheduled caste and scheduled tribe
communities — in various industry-relevant
skills such as basic retailing and data entry. Titan
has also co-created a watch repair technician’s
course, where the company’s managers are
engaged in teaching youth a skill that is directly
linked to the company’s business. The plan now
is to scale up this initiative with three more
centres (in Bengaluru, Delhi and Hosur).
In a big leap forward for its skillsdevelopment programme, Titan Company
recently took over the management of a
large government-run industrial training
institute in Salem, Tamil Nadu, with plans to
support and create a centre of excellence and
enhance employability skills. This institute has
approximately 35 percent students from the
affirmative action category.
“At Titan we are working towards creating
a larger skills-development initiative as part of
employability creation,” says Sridhar NE, the
company’s head of sustainability. “We will look
at not just scaling up but also creating industryspecific trades and, perhaps, a skills academy
in the long run, which could be a hub in itself.
Being one of the largest Tata companies in South
India, it is natural that Titan plays a larger role
in the region to implement the group initiative,
enabling the hub-and-spoke model to get
institutionalised along with peer companies in
the South.” ¨
PHOTOFEATURE
creative High
The Titan Company’s Innovation Centre, resting in splendid isolation within its
jewellery division in Hosur, is a beautifully designed space that exudes an aura
of sublime positivity. Being anything less than original and innovative seems
impossible in such an environment.
The centre has been likened to a temple where great ideas can blossom. It is a
symbol of the remarkable success Titan has achieved — in the watch industry,
with branded jewellery, in eyewear and a variety of fashion accessories, and as a
pioneering retailer — since it was established in 1984. Innovation has been the
reason for and the essence of Titan’s flourishing, and the centre reflects that ideal.
Text by Vibha Rao; photographs by BN Ramesh
October 2013
n
Tata Review
63
PHOTOFEATURE
Inaugurated in November 2012 by Group Chairman Cyrus Mistry, the Titan Innovation Centre is a natural extension of the
company’s deep-rooted culture of innovation. It aims to inspire and excite, to enable and engage, and to facilitate learning
with a focus on results. The centre has two halls built in a standout tree-house style of architecture. Designed by the
projects team at Titan, the tree-house idea was zeroed in on after more than 10 different concepts were evaluated.
PHOTOFEATURE
The walkway that leads to the
centre’s halls is lined with pictures
of famous inventors and their
inventions, an achiever’s gallery
with pictures of great leaders and
their quotes, and Titan’s innovations.
At the end of the walkway is a little
gate. Anybody wishing to enter has
to answer three questions; the gate
opens only when the right answers
are provided.
The mandate for the
designers of the centre was
to create an ambience of
creativity where innovative
ideas could flow.
This has been achieved
by creating an ‘innovation
junction’, designed to look
like a railway station, with an
‘Inno Express’ at the entrance.
These features set the mood
for visitors to the centre.
October 2013
n
Tata Review
65
PHOTOFEATURE
The first of the centre’s two halls is called the
Xerxes Desai Hall of Creativity (named after
Titan’s first managing director). Earmarked for
research and development, it has a library, a
study area and an exploration laboratory. The
hall also houses a prototyping centre, with a
3D printer where employees can make their
prototypes. There is a ‘challenges board’ where
people can post challenges for others to solve.
Employees can either come up with a solution
individually or volunteer to be a part of a team.
The second hall is called the Bhaskar Bhat
Hall of Tranquillity (that’s after Titan’s current
managing director). An island of calm, it invites
visitors to meditate and introspect while they
ponder new thoughts and ideas. The Hall of
Tranquillity provides stimulation to all five
human senses. Soothing sounds like birds
chirping and the waterfall and wind chimes
played here create an ambience of harmony.
66 Tata Review
n
October 2013
PHOTOFEATURE
Many Titan people and teams use the
Innovation Centre — to spark their imagination
or maybe just to meet. The Titan Innovation
Council organises its Innovation Bazaar and
Interweave events here. These are occasions
when innovation is celebrated and employees
can present and learn from creative ideas.
Recently, the eyewear team was able to come
up in quick time with a meaningful solution to
a particularly vexing problem. That’s routine at
the centre, an oasis of serenity as much as a
hothouse of ideas, one that pushes people to
think differently, to explore new frontiers.
October 2013
n
Tata Review
67
Marketing
The glam quotient
A blend of conventional advertising and out-ofthe-box digital campaigns, Tanishq’s 360-degree
marketing strategy has catapulted the brand to
the shining household name it is today
A
confident young woman
in the corporate world,
the tender bond between
a brother and sister and
excitement about upcoming nuptials
— these are some of the emotions
captured by Tanishq’s television
advertisements. Targeted at the
progressive Indian woman, the
jewellery brand’s communications
are as inspiring as they are easy to
relate to.
As one of the largest branded
jewellery retailers in the country,
Tanishq uses an intelligent blend
of different media platforms to
drive its communication strategy.
Says Deepika S Tewari, head of
marketing at this division of Titan
Company: “The communication
mix varies from collection to
collection. For Mia, Inara and IVA
— collections that are targeted at
young women — we used television
and digital marketing media
extensively as the target audience is
familiar with these platforms. For
collections targeted at smaller cities,
we use print and regional media to
reach out to our audience.”
Over the years, Tanishq’s brand
messaging has changed with the
times. When it was first launched
in the early 1990s, the brand
While we have different advertisements
for our sub-brands and collections, the
common thread is that our communication
talks to the progressive, modern woman.
Deepika S Tewari, head of marketing, Tanishq
68 Tata Review
n
October 2013
communication revolved around
the purity of gold and transparency
in transactions. As the brand grew,
the communication strategy saw a
shift to affordability and accessibility.
With collections like Mia and Inara
that are aimed at young, working
women with disposable incomes,
the communication is now woven
around the theme of independent
women and their careers.
“While we have different
advertisements for our sub-brands
and collections, the common thread
is that our communication talks to
the progressive, modern woman,”
says Ms Tewari.
beyond the traditional
For instance, Mia, Tanishq’s first
sub-brand, is a new workwear
jewellery category that breaks
the myth of gold jewellery being
suitable only for traditional
occasions. A young, outspoken and
stylish sub-brand, Mia is positioned
as trendy, lightweight, stylish and
light on the pocket.
“With Mia, we want to be part
of every working woman’s life and
celebrate their work,” says Ms Tewari.
“The youth scene resonates with
MARKETING
Tanishq’s brand communication
concentrates on affordability and
accessibility
music, so we have used youth-centric
jingles that they can connect to.”
For Mia, Tanishq has also
made extensive use of the digital
and mobile platforms. Mia’s separate
mobile website, a first for any
Tanishq collection, is a nod to the
current generation’s smartphone
fixation. Last year, a digital initiative
called ‘My Expression’ was launched,
inviting jewellery designs from
customers. The initiative received
an overwhelming response, with
more than 3,000 entries and 12
winning designs, which have been
incorporated in the latest edition
(Mia 3.0).
“Innovative products,
communication messaging and
consumer connect have been the
three pillars for the success of Mia,”
says Ms Tewari.
Tanishq’s latest offering, the
Inara collection, showcases exquisite
diamonds set in tastefully crafted
creations and is being offered at
accessible prices. “Inara is targeted
at the modern Indian woman, who
is seeking diamonds to suit all her
jewellery occasions,” explains
Ms Tewari. “Like with Mia, we
have used television commercials
and the digital marketing medium
extensively for Inara.”
right-cost glamour
Inara’s communication revolves
around its glamour quotient and
its affordable price. “The collection
is designed in such a way that the
perceived value of the jewellery is
much higher than its actual price,”
adds Ms Tewari. “We have kept
the imagery for this collection as
very desirable.” To bring home the
glamour quotient, in-store fashion
shows with high-profile models
were organised.
As a leading lifestyle brand in
the country, Tanishq has also tied
up with lifestyle publications and
movie collaborations to create a
buzz. For instance the IVA collection,
a glamorous line of fine fashion
jewellery, was extensively seen in the
Bollywood movie Race 2, actively
promoted by the leading ladies of the
film. The collection is young, high
on the glam quotient and extremely
vibrant, making it a perfect fit for a
Bollywood launch.
“The brand’s objective is to
connect with the fashion-seeking
consumer; the diva who strives
to be ahead of the curve,” says
Ms Tewari. “The film Race 2 helped
give our fashion stance a wide
platform, considering the mass
appeal that Bollywood has across
the country.” With this cinematic
association, Tanishq has successfully
added another facet to the brand
— fashion. “The linkup has been
useful for us. We do not associate
with other brands if we do not see a
mutual benefit.”
Fashion bloggers and lifestyle
magazines were roped in as part
of IVA’s digital communication
strategy. The marketing strategy
for the collection was a mix of
October 2013
n
Tata Review
69
Marketing
Mamma Mia! An idea on the roll
To mark the launch of Mia in 2011, Tanishq came up with the
innovative concept of ‘Mia on wheels’. A luxury bus drove
women to work from select locations across Bengaluru.
Women could register online on Tanishq’s social media
platform to be part of this unique idea. During the bus
journey, the women were offered a chance to try on jewellery
from the Mia collection. The women were also treated to
multiple feel-good services like foot massages, fashion tips
from established stylists and designers, makeover sessions
and photo shoots — all within the bus. A perfect example
of integrated marketing, Mia on wheels was a much talkedabout launch pad for the collection.
outdoor, television, digital and social
media, in-store events and cinema.
Tanishq is a pioneer in
introducing jewellery in the online
space in India. It regularly showcases
all its latest collections online and
also displays the price of each piece
of jewellery, a practice unheard of in
Indian gold jewellery retailing. “We
have customers who visit the website
to browse for their favourite design
and then make the purchase at a
store,” says Ms Tewari.
Registering about 8,000 plus
visits per day, the Tanishq website
is an important platform to connect
70 Tata Review
n
October 2013
with the consumer. “Our online sales
are growing with increased internet
penetration and mobile connectivity,
but our customers still prefer to shop
at our showrooms,” says Ms Tewari.
“Most of them are not comfortable
buying expensive jewellery without
trying it out.”
online connect
In spite of that, the brand sells an
average of `1 million worth of
jewellery every month on its website.
“We see a lot of browsing and
purchases from our nonresident
Indian customers, many of whom
like to gift Tanishq jewellery to their
relatives in India or purchase it for
themselves,” says Ms Tewari.
“Customers from tier II and III cities
also browse and purchase online
as all the designs may not be
available at the Tanishq showroom
in their city.”
In recent times Tanishq has
built a large social media footprint.
With more than 500,000 fans on its
Facebook page, the brand leverages
its social media presence to connect
more substantially with customers.
“Social media is one of the most
important elements in our marketing
mechanism,” says Ms Tewari.
“It helps us have a two-way
conversation with our customers.”
Tanishq, through its digital
initiatives, has received important
consumer insights on the product
and service front. Its online activities
are not limited to collection launches
or offers but aim at offering something
extra and more meaningful. The
social media team at Tanishq works
round the clock to acknowledge
customer suggestions, queries and
complaints.
The digital medium has brought
the brand closer to the customer,
taking the customer-brand
relationship to a higher level. “With
more than 2,400 Twitter followers
and 300,000 blog visitors, our social
media platforms have played a great
role in the success of our launches,”
says Ms Tewari.
Tanishq’s marketing campaigns
have created a communication
advantage that is hard to match. With
its clear messaging that consumers
can easily relate to and enormous
digital presence, the brand has struck
marketing gold. ¨
— Vibha Rao
PERSPECTIVE
Tata Communications provides high-speed
connectivity from each track to the
F1 headquarters in the United Kingdom
F1 at the speed of light
The association with Tata Communications gives Formula 1
supersonic speeds in connecting live to its millions of fans
around the world, says Srinivasa Addepalli
W
ith over 500 million people
from Brazil to China and Spain
to South Africa glued to their
TV sets for 20 weekends every
year, Formula 1® (or F1) is probably the
‘most global’ sporting event ever. Not only
is F1’s viewership globally dispersed, its 20
races in twenty different countries across five
continents gives it a geographical spread like
no other sport. Little wonder that Formula
One Management, the organisation that runs
F1, has revenues over $1.5 billion and is valued
at $10 billion.
In fact the secret to F1’s success — its
revenues have grown 7 percent per annum
since 2007 in spite of the recession and it has
a whopping 70-80 percent profit margin — is
its globality. A third of its revenues come from
host locations, ie, race organisers that vie to
bring the race to their country. Increased
demand from Asian and other emerging
market countries has significantly boosted
revenues: for instance, Malaysia pays $67
million per race whereas Italy pays only $7
million. Another third of the revenues come
from broadcasters around the world who pay
for exclusive rights to broadcast the races to
their viewers. Brazil and China are the two
largest markets contributing nearly a quarter
of the total viewership.
F1’s globality is also the source of the two
major challenges it faces. Firstly, race locations
are now thousands of miles away from each
other and increasingly in markets with
Srinivasa Addepalli is an independent
strategy consultant and visiting
faculty at IIM Ahmedabad. He was
earlier the chief strategy officer at
Tata Communications.
October 2013
n
Tata Review
71
PERSPECTIVE
relatively poorer infrastructure. It is expensive
and tiring to move the equipment and people
from race to race. The operating model had to
be updated to support the new geographic mix.
Secondly, as F1 reaches newer audiences,
it is no longer a one-screen (TV) sport.
Younger F1 enthusiasts are analysing race
information and live tweeting updates as
they track the progress on the television.
The audience engagement model had to be
modernised to reflect the changing media
consumption behaviour.
High tech connectivity
It was in this context that F1 chose Tata
Communications as its official technology
partner in a multi-year deal that also saw Tata
Communications become an official sponsor
of F1. James Allen, a veteran F1 commentator,
termed this ‘the deal that changes F1 forever’,
and Eddie Baker, the chief technical consultant
to F1, called it ‘the most significant moment
for F1 since the advent of satellites’.
The innovative deal also provided Tata
Communications with category exclusive
designations as official connectivity provider
of F1 and official web hosting and content
delivery network of Formula1.com. Tata
Communications provides high-speed
connectivity from each track to the F1
headquarters in the UK along with the hosting
and distribution of the Formula1.com website.
One does not realise how technology
intensive F1 is till you see a vehicle in action
at a race. Not only do the cars demonstrate the
cutting edge in automotive engineering, the
entire design management and distribution
of the race requires a very sophisticated
technology platform. For instance, F1 fans are
familiar with the drag reduction system (DRS)
that provides the cars an additional speed
boost of 10-12kmph to enable overtaking.
DRS gets activated in select zones within the
track and only if the gap between the two cars
(at that time) is one second or less. For such a
system to be operational, the F1 race control
requires live information about the location,
speed and timing information from each car
72 Tata Review
n
October 2013
on the track. Even the teams use information
from hundreds of sensors placed on the car
to analyse and improve (often, in real time)
performance.
At light speed
Tata Communications increased the
bandwidth between the race location and
the F1 headquarters by more than ten-fold
to 100 mbps. Faster connectivity meant that
most of the planned technology and media
enhancements in the sport could be done
by engineers located in the UK rather than
having to send them all to the 20 different race
venues. This gave F1 a super speed bump and
one service provider connecting them globally.
Mr Baker said, “Commitment and reliability
is one of the key reasons why we chose Tata
Communications as our connectivity provider.
Coupled with its global infrastructure
and extensive contacts, we can now travel
anywhere in the world and still expect the
same resilience and quality of connectivity.”
Nearly 70 million people visit the
Formula1.com website every year from 188
countries and this number is growing. Many
of them use tablets and smartphones to get
information about race schedules, driver
statistics and video footage of previous races.
Demonstrating the growing importance of
this audience and the decline in TV audiences
(2012 viewership was 5 percent down from
2011 and 17 percent below its all-time high in
2008), there is an expectation that F1 would
consider live streaming its races online.
The all-important responsibility
of hosting the F1 website is with Tata
Communications. Not only does the
infrastructure have to scale for millions
of simultaneous users every race weekend
but the content also has to be distributed
globally across multiple devices and network
connection speeds. Tata Communications’
data centres and content distribution network
(CDN) are expected to play a major role in
taking F1 to new audiences. As Colin Mann
wrote on the Advanced Television website,
“F1 has a mass of footage that is not currently
PERSPECTIVE
broadcast, as well as live, unused performance
data. Maximising the potential of the CDN
would enable F1 to transmit this content
directly on to the computer screen of a F1 fan
sitting at home.”
Enabling speed
The relationship with F1 is helping Tata
Communications win more business from the
large ecosystem of racing teams, broadcasters
and sponsors. MERCEDES AMG PETRONAS,
the No 3 team in 2012, chose Tata
Communications as its connectivity provider,
thereby gaining a 3X boost in the connectivity
between each racetrack and their design
factory near London. On a race weekend,
several Mercedes engineers in the factory
monitor and analyse real-time data from their
two cars and make changes, just as if they were
a few metres away. Their supervisor told me,
only half-jokingly, “These guys’ families love
Tata Communications because they don’t need
to travel the world for half the year!”
The teams as well as F1 management
are constantly experimenting with new ideas,
testing them in real time to either adopt them
or learn for future use. As technology partner,
Tata Communications has been expected to
not only keep pace but also participate in the
innovation process. Mr Baker points out, “It
traditionally takes around 30 days to install,
test, run and then dismantle a big MPLS
circuit. A lot of planning and effort has gone
into condensing that to meet our time scales,
with some events just one week apart.”
On site support
Weekend after weekend, all of 2012 and now
into 2013, the Tata Communications team
has risen to the challenge. A dedicated onsite
team is complemented by a cross-functional
support team that works as one large virtual
organisation. “Usually Tata Communications
is the first team at the track in the weeks
leading up to the race. During live events,
the onsite team is supported by the Tata
Communications’ remote pit crew from all
functions,” said Mike Winder, vice president
Forging a technology partnership — Bernie Ecclestone, CEO, Formula One
Management with Tata Communications CEO Vinod Kumar
for advanced solution delivery. For a client
that measures outcomes in the tenth of a
second, nothing is too small and nothing can
wait. Mr Winder added, “There is no slack in
the schedule. We are constantly pushing the
boundaries for F1.” In fact, one of the Tata
Communications’ tag lines reads: If we can do
it for Formula 1, we can do it for anyone.
For F1, the technology supply deal is not
just about getting more bandwidth and hosting
capacity. It is about understanding where the
future of the business was headed — younger,
tech-savvy, globally dispersed audiences;
distant, emerging market race locations; and
a major pressure on cost — and taking steps
in advance to continue to stay ahead. And to
enable this transformation journey, F1 chose
Tata Communications.
As Bernie Ecclestone, the 82-year-old
CEO of Formula One Group, says, “We looked
into the market to see who can provide the
services we needed, and that’s why we chose
Tata Communications. Out of all the people
we researched, they gave us what we wanted.”
For Tata Communications, the journey
to transform one of the world’s most exciting
sports has just begun. As Vinod Kumar,
CEO of Tata Communications, sums it up,
“Working with one of the world’s most highly
technical and innovative organisations is an
exciting opportunity to leverage our technology
leadership and vision for emerging markets.” ¨
October 2013
n
Tata Review
73
PERSPECTIVE
Getting India
IPR ready
As India grapples with the challenges of rolling out a national
strategy on intellectual property rights, Subramaniam Vutha
explains why the country’s technologists and managers should
ponder the potentially crucial role they have to play here
I
n an age where creativity and innovation
is driving every aspect of life, the role
of intellectual property rights (IPR) has
assumed a greater significance, especially
in the context of the growing globalisation in
business. IPR enables businesses to protect the
sovereignty of their trademark business ideas
and helps them gain a competitive advantage.
Let us look at the different aspects of
being IPR ready, in the form of answers to
some important questions.
Why is IPR readiness crucial for
India and Indian industry?
First, without IPR readiness, Indian industry
would be hampered within domestic Indian
Subramaniam Vutha is an advocate and a consultant
with the Tata group. He chairs the Intellectual
Property Strategy Committee at the Licensing
Executives Society International.
74 Tata Review
n
October 2013
markets because over 80 percent of patent
filings in India are by foreign companies and
such patents, when granted, could be used
to impede Indian industry’s ‘freedom-tooperate’ in domestic Indian markets. In any
event, holders of patents in India would be in
a position to impose costs on those who use
their patented technology — and this holds
true even if such use is inadvertent. Too much
is at stake for Indian industry.
Building up an IPR portfolio that could
be used to gain competitive advantage and to
counter potential infringement claims from
third parties, takes considerable management
time, effort, planning and strategising. If
Indian technologists and managers do not
apply their minds to this vital need, that
would expose their companies to significant
risks and potential costs even within Indian
domestic markets.
Second, without IPR readiness, Indian
industry would be at risk of losing the value
of their innovations. Without IPR protection,
PERSPECTIVE
Indian industry’s innovations could be
easily copied by others resulting in loss of
competitive advantage. How else could a
business attain competitive advantage if it
does not have some degree of protection for
its innovations? How else could a business
sustain its competitive advantage from its
innovations unless it identifies the various
ways in which IPR [namely patents, trade
secrets, copyright, industrial designs,
trademarks and service marks] could be used
to protect such innovations from rivals who
may seek to imitate such innovations?
Unless innovations result in sustained
competitive advantage, the value of such
innovations is transient.
Third, without IPR readiness Indian
industry would be at the risk of losing
new revenue and business options that IP
assets provide. IPR serves as collateral for
borrowings, as contributions to joint ventures
and collaborations and as value for equity
stakes.
Global leaders in various technology
and business domains are now turning their
management attention and management skills
to leveraging their powerful IP portfolios.
These are being used to generate new
revenues, and to raise productivity through
re-use and re-purposing of innovative
tools, processes, techniques, frameworks,
methodologies, product features, designs,
drawings, code, scripts, software programs,
circuitry and the like.
But the important thing to bear in mind
is that these companies have assiduously
planned, developed and enhanced their IP
portfolios over many years. Some of them
have been at it for over 100 years. So their
knowledge of, and experience in, developing
and deploying IP strategies, IP plans, IP
processes and IP licensing programmes are of
a very high order.
Indian businesses will need to match such
IP-related capabilities in order to compete
in Indian markets with companies like these
that are already active in the same markets.
For those Indian businesses that are seeking
Figure 1: Benefits of IPR readiness
Competitive
advantages: Product
features patent
protected; innovations
protected against
copying
New revenue
options: From
licensing of
innovations and
technology; sale of
technology
IPR
Readiness
Risk mitigation:
Ensuring freedomto-operate vis-a-vis
3rd party patents;
retaliatory power from
own IPR portfolio
New business
options:
Franchising, teaming,
collaboration and
joint ventures
leveraging IPR
foreign markets, the need to step up their IPrelated capabilities is even more crucial. It is a
common practice for companies with global
plans to study the IPR portfolios of local
competitors before entering into
new markets.
This serves not merely to assess the
risks of potential claims for IP infringement
by such local competitors but also to highlight
any potential advantages that that the new
entrant can leverage using its existing IP
portfolio or new patent filings in the
target market.
Figure 1 depicts the benefits of IPR
readiness and the risks of being unprepared.
Why should IPR readiness matter to
technologists and managers?
As prime movers in the development of
technology and innovations, technologists
and managers are directly concerned with the
business benefits of technology advancements
IPR serves as a set of handy tools to
translate technology advancements and
innovations into business benefits. It can
lead to a competitive advantage.
October 2013
n
Tata Review
75
PERSPECTIVE
Figure 2: Roles played by managers, technologists and lawyers
Generating /
harvesting IPR
Protecting IPR
Leveraging IPR
Technologist
IP lawyer / patent agent
[usually a technologist with
patent qualifications]
Technologist / manager
Manager
Technologist / manager
and innovations. Consider how IP assets are
generated, harvested, protected and leveraged.
In each of these aspects, it is the technologist
and the manager who plays a primary role.
Lawyers help protect and leverage IP
assets, but it is the technologist and the
manager who play an important role in
generating / harvesting, protecting and
leveraging IPR as shown in Figure 2.
How is IPR crucial in procuring
sustained business benefits from
technology advancements and
innovations?
IPR serves as a set of handy tools to translate
technology advancements and innovations
into business benefits.
Figure 3: Business benefits from IPR
Patents
Protect innovative
features of products /
processes
Industrial
designs
Protect against
copying of product
designs and
appealing external
aesthetic features
76 Tata Review
n
October 2013
Trade secrets
Protect against
misappropriation of
valuable know-how,
designs, drawings,
codes, manuals
Trademarks /
service marks
Protect against
counterfeiting
IP lawyer /
licensing professional
Without IPR in the form of patents,
trade secrets, copyright, industrial designs
and trademarks, it would be very difficult,
if not impossible, to gain sustained business
advantage from technology advancements
and innovations. Figure 3 shows how certain
IPR elements provide the basis for sustained
business benefits.
How should a technologist or
manager go about getting his
business IPR ready?
Every technologist and manager should take
the time and effort to add an ‘IPR dimension’
to his or her knowledge base.
In doing this, the technologist and
manager can consider the following options:
Enrol for and complete some basic IPR
courses. For example, there are some
free-of-charges courses offered by the
World Intellectual Property Organisation
at www.wipo.int.
Think and read about the connections
between IPR and innovations /technology
advancements.
Teach and write about the connections
between IPR and innovations /
technology advancements.
Interact regularly and frequently with
organisations like the Technology Law
Forum and the Licensing Executives
Society [www.lesi.org and www.lesindia.
org]. Invite professionals from these
forums and interact with them. ¨
PERSPECTIVE
Can India avoid the
middle-income trap?
To combat the slowdown that has everyone worried, institutional
reform is the need of the hour in emerging economies such as
India, says Govind Sankaranarayanan of Tata Capital
T
he idea that companies and countries
can fall into a middle-income trap
has been prevalent for some years.
The US National Bureau of Economic
Research has predicted that countries find
themselves squeezed into these traps at per
capita levels of about $16,000 a year. In the
case of the BRIC countries whose per capita
income stands at levels between $5,000
and $11,000, there has been considerable
deceleration in growth before reaching these
levels. Brazil grew by just 1 percent last year
while Russia has barely grown in the first
half of this year. The slowdown in emerging
markets does not now appear to be temporary
and there is a sense that these countries
will find it somewhat difficult to avoid this
plateauing out of growth.
It is worthwhile to understand why these
countries seem to have lost steam. For much
of the past decade these countries have been
the beneficiaries of cheap capital, which in
turn has spurred investment and domestic
consumption. With the short-term adrenalin
that huge capital availability creates, there
was relatively little inducement for the kind
of fundamental structural reform that always
calls for discipline. Precisely because this
period of transition also tends to come with
high-growth, there are opportunities for
October 2013
n
Tata Review
77
PERSPECTIVE
regulation capture which can disincentivise
true reform. Therefore and to rephrase
Tolstoy’s famous first lines from Anna
Karenina, ‘unhappy economies have each
failed institutional reform in their own ways’.
The role of the state
In China and Russia the dominance of
government in business related decisions has
proven to be the cause for insufficient reform.
In the case of the East European transition
economies, the one-time inducement of entry
into the European Union is no longer in play
and reforms have come to a halt.
In other countries, as Nouriel Roubini
points out, state capitalism based on the
nationalisation of resources has slowed down
the need for important private sector reform.
Now, following the debt induced financial
crisis, it seems more unlikely that we will see
institutional reform in the future. For all the
above reasons there is a strong belief that the
tapering of growth in emerging economies is
a long run trend.
The decline of manufacturing is another
reason for the impermanence of growth in
these countries. Sustained growth requires
nations to make steady enhancements in
their manufacturing base. With the exception
of China it is not clear whether many of the
other emerging economies have dramatically
improved their industrial bases.
Brazil has made itself highly dependent
on commodity supplies to China. In the
case of Russia, reliance on oil exports has
somehow reduced the Soviet era focus on
manufacturing. In case these countries do
not quickly recapture the high ground in
manufacturing, they may well find a window
of growth could shut before they increase per
capita incomes.
Govind Sankaranarayanan has been with the Tata group
since 1993 when he joined as a TAS manager. He has
held challenging positions across Tata companies
such as Tata Tea, Tetley and VSNL International. He is
currently the chief financial officer and chief operating
officer, corporate affairs at Tata Capital.
78 Tata Review
n
October 2013
Manufacturing base
Already the path to succeed in manufacturing
is strewn with more thorns than was the
case 20 years ago when China entered this
space. With the rich countries themselves
facing low growth and unemployment, even
the most fervent supporters of free trade
will not be able to succeed in avoiding some
degree of protectionism. We already see that
computer maker Lenovo and furniture maker
Ikea have moved manufacturing back to the
USA. The recent cases of the expropriation of
Spanish oil company YPF in Argentina and
the controversial US decision to tax Chinese
solar panels are only two of the more visible
instances of the trade winds that flow against
off-shored manufacturing.
A strong manufacturing base can also
spill over into benefits in other areas. The
incentive to invest in classroom education
depends very much on the opportunities
that it provides. If a country is strong in
manufacturing, and there is a visibility of
stable manufacturing jobs, this can create a
virtuous circle of investment in education
and the creation of a middle class who can in
turn persuade the political executive to make
investments in the right areas.
Silver linings
With the winds blowing against economic
reform and free trade, there is now a growing
acceptance that some of the emerging
economies run the risk of becoming captive to
the so-called ‘middle-income trap’.
What could the slowing of other
emerging markets mean for India? First, in the
light of the challenging economic situation in
India, these changes elsewhere in the emerging
world should be a call for introspection within
the Indian policy-making establishment.
It was believed during the go-go years
until 2007, that surging into the group of
more advanced economies was a right, to be
exercised at the time of our choosing. These
expectations have been belied. However,
even in this period of economic gloom, there
are some silver linings. India is less reliant
PERSPECTIVE
on external trade than some other countries
and hence its fragility to international trade
movements is generally less marked.
Second, a possible competitor, China
faces the twin challenges of high wages and
a lending bubble, both of which could erode
its manufacturing competitiveness. There is
some chance therefore that it could exit some
parts of the low value manufacturing space, in
the same way that Japan did in the 1960s. On
that occasion, Taiwan, South Korea and Hong
Kong took up the slack. There could be an
opportunity for India therein to capture some
markets in manufacturing, where China might
have lost its edge.
Thirdly, several commodity prices have
dropped by 10-15 percent in the recent past,
with potentially favourable implications for
some industries.
Finally, and at the risk of repeating a
common theme, India does have different
demographics, which still give it time to take
a breather after the great financial slowdown.
There is yet another chance for high growth,
unlike in some other emerging economies.
To believe that the Indian economy is
immune to the conventional need for strong
economic institutions and could somehow
sustain high levels of growth without these
being in place is a bluff that has been called,
in the recent past. Furthermore the belief that
an economy can ceaselessly travel the road to
higher consumption without commensurate
investments in supply creation has been
answered by the persistent inflation we face.
Finally, in democracies, the result of the
absence of well-run institutional responses to
problems can sometimes be policy logjam, as
we have seen since 2009.
Therefore the exploitation of these
economic silver linings can happen only if
we take a combination of the right steps. As
Amartya Sen has argued, we need to match East
Asian and Chinese literacy rates, which have
always been 20-25 percent higher than those in
India. This has enabled them to pursue the path
of growth through manufacturing.
There also need to be greater reforms in
A strong manufacturing base can spill over into several benefits in
other areas and give rise to a virtuous circle of investment
the area of land acquisition and incentives to
invest more across manufacturing industry.
There can be reform to encourage greater
participation and depth in the Indian bond
markets, as also executive actions to undo
the policy blockages in coal and iron ore
mining, solving vexatious power disputes,
distinguishing cowboy infrastructure players
from serious ones and supporting those in
troubled times.
Speaking after the financial crisis, Ben
Bernanke once commented that the reason for
avoidance of another Depression is because
economists now know the mistakes they made.
In the same way, India now knows that policy
inaction can have a heavy price to pay.
Conversely, and on a positive note,
there is greater clarity of what needs to be
done to return the country to economic
stability. The ball is clearly in the court of the
Indian government to rediscover the path
to growth. ¨
October 2013
n
Tata Review
79
Community
The tragedy and after
In the devastated Uttarakhand hills, the Tata effort
to provide immediate relief and help with longterm rehabilitation has eased the suffering of many
H
eavy rains and landslides
are a regular feature in
Uttarakhand, one of the
most picturesque states of
India and home to one of Hinduism’s
most popular pilgrimage circuits:
the ‘Char Dham Yatra to Kedarnath,
Badrinath, Yamunotri and Gangotri’.
However, in mid June 2013,
when it rained for days on end and
showed no signs of letting up, it
became clear that this was going to
be a disaster the like of which no
one had seen before. The series of
cloudbursts between June 15 and 17
left behind a trail of destruction and
80 Tata Review
n
October 2013
devastation. The disaster exacted
a heavy toll, with official figures
pegged at 5,360 deaths and several
thousand missing persons, besides
an inestimable quantum of loss of
land and other property. The toll was
higher because of the large numbers
of tourists and pilgrims.
Says Arun Pandhi, chief
development officer, Sir Ratan Tata
Trust (SRTT): “On the day of the
flood itself, 12,000 people were
either going up or coming down
from Kedarnath. The extreme
precipitation led to rivers of a depth
of 4 to 5 feet rising up to 100 feet.
The disaster was a lesson that nature
is too powerful to be trifled with.”
Dr Malavika Chauhan,
executive director, Himmotthan
Society, an Uttarakhand-based
associate organisation of SRTT, says,
“Almost all my team members were
out in the field. By the time we came
to Almora, three of the connecting
roads had been washed away. That is
when we realised how bad it was.”
Dr Chauhan contacted
Mr Pandhi, who was also in
Uttarakhand then, and apprised
him of the situation. Mr Pandhi
got in touch with Dr Mukund
Rajan, chairman, Tata Council for
Community Initiatives, and Sunil
Bhaskaran, deputy vice president,
corporate services, Tata Steel,
and vice chairman, Tata Relief
Committee (TRC), among others.
Community
A picturesque state turns into a valley of death
— images from the disaster in Uttarakhand, June 2013
“There was an immediate response,”
says Dr Chauhan, “much more than
either of us had expected.”
Responding to the call
The need of the Uttarakhand people
galvanised the Tata group. Support
came at a crucial time. “At that point,
no one was aware of the magnitude
of the disaster,” says Mr Pandhi.
“People had begun to arrive, looking
for their relatives. For three days
there was a virtual blackout with the
breakdown in the communication
network.” Over the next few days,
it became clear that Kedarnath
had become a valley of death.
Elsewhere, the damage to property
was greater, with entire villages and
infrastructure being washed away.
Learning about the severity
of the disaster, the Tata group’s
volunteers swung into action. TRC
began to mobilise itself and prepared
to send its people to Uttarakhand.
On June 22, Dr Rajan reviewed the
situation along with Mr Pandhi,
members of TRC, the Delhi office of
Tata Steel and others.
Group Chairman Cyrus P
Mistry also took a keen interest
in the immediate relief measures
that were being planned. “Our
relief and rehabilitation efforts in
Uttarakhand should be consistent
with the Tata tradition of relieving
the distress of those in need and of
making a supportive and sustainable
contribution to a region,” he said. “I
would like to urge and encourage
every Tata company to give
generously, be it through volunteer
support or material support that
would alleviate the suffering of
those people in Uttarakhand who
have gone through a harrowing
experience during this natural
calamity.”
Mr Mistry called a review
meeting on June 24. On June 26,
Dr Rajan held a meeting in Dehradun
with the local representatives of
companies based in Uttarakhand,
besides the TRC team. Talking about
the Tata effort, Dr Rajan says, “The
manner in which Tata companies
have come forward with their
wholehearted support for the group’s
relief initiative in Uttarakhand has
been tremendously inspiring. The
successful collaboration we have
undertaken with the Tata trusts in
this initiative has also been extremely
encouraging. There are many
worthwhile lessons we will draw from
The manner in which Tata companies have
come forward with wholehearted support
for the relief initiative in Uttarakhand has
been tremendously inspiring.
Dr Mukund Rajan, chairman, Tata Council for Community Initiatives
October 2013
n
Tata Review
81
Community
The relief efforts and medical assistance reached more than 9,000 beneficiaries in 174 villages
this for the way in which our group
addresses future relief efforts.”
Relief camps were set up in
Uttarkashi in coordination with the
district administration. “While the
army and air force were rescuing
pilgrims, we decided to help out
in areas where the damage was
equally severe but human casualties
were fewer,” says Mr Pandhi.
“Himmotthan’s partner NGOs did
the initial recce. They informed us
of the needs, based on which we
prepared the packages. They also
coordinated with the distribution.
Their cooperation helped ensure
last-mile connectivity.”
The Himmotthan and TRC
teams quickly busied themselves in
preparing packages for immediate
relief. The packages included
uncooked food, matchboxes, solar
lanterns, etc. Since sources of
drinking water had been polluted,
1,200 units of Tata Swach were
supplied by Tata Chemicals.
Materials that came in bulk were
quickly unpacked and re-packed
into relief packages.
Collaborative effort
The storage and transportation
of packages was coordinated
in collaboration with the local
establishments of Tata Motors and
Titan Company. They were then
dispatched to various villages, based
on the demand received earlier from
Himmotthan’s NGO partners. At
the villages, the NGO partner would
assist in distributing the packages.
Signed acknowledgements were
taken from the beneficiaries.
Tata Motors also took the
lead in providing relief packages
in Pithoragarh. Vinod Kulkarni,
While the army and air force were
rescuing pilgrims, we decided to help
out in areas where ... the human
casualties were fewer.
Arun Pandhi, chief development officer, Sir Ratan Tata Trust
82 Tata Review
n
October 2013
Tata Motors’ deputy general
manager, corporate sustainability,
sent vehicles with relief materials
to Pithoragarh district from
Pantnagar. Rajiv Kumar, honorary
secretary, TRC, oversaw the
dispatch of relief packages in
Rudraprayag and Uttarkashi and
personally trekked through many of
the affected villages.
But the going was not easy.
Large stretches of road had been
completely destroyed, adding
to the difficulty of reaching
immediate relief to the affected
people. Bachendri Pal, the famed
mountaineer who works with the
Tata Steel Adventure Foundation,
and her team trekked up to the most
distressed villages in Uttarkashi, the
ones that were inaccessible by road,
carrying relief material.
“I was amazed at the ease with
which everything fell into place,”
says Dr Chauhan. “The distribution
of work was managed so well. Many
companies called with offers to send
volunteers. The support of the Tata
group was like a huge tidal wave. The
Seema Suraksha Bal at Pithoragarh
also helped us with distribution.
Community
We used their godown. Our many
linkages came through for us,
helping us reach several beneficiaries
across villages.”
The relief efforts and medical
assistance of the group reached over
9,000 beneficiaries in 174 villages.
Tata companies contributed
from their resources and expertise.
Tata employees offered a day’s salary
for the relief effort, and the collected
sum was matched by the concerned
company. The companies offered
volunteers, supplied goods for the
relief packages and vehicles for
transportation. They also sent their
products in large numbers to be
included in the relief material.
Medical services were made
available by companies that sent
in teams of doctors and sponsored
medicines. Some 4,000 people were
treated through medical camps.
Companies also sent in beverages,
bottled water, blankets, torches, etc.
The donation of solar lanterns
was particularly welcomed by people
in places without electricity. At the
request of the Uttarakhand Power
Corporation, Tata Power sent in
four teams to restore power lines in
Uttarkashi, Ukhimath, Joshimath
and Narainbagar.
With much of the immediate
relief underway, it was time to
consider the long-term rehabilitation
of the area. It was felt that a full-time
team stationed in Dehradun would
be more capable of bringing the
relief effort to fruition. This led to
the establishment of the Tata Group
Uttarakhand Programme, based out
of a secretariat office in Dehradun,
to coordinate the relief exercise,
followed by the implementation of
a coordinated Tata group disaster
response programme in the state.
Col (retd) Arun Mamgain was
We need to look at how we can leverage
technology to avoid another such disaster.
We are looking at a disaster management
centre in every cluster of villages.
Sourav Roy, programme leader, Tata Group Uttarakhand Programme
appointed programme director
while Sourav Roy was placed as the
programme leader in Uttarakhand.
Mr Mamgain has been an
active proponent in the field of
education following a distinguished
career with the armed forces while
Mr Roy is a TAS manager, from
the batch of 2007, with a keen
interest in development initiatives.
They were supported in the initial
phase by Ashish Goyal, Rizina
Patrawala and Abhishek Goud, all
TAS probationers from the batch
of 2013. The programme team will
be reaching out to companies for
volunteers shortly, for the next phase
of rehabilitation work.
Assessment Survey
The Tata Institute of Social Sciences
(TISS) was commissioned to
do a baseline needs assessment
survey, covering 90 villages across
the affected districts, within a
fortnight of the disaster. The survey
determined the immediate needs of
the people and assessed the impact
of the disaster on key infrastructure.
“The TISS survey helped bridge
the key gap between information
on the requirements and fulfilment
of the requirements as part of the
programme design,” says Mr Roy.
“Even the government is awaiting
results. This could be a benchmark
survey for all disasters.”
The outcomes of the survey and
the extensive fieldwork undertaken
by the programme team have helped
shape phases II and III of the relief
effort. “As part of phase II, we will
reconstruct community structures
and schools,” adds Mr Roy. “Our
aim is to redevelop infrastructure,
which will be utilitarian, for the
community while tying into a larger
goal of multifaceted community
development. Rehabilitation of
displaced families before the onset of
winter will be a priority.”
The medical camps conducted
earlier will give way to health
interventions with wider impact.
This phase will see the upgradation
of primary health centres (PHCs)
with better equipment and
the training of a few people as
paramedical personnel. Local
nurses and midwives will also
be trained as part of the skills
programme. Medical specialists
affiliated with Tata companies will
be invited to offer their services
through the PHCs. There will also
be nutritionists to create awareness
about the right diet, etc.
Subsequently, the programme
secretariat has also initiated
a detailed household survey
through TISS. This is focused
on identifying the skills and
livelihoods requirements in the
region. Says Mr Roy: “The idea is
to get an understanding of people’s
requirements and map them out for
group companies, or look out for
external vendors, where required.
Areas like agriculture and hospitality
might be of interest to the people.”
October 2013
n
Tata Review
83
Community
There was an immediate response. So
many companies called with offers to
send volunteers. The support of the Tata
group was like a huge tidal wave.
Dr Malavika Chauhan, executive director, Himmotthan Society
Specific clusters have been identified
for the skills development and
livelihood programmes.
“A sustainable livelihood
programme driven by micro
enterprises requires two to three
years to get stabilised,” says Mr Roy.
“That is why we are working with a
partner, Himmotthan, that is deeply
rooted in the region. The intent
is to utilise Tata group’s resources
towards a sustainable programme.
When the Uttarakhand programme
finally withdraws, we should be
able to hand over the baton either
to Himmotthan or to specific Tata
companies so as to carry forward
these initiatives.”
In phase III the Tata group
will look at adopting entire villages
where damaged houses and other
infrastructure will be rebuilt along
with a rollout of the skills and
livelihoods initiatives to enable
the complete rehabilitation of the
communities there. The process of
land allotment and village selection
has already been initiated with the
administration at multiple levels.
the social equation
As the specific villages are identified,
the programme team will initiate
dialogue with the community to
ensure that all doubts are resolved
and that the new construction is
accepted by all. “There are social
aspects to it,” says Mr Roy. “We have
to give them something that is in
keeping with what they are used to.
We cannot disrupt the community.
Nor do we want to create ill will.”
Dr Chauhan adds that the
building effort has to be sustained by
TRC members interact with the local community during the relief effort
84 Tata Review
n
October 2013
the local community. “We will give
shelter for their livestock and a place
to store their fodder. The design
will be ecologically sustainable.” But
beyond these interventions, there are
other issues which raise themselves.
Dr Chauhan speaks of the
many lives that have been lost and
of the counselling services that
might need to be offered to the
survivors. “The government has
offered the people compensation of
`5 lakh per death in the family,” she
says. “There are whole villages in
Kedarnath where all the men have
died. Now the women have money
in the bank but they don’t know
what to do with it.”
The need for a disaster warning
system is also keenly felt. Sounding a
prescient warning Mr Roy says,“We
need to look at how we can leverage
technology to avoid another such
disaster. We are looking at equipping
every cluster of villages with a
disaster management centre that has
an advanced warning system.”
The early and widespread
relief efforts in Uttarakhand are a
tribute to the commitment of Tata
companies and the partnership
with Himmotthan and its partner
NGOs. It is as much a vindication of
Himmotthan’s methods of working
as of the diligence of the NGOs.
The next stages of the
Uttarakhand programme are being
planned with the aim of setting
up an initiative that may be the
benchmark for collaboration
between the corporate and
nonprofit sectors, with a common
development goal. For a disaster on
the scale of the Uttarakhand floods,
it’s obvious that more the helping
hands, the better. ¨
— Cynthia Rodrigues
Community
Trained to tackle life
Supported by the Sir Dorabji Tata Trust, the Montfort
Integrated Educational Centre in Nagpur imparts
vocational training and helps underprivileged youth
enter the job market with the necessary skills
W
alk in with a dream,
walk out with a
future — that’s the
bold promise of the
Montfort Integrated Educational
Centre (MIEC) in Nagpur,
Maharashtra, to the underprivileged
youth of the region.
The institute makes a big
difference in the community by
empowering youngsters through
a six-month residential vocational
training course. More than 200
youngsters have already passed out
from the institute and are now doing
well in their chosen careers.
MIEC was started in 2011
in Nagpur with the support and
encouragement of the Sir Dorabji
Tata Trust (SDTT), which helped
the organisation with a grant of
`27 million for a period of three
years starting from 2011. “SDTT
was looking to provide an alternate
means of livelihood to the families
and children of farmers who had
committed suicide in the Vidarbha
region in Maharashtra,” says
Poornima Dore, programme officer
(urban poverty and livelihoods)
at SDTT and the Allied Trusts.
“MIEC is well aligned with the
trust’s focus on skills and enterprise
development. So we decided that
this would be an important initiative
in the region.”
The initial discussions on the
need for a targeted programme
resulted in a joint effort to identify
a suitable location in Nagpur
and enable the organisation to
set up MIEC with the requisite
infrastructure and equipment for
skills training.
The recent years of drought in
the Vidarbha region have affected
the lives of thousands of farmer
families, leaving them without a
primary bread earner or alternate
sources of income. MIEC plays a
big role in offering succour and
hope to the youth in the region
by preparing them for alternate
employment opportunities.
At the recommendation of
SDTT, the centre has also agreed
to enroll needy youth from nearby
areas in Madhya Pradesh. “Most of
the students are referred to MIEC
by our partner NGOs, with whom
we share a lot of goodwill and
rapport,” explains Brother Mathew K
Alexander, director at MIEC, Nagpur.
NGOs like Pradhan in Mandla
(Madhya Pradesh), Karuna Sadhan
in Sindhudurg (Maharashtra),
the Nagpur Multipurpose Social
Service Centre and several other
organisations send underprivileged
youth to MIEC for training on a
regular basis. The centre offers basic
courses in eight vocational areas
Ninety percent of our students belong
to the farmer community. What we want
is for them to stay in touch and know the
basics of agriculture.
Brother Mathew K Alexander, director, MIEC, Nagpur
October 2013
n
Tata Review
85
Community
Vocational courses in tailoring, beauty care, carpentry, welding, refrigeration and air-conditioning, and farming are
part of the education initiatives undertaken at the Montfort Integrated Educational Centre in Nagpur
at its seven-acre campus: tailoring,
beauty care, carpentry, welding,
refrigeration and air-conditioning
repair, motor mechanics, electrician
and farming. Students are enrolled
free of cost or at a nominal
fee (charged for the exam and
certification).
At the end of the six-month
course, most of the students sit
for the MES (modular employable
scheme) exam, which comes
under the purview of the National
Council for Vocational Training, a
government certification.
For some trades, the students
write exams under the Community
Development Scheme, which is a part
of the Human Resource Development
Scheme of the Government of India.
Some students also write direct
exams, which are conducted by
particular companies interested
in hiring people. All the students,
however, are given the opportunity
to write one government-run
examination, which helps them aim
for a better salary later. Little wonder
86 Tata Review
n
October 2013
that the institute is in demand,
from both youngsters wanting to
join the job market and companies
looking to hire. MIEC has roped
in several companies as partners in
this initiative. Some of the capital
costs for setting up the training labs
and equipment are borne by these
companies. The alliances also help
MIEC secure job placement for all
their students.
Corporate support
One such tie-up is with Mahindra &
Mahindra, which has set up a motor
mechanics lab at MIEC through its
Mahindra Navistar initiative. The
company uses the lab to train new
recruits, and also hires many of the
youngsters in the MIEC-run motor
mechanics course.
Corporate house Godrej is
another big partner of MIEC. The
organisation has put in the initial
capital for the refrigerator and
air-conditioning repair course. It
also provides kits for students who
complete the beautician course.
Tata Consultancy Services has
donated computers for the computer
programme at the centre. All in all,
it is a win-win situation for all the
stakeholders. The uniqueness of the
initiative lies in the fact that it is a
collaborative effort.
MIEC’s doors are open to
all those in need, especially the
underprivileged, such as children
of sex workers and youth from
the scheduled caste and scheduled
tribe communities. Here they learn
different trades and basic spoken
English, and three hours a week of
computers, which is compulsory for
all. They also engage in gardening
and agricultural activities for about
an hour and a half each week.
“Ninety percent of our
students belong to the farmer
community. What we want is for
them to stay in touch and know
the basics of agriculture,” explains
Brother Mathew. Through the year
the institute celebrates different
festivals, giving students a chance
to participate in cultural events like
Community
dance programmes and singing
competitions. Time is set aside
for them to engage in sports like
volleyball and kabbadi. All these
extracurricular activities help the
youth build their confidence, do
away with inhibitions and explore
their natural talents.
Take Avinash Sahare from
Amravati, one of the many
beneficiaries of MIEC, Nagpur.
He has secured a job with Hotel
Devaragam in Kerala and will always
be grateful to the institute. “MIEC
has a very important place in my
life,” he says. “MIEC’s brothers and
the staff have helped me shape my
dream. They taught me to work
hard, be disciplined, develop a
positive attitude, and also helped
develop my personality. I could get
a job and support my family for the
marriage of my sister.”
Another beneficiary, Saritha
Pawar, who comes from the Pardhi
community of Amravati says, “In my
community, most of the families are
economically backward, uneducated
and suffer from poor health. I was
MIEC is well aligned with the trust’s focus
on skills development. So this would be an
important initiative in the region.
Poornima Dore, programme officer, urban poverty and livelihoods,
Sir Dorabji Tata Trust and the Allied Trusts
keen to go out and support my
family. Thanks to the intervention of
an NGO named Divya Sadan, I came
to MIEC Nagpur. It was a turning
point in my life.”
Marriage can wait
Ms Pawar received training in beauty
care and tailoring. It improved
her confidence and enabled her to
recognise that she could change her
life. MIEC helped her get a job at
Naturals Salon, Chennai. She says,
“Now I feel confident. Only when I
stand on my own feet will I think of
getting married.”
Some of the promising
alumni from MIEC and its sister
organisation, Montfort ITC
Ballarsha, have been encouraged
to become trainers and teachers
Where skills are for acquiring
Located in the heart of India at Nagpur, Maharashtra,
Montfort Integrated Educational Centre (MIEC) was started
by the well-known educational group, Montfort Brothers of
St Gabriel Educational Society. Veterans in the area of
providing education, vocational training and life skills to
the youth of India, the Group runs several schools and
educational establishments across India. Boys Town
Hyderabad and Montfort ITC Ballarsha are two such wellestablished skills development centres that have been
operational since 1955 and 1981 respectively, and have
trained thousands of youngsters. Both of these now run as
self-sustaining centres and are considered to be innovative
and model institutions that impart quality skills training.
at the institute. They inspire and
motivate the students by serving
as role models. The trainers also
get regular inputs and training
from experienced staff members of
another group organisation, Boys
Town Hyderabad (see box: Where
skills are for acquiring).
For students, MIEC extends a
family-like atmosphere where they
feel at home. They share a warm
and friendly rapport not only with
Brother Mathew but also with other
staff members, including Brother
Mondy, who is not just a counsellor
to them but also a friend. Many
students are unhappy to leave the
institute at the end of the course.
MIEC plans to spread
awareness about the institute and
its benefits in the region. Focus will
be on encouraging women to learn
skills that will hold them in good
stead and help them augment their
family incomes. Brother Mathew
hopes that in the future the institute
will be able to become self-sufficient
by developing an income-generating
model, for instance, through the sale
of products such as tables and chairs
from the carpentry class. The money
thus earned, it is hoped, can help
fund daily expenses.
In the meantime, MIEC is
working to fuel the individual
dreams of hundreds of youngsters
who walk in through its door hoping
to secure a better future. ¨
— Jai Madan
October 2013
n
Tata Review
87
strategy
Making each CSR
rupee count
As the impending Companies’ Act 2013 comes into effect,
the character of the expenditure on CSR projects by companies
is expected to witness a significant transformation. Focusing
on five key aspects can vastly improve CSR effectiveness,
thereby delivering significant value for the community and
the organisation, say K Raman and Manjula Sriram of
Tata Strategic Management Group
T
he impending Companies Act 2013
requires Indian companies to spend
2 percent of their profits on corporate
social responsibility (CSR), making India
among the first nations to have an act specifying
social welfare spending. The act stipulates that
companies exceeding net worth of `5 billion or
turnover of `10 billion or net profit of `50 million
must spend 2 percent of their previous three years
average net profit towards CSR.
It is estimated that this legislation will
lead to companies collectively spending over
K Raman has been with the Tata group for seven years.
He heads the social sector practice at Tata Strategic
Management Group, which has also been supporting
the development of a collective CSR agenda for the
Tata group. He was also instrumental in formulating a
strategic roadmap for the National CSR Hub.
88 Tata Review
n
October 2013
`100 billion every year beginning FY14, ie a
four-fold increase over the `25 billion spent
on CSR in FY12. With such significant funds
being deployed, companies must seek to create a
sustainable impact for both the organisation and
society.
Traditionally, CSR was undertaken as
a form of charity or philanthropy. Today,
CSR initiatives fall under four key categories
based on the level of company involvement,
type of benefits to the company (tangible /
intangible) and alignment to the company’s core
competence.
Categories of CSR
Charity: It refers to the support offered by
companies in the form of voluntary donations
or monetary support to a worthy cause. It
includes minimal employee involvement
strategy
and limited engagement with beneficiaries.
The donation is generally channelled by the
receiving entity towards supporting on-going
social programmes.
Philanthropic CSR: Philanthropic CSR implies
deeper involvement of companies and generally
allows for higher interaction with beneficiaries.
Depending on the nature of activities,
philanthropic CSR can be classified as tactical
and strategic.
Tactical philanthropy is characterised by
small scale, disjoint initiatives spread across
beneficiaries, creating a small impact in
multiple places. Strategic philanthropy focuses
on a few ‘big ideas’ and aligning company’s
resources and capabilities towards these ideas.
An example of strategic philanthropy
is Aditya Birla Group’s ‘model village’
programme that works on creating self-reliant
model villages in the areas around their
manufacturing units. Each year, an overarching theme is adopted across the villages
to address a key need, for example, in FY14, it
is villages where there is no open defecation
practised and education of the girl child. The
group collectively impacts 3,000 villages across
the country.
For a services company, a strategic
approach to philanthropy centres around
utilising its own competence to address
a critical social need. A case in point is
Manjula Sriram is project leader at Tata Strategic
Management Group. A post graduate degree
holder in business administration from IIM
Calcutta, she has over six years of industry
experience. She has led multiple consulting
engagements in the social sector domain.
Tata Consultancy Services, which started
an initiative to address illiteracy through
information technology. Adopting a computer
based functional learning approach, TCS
leveraged its core competence in software
development to develop a literacy module
which empowers beneficiaries by enabling
them to read within 40-45 hours of learning,
compared to the traditional 200 hours of
instruction. TCS provides the module free
of cost to social organisations, trains the
teachers on the use of the module and donates
computers on a need basis. Over 120,000
people have been made literate already through
over 250 centres across India.
Philanthropic CSR initiatives are primarily
designed to benefit the community. However,
in the long term the companies are also
rewarded in the form of a ‘license to operate’
and significant goodwill among the community
and customers.
Joint value creation: Joint value creation
focuses on embedding social considerations
in the business processes of a company rather
Tata Consultancy Services’ computer based functional learning
Key features
Software developed
using multimedia
features
Material from
National Literacy
Mission (NLM)
adopted
Available in nine
languages (Telugu,
Tamil, Hindi,
Marathi, Bengali,
Gujarati, Oriya,
Kannada, Urdu)
Dissemination
methodology
TCS trains the
teacher, provides
the software and
donates computers
No large scale
infrastructure,
batches of 10-15
students
Partnerships with
local governments
and NGOs
Impact
Recognition
Programme is
active in more than
250 centres across
the states of Andhra
Pradesh, Tamil
Nadu, Maharashtra
and West Bengal
Asian Corporate
Social
Responsibility (CSR)
Award, 2003
Over 120, 000
people have been
made literate till
date
Also implemented
in South Africa
Golden Peacock
Global Award 2007
for CSR
CBFL recommended
for deployment as a
National Mission in
11th Five Year Plan
October 2013
n
Tata Review
89
strategy
than considering CSR as an add-on activity.
Responsible sourcing, vocational training,
creating self-help groups for rural distribution
of products are possible avenues of joint
value creation.
The Taj group creates joint value through
its sensitive vendor tie-ups. Guests who walk
into Taj properties will see the staff wearing
beautifully designed silk sarees, which are
part of a unique initiative that supports the
renowned traditional silk weavers of Varanasi,
Uttar Pradesh — a dying tradition impacted
by rising costs and changing consumer
preferences.
By providing design and material inputs
to 40 weavers of Sarai Mohana village and
procuring from them, the Taj group not only
supports their livelihood but also helps them
to create sarees that are contemporary and
marketable to other potential customers. In
FY13, the group supported over 170 such
vulnerable vendors.
Inclusive business models: Arguably the most
evolved form of CSR is the concept of creating
inclusive business models. This approach
Structured
implementation
Implementing in
project mode with
clearly defined
objectives, timelines,
resources and impact
assessment process
3
Meaningful
outcomes
Using meaningful
indicators to
measure outcome
/ impact instead of
measuring monetary
contribution
4
Leveraging
Improving
partnerships
csr
Developing a partner
5
2 effectiveness
network of NGOs,
government agencies
and corporate
1
foundations for effective
implementation
Few ‘big ideas’
Focusing on one
or two major
programmes / focus
areas rather than
spreading funds too
thin across multiple
small initiatives
90 Tata Review
n
October 2013
Sustainable
programmes
Empowering
beneficiaries rather
than creating
dependence on the
company / initiative
involves addressing social concerns through
new business models / products that cater to
the needs of the population at the base of the
pyramid. This may involve acquiring new skills
and competencies to create disruptive solutions
to social concerns, with a potential for long
range economic gains.
General Electric’s low-cost medical
equipment for developing countries is a good
example. Tata Swach is another low-cost
innovation that addresses a critical social need
of the larger part of the pyramid.
While charity and philanthropy are
focused solely on community benefits, and
not necessarily linked to business, joint value
creation and inclusive business models integrate
business with CSR to make socially relevant
contributions. Most companies have a portfolio
of CSR initiatives across the four categories.
However, the share of each category
depends upon the overarching philosophy of
the company. Irrespective of the composition
of the portfolio, it is critical for organisations
to ensure the effectiveness of their CSR
investments in order to create a meaningful
impact.
Levers for improving CSR
effectiveness
In order to maximise the effectiveness of CSR
activities, companies must focus on five key
aspects:
Few ‘big ideas’: Companies must
identify their CSR activities with one
or a few ‘big ideas’ and then undertake
large scale initiatives aligned to them,
rather than spreading the CSR funds
and efforts too thin across a large
number of initiatives or geographies.
Such an approach brings focus and
helps create a larger impact and better
visibility for the project. For example,
the Bharti group has chosen elementary
education as its primary focus area. All
group companies collaborate with the
Bharti Foundation and work jointly
in the field of education, making it a
prominent theme across the group.
strategy
Leveraging partnerships: The various
entities operating in the CSR ecosystem
have their own strengths. While the
government has large funding available
for social projects, social organisations
have the required reach among the
intended beneficiaries and are more
aware of grassroots challenges. At
the same time, several corporate
foundations and trusts have funds
available that they wish to utilise on
large programmes addressing a critical
need. It is critical for any company
to effectively leverage partnership
options to create a wide-spread impact.
In the absence of capable partners,
companies may even need to create
a partner network by encouraging
local entrepreneurship and mobilising
local resources to undertake social
programmes.
Structured implementation: A projectbased approach with prior planning
and budgeting of resources, both
financial and human, provides
focus and direction to any initiative.
Companies need to chart out a clear
roadmap in advance, along with key
milestones to be achieved. They must
also have the required oversight and
governance mechanisms. Companies
wanting to undertake voluntary
disclosures need to factor the reporting
aspect into their roadmap. Where
relevant, a handover strategy to
stakeholders that brings the initiative
to a logical conclusion should also be
part of the structured implementation
roadmap.
Meaningful outcomes: Companies
need to make a shift from measuring
superficial parameters, such as
amount spent on CSR or number of
beneficiaries reached, to measuring
meaningful indicators of impact. For
example, it is easy for a company to
support the education of 500 children,
but the true measure of impact will be
Meaningful measurement parameters
Activity
Typical
measurement
parameter
Impact indicator
Vocational skill
development
Number of
people trained
Employment
generated
(% placed)
Primary
education
Number of
students
supported
Improvement
in assessment
scores
Preventing
water-borne
diseases
Number of
households
provided
access to
clean drinking
water
Reduction in
the incidence
of water-borne
diseases
the percentage of these students that
can actually read and write proficiently
(see table: Meaningful measurement
parameters).
Sustainable programmes: CSR initiatives
should be designed such that after
a pre-defined period they become
self-sustaining. Communities should
be treated not just as beneficiaries but
partners in the development process.
Tata Steel has used self-help-groups
(SHGs) as a mechanism for creating
sustainable livelihoods for women from
marginalised communities. This enables
them to participate in family decisionmaking, gain access to grassroots’
democratic institutions as well as boost
their economic self-reliance.
It is estimated that the Companies Act
will bring over 8,000 companies in its ambit.
The ability of companies to create long term
social and economic impact is dependent on
being guided by a clear and effective approach
to CSR.
By carefully choosing their CSR portfolio
and applying the critical levers for effectiveness,
companies can ensure they create a substantial
impact from every CSR rupee spent. ¨
October 2013
n
Tata Review
91
case study
A winning strategy
Rahul More from the Tata Management Training Centre, explains
how creating an innovative ecosystem will pave the way to longterm sustainability of the growing Tata group conglomerate
D
uring one of his visits to the Tata
Management Training Centre (TMTC),
Group Chairman Cyrus P Mistry
addressed a few major challenges while
envisaging a future for the Tata group. How
can we continuously adapt to the changing
business environment? How can we build
systems, processes, people, and culture to
respond to such changes at multiple levels to
ultimately create an institution? How can we
build a global organisation based on global
talent, collaborative formats, areas of excellence,
information systems and capability to manage
technology /innovation?
As he put forward these important questions
in front of all the stakeholders, Mr Mistry laid
special emphasis on creating a ‘strategy’ and
‘cross company / external collaboration platforms’
across the Tata group to create value and deliver
innovation at work. Organisations need to
develop strategic thinking ability to exploit
innovation platforms to create stable ecosystems.
Rahul More works as a practice consultant in the
innovation and strategy area at the Tata Management
Training Centre. His role involves strengthening strategic
thinking, organisational innovation culture, processes,
R&D effectiveness, operational excellence and
innovation ecosystem.
92 Tata Review
n
October 2013
Business leaders must understand how to build
and play their innovation ecosystem. The best
companies such as Google (Android), General
Motors, Skoda, Volkswagen, Amul, DRDO, etc,
are increasingly focusing on building innovative
stable ecosystems to achieve competitive
advantage. What really matters most in creating
and sustaining innovation is building and
strengthening interdependent links amongst all
the ecosystem players.
Innovation ecosystem, as defined by
leading researcher Russell Martha, refers to
the inter-organisational, regulatory, economic,
environmental, and technological systems
through which a milieu conducive to business
growth is catalysed, sustained, and supported.
Value is co-created through effective linkages,
collaborative formats, global talent management,
complementary innovation assets and coalitions /
networks that emerge from a shared vision of the
desired transformations.
In emerging economies, specifically in the
manufacturing industry, firms have adapted
low cost models, collaboration and mergers and
acquisition mode to raise productivity and gain
competitiveness. These models have been tested
across industries over a period of time. However,
recent global currency fluctuations mean that
such low cost models are unsustainable.
case study
Exploring interdependence
The concept of an innovation ecosystem is taken
from nature; scientists discovered an interdependence between entities where they shared
energy and nutrition towards the common
objective of survival. Realising that some aspects
of natural ecosystems could be mimicked in the
business environment, social scientists developed
the concept of a ‘business ecosystem’.
While several similarities may be observed
between a natural ecosystem and a business
ecosystem, the one significant difference is the
presence of a dominant entity, which in a sense
is the catalyst for the creation of a business
ecosystem. But this entity tends to control the
ecosystem and, sometimes, is the single largest
beneficiary of the value generated by the system.
This sets into motion a ripple effect within the
ecosystem by neglecting practical limitations of
small players in the ecosystem. This may lead to
value leakage within the system and affect the
performance of dominant entity.
At this stage, it might be useful to examine
other forms of business collaborations and
interactions with respect to value creation and
sharing, for example, supply chain and value
chain. It might be feasible to create separate
entities or independent platforms that might
be able to deliver significant value. This leads
to creation of specialised providers of products
and services. And this is a pre-requisite to the
formation of a business ecosystem.
building a strategy
Ecosystem management is not just about plotting
the network of partners and stakeholders relevant
to the innovation. It’s about designing and
executing a complex systems strategy so that
the innovation success with key partners sets in
motion a chain of success that is transmitted to
the other partners within the ecosystem, for the
ultimate benefit of the ecosystem as a whole.
Innovation capability facilitates an
innovative organisational culture characteristic
of internal promotional activities, and
capabilities of understanding and responding
appropriately to the external environment.
It comprises capabilities like absorptive
capacity, technological, operational excellence
/ manufacturing, marketing and strategic
planning capability of firm which has a
strong influence on performance and growth.
Simultaneously, competitive advantage can be
gained by strategic choices about winning by
leveraging these innovation capabilities. It is one
of the major factors for the enhancement of a
firm’s performance and it is unlikely to find all
these capabilities in the same firm. It is also an
integrated set of choices that uniquely positions
the firm in its industry so as to create sustainable
competitive advantage and superior value
relative to the competition.
As defined by Lafley AG and Martin RL,
in their book Playing to Win, strategy is the
answer to five interrelated questions: What is
your winning aspiration? The purpose of your
enterprise, its motivating aspiration. Where
will you play? A playing field where you can
achieve that aspiration. How will you win? The
way you will win on the chosen playing field.
What capabilities must be in place? The set and
configuration of capabilities required to win in
the chosen way. What management systems are
required? The systems and measures that enable
the capabilities and support the choices.
Horizontal and vertical
competencies
The innovation capabilities and strategic
choices by a firm within an ecosystem to have
a systemic view is its horizontal competency;
vertical competencies are those that will provide
deep domain expertise to achieve competitive
advantage and better firm performance. Usually,
there are two types of firms in the ecosystem,
ones which are developing the needed ecosystem
(mostly dominant firms), and those that are
strongly integrating in the ecosystem through
innovation capabilities and effective strategies.
Competitive advantages have been acquired
by firms within the ecosystem by having
systemic effect and linkages, not just horizontal
and vertical linkages that reflect in their supply
chain and value chain. Thus, in order to have
deep domain expertise, firms need to nurture
competencies and expand their reach in market
October 2013
n
Tata Review
93
case study
/ geographic experience, industry experience,
areas of excellence, and business functions. The
managers / executives within the ecosystem
can assess effectiveness of innovation capability
building and firm performance with the help of
this model and can formulate winning strategies.
In order to achieve sustainable growth
and competitive advantage within the
innovative ecosystem, firms need to develop
innovation strategy to enhance innovation firm
performance. Thus strategy formulation and
execution becomes iterative in the dynamic
business environment.
Designing a winning company
within the ecosystem
Designing a winning company revolves around
effective alignment between your strategy
and organisational design to gain consistent
advantage. The company should have a clear
and differentiated way of creating value for
its customers with well-defined innovation
capabilities and respective strategic choices.
The value creation charter of an
organisation resets on two wheels, ie, the back
wheel represents the performance wheel and
the front wheel represents the innovation
wheel. Your innovation wheel suggests your
organisational capacity to sense opportunity
and the road ahead to ride on your core
competencies. It is the most important source
for gaining dynamic capabilities and strategic
Figure 1: Value creation charter
Organisational design
(Firm strategy, structure, processes,
capabilities and culture)
Strategic leadership
(Values, beliefs, skills
and behaviours)
Value creation
charter of organisation
Performance
wheel
Source of power and
acceleration for operational
excellence, efficiency,
effectiveness along with all
stakeholders management
94 Tata Review
n
ENVIRONMENT
Alignment requires
strategic thinking to achieve
sustainable competitive
advantage
October 2013
Direction
and clarity
about the
future
Innovation
wheel
Builds dynamic
capabilities and
develops competency
for strategic renewal
renewal. The performance wheel is a source of
power and acceleration to achieve performance
excellence with efficiency and effectiveness.
It also creates the value to all stakeholders
including customers, partners, suppliers and
shareholders (see Figure 1).
The Tata companies are best at operating
this back wheel to achieve results. Due to
emphasis on performance, managers usually lack
the experience of operating the front wheel. It is
important to have a perfect alignment between
these two wheels within the ecosystem to survive
and create sustainable competitive advantage.
Companies should strive to figure out
where to play and where not to play, which is
a necessary step towards building coherent
strategies. While designing the winning
company, you cannot just shift people around
and expect to change the way they work. You
have to look at the other mechanisms that
influence the way people make decisions, their
attitudes and innovation culture within the
organisation. When a company fails to execute
its strategy, the first thing managers often think
to do is restructure. But research shows that
fundamentals of good execution start with
clarifying decision rights and making sure
information flows in the required direction.
If this is in place, the correct structure and
motivators often become obvious.
For the Tata group, which has emerged as
one of the most prominent global power houses
of India, the ultimate challenge is to develop and
sustain the group as a ‘global organisation’ and
drive growth based on continuous innovation.
One of the solutions we are proposing is to
build and leverage innovation ecosystems at
various levels and across Tata companies for
future global challenges. The model explains
the strong interface mechanism as a strategy
platform between the Tata board and the
respective company. This platform provides
flexibility to have control over the bigger picture
of the company as well as over the granular
details towards strategy foresight, strategy
implementation and strategic risk involved.
The innovation excellence practices and their
output and integration with business strategy
case study
can be judged effectively by such mechanisms.
This active interface mechanism will help the
board to manage corporate strategy effectively
and understand non-linear growth in dynamic
business environment and challenges.
Innovation ecosystem for the
Tata group
The model (Figure 2) displays interaction of
corporate strategy with the playing field —
markets. Normally, companies build innovation
capabilities to support existing business, change
rules of rivalry and create new business as
well as markets. The most important question
is — Where do we play? As the vision is to
create a value to all stakeholders, Tata group’s
corporate strategy has to constantly engage
with value creation practices and identify areas
of excellence. It also indicates a need for the
development of a ‘cross-company collaboration
platform’, where multiple business ecosystems
can be managed effectively and innovatively.
This will certainly provide strength to our
InnoCluster initiative and provide unique
opportunities to compete as well as co-operate.
The proposed interface mechanism
through a strategic platform and cross-company
collaboration platform are a top-down approach,
which explains the strategic intent of the group.
The bottoms-up approach has to be equally
effective and strong in terms of achieving goals.
The respective Tata companies have integrated
R&D wings or service operations and client base
(depending on business sector) and provide
R&D / innovation strategy or service excellence.
These departments have to expand their horizon
to have effective global R&D networks and
global talent reach. They have to strengthen their
company’s absorptive capacity by exploiting
external sources of innovation and interactions
with domain knowledge expertise. So, inter-firm
linkages and networks become an important
element to bring all actors together within the
ecosystem and offers various systems as well as
channels to deal with uncertain technology and
market environment.
This practice can really create a unique
knowledge creation platform by creating a shared
Figure 2: Proposed innovation ecosystem
for Tata group companies
Corporate
strategy
Finance and
human
resources
Sector / domain
knowledge
expertise
Suppliers and
companies in
complementary
business
Value
creation
and areas of
excellence
Cross
company
collaboration
platform
Tata board
Strategy
platform
Tata company
R&D or
service
operations
Innovations and
global R&D
network
Linkages and
global talent
reach
University /
specialised
institutions
Markets
(Where do
we play)
Tata Sons and Indian policy framework
knowledge value and managerial systems. Also,
this internal and external knowledge integration
within the proposed innovation ecosystem
develops a foundation for continuous innovation
/ experimentation and independent problem
solving. Accordingly processes and systems can
be defined to create a unique innovation culture
in the organisation.
Another important element of the
ecosystem is to build relationship with
suppliers and companies in complementary
businesses, and allow them to build their value
independently. Moreover, by identifying and
leveraging complimentary assets within the Tata
group and outside, innovations can become a
growth engine.
Finally, to mitigate strategic risk, the group
needs to focus on developing two important
skills like managing interdependence skills
and integration skills. Interdependence
skills comprise coordination, collaboration /
networking, delivery and leadership skills which
enables bringing together various stakeholders
to achieve a common goal. Whereas integration
skills comprise contracting, negotiation,
innovation and intellectual property management
skills to deliver value. Hence this proposed
innovation ecosystem model will help to create
and sustain an innovative global organisation. ¨
October 2013
n
Tata Review
95
book review
Breakthrough story
H
alf a century ago, you would have
been laughed out of the room if you
suggested that a company from South
Korea, China or India could make it
big globally. But the times, they are a-changing.
Nobody blinks an eyelid any more when
Chinese energy companies get listed among the
biggest enterprises in the world, Tata and Aditya
Birla group companies acquire rivals bigger than
themselves in the UK or America, or Brazil’s
Embraer faces off with American mammoth
Boeing and European giant Airbus to win huge
aerospace contracts worldwide.
It’s not a flash in the pan; but, as some
developing world companies have
found out, going global is easier
said than done. In their book
Brand Breakout: How emerging
market brands will go global,
Nirmalya Kumar and Jan-Benedict
Steenkamp attempt to more
than just explain the success of
emerging market brands. They try
to spell out a cutting-edge plan
for emerging market brands to
succeed in world markets.
THE ROAD TO SUCCESS
Brand Breakout outlines eight
strategies, including the Asian
tortoise route, from B2B to
B2C, brand acquisition, and
leveraging cultural resources
that will catapult brands from
96 Tata Review
n
October 2013
domestic dominance to worldwide leadership.
Marketing experts Kumar and Steenkamp
met two decades ago and have since then
collaborated on research, teaching and
consulting projects related to global strategy,
marketing and branding. They bring their
considerable knowledge and experience to
bear on the task of examining the creation and
most effective implementation of a strategic
route to success. In the process they identify
problems that companies will face and suggest
how they can overcome them. Their analysis
and propositions are supported by a bagful of
case studies, including on HTC, Tata Motors,
Samsung, Lenovo, Pearl River
Piano, Havaianas and Corona.
Not only can the book serve
as a guide for emerging market
companies, it can show Western
companies where and how their
next challenges will emerge. So,
next, expect a book by these
authors, or by another guru on
how Western companies can
counter the emerging market
multinationals.
Title: Brand Breakout: How
emerging market brands
will go global
Authors: Nirmalya Kumar
and Jan-Benedict
EM Steenkamp
Publisher: Palgrave
Macmillan, 2013
Pages: 256
GLOBAL SUCCESS
STORIES
The chaebols in Korea gained
immensely from government
policies and cheap funds just
as the Japanese keiretsu gained
from their finance capital
book review
relationships much earlier, and the Chinese
companies are reaping the advantage of direct
and indirect government support. Such support
is not an Asian phenomenon; governments
in Washington DC have rushed to the aid of
American companies time and again — from
imposing heavy import duties on automobile
and steel imports many decades ago to loading
the dice against offshoring a la Barack Obama.
This angle is interesting because few
business books, especially those with a
marketing focus, pay attention to government
policies. The authors of Brand Breakout devote
an entire chapter to the ‘national champions
route’, which leverages strong support from the
state. After referring to how previous success
stories (Airbus, Michelin, Hyundai, NEC,
Samsung, Singapore Airlines, Volkswagen and
LG) started as ‘national champions’, the authors
proceed to discuss the rationale for this route,
including industrial policy imperatives, the
strategic trade rationale and national security
compulsions. There are limits to such policies,
the authors point out, and suggest several
possible ways in which to mitigate the negatives
of government involvement. They discuss the
success of the UAE’s Emirates Airlines as well as
the failure of Malaysia’s Proton car project.
Also, it might be worth examining why
the new Chinese multinationals have greater
industry focus compared to their eastern
counterparts, which have had their fingers in
many pies, much as Indian business groups
do. One of the lessons the authors suggest for
would-be MNCs from the developing world:
“The many success stories of Chinese firms and
entrepreneurs are of those who have aggressively
pursued excellence in manufacturing and
product engineering. Given constant price
pressure, the leaders of these companies manage
with an engineering and financial mindset
that relentlessly emphasises productivity and
efficiency. Low cost is their raison d’être.”
LESSONS TO LEARN
Aspiring multinationals in countries like
India may well note the bit about relentless
emphasis on productivity and efficiency.
These factors are closely linked with factors
like wages and currency rates. Chinese
Eight ways to brand nirvana
To explain how brands go global, Nirmalya
Kumar and Jan-Benedict E M Steenkamp have
listed eight different pathways that brands (not
companies) can take to break into the global
marketplace.
Here they are:
Asian tortoise route: Migrating to higher
quality and brand premiums after
establishing a successful low-cost offering
(Haier, Pearl River Piano, Wanli…)
Business to consumer route: Migrating
from B2B into B2C (ASD, Galanz, Huawei,
Mahindra, HTC…)
Brand acquisition route: Buying Western
global brands (Geely and Volvo, Lenovo and
IBM, Tata Motors and Jaguar Land Rover…)
Positive campaigning route: Overcoming
negatives associated with the country of
origin through marketing (Ospop, Roewe,
Shanghai Vive…)
Cultural resource route: Leveraging
cultural myths to build and grow the brand
(Herborist, Shanghai Tang, Havaianas…)
Diaspora route: Following migrants and /
or tourists who have experienced the
product in the home market (Mandarin
Oriental hotels, Reliance MediaWorks,
Corona beer…)
Natural resource route: Branding natural
resources tied to a particular geographical
location (Café de Columbia, Natura…)
National champion route: Leveraging
strong state support to establish and grow
a global brand (China Mobile, Embraer,
Emirates Airlines…)
October 2013
n
Tata Review
97
book review
EXCERPTS:
Hurdles to overcome on the road to
global brands:
Hurdle 1: Improve transparency
Many Chinese firms lack transparency …
an important item on the Chinese corporate
manifesto for the future must be to open the
ownership structure up to scrutiny.
Hurdle 2: Enhance profitability and integrity
of financial statements
Many large Chinese firms seem to operate on
lower profit margins … beyond the low profit
margins, there is the question of integrity of
financial statements.
Hurdle 3: Move from imitation to innovation
The highly hierarchical and family-controlled
culture that dominates many emerging market
firms is not always conducive to innovation and
branding.
Hurdle 4: Accept management diversity and
a global mindset
Building a global brand in today’s world with
distributed economic power requires managing
across many countries … companies from Brazil,
India and South Africa have some advantage on
this front.
companies have gained from a low exchange
rate of the yuan and from low wages. With
rapid development, Chinese wages have
shot up, and global companies are looking at
setting up shop in lower-wage countries, as
textile companies, for example, are beginning
to do in Bangladesh, Cambodia and Vietnam.
In line with this trend, the authors say,
“While China has been manufacturing for the
world over the past three decades, the world
will manufacture for China over the next three.”
So where will industry move next? Things
may not move in a straight line. The authors
admit that this process is “a work in progress
… The story of the emerging markets is a
relatively young one and could still be derailed.”
Will Coca-Cola eventually acquire Huiyan,
which has a more than 50 percent share of the
branded 100 percent fruit juice market (though
its previous attempts to take over the Chinese
company were blocked by Chinese regulators),
or will the Chinese company beat the American
multinational at its own game? Huiyan already
exports concentrate and puree to over 30
countries.
In their attempt to provide practical advice,
the authors have included an appendix titled
‘Hurdles to overcome on the road to global
brands’. Their suggestions here — improve
transparency, enhance profitability and integrity
98 Tata Review
n
October 2013
of financial statements, move from imitation to
innovation, and accept management diversity
and a global mindset. I wish they had gone into
a little more depth here. But maybe that’s the
subject of another book!
BONDING OVER BUSINESS
The book is excellent, must-read material for
managers, and for would-be managers slogging
it out in business schools.
A few words about the authors may be
apt here. Nirmalya Kumar is professor of
marketing and co-director of the Aditya Birla
India Centre at the London Business School.
His research has been widely published in
journals such as the Harvard Business Review
and Journal of Marketing Research, and he has
published six books.
Jan-Benedict EM Steenkamp is the
C Knox Massey distinguished professor
of marketing and marketing area chair at
the Kenan-Flagler Business School at the
University of North Carolina. He has consulted
companies such as Procter & Gamble, Kraft,
and Johnson & Johnson on branding and
strategy, and has written for the Harvard
Business Review, The Wall Street Journal, and
Financial Times, among others. ¨
— Kiron Kasbekar