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Yahoo
18 hours ago
- Business
- Yahoo
MIT Sloan Management Review and TCS Study Reveals the Changing Role of AI in Decision-Making
The future of strategy isn't AI — it's the architecture of choice New MIT SMR and Tata Consultancy Services study urges leaders to treat decision-making as a system to be designed, not a skill to be exercised CAMBRIDGE, Mass. and MUMBAI, India, July 15, 2025 /PRNewswire/ -- Tomorrow's most successful companies won't just use artificial intelligence to analyze data — they will use it to rethink, redesign, and rearchitect better decisions. A new report by MIT Sloan Management Review (MIT SMR) in collaboration with Tata Consultancy Services (TCS) (BSE: 532540, NSE: TCS), a global leader in IT services, consulting, and business solutions, reveals how leading organizations are deploying intelligent choice architectures (ICAs) to gain a competitive edge from better decisions. These AI-empowered systems strike a novel balance between automating processes and augmenting human insight. ICAs actively generate new strategic options, learn from results, and reshape the landscape of possibilities that executives consider. Rather than simply supporting human judgment, ICAs fundamentally transform how decisions get made. Humans and machines can and should work better together. "Winning With Intelligent Choice Architectures" details that competitive advantage now flows not from better human judgment alone but from building superior systems that expand, refine, and optimize the choices humans ultimately make. The year-long research into ICAs that was conceptualized and executed jointly by MIT SMR and TCS drew insights from business leaders and top executives across six major industries. These included experts and pioneers from Mayo Clinic, Sanofi, Cummins, Walmart, Meta, Mastercard, and Pernod Ricard. The research identifies a critical shift: AI is moving from adviser to architect. Companies that master this transition are pulling ahead of those still trapped in traditional decision-making frameworks. "ICAs flip the script," said Michael Schrage, MIT Sloan IDE research fellow and report coauthor. "They do not just learn from decisions — they learn how to improve the environment in which decisions are made. That's not analytics, that's architecture." Organizations embracing ICAs do not just automate decisions; they design how they govern decision environments. The result? Decisions become faster, smarter, more accessible, and more accountable. Both human and machine agency are clearly defined, auditable, and aligned with purpose. "This isn't AI as copilot," said David Kiron, editorial director, research, of MIT Sloan Management Review. "This is AI and humans working together as architects to redesign how people perceive, weigh, and act on choices." The ICA ImperativeThe report outlines how enterprises in financial services, health care, manufacturing, and logistics are prototyping ICAs that extend decision literacy and shift executive roles from arbiters of choices to curators of choice ecosystems. It warns that success depends less on AI capability and more on organizational readiness, urging companies to reflect on questions like: Does the company treat decision-making as a designable process? Do leaders know what choices they're not seeing? Are governance and incentives aligned to optimize option quality, not just decision speed? Ashok Krish, head, AI Practice, TCS, said, "By augmenting human judgment with machine intelligence, ICAs shift AI from task automation to building superior decision environments. They enable more trackable, traceable outcomes that ensure accountability for complex situations with multiple decision-making factors. They help align talent development strategies with organizational goals, making it easier to identify and nurture high-potential employees in the AI era. Ultimately, ICAs foster environments where human choices and AI work together seamlessly to create connected organization intelligence, where decisions are smarter and more informed." Decision Rights Are Now a Design ProblemBased on these research findings, the authors warn that if leaders do not explicitly assign decision rights in ICA-enabled systems, those systems will assume them. Machine learning models will set priorities, trade-offs, and defaults — often without visibility, oversight, or accountability. Sankaranarayanan Viswanathan, VP and head of business innovation, Corporate Technology Office, TCS, said, "The real challenge for enterprises isn't just making better decisions — it is recognizing that decisions are merely the outcome of the choices they privilege or overlook. What we need are systems that foster intelligent choice architectures — enabling the organization to see, understand, and act with awareness. Accountable AI demands clarity not only in outcomes but in the choices considered, the priorities weighed, and the trade-offs accepted. Without this, intelligent systems will silently assume decision-making authority — often without oversight or recourse." Strategic TakeawayICAs signal a profound shift: The future of competitive advantage lies not in better decisions but in better-designed decision environments. This redefines leadership, not as simply making the call but as architecting the arena in which better calls can be made. ICAs are not the next stage of automation; they represent the future of choice itself. They reframe choice-making as a design problem: structuring, surfacing, and expanding meta choices that influence outcomes before options are consciously considered. Download the publication here. Media Contact:Tess Woods:+1 617 942 0336Tess@ ABOUT MIT SLOAN MANAGEMENT REVIEWAt MIT Sloan Management Review (MIT SMR), we explore how leadership and management are transforming in a disruptive world. We help thoughtful leaders capture the exciting opportunities — and face down the challenges — created as technological, societal, and environmental forces reshape how organizations operate, compete, and create value. MIT SLOAN MANAGEMENT REVIEW: BIG IDEASMIT Sloan Management Review's Big Ideas Initiatives develop innovative, original research on the issues transforming our fast-changing business environment. MIT SMR conducts global surveys and in-depth interviews with front-line leaders working at a range of companies, from Silicon Valley startups to multinational organizations, to deepen our understanding of changing paradigms and their influence on how people work and lead. TATA CONSULTANCY SERVICES LTD (TCS)Tata Consultancy Services (TCS) (BSE: 532540, NSE: TCS) is a digital transformation and technology partner of choice for industry-leading organizations worldwide. Since its inception in 1968, TCS has upheld the highest standards of innovation, engineering excellence, and customer service. Rooted in the heritage of the Tata Group, TCS is focused on creating long-term value for its clients, its investors, its employees, and the community at large. With a highly skilled workforce of 613,069 consultants in 55 countries and 202 service delivery centers across the world, the company has been recognized as a top employer in six continents. With the ability to rapidly apply and scale new technologies, the company has built long-term partnerships with its clients — helping them emerge as perpetually adaptive enterprises. Many of these relationships have endured into decades and navigated every technology cycle, from mainframes in the 1970s to artificial intelligence today. TCS sponsors 14 of the world's most prestigious marathons and endurance events, including the TCS New York City Marathon, TCS London Marathon, and TCS Sydney Marathon with a focus on promoting health, sustainability, and community empowerment. TCS generated consolidated revenues of over US $30 billion in the fiscal year ended March 31, 2025. For more information, visit Follow TCS on LinkedIn| Instagram | YouTube| X TCS Media Contacts: Corporate Communication & India Email: | Phone: +91 22 6778 9999Email: | Phone: +91 22 6778 9098 USA Email: | Phone: +1646 617 8221 View original content to download multimedia: SOURCE MIT Sloan Management Review Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
a day ago
- Business
- Time of India
TCS gives out variable pay! Over 70% employees to get 100% variable; no decision yet on salary hikes
At TCS, the hierarchical structure begins with Y grade for trainees, progressing to C1 for systems engineers. TCS variable pay: In good news for a majority of its employees, Tata Consultancy Services (TCS), India's largest IT services firm, will give 100% variable pay out to around 70% of its staff for the April to June quarter. The compensation for remaining staff members will be decided by their business units' performance metrics. Although quarterly variable payments have been consistently distributed, the organisation is yet to finalise its annual salary hike policy. This delay comes amidst challenging economic conditions, resulting in the company experiencing revenue decline in dollar terms for three consecutive quarters. TCS Variable Pay TCS has verified the disbursement of variable compensation. A company representative told ET that the eligibility requirements remain "in line with our standard practice across quarters". In an email communication to staff last week, chief human resources officer Milind Lakkad reportedly said, "All employees up to C2 grade (or equivalent grades) covered under the QVA plan will receive 100% of the Quarterly Variable Allowance (QVA). by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Providers are furious: Internet access without a subscription! Techno Mag Learn More Undo The individual pay-out for the C3 grade and above may vary, depending on business performance." At TCS, the hierarchical structure begins with Y grade for trainees, progressing to C1 for systems engineers, followed by C2, C3 – A&B, C4, C5, and culminates with CXOs. Staff members holding C3 positions and above are generally considered senior personnel. The leading IT services provider increased its workforce by 5,060 people during the quarter ending June, bringing its total employee strength to approximately 613,000. The TCS chief executive K Krithivasan spoke of ongoing challenges in Q1 in last week's earnings announcement, highlighting the persistent and heightened delays in decision-making and project initiations. He noted that global business operations faced disruptions stemming from conflicts, economic instability and supply chain complications. For software service providers, the ability to drive growth significantly depends on discretionary technology investments from their clients. Krithivasan expressed that whilst discretionary expenditure remains low across various sectors, he anticipates a recovery once the broader economic landscape becomes more definitive. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
News18
a day ago
- Business
- News18
TCS Rolls Out 100% Variable Pay In Q1 To Over 70% Of Employees; Details
Last Updated: Tata Consultancy Services, India's largest IT services company, has announced 100% variable pay for more than 70% of its employees; Details TCS Variable Pay 2025: Tata Consultancy Services (TCS), India's largest IT services company, has announced 100% variable pay for more than 70% of its employees for the April–June quarter, the Economic Times reported. For the remaining staff, payouts will be determined based on the performance of their respective business units. 'All employees up to C2 grade (or equivalent grades) covered under the QVA plan will receive 100% of the Quarterly Variable Allowance (QVA). The individual payout for the C3 grade and above may vary, depending on business performance," chief human resources officer Milind Lakkad stated in an internal email, as reviewed by ET. TCS follows a structured grade hierarchy beginning with trainees at the Y level, moving up to systems engineer at C1, and then ascending through C2, C3 (A & B), C4, C5, and finally senior management levels. Those in the C3 and above bands are typically considered senior employees. Despite timely quarterly variable payments, the company is yet to announce its annual wage hikes amid ongoing macroeconomic challenges that have weighed on its revenue in dollar terms for three consecutive quarters. TCS added 5,060 employees in Q1 FY26, bringing its total workforce to nearly 613,000. Krithivasan, however, remained cautiously optimistic, stating that discretionary tech investments — key drivers for software services firms — are expected to recover once macro clarity emerges. view comments First Published: July 15, 2025, 10:15 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
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Business Standard
a day ago
- Business
- Business Standard
TCS maintains 100% variable pay for 70% of staff in Q1 despite slowdown
Tata Consultancy Services (TCS), India's largest IT services company, has announced a 100 per cent payout of the Quarterly Variable Allowance (QVA) to over 70 per cent of its employees for the April–June quarter (Q1 FY26), according to an internal mail viewed by The Economic Times. This marks the second consecutive quarter of full QVA disbursement to the majority of its workforce, even as the industry continues to battle global macroeconomic headwinds and tight client budgets. The company stated that the payout for employees in higher grades, typically managerial and leadership roles, would remain variable and aligned with the performance of their respective business units, a policy it has followed consistently across quarters. 'We have paid out 100 per cent QVA to over 70 per cent of the company. For all other grades, the QVA depends on their unit's business performance. This is in line with our standard practice across quarters,' TCS had said in a statement issued previously in May, when it also made a full QVA payout for the January-March quarter. The company's internal grading structure begins with Y-level trainees, followed by system engineers (C1), and ascends through C2, C3, C4, C5, and executive leadership levels. Staff in the C3 and above bands generally comprise senior managers and business unit heads. Growth slows, but headcount grows Despite its commitment to employee payouts, TCS reported a mixed financial performance in Q1 FY26. Net profit rose 6 per cent year-on-year to ₹12,760 crore, up from ₹12,040 crore in the same period a year ago. However, revenue grew just 1.3 per cent year-on-year to ₹63,437 crore. In constant currency terms, revenue declined 3.1 per cent, and sequentially, revenue was down 1.6 per cent — the slowest growth since the Covid-hit Q1 FY21. The company cited global macroeconomic uncertainty, geopolitical tensions, and sluggish discretionary tech spending as ongoing drags on demand. CEO K Krithivasan noted that a recovery in discretionary investments remained elusive. 'This trend has continued and intensified to some extent in this quarter,' he said during the earnings call. Despite the subdued business environment, TCS added 5,060 employees during the April-June quarter, building on the 625 net additions made in the January-March period. The company's workforce now stands at nearly 613,000 — the highest among Indian IT firms. Attrition for the quarter stood at 13.8 per cent. No word yet on annual increments While the firm has honoured its quarterly variable pay commitment for two straight quarters, it has yet to announce annual salary hikes. Speaking after the Q1 results, Chief Financial Officer Samir Seksaria said delivering annual wage hikes remains a top priority for the company, despite the deferment. 'My priority is getting back to the wage hike,' Seksaria told PTI, though no timeline was specified. TCS typically rolls out annual increments starting in April. Seksaria noted that wage hikes, while critical, usually dent operating margins by over 150 basis points. He also pointed to a decline in utilisation levels due to upfront hiring, even as demand has remained weak. 'As demand recovers, we expect utilisation to improve. If demand recovery is prolonged, we will double down on optimisation,' he said, adding that internal efficiencies will be key to margin management going forward.
Mint
a day ago
- Business
- Mint
HCL Tech vs TCS: Which IT stock to buy today after Q1 results 2025? EXPLAINED
Following the release of financial results for the April-June quarter of fiscal year 2025-26 (Q1FY26), India's top information technology (IT) companies will attract attention in today's market session. As investors on D-Street contemplate on which IT stocks to buy, sell, or hold at this time, market analysts prefer Tata Consultancy Services (TCS) over HCL Technologies Ltd following their recent Q1FY26 earnings report. Q1 Results HCL Technologies announced on Monday, July 14, a 9.7% decline in its consolidated net profit for the June quarter, impacted by increased expenses and the one-time effect of a client's bankruptcy. The company reported a net profit (attributable to the owners of the firm) of ₹4,257 crore during the same period last year, as stated in a regulatory filing. For the quarter in review, revenue from operations increased by 8.1%, reaching ₹30,349 crore, compared to ₹28,057 crore in Q1FY25. The company reported that its operating margin was 16.3%, which fell short of their expectations. Although Q1 has typically been their weakest quarter, the lower-than-expected operating margin was primarily caused by a decrease in utilization due to delays in the ramp-up of a particular program. HCL Tech share price closed down by 1.04% at ₹1,619.95 per share on the BSE on Monday. The financial results were disclosed following the end of trading hours. On Thursday, July 10, TCS announced a 6% increase in its net profit for the June quarter, reaching ₹12,760 crore. In the same period last year, the Tata group firm reported a net profit of ₹12,040 crore. The company's revenue rose by 1.3% to ₹63,437 crore, compared to ₹62,613 crore during the same period last year, although it declined by 3% when measured on a constant currency basis. According to a company statement, its operating profit margin improved by 0.30 percent quarter-over-quarter, standing at 24.5 percent for the April-June period. HCL Tech vs TCS Q1 Results: Here's what experts say According to Mohit Gulati, the CIO and managing partner of ITI Growth Opportunities Fund, in the wake of Q1 FY26 earnings, TCS clearly emerges as the more compelling IT bet, backed by a superior margin profile, robust deal wins, and a steady profit trajectory. While HCL Tech continues to demonstrate long-term potential, near-term headwinds around margins and deal execution warrant a wait-and-watch approach before committing fresh capital. 'That said, both companies have shown remarkable resilience across decades of business cycles — navigating global shocks, tech shifts, and macro volatility — a testament to the enduring strength of India's IT backbone,' added Gulati. In the same vein, Vinit Bolinjkar, Head of Research at Ventura Securities, considers TCS to be a stronger choice because it managed to maintain its margins, and some of BSNL's orders are expected to come in the next quarter. HCL Tech experienced a notable drop in margins. In a detailed comparison, Bhavik Joshi, Business Head, INVasset PMS believes both TCS and HCL Technologies delivered solid Q1 FY26 results, but their paths forward differ in key areas. TCS, with its robust margin leadership of 24.5% and industry-best cash conversion, has proven resilience despite the ongoing weakness in global demand. The company's strategic focus on AI and a healthy deal pipeline, with a $9.4 billion order book (+13% YoY), provides a solid foundation for long-term growth, even if near-term visibility remains subdued. For investors seeking stability, consistent margins, and strong cash flow, TCS stands out as the more defensive choice. On the other hand, HCL Technologies delivered strong revenue growth of 8% YoY, outpacing TCS, fueled by its digital and cloud capabilities. However, the company is facing significant margin pressures with operating margins dropping to 16.3%, primarily due to heavy investments in Generative AI and Go-to-Market strategies. This creates a higher risk-reward scenario for HCL Tech, as it seeks to capitalize on future AI adoption, but the short-term profitability concerns, with net profit declining by 9.7% YoY, warrant attention. 'In summary, TCS presents a safer, margin-driven play with better near-term visibility, while HCL Tech offers higher growth potential but with added volatility due to its aggressive digital and AI investments. For those prioritizing stability and margin leadership, TCS remains the preferred option, but those willing to embrace a bit of risk in exchange for higher growth potential might find HCL Tech appealing,' added Joshi. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
