HCL: How the Indian outsourcer is giving itself a business makeover

Summary:New Directions in Delhi...

...give $10m more to a supplier if the vendor can deliver something that transforms their business, than sign up with another rival supplier who offers a $10m saving but nothing more.

The trend away from providing old-school outsourcing - purely focused on cutting costs or jobs - to providing services that support business processes is in favour among India's outsourcers. It's a shift in part inspired by new outsourcing upstarts such as China, and their growing ability to offer commodity services at costs that can rival or beat India's.

"The first threat is China and the reason I say that is, I travel in China - those guys work 18 hours a day, they work for half the salary and they work very hard," Nayar tells his employees, adding: "Would they take the low-end work away from you? The answer is yes."

While China is not about to displace India, HCL is nonetheless setting its sights on more complex, business-focused contracts.

Vineet Nayar at HCL's Directions event

HCL CEO Vineet Nayar onstage at the company's Directions event where employees can air grievances and make suggestions
(Photo credit: HCL)

HCL has been targeting higher-end services already for a couple of years, acquiring the SAP consultancy Axon in 2008 - the same year it opened what it calls a value portal: an online suggestion box where employees can post ideas for extra services that could be offered to customers to either cut costs or boost efficiency.

Over that period, staff have submitted 5,000 or so ideas, which were examined by the company and the most appealing then taken and presented to customers. About 1,000 are now either implemented or in the process of being rolled out at HCL's customers, including one which saved a company $120,000 a year by streamlining HR processes.

Despite its two-year history of the process, the transition from tech provider to services provider is not complete, as Nayar acknowledges, telling the Directions event: "We still see ourselves as an IT company" and adding attitudes have not shifted as much as he would like.

But just how do you go about changing an entire company's mindset? Awareness is...

Topics: Tech Industry


Jo Best has been covering IT for the best part of a decade for publications including silicon.com, Guardian Government Computing and ZDNet in both London and Sydney.

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