...HCL Technologies Ltd. HCL Technologies Ltd. (HCLT) is a leading global IT services company offering various services in Application Development & Maintenance (ADM), Engineering and R&D Services, Enterprise Application Services (EAS), Enterprise Transformation Services, Infrastructure Management Services (IMS)and BPO. HCLT delivers solutions across banking, insurance, retail and consumer, aerospace, automotive, semiconductors, telecom and life sciences sectors. Its well-established infrastructure management practice, combined with recent acquisition of Axon, provides significant cross-selling opportunity, which could help HCLT win some of the large size deals. At CMP, the stock is trading at 15.5x FY12E and 12.3x FY13E earnings. We recommend a buy with a price target of `587 i.e (15x FY13e Adj. EPS of `36.62 + value of investments per share of ` 37.5). KEY HIGHLIGHTS ■ HCLT grew faster than Industry: Indian IT exports grew at a 5-year CAGR of 23% from $18bn in FY2005 to $50bn in FY2010. HCLT revenues grew at a 5-year CAGR of 29% from $764mn in FY2005 to $2705mn in FY2010. ■ Axon acquisition adds value: Prior to the acquisition of Axon in 2008, about 11% of HCLT’s revenue came from EAS. With the acquisition of Axon, HCLT’s revenues from enterprise solutions increased to more than 20%. ■ Gaining market share in ADM & IMS space: HCLT’s performance has been particularly strong in deals with bundled ADM and IMS. With the rising traction in restructure/renewal of global...
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...even more innovative then they are. As global trends emerge, they influence the need for organizations to innovate in order to have a competitive advantage and be successful. When we examine the case of HCL Technologies (HCLT), it is evident that the former CEO, Vineet Nayar, planned and executed a clever strategy to turn around the company’s fate from a suffering IT service provider to an industry leader. This paper will analyze Nayar’s leadership behaviors and skills; and how he applied these to combat the global trends affecting HCLT and create a more innovative organization. In assessing Nayar’s discovery skills in his innovation leadership, opportunities will also be evaluated for ways in which Nayar can improve these skills in support of leading HCLT further in innovation. Global Trends Affecting HCLT Overall, Nayar’s success story with HCLT comes from his ability to drive innovation and transform HCLT into a more innovative organization, despite the global adversities that the company faced. In his article, Nayar (2010) tells us that HCLT’s revenues were growing by about 30% a year when he became the CEO of the Indian based IT services provider (p.110). Although there was revenue growth, the IT services industry was rapidly changing and HCLT was being impacted by several global trends as a result of these changes. Nayar (2010) tells us that the company was losing its market share and mindshare; despite the profits it made (p.110). Both market share and mindshare...
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...Messaging to Prepare for Future Challenges With the growth and expansion of HCLT, there are a few tweaks that need to accommodate these changes. Mr. Vineet Nayar wants to ensure that he’s not just the CEO, but he wants to incorporate all of his employees (or at least those willing) into the fold. We all know that communication is a must have in any business. Without communication, it can lead to many problems from the bottom of the company all the way to the top. With electronics becoming as flourishing as they are in the business world, one must find ways to connect and communicate when face to face isn’t possible. A vital means of attending to company concerns is through effective internal communication - downward, upward and horizontal. It helps increase job satisfaction, safety, productivity and profit and decrease absenteeism, grievances and turn over (Murphy, Hildebrandt & Thomas, 1962). At this point in time, Mr. Nayar is trying to expand the communication levels in his company. Portals are designed to provide more direct and easy access to information which promotes self-service, allowing employees to focus on their work and freeing HR resources for more strategic and value-added functions. (Felix, S., 2001) With that, he implemented a section under his value portal entitled My Blueprint. My Blueprint is an addition from the value portal which originally was for employees to build business relationships with their customers. Employees could generate and...
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...improve overall employee passion and customer satisfaction. In 2006 the CEO had recast the role of his office and transferred the responsibility for change on to his employees for many initiatives. One example is that of the value portal. The company wanted to change the relationship with their customer by enabling them to be more responsible for their partnership with the company. Nayar wanted his customers to be actively involved while also challenging his employees to go beyond their defined roles and responsibility. He accomplished this by creating a portal that could be used between customers and employees. This portal the “Value Portal” allowed customers to evaluate and rate the new ideas that HCLT employees generated. The portal was very successful and hundreds of HCLT customers join and thousands of ideas were generated with a potential savings of hundreds of millions of dollars(Nayar, V. 2010) . With this success Nayar felt his employees were ready for bigger responsibility, he felt that it was time to become more transparent and that his employees should share in the responsibility for the company’s strategy. With the success of the Value Portal, Nayar had decided that he would change how his managers would use the My Blueprint concept in 2009. He once again felt like his offices needed to become even more transparent....
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...in the ways of leading the organization and allowing more internal input from others all while slowly being an authoritative figure himself by sharing the responsibilities. He delivers meaningful messages to the employees in new inventive ways that has the business world turned upside down. Compare and Contrast HCL Technologies recognized what areas in the business they lacked in and where they had an immediate need for improvement. Hence the reason why they allowed Axon to come in and “took charge of running many other parts of HCLT businesses”, (2010, p. 25). Nayar knew how beneficial it was to allow Axon to help fine tune HCLT’s weak points and align them to the point where Axon already had reached. Nayar knew that Axon has a stronger consulting background than HCLT and will better serve the company by “leveraging HCLT’s balance sheets, brand, reach, customers, solutions, and innovation framework”, (2010, p. 25). Axon had the power to help HCLT get more established and provide the ease into the transparency. All while trying to reduce the resistance from the objections from the employees regarding all the company changes. Each individual...
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...By guest author Vineet Nayar [Vineet Nayar, vice chairman and CEO of India-based HCL Technologies (HCLT), had no illusions about the fact that by the spring of 2005, the company was slipping: "HCLT was like [a] childhood friend who suddenly looked old. Once one of India’s corporate stars, HCLT was growing more slowly than the market leader in its industry [...] and slower than its immediate rivals, losing market share and falling behind in mindshare, too.” One day, says Nayar, HCLT decided to change. He discusses how the company went about its transformation in his book, Employees First, Customers Second, which was published in 2010 by Harvard Business Press and available from the press; on Amazon, Powell’s Books, and Flipkart; and in bookstores. On this Employees First, Customers Second approach, Nayar writes, “The conventional wisdom, of course, says that companies must always put the customer first. In any services business, however, the true value is created in the interface between the employee and the customer. So, by putting employees first, you can bring about fundamental change in the way a company creates and delivers unique value for its customers and differentiates itself from its competitors.” The EFCS approach has four parts: * Mirror Mirror: Creating the Need for Change * Trust Through Transparency: Creating a Culture of Change * Inverting the Organizational Pyramid: Building a Structure for Change * Recasting the Role of the CEO: Transferring...
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...In the excerpt of Vineet Nayar’s, “Recasting the Role of CEO: Transferring the Responsibility for Change. How Leaders Tap the Creative Energy of Employees”, it demonstrates the concept that if management can remove itself and allow employees to lead that the collaboration process will lead to continuous and sustaining innovation. This assessment will explore the transformation that Nayar implemented within HCLT to change the organizational structure, culture, and processes to support and sustain innovation in the changing global markets. Recasting the Role of CEO is as it states is the role reversal change that Nayar implemented to change the organizational structure of thinking within his organization. From that trend he developed and equally important initiative call Employee First Councils which evolve from EPIC. As Nayar points out he saw that his organization would need to rethink the role of CEO and to transfer much more responsibility for change to the employee (Nayar 2). By reversing the role of CEO the goal was to rejuvenate the management within HCLT. This innovative and practical approach was a transformation to change the organizational culture way of thinking. “Culture has been defined as the outcome of group learning. When a number of people...
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...Latashia Spears Unit Assignment 1 3/3/13 HCLT commitment to transparency and their efforts in inverting the pyramid were making a great difference for the company. The blueprint meetings, planning and implementation process has allowed HCLT to successfully compete with the best global players in the IT industry. Even though HCLT was still a small company, they saw their business growing. They began to hire hundreds of new employees and with worldwide revenue; they were quite diversified with operations in eighteen countries. One of Nayars primary focus was keeping the employees first and customers second, but with the massive growth and gain of new employees, Nayar wasn’t sure how to sustain that focus. “How would new people coming on board understand the importance of trust and transparency”, Nayar asked. This question is what brought about the Starfish and the Spider leadership organizational concept by Ori Brafman and Rod A. Beckstrom. Most companies, they argue, function like eight-legged spiders. “Cut off the leg of a spider, and you have a seven-legged creature on your hands; cut off its head and you have a dead spider”. “But cut off the arm of a starfish and it will grow a new one. Not only that, but the severed arm can grow an entirely new body. Starfish can achieve this feat because, unlike spiders, they are decentralized; every major organ is replicated across each arm”, (Nayar, V. (2010). Recasting the Role of CEO: Transferring the responsibility for...
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...An Organizational Perspective of HCL Technologies Michael Franklin MBA – 6241 16 September 2012 Abstract This organizational perspective paper provides an overview of outsourcing, how the relationship between development and performance management effects outsourcing services and the goals of HCL Technologies. An Organization Perspective on HCL Technologies Introduction In order for a company to effectively provide outsourcing services, it is important that some the internal aspects of the company, such as development and performance management, be established and operating proficiently. In doing so, it is also important that the Human Resource Management (HRM) team know what type of development is needed within an organization as well as establish a good performance management system in order to meet outsourcing organizational strategic goals. “For a company to have a good strategy foundation, certain tasks must be accomplished in pursuit of the company’s goals, individuals must possess certain skills to perform those tasks, and these individuals must be motivated perform their skills effectively.” (Noe, R., Hollenback, J., Gerhart, B., Wright, P. 2010, p. 9) This is where the importance of development and performance management becomes essential for a company. When providing outsourcing services for global clients, it is important that internal aspects such as development and performance management are operating at the highest level. HCL Technologies is a technology...
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...Executive Summary The ERS division of HCLT is attempting to expand the reach of its innovative new product, which is referred to as Engineering out of the box (ETOOB). The (ERS) division is faced with the challenge of trying to make an already successful product more profitable. The (ETOOB) is revolutionary and helped its product and technology customers reach the market on average 20-25% faster. As requested by HCL, We are here today to identify potential opportunities and issues in both local and global markets and identify our potential solutions. The technology industry in India is growing rapidly with the continued expansion of outsourcing from North American and European countries. In 2011, with the help of its EOOTB solutions the HCL ERS division grew by 26% and business in pipeline grew by 86%. In this paper, we’ll focus on HCL’s EOOTB offerings. HCL knows that they must act fast as the success of (ETOOB) has led to many companies working on second mover strategies. They must reach new markets and demonstrate value to growing existing markets. After a thorough market analysis into existing industries and emerging markets, we have suggested focusing on creating value added solutions. To address new markets and become thought leader, we’ll focus on the importance of Value Based on Relationship. We will also facilitate more customizable solutions while also providing ‘out of the box’ solutions for our less complex clients. To gain (ETOOB) Provides a solution...
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...“Study on Six Successful Leaders in Bangladesh” i Report on “A study on six successful leaders in Bangladesh” Prepared For MD: Shibli Shahriar. Assistant Professor. Department of Business Administration. Faculty of business and Economics. Daffodil International University. Prepared By Name Subrata Saha Mithun Smita Paul Shamima Akhter Sanjida Sultana Joytee Dey ID 133-14-1216 133-14-1231 121-14-677 132-14-1096 132-14-1095 Remarks December 12, 2013 ii Letter of Transmital December 12, 2013 MD. Shibli Shahrir Assistant Professor Department of Business Administration Faculty of Business and Economics Daffodil International University Subject: Submission of Report Dear Sir, Following the successful completion of our report we are gladly submitting it for your inspection. The report is prepared as titled “A Study on six successful leaders in Bangladesh”. We gratefully acknowledge your assigning us this topic to work on and your guidance in completing the report. Sincerely yours Subrata Saha Mithun iii Acknowledgement First and foremost, I thanks to my God. Besides we would like to thank to our honorable teacher and supervisor of this report MD. Shibli Shahrir for the valuable guidance and advice. He inspired us greatly to study in this project. His willingness to motivate us contributed tremendously to our report. We also would like to thank him for showing us some example that related to the topic of our report. Besides...
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...CUSTOMER IS THE KING 1.0 Introduction According to Ratan Tata, Chairman of Tata Group, we should be treating the customer in the same way that we would want to be treated as customers. As per his say, In today's world, what customers are looking for, I believe, are products that suit their purpose best in terms of price, features, quality and appearance. They expect to be treated as kings and to receive sales and service support for products like vehicles and air-conditioners. They expect to receive timely and competent attention, along with a definite solution to their problems from our service people, dealers or channel partners. Businesses establish reputations for themselves based upon how well they treat their customers over time. Getting off on the wrong track can seriously harm a business, while doing it right can produce amazing amounts of “goodwill”, admiration and long term success In Mauritius the actual motto is the “customer is the king”. In the country the company is still using this old adage. Nowadays a new management concept has emerged “employee first”. There is only a few company in Mauritius which is now implementing this new concept in there organisation. Soft and hard HRM There are many different approaches a business can take to HRM. Guest(1999) identified two perspectives of HRM: Soft and Hard HRM Soft HRM: Employees are being treated as valuable asset of the organization. Hard HRM: Employees are being considered as variable cost of the strategic...
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...1.1 Introduction One of the leading IT services companies, L&T Infotech., is a well established company. It is an Indian company which always maintained the highest international standards of excellence through quality, technology and innovation. The company has an ISO 9001-2001 certification and has high profile clients such as like Chevron, Free scale, Hitachi, Sanyo and Lafarge, among others. L&T Infotech is a global IT services and solutions provider. It provides the winning edge to the clients by leveraging Business-to-IT Connect and deeply committed people. The clients have found in L&T Infotech a right-size partner who combines scale, stability and customer-centricity The parent company is Larsen & Toubro Ltd. (L&T), a technology, engineering, manufacturing and construction conglomerate, with global operations. This rich corporate heritage has given many inherent advantages that translate into tangible benefits for the clients. Founded in 1938, Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest and most respected companies in India's private sector. Seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business. L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings...
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