E-MAIL A FRIEND
PRINTER FRIENDLY
SAVE ARTICLE
FOR REPRINTS
Disruptive potential.
HCL Technologies has spent the last few years preparing itself for what it sees as the next wave of global IT services delivery.
A relative newcomer to the market, the company believes it has anticipated a fundamental shift in the pattern of demand for offshore services. While, to date, most customers have passed different suppliers distinct areas of their IT activities and IT-enabled processes – application development, remote infrastructure management, package implementation and certain business process – HCL believes that organisations now increasingly want to source many of those core elements from a single partner, and to buy them as a more integrated set of services.
The evidence is already building that the company is onto something. Over the past three quarters its revenue growth rate has soared from 29% to over 40%, putting it on target for revenues of $1.25 billion for its year ending in 30 June.
Recent deals fuelling such momentum have been with the likes of DSG International, parent of Currys, Dixons, PC World and many other outlets, which last year placed the largest ever IT offshoring deal (£343.1 million over five years) with HCL, covering system development, application delivery, infrastructure support and maintenance services; insurance company Skandia, which (for $200 million over five years) has handed HCL its application development, maintenance and support functions, and also asked it to remotely manage its systems; and Teradyne, the testing equipment company, where a $70 million, five-year deal covers consulting, application development, and application and infrastructure management.
The business of those customers points to a tight focus on key verticals – high-tech/manufacturing, financial services, telecoms and retail. Other key clients among HCL’s 230 active accounts, include HBOS, ABN AMRO, the AA, Camelot, Volvo and BT.
The company is not the only one that thinks its ‘transformation strategy’ can break the existing offshore mould. Analysts at IDC recently identified the company as a “disruptive force” capable of leading the “future of the IT services industry”. HCL is trying to take Indian offshoring a step further – to embrace ‘true’ outsourcing, taking complete ownership of whole end-to-end process and the parts of the IT function that underpin them.
There are some hot areas alongside the ‘classic’ business of core software services (which has been growing at around 37%). According to IDC, “HCL is positioning itself to be strongly focused on remote infrastructure management, the traditional domain of [Western IT giants].” Indeed, that business is growing at around 80% and accounts for a fifth of HCL’s revenues.
The company also has a higher count of non-Indian staff than most of its rivals. Its BPO business, which brings in a fifth of its revenues, includes a 1,200-strong contact centre workforce in Belfast in the UK.
In fact Europe has been a booming market for HCL. Not only does the region account for around 30% of revenues, but its revenue growth rate is running at 93%.
More from this feature...
Overview
Out of India - Who's best placed to exploit the world's biggest pool of low-cost, highly skilled IT service labour.
From East To West
From West To East
The Western IT services companies making best use of Indian resources:Q&A
Burger King - Raj Rawal, CIO of the world's second biggest burger chains explains how outsourcing to India improves quality as well as cost.
