Hcl Technologies Presentation

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    HCL TECHNOLOGIES

    The incredible journey of a company and thatof a radical man

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    INCEPTION

    1972: The Govt. of India passes the foreignexchange & regulation act, creating barriersfor multinationals to function and thus it

    paved the way for IBMs departure creating avacuum in the IT sector

    1974: Shiv Nadar founds HCL in his garagewith fellow engineers having received Govt.approval to enter the hardware market

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    VISION & WORKING STRATEGY

    Shiv Nadar was a visionary who believedthat computers could be manufactured inIndia

    He made it possible for HCL to createcomputer system before APPLE or comingup with 4th generation computer languagebefore Oracle

    He invested heavily into R&D which allowedHCL to keep up with latest trends like DOS &UNIX, thus paving the way for golden 80s for

    HCL

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    RECRUITMENT STRATEGIES

    HCL recruited freshers from leading B-schools and Engineering institutions fromacross India

    HCL paid a superior salary to attract potentialcandidates

    All the candidates employed had an

    entrepreneurial spirit, never say die attitude& were unafraid of failures

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    ENTERS THE FUTURE PRESIDENT

    1985: Shiv Nadar hired a 23 year oldengineer with an MBA degree from XLRI,Jamshedpur, Vineet Nayar

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    THORNS AHEAD

    The changing trends in the IT marketdemanded changes in strategy from HCL

    The financials in computer business waschanging: hardware became commoditizedand software and services became theemerging trend

    New competitors like Wipro,TCS & Infosysentered the market

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    WRONG DECISIONS

    HCL decided to stay in hardware sector,committed to stay on cutting edge

    Being ahead of the curve HCL decided to go

    global after a study and offered innovativeproducts but couldnt register sales due tothe American perception that the Indianhardware was inferior

    HCL thus had to enter a joint venture with HPin the early 1990s

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    BANE OR BOON

    1992: Vineet along with many of hiscolleagues was frustrated and unsure ofHCLs Future.

    Vineet thinks of leaving HCL & start anentrepreneurial venture.

    Nadar gives Vineet the oportunity to be an

    entrepreneur within HCL. Vineet accepts proposal and tries to win the

    bid for the Govts tender of creating a newelectronic Stock exchange.

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    THE COMNET BECOMES A REALITY

    Vineet hires a few of his colleagues andfounded HCL Comnet (an IT infrastructure andnetworking business wholly owned by HCL)

    trying to win the contract Using satellite technology for the Online Stock

    exchange was the most radical and innovativeconcept at that time and the team worked for 2

    years relentlessly to make it a reality. Soon Vineets Comnet became was HCLs most

    innovative & successful divisions.

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    TOUGH TIMES

    HCL started lagging behind Indian competitors

    Deregulation of policies by Indian govt. saw the returnof multinationals like IBM increasing competition

    Customers demanding integrated IT services forcompetitive advantage

    Global IT leaders transforming in to service deliverybusiness

    Companies off shoring recoding and applicationdevelopment to India(particularly Y2K problem)Another wrong decision by Nadar not to participate in

    Y2K problem remediation cost HCL further

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    IDENTIFICATION OF PROBLEM & SOLN.

    HCL not moving into services

    Ending collaboration with HP to move in toServices

    Attrition rate rose to 30%Changing management & work culture

    Late entry into services market

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    RISE OF A NEW LEADER

    2004: Nadar feels the need for a new leaderfor HCL tech.

    Vineet the entrepreneur of Comnet (mostsuccessful unit under HCL) the obviouschoice

    Vineet refused.

    2005: Nadar asked vineet to take the helmonce more

    Vineet finally agrees

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    RECOVERY PROCESSES STARTED

    2005: IT industry estimated $36 billionrevenues

    IT industry Growth 28% annually

    From 3lac employees in 2000 the numberrose to 1million in 2005

    Changing technological trends

    Software turned into Service(open source toolautomation)

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    TRANSFORMATION BEGINS

    April 2005: vineet starts as president-HCLTech

    3 customers canceled their contracts soonafter he joined

    Vineet understands the gravity of thesituation

    Decided extreme plans are needed for turnaround of HCL

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    HEAR THE STRATEGIES CHANGING

    Change in strategies and ops walking away small project based work and going

    after big deals Blue print meeting Mirror-Mirror Initiative Import of Young Sparks Centralization of policies Creation of LOB(line of business)

    Mobilizing finance teams for sales and deliverybringing in value added business

    MSD(multi services Delivery unit

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    3 STEP RADICAL STRATEGY

    1st phase: EFCS(employee first customersecond)

    2nd phase: Form strategic partnerships tooffer more value added services tocustomers

    3rd phase: Radical change to be brought to

    HCLs business model but what and whenstill unknown even to vineet

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    EFCS-IMPLEMENTATION

    July 2005: Young Sparks introduced HCLitesto EFCS strategy provide a unique employee environment

    Drive an inverted organizational structure ensure transparency and accountability

    Encourage value driven culture

    Implementation tool: Intranet Icon for rejuvenation: Thambi-the

    extraordinary individual

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    THAMBIENTREPRENEU

    R

    PARTNER

    BEST OFBREED

    PRIDE

    ;PASSION

    ENGINEERINGMINDSET

    INDUSTRIOUS

    CREATIVIT

    Y

    FLEXIBLE

    DOWN TOEARTH

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    TOOLS BROUGHT IN FROM COMNET

    The new and improved intranet system

    Smart service desk

    The new U&I communicationNatasha

    Town hall meetings

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    360 DEGREE FEEDBACK

    360 degree feedback for top managersrecommended to be posted on intranet forthe entire organization to see

    Transparency and innovation rejuvenated thetrue HCL DNA

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    INITIATIVES TO EMPLOYEES

    Trust pay

    Business plans

    Project quality index Project tracking

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    TRANSFORMING SALES

    Sanjeev Nikore from COMNET was broughtin to run sales

    Automated systems introduced

    Big incentives for sales like trip to Rome

    Nikore and his counterparts in delivery met inWar room

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    RESULTS BEGIN TO POUR IN

    $50 millions contract with Auto Desk

    Strategic partnerships agreements withJapans, 2nd largest steel manufacturer

    Top 10 most wanted Indian stocks

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    PREPARATIONS FOR BIG LEAGUE

    Blue Ocean strategy

    Creating uncontested market space

    Value centric not Volume centric

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    FINALLY ENTRY INTO THE BIG LEAGUE

    $330 million DSG international deal

    Deal record in IT history

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    2007 SCENARIO

    Revenues of $362 million were upto 44%YoY

    Operating margins 18%

    Operating income up by 57%

    Net income 76% YoY

    ALAS!!!!! Company still trailing behindcompetitors

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    PUBLIC SPEAKING

    Audacious multibillion celebration, explore

    and transform

    Bold speech of Vineet

    Declaration of EFCS

    Surprisingly well received by public

    Huge media attention Fortune entitled HCL as the worlds most

    modern management- in INDIA

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    PROOF OF GOOD WORKING CULTURE

    Co. growing 40% anually

    No. of employees increasing from 24090 to32626

    Attrition rate between 14 & 20%

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    ATTRITION RATE- IT INDUSTRY

    Sep. 2005 Dec. 2005 % change

    TCS 8.7% 10.8% 24.14%

    INFOSYS 10.0% 13.5% 35.00%

    WIPRO 14.0% 16.0% 14.29%

    SATYAM 16.2% 17.6% 8.64%

    COGNIZANT 16.1% 17.1% 6.21%

    HCL 19.5% 17.7% -9.23%

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    NEW WORK CULTURE

    Improved and transparent working culture

    Initiative for thinking innovatively

    Introduction of iGEN

    Active participation by all the employees iniGEN

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    FINALLY A BIG PLAYER

    $70 million deal with Teradyne

    $100 million with Celestica

    $200 million deal with Skandia

    Enterprise transformational service

    Explore and transform with 300 customers

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    NEW INITIATIVES

    Mirror mirror once again

    Six sigma implementation conducted in 90days

    Bringing in new dimensions into the co.

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    HCLS NEW INITIATIVES

    1. 15 Days DMO(days manpower outstanding)2. DRIVE(Discover Review Invent Validate

    Enlighten) for ISL3. Targeting lowest attrition rate4. HCL cares5. Smart Recruit and Smart move6. Stitch 8 Hrs deadlines

    7. Employee Help Desk8. Zero Ticket Day: the Aim9. Better predictability of costs and revenues

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    CONTD.

    More Transparent and Automated process Employee first: Identify performers and

    reward them

    Value creation framework for customersDomain focussed R&D and investment

    Nxt Gen Leaders

    Train the trainers Zero defect billing

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    TRANSFORMERS BEING TRANSFORMED

    April 2007 Impressive results LTM revenues $1.27 billion

    Top 2 fastest growing Co.

    Besides Indian competitors multinationalcontenders

    Economists take on HCL

    5th biggest Indian Outsourcer Largely unnoticed -won contracts worth $300-

    700 m

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    NOW WHAT????????

    IS HCL READY FOR THE 2nd PHASE AND3rd PHASE?????????

    YES.

    No..

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    WHAT IS THE 3RD PHASE??????

    What type of radical changes does thecompany/ Vineet think of or implement..

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