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Case Study

TCS develops an IT operating model for a leading industrial manufacturing group


A leading industrial manufacturing group, was having trouble achieving its desired business goals with its existing IT operating model. Learn how TCS designed a new IT operating model that streamlined the interface between business and IT.

The Customer: TCS’ client is a leading global provider of industrial productivity solutions with operations in over 150 markets. The group develops and manufactures compressors, power tools, assembly systems, construction and mining equipment for a wide range of industries.

Business Scenario:
The company had an established IT shared services unit, based on the internal service provider model. This model
aimed to drive better standardization and cost control, allowing the divisions to focus on their core businesses. While this model delivered certain benefits, it was not agile and effective in fulfilling the business needs.

Some key challenges included the following:

  • The client's focus was on ensuring smooth functioning of day-to-day operations, resulting in inadequate contribution of IT toward business development
  • High costs and communication inefficiencies due to the size and complexity of the IT setup
  • A lack of focus on the adoption of new technologies and solutions

TCS’ Solution:
We used a holistic approach to design an IT target operating model, which was built along the following lines:

  • Operating context: By defining the operating context, we addressed the key areas relating to the role of IT, the placement of various IT functions and the required roles, skills and IT governance arrangements.
  • Role and task mapping: We mapped the various activities in the IT value chain to the respective roles, highlighting individual responsibilities for each key IT performance measure.
  • Implementation approach: We provided a transition roadmap (from the existing to the target operating model) and ensured that the new model delivered the intended results within the estimated time.

The target operating model included two main components:

  • Value IT: Business was accountable for driving the use of IT with its core focus on business value creation
  • Utility IT: IT was accountable for driving the use of commodity IT and managing IT service delivery

This change would reflect in the roles, responsibilities and placement of the various activities across the shared
service IT unit and business area IT teams.

The new IT operating model will help the group with the following:

  • Streamline the interface between business and IT to ensure agility and responsiveness to business-IT requirements
  • Focus internal IT capabilities on creating Value IT solutions that provide the group with a competitive advantage
  • Establish business accountability for driving IT usage to create business value
  • Embed innovation as a part of the organization’s culture
  • Achieve cost efficiencies in the delivery of Utility IT services by leveraging external IT service providers