Mumbai: India’s largest software firm, Tata Consultancy Services Ltd (TCS), has named its chief financial officer, Rajesh Gopinathan, to succeed N. Chandrasekaran (popularly called Chandra) as the chief executive officer.
Chandrasekaran was named chairman of Tata Sons on Thursday.
Mumbai-based TCS also appointed N.G. Subramaniam as the new chief operating officer, thereby creating the CEO-COO model after seven years. Chandrasekaran was COO before becoming CEO in 2009. Subramaniam, who is also Chandrasekaran’s elder brother, is president of a business unit, TCS Financial Solutions.
The changes come into effect from 21 February.
“TCS has evolved into an industry leader during Chandra’s tenure. It is definitely big shoes to fill. With continuous guidance from Chandra and the support of the TCS team, I am confident of continuing this great journey TCS is on,” said Gopinathan.
Many within the firm see the decision to appoint Gopinathan as Chandrasekaran’s, and believe the former will carry forward his predecessor’s strategy and not do anything radical. “TCS is not a company which will do something radically different. Rajesh is a very meticulous and articulate guy. Above all, Chandra trusts him completely and so will rely on him to execute his vision,” said one executive. “I don’t see Chandra letting go at TCS and he’ll still work closely with Rajesh,” this person, who asked not to be identified, added.
Once he takes over as Tata Sons chairman, Chandrasekaran is also expected to take over as chairman of TCS.
Gopinathan, 46, was handpicked by Chandrasekaran when he joined TCS from Tata Industries in 2001. He worked across different geographies and units before being appointed CFO in 2013. Gopinathan is an alumni of Regional Engineering College, Trichy (now National Institute of Technology), and the Indian Institute of Management, Ahmedabad.
As CFO of TCS, Gopinathan managed to ensure TCS retained its profitability even when its rivals, including Infosys Ltd and Wipro Ltd, saw an erosion in theirs. “The review meetings between unit heads and leaders, and Rajesh and Chandra are the most feared. Rajesh sometimes used to override even Chandra when it came to pricing. He would quiz you to the point where you could just not hide anything. So, questions like what is the profitability of this contract in the first year, how will you improve the margins once you bring more work offshore, what component of savings do you intend to give to the client as the contract comes to a close, and so on are common,” said another executive who reports to Chandrasekaran, asking not to be identified.
Significantly, TCS’s decision to appoint its CFO as CEO is the second such instance in the country’s $150-billion outsourcing sector. Last year, Bengaluru-based Mindtree Ltd, a firm one-fourth TCS’s size, appointed its head of finance, Rostow Ravanan, as CEO.
However, not everyone approves of Gopinathan’s appointment as CEO of TCS, which is struggling for growth.
“Without a doubt, he is one of the best numbers guy. But when a paradigm change is sweeping through the industry and changing the way we do business, the question is if he is the best man for the job. He’s more an operations guy,” said a third company executive, based out of France, who asked not to be identified.
“Look around. IT firms are looking to try out new things. With Rajesh at the helm, I’ll be surprised if there will be anything significantly different (TCS tries),” he added.
Clearly, much like Chandrasekaran at Tata Sons, Gopinathan will have his share of challenges at TCS