Detailed Presentation by students of MDI PGPM 2013-15 on Organizational Design and Change on HCL Technologies

1. HCL TECHNOLOGIES LIMITED
ORGANIZATION DESIGN AND ITS IMPACTS
GROUP 3, PGPM SEC B
ANKIT AGGARWAL 13P063
M GAUTAM 13P081
MONIKA KHETAN 13P088
NAKRA GOPESH 13P104
SATYAJIT TRIPATHY 13P109
SUYASH NIGOTIA 13P116

2. ORGANIZATIONAL ENVIRONMENT
 Elements that exist outside the boundary of the organization and have the potential to affect all or
part of the organization
TASK ENVIRONMENT
•Shift to Non-linear growth models
•Evolved from being a pure play IT service provider to offering end-to-end execution
capabilities
•Moved up the value chain and positioned itself as a global player
1. Industry
•Focus on other verticals such as manufacturing, engineering & healthcare, apart from BFSI
•Focus towards opportunities in emerging economies of Latin America, Africa & Middle East
•Shift to Tier II/Tier III cities to save on land and operating costs
2. Market
•Global IT players like IBM, Accenture & Cognizant have increased headcount in India
•Slowdown in the U.S. economy took heavy toll on the Indian IT players
•Europe has emerged as the Second largest IT/ITeS Market
3. International

3. GENERAL ENVIRONMENT
•Proposed H1B and L1 visa restrictions in the new US immigration bill
•Rise in Tax Outgo with the ending of STPI tax break1. Government
•Recent depreciation in the value of the rupee will have a positive impact as IT/ITeS
companies
•Sector is heavily export oriented with exports accounting for over 70% of the revenue
•Key concerns : Exchange rate fluctuations, Geographical concentration of clients in
US/Europe
2. Economy
•Offering Remote Infrastructure Management
•Enterprise Application Services3. Technology

4. ORGANIZATION STRUCTURE
 Designates formal reporting relationships
 Includes number of levels in hierarchy and span of control of managers
EARLIER ORGANIZATION STRUCTURE FOLLOWED IN HCL TECHNOLOGIES
 Traditional Pyramid Structure with
 Senior People on Top
 Thick layer of middle managers and enabling functions in the middle
 Frontline workers on the bottom
 This structure worked well till software industry was like manufacturing industry
 Aim at that time was to create faster chip, better user interface & smarter features
 The value chain no longer lay in the technology with the rise of the knowledge economy

5. REASONS FOR CHANGE IN STRUCTURE
4 TRENDS DEVELOPING IN INFORMATION TECHNOLOGY
 IT was becoming more complex & central to business strategy
 IT Industry was spearheading the technological changes and new innovations required to make
business process faster and cheaper
 Customers‟ business and needs were becoming complex and so the solutions complexity was also
increasing
 Execution and implementation part at customers‟ end were becoming important
 It was needed that innovation does not become hype
 Organizational hierarchies were getting in the way of quality implementation of software
 Different teams involved belonged to different hierarchies
 Organizational power was proportionate to person‟s position in hierarchy rather than his/her
ability to add value

6. STRUCTURAL SHIFTS
IDEA OF INVERTED PYRAMID
 In the new age IT Business, centuries old hierarchical structure and matrixes would not work
 Earlier structure didn‟t support the people in value zone
 In Traditional organization structure managers and bosses are at the top and do not directly contribute
to the value zone
 So, new idea of inverted pyramid was implemented wherein management as well as people in
enabling functions became accountable to those who create value
REVERSE ACCOUNTABILITY
 Certain elements of the hierarchy became more accountable to the value zone
 New concept of Smart service desk was introduced
 Technology had become central to creating and sustaining entirely new business models

7. HCL – ORGANIZATIONAL STRUCTURE
CEO
Chief customer
office
Head - Infrastructure
services
Head - Consumer &
Manufacturing
Head -
Engineering and
R&D
Enterprise
Services
CFO
 When both the pyramids
merge, we end up with
Star Organization
 In this a manager is
accountable to their
employees & the
employees to the
organization

8. RELATIONSHIP WITH STAKEHOLDERS
Investors & Shareholders
 Provides statutory disclosures to increase transparency
 Reports numbers on constant currency and also
provides its distribution across services and geos
 Concept of „twin audit‟ as its statutory auditors are
PWC & KPMG
Analysts
 Dedicated portal for interaction and hold strategy
discussions periodically
 Annual “Directions” meet & the “HCL Global Meet” –
Customers, Investors and analysts all interact together
in a free flowing discussion
Employees
 “Employees First” philosophy enables initiatives
such as the Five Fold Path to Individual
Enlightenment
Customers
 Service Delivery Platform – Customers can access
& analyze all kinds of information
 C-SAT surveys to get regular feedbacks
 Advisory Councils that allow top customers
advise HCL on areas of improvement

9. ORGANIZATIONAL CULTURE
 HCL is considered one of the best companies in India in terms of Organizational Culture
 Proper work life balance and Employee friendly culture
 Employee Respect & Employee Involvement is of Prime Importance
EMPLOYEES FIRST, CUSTOMER SECOND (EFCS)
 Started in 2005, it signifies HCLT‟s Transformational journey

10. EFCS TRANSFORMATION
 First established Point A –
reality of their business
situation through honest,
open conversations
 Established Point B – Vision
of the future which
inspired & motivated
people
 Shared
company‟s
financial
information
(both good &
bad) with
employees
across various
groups
 360-Degree
Review
 Made enabling
functions
accountable to
those in value
zone
 Creating self-run & self-
governing company
 Value Portal - System that
enables employees to
offer suggestions and
solutions for change

11. CORE VALUES
1. EMPLOYEE FIRST
 Smart Service Desk : Employees with a problem can open a trouble ticket
 CEO Connect : Online Availability to all employees
 Talent Transformation : Behavior-based competencies in individuals are built
 Employees First Academy : Effective leaders are nurtured on three levels - Employees First Lifestyle,
Employees First Leadership, and Harvard Emerging Leader Program
2. VALUE CENTRICITY
 Choses a value-centric nonlinear business model
 Believes in delivering value by going beyond contractual agreements with the clients
3. TRUST, TRANSPARENCY AND FLEXIBILITY
 Confidence for investors : Concept of “twin audits”
 Creating value for clients : Unique Service Delivery Platforms
 Collaboration for Best Practices : Partnerships & Joint Ventures with several Global 500 companies

12. ADDITIONAL ASPECTS IN CULTURE
1. RELATIONSHIP BEYOND
CONTRACT POLICY
2. FLEXIBLE WORK TIMINGS
3. INSTITUTIONALIZED INNOVATION
4. BUSINESS ALIGNED IT
5. BELIEF ON EQUALITY
CATEGORIZATION OF HCL’S
ORGANIZATIONAL CULTURE

13. RESULTS OF THIS NEW CULTURE
 Company has Re-ignited its Growth Engine
 Maintained a CAGR of 25% in the last 3 years
 Tripled its employee base since 2005
 Ideas submitted by creative employees through HCL‟s value portal generated new streams of
revenue
 Individual Employee Productivity is up
 Engaged employees have direct effect on bottom line
 Average revenue per employee is more than $50,000 a year from $37,000 per year in 2006
 Employee Attrition is down
 Net Attrition is down by almost 50%
 Reduction in attrition among employees rated as “outstanding” is even higher
 Long-Term Reward of Improved Customer Satisfaction

14. AREAS OF CONCERN
 Over Dependence on Infrastructure Sector
 Primary source of revenue but high volatility in Infrastructure sector in India
 Bumpy Growth in Europe
 Europe is a strategic region as it hosts some of the major clients
 Slower growth in Europe has raised concerns about its performance
 R&D and Innovation Challenge
 Increased automation, changing business models
 Competition from startups in new-age technology areas such as analytics and cloud-computing
 Competitive Indian IT Industry
 Lot of foreign IT companies doing really well in the Indian space in the last few years

15. AREAS OF CONCERN
 CIO Concerns
 Lowering operational cost without compromising on the overall quality
 Ineffective IT management processes (development and support)
 Weak measurement frameworks for measuring IT performance in terms of delivery effectiveness, cost
as well as value
 Training Problems
 Delivery of relevant training and knowledge in timely manner to over 85000 employees in 31
countries
 Aligning training with business objectives
 Enhancing competency levels in keeping pace with rapid organizational growth and fast emerging
business opportunities
 Dependence on external training for diverse training requirements

16. THANK YOU