IT Industry Sector

Report
Sameer Bhatia (1301-188)
Aditya Vashisth (1301-303)

Agenda

About NASSCOM

Major Companies

ITs impact on Indias Economy

8.1%Sectors share in National GDP (2013)4th

3.1m Largest Private Sector Employer

n

>1mn
Largest Employer of Women 3538%

Spearheading the Indian MNC >60

story with a share of 28%
M&A

Promoting balanced regional >99

38%Largest share in total services exports
IT SEZs
Growth; 30% of IT SEZs in
Tier II/III cities
$2.4bHighest attractor of PE/VC investments,
Share in global offshoring market55%
n taking a lions share of 47%

Sector at a Glance- Evolution

By early 90s,
US-based
companies
began to
outsource work
on low-cost and
skilled talent
pool in India

Increased
investment in R&D
and infrastructure
started
India increasingly
seen as a product
development
destination

The number of
firms in India
grew in size and
started offering
complex services
such as product
management and
go-to market
strategies
Western firms set
up a number of
captives in India

Firms in India became

multinational companies
with delivery centres
across the globe (580
centres in 75 countries, as
of 2012) Firms in India
make global acquisitions
The IT sector is expected to
employ about 3.0 million
people directly and around
9.5 million indirectly, as of
FY13
Indias IT sector is at an
inflection point, moving
from enterprise servicing
to enterprise solutions

ITs impact on Indias Economy

Improved access and delivery of
le
services, bridging technological
b
i
ns
divide, e-governance solutions,
o
sp sive
e
CSR activities
R lu
y
c

Contribution to Indian
Economy

Empo
w
e
r
Di
i
n
v
g the
e
r
s
e
Hum
a
n
A
ssets

l
ial d In
c
So an

Enhancing education system

Generating employment Regional
Development

Creating Innovation
Putting India on the
Platform
Global Map

Presence in 75 countries with

850 global delivery centers
1,00,000 foreign nationals employed
380 cross border acquisition during FY08-12

~8% of Indias GDP

~2325% of Indias exports
~7% of Indias total FDI share

~50% Workforce from non Tier-I cit

30-35% Women Employees

~78% increase in patents filed in 2009-12

Growing RND Spend

IT scan-Political Factors
Very little influence of political situation including change of
government.
No tax sops to US companies outsourcing IT jobs
Diverse employment practices-qualification, abilities, gender,
skill sets
Continuous change of stand on applicability of labor
legislations to the sector
Strengthening of the IT Act- security of data in transmission &
storage.

IT scan-Economic Factors
Stage of business cycle: IT industry is in growth phase and this
can seen through increasing contribution to GDP and employment
.
Exchange rate: Indian IT sector is dependent especially US,
for more than 70% of its revenue. So, the fluctuation in the
exchange rate can bring a considerable difference in the
performance of a company.
Economic growth: Due to global slowdown, exports of IT and
ITeS services has slightly dimmed but a great opportunity is
waiting in Indias domestic market with increasing technology
adoption

IT scan-Socio-Cultural Factors
English language being widely spoken in India has help in fostering the
industrys relationship and interaction in India and on the global stage.
Great availability of both skilled and unskilled labour force coupled with
Immense intellectual capital
Potential employment opportunity for women in this organized sector
Large number of universities and institutes with engineering enrolment
as high as ~8 Lakh
Indian Labor -> Not only cheap but technically skilled as well

IT scan-Technological Factors
Government Research spending : Government IT spending in India reached
$6.4 billion US Dollars (USD) in 2013, a 7 percent increase over 2012,
according to Gartner, Inc.
Great availability of both skilled and unskilled labour force coupled with
Immense intellectual capital
Changes in Internet : Indian Internet Companies with Innovative models,
example: Naukri.com, Flipkart, Redbus
Lifecycle & speed of technological obsolescence : Desktop to Laptop to
Smartphones, Landlines to Whatsapp/ Skype/ Viber , DOS to Windows 8

IT Scan- Policy structure

INFO INFRASTRUCTURE DRIVE
No license fees for ISP for first 5 years
Promotion of Hi-Tech Habitats
Export shipment time for air cargo will be reduced to less than 24 hours
FINANCIAL SOPS
IT Software shall be entitled for zero customs duty and zero excise duty
The definition of software and export turnover changed so as to include IT services exports to
get Tax Exemption under Section 80 HHE of the IT Act
Banks to give 25 percent of the contract value for 18 months with the first six months as term
loan (without collateral's).From the 7th month onwards annualised Cash Flow Statements
shall be accepted instead of collateral's.
IT software and services industry shall be treated as a Priority Sector by banks for period of
five years
Working Capital amount increased from 400 Crores to 1200 Crores
Banks shall be allowed to participate in Venture Capital funds
Banks shall setup JVs for setting up of at least four different venture capital of a corpus not
less than Rs. 50 crores

IT scan- skills & employability

Availability of skilled English speaking workforce has been a major
reason behind Indias emergence as a global outsourcing hub
India added around 4.7 million graduates to the talent pool during
FY13
Growing talent pool of India has the ability to drive the R&D and
innovation business in the IT-BPM space

About 2 per cent of the industry revenue is spent on training

employees in the IT-BPM sector
40 per cent of total spend on training is spent on training new
employees
A number of firms have forged alliances with leading education
institutions to train employees

Sector Segmentation

IT/ITES

IT services:
Market Size: USD56.3 billion during FY13
Over 78 per cent of revenue comes from the export market
BFSI continues as the major vertical of the IT sector

Business Process Management (BPM):

Market size: USD20.9 billion during FY13
Around 85 per cent of revenue comes from the export market

Software products and engineering services:

Market size: USD17.9 billion during FY13
Over 79 per cent of revenue comes from exports

Hardware:
Market size: USD13.3 billion during FY12
The domestic market accounts for a significant share
The domestic market is experiencing growth as the penetration of personal
computers is rising in India

 Strong growth in demand for

exports from new verticals
Expanding economy to propel
growth in local demand

Industry
Value in 2013E:
USD108
billion

Growing
demand

IT firms in India have delivery

centres across the world; as of
2012, IT firms had a total of580
centres in 75 countries
Indias IT & ITes industry is well
diversified across verticals such
as BFSI, telecom, retail

Global
footprints

DRIVERS

DEMAND
Competiti
ve
advantag
e
India has cost savings of 60 70
per cent over source countries
With 52 per cent market share,
India continues to be a leader in
the global sourcing industry
The country has a huge talent
pool

Policy
support
Tax holidays extended to the IT
sector
Due to policy support, there was
cumulative FDI of USD14.0 billion
into the sector over April 2000
February 2012, making up 8.6
per cent of total FDI.

Industry
Value in 2020F:
USD300
billion

Competitive Landscape
In terms of the provider size, the industry
structure is fairly concentrated with the top 11
players accounting for over 40% of the total IT
revenues,
while
the
midsized
segment
contributes about 3540%.
Also complementing the growth of the large
players
is
the
small
and
medium
enterprises(SME) segment comprising >16,000
small players and emerging start-ups that are a
potential growth segment for the sector.
Category
No. of Players

14%
16%
70%
IT SECTOR STRUCTURE BY OWNERSHIP (FY14E)
Indian
Service
Providers
(TCS,
Infosys,
Wipro, HCl,
etc.)

% contribution to total IT
revenues

Largesized

11

40%
(> USD1 billion)

Midsized

120150

3540%
(USD100 million
USD1billion)

Emerging players

1,0002,000

910%
(USD10100million )

Smallsized/ Start-ups

15,000

910%
(<=USD10 million

Global Inhouse
Centers
(EMC, Ford,
Boeing,
Honeywell,
etc.)

Multinational
Corporations
(IBM,
Accenture,
HP,
Microsoft,
etc.)

Business Models- By software segment

Software
Category

Definition

Characteristics

Example
application
Types

Susceptibility to
Model changes/
exceptions

Point products

Function specific,
Single-Instance
applications to
automate discrete
business
processes

Discrete from
other aggregated
enterprise
functions,
sometimes
generic

Office
productivity,
email, threat
detection and
prevention

SaaS inroads
likely except for
some design and
document related
software (where
online use is
problematic)

Front-office suites

Multifunction,
Single instance
applications

Cover multiple
business
processes

CRM, Sales force

automation

Large orgs. Still

keeping self host
core functions.

Back-office suites

Multifunction,
Single-Instance
accounting apps.

Highly integrated,
proprietary defacto standard

ERP, BI, HR ,
reporting tools

Large orgs. Still

keeping self host
core functions.

Ecosystems

Multi instance,
Multi participant,
Function specific

Hub & Spoke,

externally
oriented

Supply chain,
purchasing,
inventory
management

Established hubs
could prove
resistant to
change

Middleware and
Infrastructure

Lower &
intermediate

Proprietary defacto; standard or

Operating
systems,

Open-source and
perpetual models

Shift to Value-Based Pricing Model- Factors

Software Architecture
Software Architecture
Monolithic Multifunction
Monolithic Multifunction
Application
Applicationsuite
Application
Application
Best
of breedsuite
single Best of breed singlefunction application
function application
Application
Modules

Application
Modules
Services
Services
Delivery Method
Delivery Method

Financial Model
Financial Model

Pay per transaction

Pay per transaction
Pay per module per user
Pay per module per user
Pay per user
Pay per user
Open source license
Open source license
Term License
Term License
Perpetual License
Perpetual License

Value
Based
Pricing
Model

Utility Computing
Utility Computing
SOA
SOA
Ecosystem software-as Ecosystem software-asa-system
a-system
Single
software -as-a Single software -as-asystem
system
BPO
BPO
ASP
ASP
Self Hosted
Self Hosted

10 Delivery Models Transforming IT

Business process utilities
(BPUs)
Infrastructure utilities (IUs)
Storage as a Service
Grid Computing

Outsourced business process services based on standardized processes and a unified, oneto-many platform.
shared IT infrastructure architectures offered on-demand and priced-on-service usage.
storage capacity offered on a usage basis.

Communications as a
Service (CaaS)

a collection of computing resources with multiple owners coordinated to address a

common problem.
a multiyear, annuity-based offering that bundles vendor-owned, managed and co-located
communication applications with connectivity and IT services.

Remote management
services

outsourced operations and management capabilities offered over a networked

infrastructure.

Community source
Software streaming

shares elements from the open-source community, but is its own trend in that users
coordinate the work of user IT organizations that have common requirements to solve
business problems.
solutions that do not use persistent storage to cache applications and data.

Software-based "appliances"
separate application and operating system logic from the underlying hardware.
(SBAs)
User-owned devices

devices owned and managed by employees responsible for providing technology to

complete job-related tasks.

Industry Forecast Value

140
TOTAL IT SECTOR REVENUES (in USD Billion)
120

100
80
60
40
20
0

69.2
50.1

24.1

76.5

86.4

Exports
Domestic

Export revenues grew by roughly 13%year-on-year(Y-o-Y)

to reach USD 86.4 billion in FY14.
Domestic market revenues declined by 1.3% in FY14 from
FY13 due to economic uncertainties, currency fluctuations,
inflation, slowdown in GDP, and the 2014 elections, which
impacted total IT spending.

REVENUES BY SEGMENT (FY14E)

11%

59.4

29

31.7

32

IT services
Software
products &
USD 118 billion 54%
ER&D

15%
31.6

FY10 FY11 FY12 FY13 FY14E

Among the segments, IT services was the largest (54%)

contributor, with its growth being driven by IT consulting,
information systems (IS) outsourcing, and software testing.

20%

BPM
Hardware

Industry Forecast Trends and Highlights

Export Revenue Segment

Export Revenue Break-Up by

Vertical (FY14E)

IT services dominated with a YoY growth of ~14%, while BPM exports recorded a growth of ~11%
over FY13.
Software products & ER&D achieved a doubledigit growth rate of ~10%.
Manufacturing showed the highest YoY growth(17%) in exports in FY14 followed by the emerging
verticals(retail, healthcare, and utilities) which grew 16% YoY and accounted for 26% share in
exports.

Industry Forecast - Fast Growing

Segments
Global SMAC Market

INDIA: Fast Growing Digital

Economy(2013)

g SMAC technologies, cloud represents the largest opportunity, expected to increase to USD207 billion by 2
has around 920 million telecom subscribers, 213 million internet users, 40 million smart phone users.
would drive growth in SMAC technologies which currently account for510% of the total IT sector revenues
International DataCorp.s estimate, Indian IT vendors are expected to generate atleast USD225 billion in re
20.

Industry Forecast - Export Revenues by Geography

S, with 61% share of total IT exports, continues to be the leading contributor to IT sector revenues.
T exports to US increased 13% YoY in FY14.
K and Europe are witnessing increased demand, as observed from the higher YoY growth.
he APAC market is relatively under-penetrated

Technology Forecast Trends &

Innovations
Ubiquitous Computing -

EmbeddingmicroprocessorsApplication - Replacing of old electric

meters with smart meters to report usage,
in everyday objects so they can communicate unobtrusively

power outage in real time

3D Printing

- Metal hip implants, skull

making three dimensional solid objects from Application
a
implants, orthodigital file by laying down successive layers of material

pedic insoles, body braces, and jaw

transplants
Advanced & Pervasive Analytics Filter through loads of Application
data
Effective segmentation,
collected from connected devices and deliver right information to thetargeting and
right person at the right time
advertising to get better returns on
marketing efforts
Context Rich Systems - Intelligence gained from ubiquitous computing
Application Self driving cars that
and pervasive analytics will enable development of systems that are alert
maneuver and
and responsive to surroundings
Control speeds without human
intervention
Cloud/Client Architecture - Complex demands ofmobile userswill
Application Moving workloads to
drive apps to demand increasing amounts of server-side computing and
datacenters to
storage capacity. Off-premise Private cloud to fill the gap
minimize storage requirements and increase
availability
Digital Physical Blur - A new layer of connected intelligence that
Application Consumer wearables that track
augments the actions of individuals, automates processes, and
physical activity to give insights into
incorporates digitally empowered machines into our lives
performance and physical health

Technology Predictions
By 2029, 11 petabytes
of storage will be
available for $100

20-time increase in
home networking
Speeds in next
10 years

By 2015, Google will

index approximately
775 billion pages of
content

By 2020, a $1,000
PC will have
Processing power of
a human
brain

By 2020 worldwide,
the average person
will maintain 130 TB
of personal data

Every Two years

Worlds data will
Increase six fold and
Corporate data
fiftyfold

By 2020, there will

be more devices than
people online.

Technology Forecasts Insights

l business will require 50 percent less business process workers; however demand for higher compe
ncrease

cost of ownership for business operations will be reduced through the use of smart machines and indust
ces

le goods e-tailers will use 3D printing (3DP) to create personalized product offerings

ry Stores will use Context Rich Systems to send targeted and dynamic advertising messages based on
cted from customers basket

mmerce will take a greater share of global financial transactions and business

ivity of Data shared through cloud will increase the demand for data security and protection services

o thelimited address spaceofIPv4 objects in the IoT will have to useIPv6to accommodate the extremely
ess space required

currently outsourced to India will be outsourced to less developed nations and work currently done in devel
es will be outsourced to India

IT Sector - Future Prospects

Key Growth Engines

Key Growth Inhibitors

Weaker Infrastructure
owth in global IT spending
Currently, over 95% of Indias exports originate
h the global economy showing signs of a gradual
from nine
overy, worldwide IT spending is expected to grow
% to reach USD3.8 trillion in 2014 as per latest GartnerTier-I cities, whose infrastructure is heavily
constrained.
casts.

Move to Tier-II and Tier-III cities has not gathered

ergence of Disruptive technologies
pace
hnologies such as cloud, mobility, analytics, social media,
flexible product portfolios are reshaping the Indian IT due to poor local infrastructure, and talent issues
ustry.
Competition from other low-cost countries
Philippines has overtaken India in terms of voice
owth in markets beyond the US and EU
C and APAC, are expected to be the major growth areasrevenues
in
future.
China is emerging as a favorable outsourcing
destination.
owth in government investments
ernment in India is expected to spend USD6.4 billion on
US Immigration Bill and EU Data Protection
roducts and services in 2014, a 4.3% increase over 2013.
Bill

FY15 Outlook
Outlook for Indian IT Sector
132135
118

USD
billion

99

86

32

36

FY14E

FY15P
Domestic

Exports

With an improvement in global

economic climate and rise in
technological expenses, FY14
brought an optimism in Indian IT
sector
NASSCOM predicts an increase
of around USD 13-14 billion in
overall revenues of IT sector in
the FY15
Export revenues are expected to grow
13-15% YoY
Domestic market revenues are expected
to grow by 9-12% YoY

Futuristic Outlook 2020

According to NASSCOM, Indian IT Sectors revenues is expected
to reach upto USD 310 billion
The exports market revenues are projected to reach three-fold
to around USD 175 billion under current-initiatives scenario
with an opportunity to add upto USD 135 billion under focusedinitiatives scenario
The domestic market on the other hand is expected to grow to
USD 50 billion under current-initiatives scenario with an
opportunity to grow by another USD 15 billion under focusedinitiatives scenario

Revenue share (By vertical & services)

Fastest growing business line,

constituting 29.2% of HCLT's
revenues
Services offered are primarily
geared towards the G2000
companies and offer a credible
alternative to Global MNC IT
Outsourcers

Service Offerings- Infrastructure Division

Cloud consulting and assessment, migration and implementation including
management and hosting of private Cloud or utility infrastructure and
management of public Cloud as a part of the infrastructure services. The
Cloud
aggregation and management of Cloud services is executed through HCL's
computing proprietary My Cloud platform.

Data
center

End-to-end life cycle of services including management and hosting of

customer assets, consolidation and migration services, virtualization and
design and management of green data centres. These services also take care
of mainframe & AS/400 management.

Service desk, messaging and collaboration services, managed print services,

managed desktop services, global field support, client application
End user management services, business productivity online services, application
computing packaging factory, Windows 7 & 8 migration and asset management.
one of the critical services that leverage service management based on ITIL
based processes for centralized management of distributed assets. The
services included are disaster recovery and business continuity services,
Cross
service automation and governance, risk and compliance services. Many of
functional these services are bundled with the overall services.
Day 0, 1 and steady state operations across original equipment
manufacturers (OEMs), enterprises and telecom service providers. Critical
Network services in this space involve managed network services, network consulting
services services, network virtualization and technical product support services.

Manages mission-critical
environments for over 20% of the
Fortune 100 organizations
Offerings: Cloud Computing
Services, End User Computing
Services, Data Center Services,
Network Services, Information
Security Services, Cross-Functional
Services, Mainframe & AS/400
Management & System Integration.
Industries served include
Automotive, Banking, Chemical,
Energy (Oil & Gas) & Utility,
Consumer Electronics,
Financial Services, Consumer
Products,
Hi-tech, Independent Software

Service Offerings- Custom Application Services Division

HCLT's Custom Application Services division uses IPs, tools, frameworks and industry best
practices to provide differentiated change-the-business, run-the-business and cross-functional
IT services to customers. By focusing on these three aspects of the customer's IT ecosystem,
Differentiat the division has been successful in providing committed savings on Application Management
ed LOB
and increasing agility and adoption on Application Build engagements.

With a modular approach to design, development, testing, and rollout, HCLT's ADeX Practice
(Application Development Excellence) leverages best-in-class development processes and
methodologies along with benchmark tools and reference architectures; to ensure that client
Design
Approach requirements are met with high productivity and process compliance.

To align IT with business needs, the division provides cross-functional services through
collaborative governance, flexible commercial models and tools, which provide business
differentiation through IT. In addition, flexible commercial models such as onsite, near-shore,
Business offshore facilities, shared delivery centres assist in defining, realizing and sustaining business
Alignment change.

Value
Centric

Future
Ready

HCLT's value-centric focus keeps it continuously investing in robust methodologies, tools and
processes and best-of-breed partnerships. Skills are continuously upgraded within the practice
and customers continue to enjoy faster time-to-market as they leverage HCLT's extensive
research and development on methodologies, reusable components and frameworks.

Future investments include retail analytics, ecommerce, mobility & cloud.

Constitutes 30% of HCLT's

revenues.
Offerings: Application
development,
management, support, reengineering,
modernization, migration and
independent verification &
validation.
Industries: Retail, banking,
insurance,
capital markets, media &
publishing,
manufacturing and public &
healthcare
services.
Significant investments in niche
technologies: e-commerce,
Mobility,
Cloud and Analytics.

Constitutes 17.5 % of HCLT's

revenues

Service Offerings- Engineering and R&D Division

Thought
Leadership

HCLT ERS is committed to creating thought leadership in areas such as social media, medical devices,
PLM, gesture technology, etc. We practice it by encouraging bold thinking and disruptive approaches
that are needed to help our customers outperform in a rapidly changing digital economy.

One such differentiation is our suite of solutions which takes HCL developed best practices, IPs and
Differentiat accelerated frameworks and packages them into service offerings that solve critical and highly relevant
business problems for our customers.

ed Offering

END-TOEND

R&D

solutions cater to engineering needs across the entire product development lifecycle and provide
solutions that help the customer address challenges of accelerated product development, gaining a
price to benefit ratio and adapting to new technologies. HCLT is investing heavily in developing solutions
to help clients impact the overall product ecosystem faster and better .Some of the focus areas of our
solutions include Mobility, M2MPlatforms, Software as a Service models Cloud, NUI, etc.

HCL is placed in the Leadership Zone by a leading Analyst firm among the Automotive, Consumer
Electronics, Computer Peripherals and Storage, ISV, Consumer Software, Medical Devices,
Semiconductor, Cloud Computing, Enterprise Mobility and Aerospace & Defence R&D Service Providers.
is proof of the fact that HCLT ERS is capable of performing concept to Go-To-Market for the product
leader This
and has significant investment in Lab infrastructure.

Leveraging
Niche

There is niche capability across Engineering, Embedded and Software services. HCLT ERS possesses a
formal innovation culture, resulting in IP's and strategic innovations and plays a leadership role in
alliances, leverage start-ups, Specific academic research and co-creation with customers.

One of the largest global

Engineering
and R&D Services organizations in
the
World Offerings: End-to-end
engineering
services & solutions in hardware,
embedded, mechanical and
software
product engineering
Key differentiator: "Engineering
Experiences" [E2] Industries
served: Aerospace & defence,
automotive, consumer electronics,
industrial manufacturing, medical
devices, networking & telecom,
office automation, semiconductor,
servers & storage, and software
products
Executed Faster Product
Development
with automated testing processes
for

18.9% of HCL's revenues and

continues to be a key area of
growth

Service Offerings- Enterprise Applications Division

Strategic
Partnershi
ps

Partnerships with SAP, Oracle & Microsoft ensure that HCL can
make the latest enterprise technology offerings available to its
clients.

EAS has won several awards for its

Enterprise Mobility Services

EAS will continue to invest in Enterprise Mobility offering

clients a comprehensive range of services from mobile
development and integration to mobile application
Enterprise application
services, to fully managed mobility including provisioning,
Mobility hosting, and end-user support.

Customer
Focused

Strategic partnership with SAP,

Oracle
and Microsoft

HCL's client base is now looking to EAS as a transformational

partner in the Oracle space. Through EAS' benefits driven
approach to helping clients change their business, HCL is able
to focus on business solutions powered by Oracle technology
to drive tangible benefits to the business.

EAS Oracle Practice has achieved

over
20 specializations including 9
advanced
specializations and has been one of
the
only GSIs recognized as an Oracle
Enablement 2.0 Delivery Partner
HCL EAS has a global agreement
with
SAP to deliver Managed Mobility
Services to Improve Time to Value
and
Reduce Complexity for Customers
HCM HCL's FinEdgeTM a CRM

Service Offerings- Business services Division

BPO constitutes 4.4% HCLT's
revenues

Hybrid
Strategy

Offerings

HCL's Business Services division employs over 10,000

professionals equipped to offer Round the Clock services on a
'follow-the-sun' Global Delivery Model through a combination
of offshore, near shore and onshore delivery centres.

HCLT offers horizontal BPO services such as F&A, SCM, Product

Support and HRO while combining its strengths in
Applications, Infrastructure and Consulting to offer BPO led
transformation services to enterprises across industries with a
keen focus on delivery business outcome.

Offers Next Generation BPO

services
to global organizations, most of
which
are Fortune 500/Global 2000
companies
Areas of focus
o BFSI, Healthcare
o Enterprise Function as a Service
(EFaaS)
o F&A, SCM, and Product Support
Services
Innovation and improvement-led
solutions

eFaaS

HCLs Enterprise function as a service (EFaaS) is a BPO-led

offering which combines end-to-end business transformation
and outcome/benefit realization.

Flexible business models, including

Output and Outcome based
constructs
Risk & Compliance
Numerous industry recognitions

Managed Services
(Evolved)
Service provider is
responsible for
delivering IT
outcomes or business
output
Managed
/ outcomes.
Services
(Basic)
Service provider is
responsible for
delivering IT output
based on SLAs.

Classifying service delivery

models
Emerging
Service Delivery
Model
The rules of
engagement
between a buyer
and the service
provider, such as
who owns service
delivery and the
allocation of roles
and responsibilities;
what deliverables
the service provider
is accountable for
(input, output,
outcome); who
controls resourcing
decisions
(location, mix, etc.)

Models
The service
provider owns
service delivery
and is
responsible for
providing
outputs/outcom
es.

Traditional
Models
The buyer owns
service delivery
and procures
inputs or
components of
output from the
service provider.

Co-sourced Delivery
Service provider is
responsible for
delivering
components of output
(e.g., project
deliverables).
Staff Augmentation
Service provider is
responsible for
providing
inputs (e.g., person
hours, capacity)

Commercial models
Input or Headcountbased
Pricing is directly linked
to headcount
Time & Material (T&M)

Output & Nonheadcount-Pricing is

directly linked to
discrete units of output/
Consumption
Application-Based
Pricing

Fixed Bid/Fixed
Capacity

Transaction/TicketBased Pricing

Fixed Bid/Fixed
Capacity plus T&M

Service Catalog-Based
Pricing

Less
Less

Outcome & Nonheadcount-based

Pricing is based on
measurable cost or
revenue impact
delivered to the buyer
Pay on Performance
(Hybrid of output/input
and outcome)
Gain Share Model
(Revenue increase and
cost saving)

Service Provider Risk / Reward

More
Buyers Perception of Service Provider
More

To stay ahead of the

Competition, HCL
Is moving more
work to this zone

Outcome
Based
Input-Based Output-Based

Alternate Models
Traditional Models

Commercial Model Maturity

HCL sourcing paradigm- Is HCL future ready?

More than 95%

of IT providers
are
here today.
Prevalent
Buyer owns
delivery. Service
provider is
responsible for
providing people
with the right skills,
and pricing is
headcount-based.

Staff Augmentation

Not common
Delivery ownership
is shared between
buyer and service
provider. Pricing is
linked to discrete
units of work or
consumption.
Prevalent
Delivery ownership
is shared between
buyer and service
provider.
Pricing is
headcount-based.

Co-sourced

Service Delivery Maturity

Aspirational state
Managed services is
well evolved. The
service provider has
full ownership of
delivery.
Mature buyers are
likely to move here
in the near-term.
The service
provider has almost
full ownership of
delivery, and
pricing is linked to
discrete units of
work.
Gaining traction
Service provider
has partial to full
ownership of
delivery. Pricing is
headcount-based.

Managed Services

Innovations & Technological

Developments
eps employees at the center and believes inemployee-led-innovation to build a strong engagementculture
Value Portal Idea exchange platform
Objective Capture ideas at the
grassroots level

MAD Jam Celebrating the Power of

Transformational Ideas
Objective Showcase Talent and Innovation

Over 7000 ideas generated by 500

employees with
over 800 ideas been implemented

In the first round 377 ideas were selected from

Value
Portal and 18 were shortlisted

Offline Customer Support service

produces
annualized savings of $70,000 to the
bank
Meme B2E Social Networking
Testing
Automation
tool Share, Learn and Grow
Objective
Connect,
produces annualized
savings
of $1
million
to the
client
More
than
60,000
employees
subscribed

with their
own profile pages

BlogHer - Aims to create dialogue and

suggest
gender inclusive policies and practices
AskHR- Allows employees to pose
questions to

Customer On-boarding drastically

reduces
the on-boarding cycle time of a
customer

Mobility Solutions enabled police

officers to
instantly send details to the central
police system
using mobile devices

Overall HCL Strategy

L Technologiesis considered an aggressive bidder and therefore has

siderably lower margins when compared to those of TCS and Infosys

10X the Avg.

Size

Mega Deals
Large strategic deals that sets a long term vision for the customers
These deals are 10X your Average Deal Size and help you retire
your quota faster
Target Marquee Accounts with IT budgets in multimillions.

s core agenda is to eliminate all challenges from the sales process

orten proposal cycle by culling suitable information to make proposals more persuasive
nnect experts and information seekers on an easily searchable tool
ick on-boarding of sales representatives
ke qualified references available that can help close deals quickly
ld quality metrics in the sales processes by enabling people to connect easily with assets and experts
nnect sales and marketing teams working in silos

How they Do It?

WIKIPORTAL

Developed on Microsoft SharePoint Server

Connecting over 10,000 sales, marketing and solutions employees across 31 countries
Integrated with line-of-business applications such ERP, CRM and enterprise user profiling solu
Integrated with global social media tools such as Twitter and Crush to get in-depth sales intel
reports

The platform allows access to structured data and unstructured information through social and
collaborative features such as tagging, wikis, blogs, discussion forums, expertise locations and soc
networks

Benefits

Enhances Sales Productivity - Reduces Cost of Sales, Shortens Sales Cycle, Increases Win R
Improves Global Communication - Enhances internal communication and easy tracking of e
Increases Scope for Innovation - Connected employees exchange ideas. Sharing rewards a
recognitions encourages others to excel
Increases Closure Rate Reference Management System increases HCLs ability to influence
and increases the bid to win ratio by 80 percent compared to the
standard

Key Features of WIKIPORTAL

Search/ Find
Buddies

My Site

Expert
Exchange

Gallery/
Lounges
Reference
Management
System
(RMS)

Heavily customized, user friendly front end feature of the portal

Displays information and search results
Integrates search with CRM and makes deal information available on
WIKIPORTAL
Integrates with user profiling system for auto profile updates
Searches and updates essential information such as the past, present
experience, projects etc. to My Site
Integration with Twitter and blogging platforms allows knowledge sharing
at large scale

Facilitates interaction with recognized experts of their field

Experts receive questions directly in their Inbox by following the link to
Expert Exchange and respond

Uses SharePoint blogs to share and learn from win summaries, executive
stories, reusable components
Allows access to most relevant references for a prospect deal, e.g.,
customer, analyst
References include video, text, call, and face-to-face
Ensures mapping of a prospect with an existing client to facilitate quick
deal closures
Integration with CRM and ERP, delivers status trackers to prevent
overuse

Conclusions Attractive
Opportunities
Social Media Analytics
An explosive growth opportunity for Enterprise Social
Software with the global market exceeding USD6.4
billion by 2016
According to Forrester Research, spending on social
business software is expected to grow at a CAGR of
Cloud
Computing
61% during
201316
Market is expected to reach USD650700 billion
globally and USD1518 billion in India by2020
Cloud penetration in hardware is expected to show a
major shift from 810% in 2012 to 2224% in 2016

Enterprise Mobility
Global revenues are estimated to reach around
USD140 billion by 2020, a CAGR of ~15%
North America is expected to remain the largest
market while APAC is expected to grow the fastest at
~21%
Existing spend of less than 5% on EM is expected to
grow to 10-12% by 2020

Big Data/Analytics
The global market is estimated to grow 45%
annually to reach ~USD25 billion by 2015
Indian Big Data industry is expected to grow from
~USD200 million in 2012 to ~USD1 billion in 2015, a
CAGR of over 83%
Emergence of niche start-ups and technological
developments would foster growth

SMBs

SMBs are emerging as key stakeholders for Indias IT

sector. Despite being large (47 million units) and
highly unorganized, this segment is witnessing rapid
IT adoption
The key to exploiting the SMB opportunity is to offer
cloud models (SaaS, PaaS, IaaS), bundled end-to-end
offerings, bundled pricing, and intuitive solutions

Emerging Geographies

BRIC nations, continental Europe, Canada and Japan

have IT spending of approximately USD380420
billion
Adoption of technology and outsourcing is expected
to make Asia the second largest IT market by 2020

Thank You!

References
http://info.shine.com/industry/it-ites-bpo/11.html
http://www.ibef.org/industry/information-technology-india.aspx
http://businesstoday.intoday.in/story/indias-usd-108-billion-it-industry-enters-middleage/1/202800.html
http://www.zinnov.com/event.php?ev_id=93
http://sme.siliconindia.com/sme-expert/Indias-SMB-Sector--On-an-Accelerated-Path-of-TechnologyAdoption-eid-456.html
http://india.smetoolkit.org/india/en/content/en/42648/Is-the-Indian-SMB-market-lucrative http://www.business-standard.com/article/companies/indian-smb-market-at-48-8-mn-unitsgrowing-at-a-cagr-of-4-53-zinnov-study-113031400498_1.html
http://www.forbes.com/sites/peterhigh/2014/10/07/gartner-top-10-strategic-it-trends-for-2015/
http://www.gartner.com/newsroom/id/2866617
http://gblogs.cisco.com/nl/food-for-thought-top-25-technologie-voorspellingen-vanuit-cisco-ibsg /
Annual Report 2012-13
HCLT Q4 2014-amj14-ir_release