Why an IT Services Powerhouse Got into the Software Business

by Seeta Hariharan, GM and Group Head, TCS Digital Software & Solutions Group


Companies in every industry are up against an unprecedented combination of threats. Banks are facing fintechs, retailers are battling born-on-the-web giants and telcos are searching for new paths to value.


But it’s a windfall for consumers, who have more choices than ever before, making them feel in control. Technologies like Artificial Intelligence, the Internet of Things and the cloud keep raising consumer expectations with personalized services, leaving them feeling empowered like never before.


The end result is that with customers firmly in the driver’s seat, customer experience has become the new competitive battlefield.



Across all sectors and demographic categories, instead of pushing products, companies now compete for consumer loyalty and revenue by selling superior experiences.


Thanks to disruptions from digital technology, companies are being put on notice in every industry. With nearly 60% of businesses stuck in the early stages of digital transformation, according to IDC (CloudView, April 2017), the threats are at a survival level, certainly higher than market share losses or angry shareholders.


Fortunately, most well-established companies are sitting on a gold mine of data that can be turned into dollars if they can use it to unlock their customers’ consumption patterns to deliver better experiences. But with the quickening pace of business, they’re in a race against rivals to uncover the hidden gems that can give them a profound understanding of the myriad of desires and choices consumers face, and use them to design and deliver winning customer experiences.


This faster pace requires companies – especially firms weighed down by legacy platforms like banks, retailers and telcos — to embrace a new, more flexible approach to IT. Not exactly tech’s early adopters, these established players are now competing on customer experience against online firms that grew up in a walled garden strewn with millions of digital footprints to follow.


They face three daunting hurdles.


  1. They must capture and connect huge amounts of information from a vast variety of sources across both the digital world and their more familiar physical world, which to the consumer are already converged. And they need to capture and connect not only data from their branches, but from cities where they do business, sensors and other IoT devices embedded in today’s instrumented landscape.


There is an endless list of other potential sources at their disposal — from weather reports, Tweets and Facebook posts, to consumer sentiment analyses and breaking news. It’s all potential revenue if the data can be monetized.


  1. They need to analyze this information all in real time to take advantage of the slim windows of opportunity that make the difference between a rewarding customer experience, a missed opportunity, and an irrelevant, unwelcomed intrusion.

Since few consumer interactions occur in a vacuum, the best customer experiences require sharing insights across company silos and with companies in other industries. A bank that understands they’re selling customer experience instead of mortgages can provide timely offers for moving, interior design, landscaping or home security services. That requires IT systems that can easily communicate because of open source technology.


  1. Probably the most important hurdle to clear is in creating a system that can continuously learn from their customers’ consumption patterns, so that customer experiences will keep getting better and better.


Many born-on-the-web firms have a head start, but there’s no monopoly on selling superior customer experience.  With online firms now expanding into brick-and-mortar locations and advanced digital technologies more accessible than ever, the customer experience battle is just getting started.


To succeed, companies must become obsessed with selling the best, most personalized and welcomed customer experiences possible. That means accelerating slow or stalled digital transformation initiatives. That’s why four years ago Tata Consultancy Services formed TCS Digital Software & Solutions Group. I have been fortunate to be a part of that effort.


As a global IT services leader, TCS has been building solutions for the world’s top companies across major sectors and markets for decades. In fact, our partnerships with clients are so close that thousands of TCS employees work at client locations around the globe. That’s given us a unique and intimate understanding of the industry-specific strategies, challenges and priorities they and other firms in their spaces face today and going forward.


With companies under extreme pressure to pick up the pace of digital transformation, we realized we were sitting on a wealth of intellectual property, industry knowledge, and skilled programmers. If we could leverage these assets more broadly by making them scale in the form of out-of-the-box software programs that solved very specific industry problems, it could help a potentially much greater number of companies accelerate their digital transformation journeys.

For Retailers and Brands, “The Moment of Truth” Has Already Passed

by Seeta Hariharan, GM and Group Head, TCS Digital Software & Solutions Group

In the 1980s, former Scandinavian Airlines System (SAS) CEO Jan Carlzon transformed the struggling carrier into a leader by turning customer service into an obsession. In doing so, he coined the phrase The Moment of Truth to describe the exact point in time a customer made contact with a SAS employee –when SAS had to prove its value in order to keep the customer.

For SAS, Carlzon preached, the collective outcome of these Moments of Truth – 50 million of them per year, he tallied – ultimately determined the success or failure of his company.

Walmart founder Sam Walton put the same phrase into action by instituting the retailer’s famous Ten Foot Rule. Employees who came within 10 feet of customers were expected to greet them to influence The Moment of Truth at the shelf when they decided whether to buy a product.

In 2005, Proctor & Gamble declared The Moment of Truth to be about the customer’s experience with a product: seeing it in a store or online, buying and using it, and offering feedback about it.

In 2011, Google (perhaps not surprisingly) proclaimed The Moment of Truth to be when a customer researched a product online before making a purchase.

Fast forward to today. Given the massive disruption in retail over the past decade, if you asked a hundred consumers or retailers to define The Moment of Truth, you’d get just as many answers. That’s because for retailers and brands, The Moment of Truth has passed. It’s been replaced by the sum of the consumer’s connected experiences.

Here’s why: As consumers, the value we once associated with the act of buying a product has diminished. Sure, there are lots of ways to buy products today – online, in stores, using mobile payments and even digital currencies. But in an omni-channel world, every successful transaction is still just a transaction. A non-event, not a memorable experience that creates lasting value. Ironically, it’s often memorable only if something goes wrong.

Today, brands at the vanguard don’t push products. They curate connected customer experiences by leveraging partners to create ecosystems of value for consumers.

Take Airbnb. They’re not just selling rooms, they’re delivering a broader, more satisfying travel experience involving such diverse experiences as violin making in Paris, truffle hunting in Tuscany or driving classic cars in Malibu.

Or consider Ikea’s acquisition of Task Rabbit. It improves the home furnishing experience by taking the frustration of assembling furniture off the table.

For consumers, it’s no longer just about buying a product or service. It’s about anticipating memorable experiences from their favorite brands, regardless of industry. In today’s connected economy, customers are placing more value on their experiences than the products or services they’re consuming. They want experiences that make their lives easier and precisely reflect their preferences, needs and aspirations.

Think about it. Decades ago, a Moment of Truth with a retailer or brand was when a customer in a store interacted with a salesperson or spoke with a customer service rep by phone. With the dawn of the Web and e-commerce, the number of these touch points exploded. Today, the Internet of Things has brought the digital insights of the online world to the physical world. Using machine learning and augmented intelligence, retailers and brands design highly personalized customer journeys spanning the real world and the digital world, which to consumers are one.

For today’s connected consumer, the most recent great experience with a retailer or brand automatically raises the bar for all other competitors going forward. It’s become a virtuous cycle that’s made them feel empowered, always expecting more.

For retailers and brands, this has made connected customer experiences the new competitive battlefield. Instead of pushing products, they must now sell great customer experiences that play out seamlessly across their integrated physical and digital worlds.

Leading born-on-the-Web retailers such as Amazon understand the importance of connected consumer experiences for creating greater value. That’s why industry pundits are so intrigued by the company’s foray into brick-and-mortar stores and its acquisition of the Whole Foods supermarket chain. They’re eager to see what it holds for the connected customer experience.

For retailers and brands, the implications of Connected Consumer Experiences are daunting. How do data-driven marketers reconcile the new Moment of Truth — the sum total of the consumer’s connected experiences?

They have to go well beyond selling products to address broader consumer needs and aspirations like beauty, adventure, health or wellness. They must orchestrate customer experiences that span multiple brands, service providers and commercial ecosystems.

Instead of static product offers, carefully designed connected experiences need to continuously raise the bar, feeding the virtuous cycle of consumer expectations. Imagine if a fitness equipment store went beyond its traditional boundaries to serve its customers – as an example, when a consumer buys a rowing machine, the store offers not just assembly services but also fitness apparel, nutritional supplements and a trial membership at a local rowing club.

Doing this at scale is a tall order. It requires capitalizing on the gold mine of customer data retailers are sitting on and IoT insights from the physical world, including stores. Connecting, analyzing and sharing it in real-time across company silos and with their new partners in value to understand, anticipate and satisfy customer needs. And most important — continuously detecting and learning new consumer consumption patterns so customer experiences get better and better.

The new marching orders for retailers and brands are clear: they must deliver connected consumer experiences that add up to The Moment of Truth.

Do you agree? To hear more about our views on digital transformation in retail, watch this video featuring IDC Retail Insights analyst Greg Girard.

The View from the Top of FinTech is Clear: Banks Must Speed Up Digital Transformation

by Seeta Hariharan, GM and Group Head, TCS Digital Software & Solutions Group

For more than a decade, Wall Street and the rest of the financial services industry looks forward to IDC’s annual ranking of the top FinTechs.

For banks, it’s not just about the handful of FinTechs they must now get to know. It’s also a learning moment for the industry. A chance to look back over the past 12 months and ponder what trends and insights can be gleaned from the handful of firms perched at the top that have earned bragging rights for the next 365 days.

So when IDC recently announced that TCS captured the #2 position on the 2017 IDC FinTech Rankings, I took it as an invitation to share our view with customers on the constantly evolving financial services industry.  (To see more of our views from the top of the financial services technology industry, watch this video featuring IDC Financial Insights Research Director Jerry Silva.)

GM & Group Head Seeta Hariharan and IDC Financial Insights Research Director Jerry Silva speak about trends in the financial services industry.

TCS’s longstanding relationships with the world’s largest and most successful banks as well as leading companies across other industries give us a unique perspective. From this vantage point, it allows us to spot trends playing out in one sector that often hold crucial lessons for another.

The telecommunications industry is a perfect example. I often tell banking customers that on many levels, the disruption they’re facing from today’s born-on-the-web firms reminds us of the disruption telcos faced beginning in the late 1990s.

Back then, telcos began struggling against a new type of competitor – the over the top (OTT) providers. This new wave of compelling content providers quickly began offering popular video content like YouTube, chat and other social media services such as Facebook and Twitter. While industry pundits debated whether the telecom industry would transform itself to offer higher value in the form of smart pipes, the telcos became providers of commodity infrastructure, or dumb pipes.

I think we all know how that turned out. The telco industry’s failure to digitally transform became a business school case study.

Yet banks aren’t destined to repeat the mistakes of the telcos if they can speed up the pace of digital transformation.

Banks that used to rely on profitable financial products like fee-based checking are under pressure to develop new revenue streams. Their agile new rivals are not just undercutting them with competing financial products for free or at low cost. They’re also more adept at using digital technologies to deliver a better overall customer experience.

Despite investing to varying degrees in digital transformation, most large and midsized banks remain burdened by multiple legacy platforms inherited from decades of M&A activity and industry consolidation. It’s left them mired in various stages of defining their long term digital strategies and challenged to make headway against crafty competitors who count themselves among tech’s early adopters.

In less than a decade, the competitive arena for banks has shifted. Their rival digital upstarts have taught them a valuable lesson: To successfully compete for revenue and consumer loyalty, instead of pushing products they must sell superior customer experiences.

Fortunately, every bank is sitting on a treasure trove of data that can be turned into revenue if they can mine the insights to deliver winning customer experiences. If banks can truly understand their customers’ individual consumption patterns, they can deliver value at every touch point.

As digital natives, born-on-the-web rivals may appear unbeatable at leveraging customer data. But every customer lives in a digital and a physical world. That gives banks unleveraged assets the upstarts lack – physical locations in the form of branches.

That’s right — banks can actually deliver superior customer experiences by better understanding the consumption patterns of their customers. They can monetize their data by deeply understanding the choices, desires and aspirations playing out in the consumer’s converged physical and digital worlds. It requires capturing vast amounts of online and IoT data; connecting, analyzing and sharing it across company silos; drawing inferences through partnerships; and continuously detecting and learning consumer behavior patterns. All in real-time.

This approach is critical for banks to survive. But it demands a new kind of insight — “Connected Consumer Intelligence” — which TCS Digital Software & Solutions Group employs in its software. It’s the way banks can deliver superior customer experiences across the physical world and the digital world, which to consumers are now indistinguishable. And it’s the way banks can speed up their digital transformation and not go the way of the telcos.

Smart Banks and Dumb Pipes

The recent dynamics introduced in the banking industry by the emergence of financial technology or Fintech players reminds me of the disruptions seen in the telecom industry starting in the late 1990s. It seems to me that the banking industry now has some lessons and opportunities that they can cash in on, if they pay attention to the lessons from the past.


  The Telecom Industry

Remember how the telecom industry in the 1990s faced a new breed of competitors, the over-the-top-providers (OTTPs)?  The debate then was whether the telecom industry would transform itself to provide smart pipes or just provide dumb pipes. At the time, the world wondered if telecom players would be open to collaborating with these new competitors or if they would assume that a competitive advantage comes from control and, therefore, a closed system?  Would their customer retention strategy be through offering exciting services or merely through contracts?  Would they learn from these upstarts and use that knowledge – and their financial resources – to change the system for their own gain?


We all know the state of the telecom industry.


Even after more than a couple of decades, the industry continues to be plagued by displacement of its traditional businesses and by declining revenues.  Of late, these declines have even been felt in the wireless segment.  Consolidation continues and infrastructure investments keep increasing due to OTTPs’ bandwidth-hogging applications and services. In addition to all of that, consumers’ expectation of service quality remains five nines when it comes to service providers, while OTTPs get a virtual shrug from consumers when their apps get cranky.


Let’s jump for a moment from the telecom kerfuffle to where the banking industry is today.


Today’s Banking Industry                                                                                                     


In the last few years, a new crop of FinTech firms is gaining in prominence with consumers:  companies like Intuit and Quicken allow consumers to manage their finances better, companies like Betterment and Wealthfront enable consumers to make smarter investment choices, and data aggregators such as Plaid and Yodlee (Envestment) act as a conduit between consumer’s financial data and companies that enable consumers to manage their finances.

“The possibilities are numerous once you have access to customers’ financial data.  You can make ambitious, big-picture choices based on reliable, strong information.”

So now imagine the possibilities that bloom for these FinTechs once they have access to consumer’s financial data and financial transactions.  Here are three examples of what that can look like.


  • FinTechs having access to a consumer’s financial obligations such as home loans and credit card debts, can connect them with lenders or card issuers offering better interest rates. (Implication: customer retention becomes a problem for banks.)


  • FinTechs, understanding a consumer’s savings pattern and cash-on-hand, can provide advice on better investment choices and savings schemes with higher yields. (Implication: loss of customers for a bank or financial institution.)


  • Data aggregator FinTechs can use their platform for personalized advertising based on a consumer’s consumption patterns, thus deepening the bond with the consumer. (Implication: in the era where banks are trying to understand their customers’ better and offer products and services that match their preferences beyond their core, the data aggregator can more easily provide access to these products and services since their platforms lend themselves to onboard partners).


All the above examples illustrate how the relationships between a traditional bank and its customers could be transformed due to the emergence of FinTechs. Traditional banks need to rethink their customer relationship, customer retention, and customer experience strategies so that they may compete effectively amidst the changing banking landscape.


What do financial institutions in the US think of the FinTechs having access to their customer information?  JP Morgan Chase and Wells Fargo have been more outspoken, expressing concerns about the security of their customers’ financial information, which is well founded.  But they also realize the potential of losing their customers if they don’t offer similar services.  To combat the competitive challenges, each of them has signed agreements with Intuit and Xero, respectively, that provide these companies access to their customers’ financial information using APIs (application programming interfaces) with the condition that they will not sell their customer’s data to third parties.


Meanwhile, What Are the Europeans Doing?

In Europe, the situation is different.  The general belief of European banks is that the digital footprint of the consumer is owned by the consumer, not the bank. This is aided by the European Commission’s Directive on Payment Services (PSD2) that not only addresses online and mobile payments but also contains provisions that enables third parties to access the banks’ customer financial information through APIs.


In response to this directive, here are some specific examples about how some European banks are reacting:


  • The Spanish Bank BBVA recently announced that it is opening up access to customer data so that other companies can use the information to offer bespoke financial services.
  • The French Bank Credit Agricole launched its app store in 2012, and then stated publicly that data the customer creates in relationship with the bank, or any partner, is the customer’s own property, so they should have access to it through the apps that are useful to them.
  • The German Fidor Bank went a step further when it announced its API developer community.


Obviously, another piece of this success pie is knowing how to use all of this consumer information so that a bank can anticipate consumer expectations and keep its status as an innovative success machine.


“If established industries can’t stay in these new games, they will go the way of rotary dial telephones.”


Is History Repeating Itself?

I see a pattern here.  The banking industry today is facing the same issues that the telecom industry did in the 90s.  How can they play well with the new smart kids while keeping their popularity on the playground?  Disruptors like Uber and Airbnb will continue to change the game.  If established industries can’t stay in these new games, they will go the way of rotary dial telephones.


I hope to see US banks accepting these changes and finding ways to ensure security while providing a wide range of customer services.  Disruptors will continue to push the boundaries of what customers don’t even know they want, creating customer demands that force new technologies that improve bandwidth, enhance globalization, and reboot everyday life.


“You have to be obsessed with your customer—that’s the strategy that works.” 


New start-up companies continue to emerge and then sit on top of the infrastructure of the telecom service providers.  But it’s those new companies that have been successful in cultivating strong customer loyalty. So you tell me.  Am I wrong?  Will we see a repeat of the telecom industry, i.e. will financial institutions essentially become ‘dumb data pipes,’ with FinTechs using the data and services of these banks as a platform to engage with consumers (and profiting from their traffic)?  How will the US banking industry respond? Will the US banks try and maintain control of their customers through closed systems like the telecom industry in the 1990s and 2000s?  Or will they focus on delivering superior customer experiences even if that means collaborating with the new disruptors?


Delivering superior customer experiences will require obsessing about the customers’ wants before they ask for it.  And this obsession is what will drive the right decisions within any enterprise, including the banks in the US.



Owning the Customer Journey

In the last five years, it has become abundantly clear that the question of digital transformation is not one of if we should prepare for its affects, but instead how should we prepare? And more importantly, how do we anticipate the continued disruptions caused by digital technologies?

Progressive industries like Retail and Media & Entertainment have found themselves at the forefront of the digital revolution, as their survival has depended on their ability to anticipate and adapt to the sweeping changes brought about by digital transformation.

Iconic companies like Disney, Amazon and Netflix have continuously innovated their business models to accommodate the new digital market, while companies like Borders and Blockbuster were slow to react and unfortunately found themselves bankrupt and out of business.

The most important lesson that has washed ashore in this era of digital disruption is that the customer is the new CEO. The customer has the power!

In addition to a younger, finicky, more demanding, power-wielding customer who is both digitally connected and willing to trade his personal information for customized services, there are three industry shifts that make mastering digital transformation increasingly important for today’s business leaders:

#1. Business models are evolving faster than ever to anticipate customer needs. Uber is a great example of this.

#2. Surprising partnerships are being forged. An example of this is Airbnb’s partnership with Concur, an expense management company. Airbnb, once thought of by many including hotel chains as suitable primarily for leisure travelers is now a viable option for business travelers.

#3. New niche players are cropping up in the market every day. zTailors, established by the ex-CEO of Men’s Warehouse, is an example of a new company with infinite potential.


So, how can companies capitalize on these shifts and seize the digital day? I am completely convinced that the prize will go to those companies with a laser focus on “owning the Customer Journey.” Owning the Customer Journey means providing a seamless experience to customers across the traditional boundaries of services that a single corporation is able to offer.

Owning the journey requires corporations to understand a customer’s digital universe of interactions and adherence to three guiding principles:

Principle 1. Provide absolutely relevant services or products at the point of interaction through collaboration with an ecosystem of partners

Principle 2. Anticipate customer needs throughout their digital journey and most importantly

Principle 3. Deliver continuous value to customers in a boundary-less world.

Most companies engage with their customers using intelligence derived through past interactions as well as information that they can glean from public domain. For instance, a bank predicts life-changing events of its customers, such as a new car purchase, and sends loan offers. A retailer understands its customers’ preferences derived from their past purchases and sends enticing coupons. Some of these offers hit the mark while many miss entirely. These examples illustrate the typical lack of ownership of a customer’s digital journey.


Instead, let’s look at three potential scenarios in which the company takes ownership:

Bank of America knows that Joe, one of its customers with good credit history, is at Carmax and plans to buy a car today. While at Carmax, Bank of America sends Joe a loan offer in real-time, which makes the car buying process easier for Joe, and increases his loyalty towards his bank.

Saks knows from New York City’s citizen Wi-Fi data that Mary, one of its valued customers, is walking down 5th Avenue. They also know her buying preferences, her past purchasing history and her propensity to spend, and send her an absolutely relevant offer as she nears the store. The timely offer entices Mary to visit Saks, which she otherwise would not have, to buy a few pairs of her favorite designer shoes.

Discover Card knows that Tom, one of its cardholders, is driving with his family to Orlando. Based on his current location, Discover sends him relevant coupons for food, clothing, and gas at stores along his route – all matching his buying preferences.

Each of the above examples underscores the need not just to access and analyze vast amounts of data to better understand your customers’ real-time needs but also highlights the need for partnerships that cross a corporation’s traditional boundaries to provide experiences that span a customers’ digital journey.


So, what are the right steps towards owning your customers’ journey?

  1. Build your digital strategy knowing that you ultimately want to own the journey of your customers. This will ensure that you make the right choices on the IT architecture, technologies, platforms, solutions and organization structure from the get go.
  1. Realize that partnerships will be key in the new digital age and will require viewing your data ownership differently. Companies cannot view data as their intellectual property, but must view data as a shared IP.
  2. Chalk out markers for success. It may be difficult to plan today for where the Customer Journey will start and where it will end; however, it is easier to create intermediate signposts.

In my interactions with many different companies, I see them getting excited about the possibilities when we discuss how they can own their Customer Journey. This is, indeed, one of the most exciting times for businesses because, for a limited time, with the right strategy, it’s still anyone’s game to win.


In my subsequent blog posts, I will address how companies in various industries can own the Customer Journey including privacy and security.