Business Growth : Re-defined

  • Annual Revenues up by 35.2%
  • EBIT up by 36.8%
  • Deals worth US$ 1 bn signed in FY08
  • Q4 revenues up 3.9% sequentially; EBIT up by 10.9%
  • Q4 dividend stepped up 1.5 times to 150%
  • Declining attrition for the sixth consecutive quarter
  • HCL Technologies on US$ 2 bn annual run rate
  • Margin expansion for the fifth consecutive quarter and second consecutive year in a row
  • Crosses 50,000 employee headcount

Overview

HCL is uniquely positioned as a co-sourcing partner because of the experience it has created for its customers through continued momentum in demonstrating leadership in execution experience in our multi-service engagements.

HCL’s four pronged Blue Ocean strategy covering service innovation, pricing innovation, creation of new markets and technology disruption continues to pay rich dividends with innovative partnerships and revenue sharing business models being the highlights of this year. Commenting on the results, Vineet Nayar, CEO, HCL Technologies says, “HCL registered a YoY growth of 35.2% following a YoY growth of 42.4% last year. HCL registered a QoQ growth of 3.9%, following three successful growth quarters of 8.4 %, 7.4% and 5.2% QoQ respectively.

HCL has expanded its operating margins for the second year in a row. HCL has grown revenue ahead of manpower growth second year in a row. HCL has demonstrated global leadership in Remote Infrastructure Management (RIM) which was ranked No. 1 ahead of all global players this year by the Black Book of Outsourcing – a first in the Indian IT industry.”

Key Catalysts for Growth

  • Engineering and R&D Services, Infrastructure Services and Custom Applications witnessed accelerated growth reaffirming HCL’s dominant market position and competitiveness in these service lines respectively
  • Among the verticals, FS and Manufacturing crossed the US$ 0.5 bn mark. The fastest growth was recorded in Life Sciences, while Manufacturing and Media, Publishing & Entertainment continue to grow consistently
  • Our key geographies crossed significant milestones this year with the US revenues and Europe revenues crossing the US$ 1bn and US$ 0.5bn mark respectively

The year in perspective

The HCL strategy embodying a unique kind of disruptive innovation in its business model focusing on Value Centricity and a Blue Ocean approach to business has resulted in deepening customer relationships, creation of new markets and strategic partnerships where there is collaboration, goal alignment and substantive engagement.

Value Centricity

  • The momentum in inking transformational deals that began in 2005 continued this year with a total value of deals in excess of US$ 1 bn being signed including eight deals worth US$ 310mn this quarter
  • HCL acquired Capital Stream, Inc., a US based industry leader in lending automation solutions. This strategic acquisition is a part of HCL’s well structured M&A strategy and will enhance HCL’s ability to provide end-to-end solutions through product and multi-service delivery capability to commercial and retail financial institutions globally
  • HCL launched the SAP Revenue Recognition solution, pre-configured SAP Metals template, Auto Template for Auto ancillaries in the SMB sector and solution to avoid SAP Business Information Warehouse Slowdowns that helped customers reduce their total cost of outsourcing (TCO)

Blue Ocean

  • HCL launched Integrated Operations and Management Centre (IOMC) that integrates offerings across Global Services, Infrastructure Operations and Application Operations. It acts as a single window to deliver, manage and monitor Infrastructure Support and Application Operations giving customers increased efficiencies and enhanced business impact
  • In continuation of co-creating value with our customers and partners on a risk sharing model, HCL rolled out the Global Risk Reward Partnership (GRRP) based on the principle of a joint ownership of a product. This year HCL has initiated three new engagements under this model, including the strategic partnership with CA, and entering into newer such engagements with customers
  • HCL signed the SAP Global Services partnership based on Blue Ocean thinking to deliver joint business value through Customer Centric Ecosystem. This milestone partnership drawing upon HCL’s strengths in emerging geographies, strong domain experience, risk taking and service innovation capabilities has already started delivering results

Thought Leadership

  • HCL has been the pioneer of Remote Infrastructure Management (RIM) in India and HCL’s leadership in RIM has been recognized by various independent analyst and media firms. This year HCL’s RIM was acknowledged by Brown & Wilson Global User Survey 2008 as World’s No 1, ahead of leading global players
  • HCL pioneered the concept of co–sourcing in 2005, and moved it to the next level of an integrated service approach of Full Service Co Sourcing recently recognized by Ovum as having a clear and differentiated positioning in the applications outsourcing market. HCL has a growing emphasis on larger deals under its asset-light and consulting light ‘full service co-sourcing’ model delivered using unique service-model IPs, a first of its kind integrated service offshore transitioning model
  • HCL’s biggest differentiator has been the adoption of the Employee first philosophy that was lauded by some of the world’s most influential thought leaders as the management mantra for the next generation. Harvard Business Review and Business Week heralded HCL’s Employee First as “the radical management philosophy that will catch on with the world sooner or later”. HCL was also invited to share thoughts in some of the most respected global platforms such as WEF, MLab and INSEAD
  • HCL has conceptualized a unique collaborative platform called “Unstructure” where business and technology practitioners can contribute their thought to address the major issues and trends affecting the business of technology

Transformation @ HCL

  • HCL invited to participate in the “Future of Management” MLab Conference, headed by Prof Gary Hamel
  • HCL invited to speak at the INSEAD Leadership Summit in France that brought together global leaders from business, government, media and academia to explore the links between business, environment and society
  • HCL announced the fourth chapter of its Global Customer Meet 2008 – “Unstructure”, where some of the most noteworthy thought leaders will mentor conversations on topics that explore the trends in the business of technology. This event which is slated for 17th and 18th of November, will be held in Orlando, Florida.
  • HCL’s series of Financial Services Thought leadership event – InvesTECH@HCL successfully held in New York this quarter. The highlight of the forum in New York was an exclusive panel discussion on ‘Risk Management Strategies in a Downturn Economy’ by industry experts and practitioners. A new operating model from HCL called Run the Enterprise to help the Financial Services Institutions enhance their ongoing business performance was also showcased during the event

Recognitions

  • Forrester counts HCL as the leader in SAP implementation in the Forrester Wave: Australia/ New Zealand SAP implementation providers 08 report. HCL is a Leader in ANZ that leverages its offshore capabilities very well for its SAP clients and has won a number of its projects due to its capabilities implementing niche solutions
  • IDC considers HCL as a formidable opponent in Application Outsourcing in the Worldwide Application Outsourcing 2007 Service Provider Analysis. IDC believes that HCL’s transformed and modernized applications will be prime candidates for AO, further growing its business in this area. HCL’s willingness to work with clients using risk-reward or self-funding transformation contracts has made it an up-and-coming company to watch.
  • Voice & Data 100 survey ranks HCL No.1 in Network Management & Network Security Services and No. 2 in Network Integration Services
  • “Strategy + Business” magazine published by Booze Allen Hamilton, in its story on the topic of Indian companies “reverse investing” in the US, talks about HCL’s drive to engage in more complex work with clients and firmly positions HCL and its differentiated business strategy
  • The CEO Forum magazine (ANZ) appreciates HCL’s inspiring effective organizational innovation and positions Vineet Nayar as a “Change Master”

Now this is what I call Growth!!!

Advertisements

About theultimaterenaissance

I am an Engineer and a Management Graduate. I love writing poetry and research reports on cars. Surfing, listening to music, and Reading and writing Technical & Research papers are among my most savored hobbies.
This entry was posted in Business and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

2 Responses to Business Growth : Re-defined

  1. Pingback: Recent Links Tagged With "defined" - JabberTags

  2. Hello Guru, what entice you to post an article. This article was extremely interesting, especially since I was searching for thoughts on this subject since last Thursday.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s