S Mahalingam, former TCS CFO: The man who crafted a slice of software history

TCSBSE -0.74 % as CFO and executive director on Saturday, is a study in contrast. He has been the careful, technically correct and, mostly, unflappable finance man — qualities which have won him the admiration of the investor and analyst community alike. Through a decade of currency swings, Mahalingam piloted TCS' hedging strategy taking the brickbats and praise with a stoicism that earned him the sobriquet of 'Buddha' within the company. "He knows what to communicate, how to communicate and when to communicate," said an analyst.

Some of TCS' cast-in-stone policies such as 'never to give guidance' was a result of the thinking of Maha (as Mahalingam is called) and other key members of the Tata Group like Ishaat Hussain, finance director of Tata Sons, and S Ramadorai, the former CEO. Instead of offering guidance, they believed in giving investors many data points so they could decide for themselves. This policy never wavered even when the company started performing better than its nearest rival InfosysBSE -1.71 %. In the initial years, though, there was enormous pressure. Despite being the largest software company, TCS was the last among its peers to go public.

"There was constant comparison. Internally, the challenge was to move the company to a different mindset — going public entailed a huge cultural change in everything from collecting receivables to performance reviews. Externally, the challenge was to manage perception," recollects a former employee. "It's about discipline and the CFO has to drive it."

"We are all creatures of habit. So, when TCS went public, the expectation was that it would provide everything in the same format as its peers," said the former head of research of a brokerage firm. "As a CFO, I would say Maha had the most challenging task of all his peers." But perhaps Maha's most significant contribution to the building of TCS came when it was still a division of Tata Sons and he was yet to become the CFO. As a young man who had completed his chartered accountancy and had aspirations to do an MBA in the US, Maha was drafted into the Tata Group and TCS by FC Kohli, for what he thought was a consulting role.

Kohli, however, had other ideas. He packed Maha off to see what a computer looked like and to learn COBOL, a programming language. At that time, TCS had only 20 people, including finance and HR staff. TCS had been set up in 1968 and Kohli joined in 1969. The young chartered accountant, who joined a year after Kohli, would handle a number of functions for the next 33 years of his career, but none in finance.

 MUKESH KUMAR

PGDM 2nd SEM