Hcl Technologies Essay

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9-408-004 REV: JULY 17, 2008 LINDA A. HILL TARUN KHANNA EMILY A. STECKER HCL Technologies (A) In January 2006, HCL Technologies’ 44-year-old president, Vineet Nayar (referred to as “Vineet”), was ecstatic to hear that his company had just won the biggest IT outsourcing deal in Indian history, yet he knew the road ahead would be long. HCL had been founded in the 1970s and by the 1980s had established itself as India’s most sophisticated and successful hardware company. But through the late 1980s and 1990s, as software and services became the trend, HCL slipped behind both Indian and multinational competitors. In April 2005, Vineet became HCL Technologies’ president at the request of the founder and chairman, Shiv Nadar. At the time, the 41,000-employee HCL enterprise had $3.7 billion in revenues and a market capitalization of $5.1 billion. While it was growing at a cumulative average growth rate of 35% (including inorganic growth), this was due largely to the momentum of the past. Like many of his competitors, Vineet hoped to move his company up the value chain. At HCL, the plan was to accomplish this goal by providing clients with innovative, integrated services that would impact and even redefine their core businesses (see Exhibit 1). To fulfill this vision, Vineet had devised a three-part transformation strategy. In the first phase, Vineet had introduced a corporate strategy called “Employee First, Customer Second” (EFCS). EFCS was energizing employees, and the company’s financial performance was improving. At the February 2006 Global Customer Meet in Delhi, on which HCL would spend $2 million, Vineet planned to make the EFCS strategy public for the first time. He also planned to announce that HCL was going to walk away from “small time engagements” in order to focus on value-added, innovative projects. This related to the second phase

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