PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
Nayar accepted the position of HCL Technologies president in
April 2005, on the condition he could run the firm his way—as an
entrepreneurial, cutting-edge company. As part of a new strategic
direction, the firm:
reorganized around five business lines: Tech and
manufacturing, life sciences and healthcare, media and
entertainment, retail and telecommunications, and
financial services;
moved up the value chain, turning down individual projects
of less than $1 million and actively pursuing large
multi-year, multi-service partnerships, through a new
Multi-Service Delivery (MSD) unit made up of HCL’s
200 best engineers;
shifted more broadly from “volume” business—mainly
project work billed on a time and materials basis—to
royalty and outcome-based revenue sharing “value”
arrangements offering a steady revenue stream over
time;
abandoned highly competitive, increasingly low-margin
business segments in favor of relatively untapped,
uncontested markets referred to within the company as
“blue oceans”; and
adopted an “employee-first” approach internally, aimed
at improving the customer interface by engaging and
supporting employees through expanded internal communication,
team building and career incentives.
HCL’s first large deal was with a Bay Area firm: a five-year, $50
million contract with Autodesk, under which Autodesk outsourced
its applications and data center infrastructure—storage and data
management, software configuration, technical support, and database
administration—to HCL. Earlier, HCL had signed a 2003
multi-year co-sourcing agreement with AMD to manage and maintain
AMD’s IT infrastructure and applications.
A $330 million co-sourcing deal with leading European consumer
electronics retailer DSG International followed in January 2006.
Creative pricing was key: HCL offered full visibility into its unit pricing
structure and included cost reduction and productivity guarantees.
Later that year, HCL signed long-term IT consulting, applications
development, and infrastructure management agreements with
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