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 Infosys. 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.
India was an unlikely place to start any export activity at that time, especially in computing. PCs were still not invented and databases did not exist. TCS had imported a Burroughs 1728 machine and, under the rules, had to export twice the value in four years. So, software services exports were critical. One of the early orders was from the UK to build a product.
Maha travelled to the UK to gather the requirements. However, there was a problem. Since the software itself was to be developed in India the only way to send the requirements and specifications from the UK to India was via post. International calls were expensive and there was no direct calling. The first post was followed up with another from a different post office to ensure that even if one was lost in transit, the other would reach.
This laid the foundation of the excellent process, which TCS is so well-known for even today. For a short period after that Maha ran the US operations before moving back to India. Here, Kohli put him again in a start-up mode — Maha was sent to develop the Chennai centre, which had less than 30 people.
The first IBM mainframe TCS acquired was installed at the company's Chennai facility in 1988, four years after Maha moved. N Chandrasekaran, the current TCS CEO, cut his teeth here working on some sophisticated technology for IBM Research Labs. An interesting piece of work that TCS did here was to maintain systems from a remote location. High-speed communication links were only just being introduced.
In the meantime, Maha had also taken over training duties for its Trivandrum centre. S Ramadorai had taken over as CEO from Kohli and he was persuading Maha to return to Mumbai. He was offered the human resources function after Jose Abraham, the earlier HR head, left the company to go to the US. Maha continued to work out of Chennai but ultimately ran out of excuses and moved back to Mumbai as CFO when the Tata Group decided to make TCS a separate company and list it.
Over three decades after he became a chartered accountant, Maha moved into a finance function. He wasn't daunted by it although there was much that had changed — accounting standards had been introduced, taxation and derivative accounting and other new concepts were introduced or had been changed.
Many years later, when the US slowdown hit Indian software exporters in late 2008, Maha was able to tap into those skills he learnt while he was managing software operations and delivery. He knew exactly where to cut corners and keep margins steady by making productivity improvements.
"Today, if TCS has a margin and growth trajectory that is in tandem and not one at the expense of the other, the credit should go to Maha. In that sense, Maha has been a perfect foil to Chandra (Chandrasekaran)," says Pankaj Kapoor, director at Standard Chartered Securities, referring to the current CEO's aggressive growth focus. In the end, Maha was more than a CFO. He was an able lieutenant to three CEOs and a man who participated in creating a slice of India's software history.
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