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2015

Analysis of IT Sector-Report

By-Aakriti Bhadoria
-Aditya Bhadoria
-Tushar Srivastava
-Manisha Singh
-Nikhil Dhindra
-Saurabh Shukla
1/4/2015

ACKNOWLEDGEMENT
No one walks alone in the journey of life, and to share our insights together with the secrets to
our positive approach towards our project and all that life throws at us. Much of what we have
learned over past three months came as a result of being student of such a wonderful teachers
who shared their knowledge, their ideas and numerous tips all of which culminated in the
completion of this project.
We would like to express our deepest gratitude and Indebtedness by few words towards
everyone concern in the making of this project.
First and foremost, we would like to thank to Prof. V. V. Ratna for the valuable guidance and
advice.
We take immense pleasure in thanking our group members for giving us an opportunity to
realize the value of working together as a team and experiencing working environment.
We are forever indebted to our parents and our seniors for providing endless motivation and
their understandings, and subconsciously contributed tremendously in completion of this
project. Without helps of the particular that mentioned above we would had faced many
difficulties while doing this.

Contents
Evolution of the IT Industry .......................................................................................................................... 6
History of computer technology ................................................................................................................... 7
Industry Setting ........................................................................................................................................... 10
Challenges of the Industry ...................................................................................................................... 10
Future Prospects ..................................................................................................................................... 11
Strategic Issue ............................................................................................................................................. 12
Government policies ............................................................................................................................... 12
Globalization ........................................................................................................................................... 12
Re-Thinking the Purpose of Your Business ............................................................................................. 14
Recruiting & Retaining Employees .......................................................................................................... 14
Adaptability & Change Management...................................................................................................... 15
IT Industry Structures.................................................................................................................................. 16
Structure of Indias IT Industry ............................................................................................................... 16
IT services ............................................................................................................................................ 17
IT enabled services .............................................................................................................................. 17
Software products............................................................................................................................... 18
Hardware ............................................................................................................................................ 18
Structuring Technical Staff ...................................................................................................................... 22
Determinants of Industry Attractiveness.................................................................................................... 24
Driving Forces.......................................................................................................................................... 25
Innovation in Last Decades ..................................................................................................................... 25
Function of Information Technology ...................................................................................................... 25
Innovation and Information Technology ................................................................................................ 26
Industry Players and their strategies .......................................................................................................... 27
Tata Consultancy Services....................................................................................................................... 27
WIPRO ..................................................................................................................................................... 30

HCL INFOSYSTEMS .................................................................................................................................. 33


INFOSYS ................................................................................................................................................... 36
Performance of Key Players IT Industry ................................................................................................... 41
Tata Consultancy Services....................................................................................................................... 42
Infosys ..................................................................................................................................................... 44
HCL Technologies Limited ....................................................................................................................... 46
SWOT ANALYSIS FOR AN IT INDUSTRY:....................................................................................................... 49
STRENGTHS: ............................................................................................................................................ 49
OPPORTUNITIES ...................................................................................................................................... 49
WEAKNESSES........................................................................................................................................... 50
THREATS .................................................................................................................................................. 50
MATRIX REPRESENTATION BASED ON PARAMETERS OF AN INDUSTRY: ........................................... 51
QUALITATIVE AND QUANTITATIVE PARAMETERS: ............................................................................. 52
QUALITY STANDARDS:......................................................................................................................... 52
REFRENCES .............................................................................................................................................. 53

CONTRIBUTION OF MEMBERS:
Industry settings and evolution of the industry by Akriti Bhadoria
Special strategic issues facing the industry (such as changes in governmental policies,
changes in demographics, globalization, etc.) by Aditya Bhadoria
Industry structure by Manisha Singh
Industry attractiveness, driving forces and key success factors i.e. what does it take to
succeed in this industry by Tushar Srivastava
Industry players and their strategies and also what strategy seems to be most successful in
the industry and why by Saurabh Shukla
Performance of major players of the industry by Nikhil Dhingra

Evolution of the IT Industry


When and How IT sector evolved?
Information technology (IT) is the application of computers and telecommunications
equipment to store, retrieve, transmit and manipulate data, often in the context of a business or
other enterprise.

The term is commonly used as a synonym for computers and computer networks, but it also
encompasses other information distribution technologies such as television and telephones.
Several industries are associated with information technology, including computer
Hardware, software, electronics, semiconductors, internet, telecom equipment, e-commerce and
computer services.

Humans have been storing, retrieving, manipulating and communicating information since
the Sumerians in Mesopotamia developed writing in about 3000 BC,but the term information
technology in its modern sense first appeared in a 1958 article published in theHarvard Business
reviews authors HarlodJ.Levittand Thomas L. Whisler commented that "the new technology
does not yet have a single established name. We shall call it information technology (IT)." Their
definition consists of three categories: techniques for processing, the application of statistical and
mathematical methods to decision-making, and the simulation of higher-order thinking through
computer programs.

Based on the storage and processing technologies employed, it is possible to distinguish four
distinct phases of IT development: pre-mechanical (3000 BC 1450 AD), mechanical (1450
1840), electromechanical (18401940) and electronic (1940present). This article focuses on the
most recent period (electronic), which began in about 1940.

History of computer technology

Devices have been used to aid computation for thousands of years, probably initially in
the form of a tally stick. The Antikythera mechanism, dating from about the beginning of
the first century BC, is generally considered to be the earliest known mechanical analog
computers, and the earliest known geared mechanism. Comparable geared devices did
not emerge in Europe until the 16th century, and it was not until 1645 that the first
mechanical calculator capable of performing the four basic arithmetical operations was
developed.

Electronic computers, using either relays or valves, began to appear in the early 1940s.
The electromechanical Zuse Z3, completed in 1941, was the world's first programmable
computer, and by modern standards one of the first machines that could be considered a
complete computing machine. Colossus, developed during the Second World War to
decrypt German messages was the first electronic digital computer. Although it
was programmable, it was not general-purpose, being designed to perform only a single
task. It also lacked the ability to store its program in memory; programming was carried
out using plugs and switches to alter the internal wiring. The first recognizably modern
electronic digital stored-programmer computers were the Manchester Small Scale
Experimental Machine (SSEM), which ran its first program on 21 June 1948.

The development of transistors in the late 1940s at Bell laboratories allowed a new
generation of computers to be designed with greatly reduced power consumption. The
first commercially available stored-program computer, the Ferranti marx I, contained
4050 valves and had a power consumption of 25 kilowatts. By comparison the first

transistorized computer, developed at the University of Manchester and operational by


November 1953, consumed only 150 watts in its final version.

Worldwide IT spending forecast (billions of U.S. dollars)

Category

2014 spending

2015 spending

Devices

685

725

Data center systems

140

144

Enterprise software

321

344

IT services

967

1,007

Telecom services

1,635

1,668

Total

3,749

3,888

Industry Setting
While the underlying theme of 2010 was that of steady recovery from recession, thanks to the
accelerated recovery in emerging markets, worldwide spending in IT products and services
increased significantly in 2011. In 2011, Indias growth has reflected new demand for IT goods
and services, with a major surge in the use of private and public cloud and mobile computing on
a variety of devices and through a range of new software applications.
High inflow of FDI in the IT sector is expected to continue in coming years. The inflow of huge
volumes of FDI in the IT industry of India has not only boosted the industry but the entire Indian
economy in recent years. Foreign direct investment (FDI) inflow rose by more than 100 per cent
to US$ 4.66 billion in May 2011, up from US$ 2.21 billion a year ago, according to the latest
data released by the Department of Industrial Policy and Promotion (DIPP). This is the highest
monthly inflow in 39 months.
Foreign technology induction is also encouraged both through FDI and through foreign
technology collaboration agreements. India welcomes investors in Information Technology
sector. Greater transparency in policies and procedures has made India an investor friendly
platform. A foreign company can hold equity in Indian companys upto 100%.
To support Research & development in the country and promoting Start ups focussed on
technology and innovation, a weighted deduction of 150% of expenditure incurred on in-house
R&D is introduced under the Income Tax Ac. In addition to the existing scheme for funding
various R&D projects have been funded through new scheme like Support International Patent
Protection in Electronics & IT.

Challenges of the Industry


Cyber security and quality management are few key areas of concern in todays information age.
To overcome such concerns in todays global IT scenario, an increasing number of IT-BPO
companies in India have gradually started to emphasize on quality to adopt global standards such
as ISO 9001 (for Quality Management) and ISO 27000 (for Information Security). Today,
centers based in India account for the largest number of quality certifications achieved by any
single country.

India aims to transform India into a truly developed and empowered society by 2020. However,
to achieve this growth, the sector has to continue to re-invent itself and strive for that extra mile,
through new business models, global delivery, partnerships and transformation. A collaborative
effort from all stakeholders will be needed to ensure future growth of Indias IT-ITeS sector. We
will need to rise up to the new challenges and put in dedicated efforts toward providing more and
more of end-to-end solutions to the clients to keep the momentum going.
India is now one of the biggest IT capitals in the modern world and has presence of all the major
players in the world IT sector. HCL, Wipro, Infosys and TCS are few of the household names of
IT companies in India.

Future Prospects
Globalization has had a profound impact in shaping the Indian Information Technology industry.
Over the years, verticals like manufacturing, telecom, insurance, banking, finance and lately the
retail, have been the growth drivers for this sector. But it is very fast getting clear that the future
growth of IT and IT enabled services will be fuelled by the verticals of climate change, mobile
applications, healthcare, energy efficiency and sustainable energy.
The near future of Indian IT industry sees a significant rise in share of technology spend as more
and more service providers both Indian and global target new segments and provide low cost,
flexible solutions to customers.
By 2015, IT sector is expected to generate revenues of USD 130 billion (NASSCOM) which will
create a transformational impact on the overall economy. IT spending is expected to significantly
increase in verticals like automotive and healthcare while the government, with its focus on egovernance, will continue to be a major spender.

Strategic Issue
Strategy is a topic that is sometimes hard to grasp, and to create and execute a successful one is
an on-going challenge for many companies. This year proves to be no different, as the economy
begins to improve a little, but with clear challenges ahead in terms of expanding to new markets,
reaching different customers, and driving innovation in a world where everyone considers
innovation the big strategic advantage. It create a strategy that considers all of these diverse
challenges, and remains true to your companys vision.

By interviewing Mrs. Poonam Gautam, we got to know this and then we also discussed this
with other groups-

Government policies
After the economic reforms of 1991-92, major fiscal incentives provided by the Government of
India and the State Governments, like, liberalization of external trade, elimination of duties on
imports of information technology products, relaxation of controls on both inward and outward
investments and foreign exchange, setting up of Export Oriented Units (EOU), Software
Technology Parks (STP), and Special Economic Zones (SEZ), has enabled India to flourish and
acquire a dominant position in worlds IT scenario.
In order to alleviate and to promote Indian IT industry, the Government of India had set up a
National Task Force on IT and Software Development to examine the feasibility of strengthening
the industry. Venture capital has been the main source of finance for software industry around
the world. In line with the international practices, norms for the operations of venture capital
funds have also been liberalized to boost the industry.
The Government of India is also actively providing fiscal incentives and liberalizing norms for
FDI and raising capital abroad.

Globalization
Globalization is the process of worldwide incorporation arising from the exchange of views,
products, ideas, and other aspects of nation. In other words, globalization refers to process that

increases world-wide trade of assets. Advancements in transportation and communications


infrastructure, including the growth of internet, are the major factors of globalization.

As a product of globalization, the internet (a subset of IT industry) connects computer


users around the world. From 2000 to 2009, the number of internet users globally rose
from 394 million to 1.858 billion.

By 2010, 22 percent of the world's population had access to computers with 1 billion
Google searches every day, 300 million internet users reading blogs, and 2 billion videos
viewed daily on YouTube.

According to research firm IDC, the size of total worldwide e-commerce, when global
business-to-business and consumer transactions are added together, will equate to US$16
trillion in 2013. IDate, another research firm, estimates the global market for digital
products and services at US$4.4 trillion in 2013.

The true impact of IT industry on the economy, however, goes well beyond product and services
sales. In terms of dollar value of activity, more software is written by companies for their own
operations than the value of software products and services combined. These information
systems were originally deployed to gain efficiency in the financial and administrative data
processing of large companies, in which role they have become essential. Today their impact is
much deeper: home banking, self-service package tracking, frequent flyer programs and
data mining for customer preferences are a few examples of the now-pervasive use of
automation in the front office to attempt to achieve competitive advantage. The biggest
industrial impact of software mostly likely results from the use of embedded chips to achieve
product functionality in everything from cellular telephones to automobiles. As the cost of
computer chips drops, computers and the software that runs them have become as important a
part of everyday products as they are of aerospace and defense systems. Companies in industries
like telecommunications, aircraft manufacturing, consumer electronics, and automobiles now
have products whose competitive features depend on the software theyve embedded in them.
Some of these companies have indicated that 70% of their product development costs are now in
software development.

Small and large companies looking to expand their business to meet growth challenges as well as
look to outside resources for innovation and to improve efficiency have an entire world of
consumers at their fingertips, if they simply know how to reach them.

Re-Thinking the Purpose of Your Business


Purpose and strategy go hand in hand, as one should imply and confirm the other. Today more
than ever companies are considering a larger, more holistic vision of their company that they
hope to transmit into the DNA of every department. In order to do that you have to have clear
company vision, both long and short term, as well as a compatible strategy.
The challenge lies within defining a purpose that reflects the values of your consumers, ones that
are considerably more concerned with the social implications of business.

Recruiting & Retaining Employees


Talent wars generational differences and changing employee expectations. In order to
successfully execute a strategy it is essential for companies to find the right people, implying
both recruiting and retaining talent. The social networks such as LinkedIn and even Facebook
and Twitter, when looking for a candidate companies have the ability to reach a larger pool than
ever before. While this is certainly a positive change, one competency that remains is the ability
to choose the right people.
Fortunately, younger generations are a little less concerned with monetary compensation, and
place more importance on sticking with a company that has values and both empowers and gives
them opportunities for personal growth.
Impact of Technology and Social Media
Utilizing technology and social media to increase efficiency, form relationships with clients, and
reach new consumers is a must for any company. An almost ubiquitous concept, the challenge
lies within setting up systems within your company that allows for a flexibility that infiltrates
new processes in order to best take advantage of the latest technology and social media. Forbes
recently released a list of strategic issues for Chief Innovation Officers, also bringing to light
some of the same technology and social media issues such as pushing transformative thinking
and customer engagement. Who is responsible in the company to ensure that innovation and

customer service are a top priority, and that processes continue to take advantage of the latest
and ever-changing technology available?

Adaptability & Change Management


Finally, it has become imperative for leaders to also be crisis and change managers; to make
decisions quickly as markets and products change faster than ever before. Not a new challenge
but certainly a relevant one, a companys DNA has to have flexibility code within it in order to
avoid becoming obsolete.
At a smaller scale, the innovative finance management company Intuit pushes fast cycle
experimentation: constantly testing new ideas and concepts in order to find successful solutions.
Practices that challenge employees to fail, innovate, and try new ideas spreads throughout the
entire organization, making a culture of innovation and adaptability.
Some company and their strategic issues are:

IT Industry Structures
Structure of Indias IT Industry
To know more about the structure of IT sector, we interviewed Mrs. Poonam Gautam, IT
representative and Assistant Programmer in TCS. The IT industry has emerged as one of the
most important industries in the Indian economy contributing significantly to the growth of the
economy.

The IT industry of India got a major boost from the liberalization of the Indian economy. India's
software exports have grown at an annual average rate of more than 50% since 1991. The
structure of the IT industry is quite different from other industries in the Indian economy. The IT
industry of India is hugely dependant on skilled manpower. Primarily a knowledge based
industry, the IT industry of India has reordered significant success due to the huge availability of
skilled personnel in India.

The industry structure in the IT sector has four major categories. These are
IT services
IT enabled services
Software products
Hardware
IT services
IT services constitute a major part of the IT industry of India. IT services include client, server
and web based services. Opportunities in the IT services sector exist in the areas of consulting
services, management services, internet services and application maintenance. The major users
of IT services are Government
Banking
Financial services
Retail and distribution
Manufacturing

IT enabled services
The services which make extensive use of information and telecommunication technologies are
categorized as IT enabled services. The IT enabled services is the most important contributor to
the growth of the IT industry of India. Some of the important services covered by the ITES
sector in India are Customer-interaction services including call-centers
Back-office services
Revenue accounting
Data entry and data conversion
HR services
Transcription and translation services
Content development and animation
Remote education,

Data search
GIS
Market research
Network consultancy
Software products
Software products are among the most highly exported products from India. The software
industry in India originated in the 1970s and grew at a significant pace in the last ten years.
Between 1996-1997 and 2002-2003, the Indian software industry grew more than five times
from 2630 crores to 13200 crores. During the same period software and service exports from
India grew by almost twelve times.
Hardware
The hardware sector of the It industry focuses on the manufacturing and assembling of computer
hardware. The consumption of computer hardware is high in the domestic market. Due to the rise
in the number of IT companies, sales of desktops, laptops, servers, routers, etc have been on the
rise in recent years. Many domestic and multi-national; companies have invested in the computer
hardware market in India.

IT INDUSTRY STRUCTURE ATTRACTIVENESS

By taking interview, we got to know about the Organizational structure of small, medium and
large It Structure-

Figure 1: Organization structure (for small IT organizations).

Enterprise Infrastructure
Service

Data Centre
Service

Client Service

SER
Technical Service
2&3

Production Control
2
System Administration
Web
Database
Administration
Networking

Operations
1

Help Desk
1

Desktop Service
2

Organization structure, shown in Figure 2, is designed for IT departments with 50 to 75


employees. The significance of this structure is as follows:
The production control function is structured at the enterprise level, bringing visibility and
accountability for key infrastructure process design, ownership, and accountability.
Service center (help desk) is structured at the enterprise level.
All mission-critical technical services are grouped under the Technical Services organization.
Figure 2: Organization structure (for mid-size IT organizations)
Enterprise Infrastructure
Service

Technical Service
2&3

System
Administration
Database
Administration

Data Centre
Operations
1

Client Service
2&3

Service Control
1

Desktop service

Desktop Architecture
Customization

Web

Network Service

Production Control
2

IT security
Service

Organization structure, shown in Figure 3, is designed for larger IT departments with 75+
employees. This structure is designed to introduce an infrastructure technology consulting group.
This group's primary focus is designing and developing those special utilities/tools needed to
improve the effectiveness of the infrastructure.
Figure 3: Organization structure (for large IT organizations).

Enterprise Infrastructure
Service

Technical Service
2&3

Data Centre
Operations

End User
service
2&3

Service centre
1

2&3

System Administration
Desktop service
Database
Administration
Web

Desktop Architecture
Customization

Massaging

Network Service

End User Training

Infrastructure
Technology Consulting
3

Production
Control
2

IT security
Service

Structuring Technical Staff


All staff supporting mission-critical systems within the infrastructure support and development
organization should be structured in the same manner, with three levels of support junior
technicians (second-level support personnel) working very closely with senior technicians (thirdlevel support staff) and reporting into the same management. This structure provides certain
benefits:
Accelerated skills development for second-level or junior technical personnel.
Clearly defined career path for lower-level technical personnel.
Improved communication between second-level and third-level support as they work together
on implementing projects and production support issues.
Projects and support issues are discussed in the same staff meetings.
Second-and third-level technical service personnel have the same group goals and objectives.
Improved turnaround for problem resolution.
Senior staff is freed to provide analysis of new technologies and fully implement and customize
systems management tools.
Time is freed for senior technical staff to architect the proper infrastructure.
Second-level technical personnel assist senior staff with implementing and maintaining systems
management tools.
Second-level personnel should not be designated "support only." They need to be working on
projects with senior technicians.
Second-level and third-level technical staff should also be physically located in the same area.
They should have coffee breaks together and attending technical service group outings. There
cannot be any organizational barriers.

Network computing requires cross-functional teams for the technology to be successful. The real
question is how to get the separate technical areas to work together and share knowledge. This is
a
cultural issue and is truly different for each organization. These are the steps involved:
1. Unify the management team. This is not a difficult task. Gather them all in the same room, talk
about the project, and discuss the value it will have to the organization. Continue this type of
meeting to ensure that the importance of the project stays fresh in their minds.
2. Clearly define the technical roles and responsibilities for each team member.
3. Define the method of measurement and reward for each team member as it relates to the
project.

Determinants of Industry Attractiveness


Information technology can alter each of the five competitive forces and, hence, industry
attractiveness as well.

Threat of new entrants.

Bargaining power of buyers.

Threat of substitute products or services.

Bargaining power of suppliers.

Rivalry among existing competitors.

The technology is unfreezing the structure of many industries, creating the need and opportunity
for change. For example:

Information technology increases the power of buyers in industries assembling purchased


components. Automated bills for materials and vendor quotation files make it easier for
buyers to evaluate sources of materials and make-or-buy decisions.

Information technologies requiring large investments in complex software have raised the
barriers to entry. For example, banks competing in cash management services for
corporate clients now need advanced software to give customers on-line account
information. These banks may also need to invest in improved computer hardware and
other facilities.

Flexible computer-aided design and manufacturing systems have influenced the threat of
substitution in many industries by making it quicker, easier, and cheaper to incorporate
enhanced features into products.

The automation of order processing and customer billing has increased rivalry in many
distribution industries. The new technology raises fixed costs at the same time as it
displaces people. As a result, distributors must often fight harder for incremental volume.

Information technology has had a particularly strong impact on bargaining relationships between
suppliers and buyers since it affects the linkages between companies and their suppliers,

channels, and buyers. Information systems that cross company lines are becoming common. In
some cases, the boundaries of industries themselves have changed.

Driving Forces
Last two decades have seen great stride in information technology. The development in
information technology has changed the way business is getting conducted. One of the striking
points about information technology is innovation. Information technology has been a driving
force for product, service and process innovation.

Innovation in Last Decades


It has brought forward capabilities, which previously were only considered as fiction novel
material. Information technology has supported miniaturization of electronic circuits making
many products portable, for example, computers, phones, etc. Information technology has
helped development in communication technology by making it affordable. Penetration rate of
mobile phone is higher than ever before with greater coverage and with ever lowering cost.
The concept of big data has become reality, with development of high memory storage devices.

Function of Information Technology


Information technology is a network of devices, which are connected with each other, which
process data into useful and meaningful information. Information technology, therefore, has six
broad functions around which innovation is driven. The six broad functions are as follows:

Capture: it is defined as a process to obtain information in a form which can be further


manipulated. This input of information may be through keyboard, mouse, picture, etc.

Transmit: it is defined as a process through which captured information is sent from one
system to another. This system could be within same geographical boundary or
otherwise. For example, Radio, TV, email, telephone, fax, etc.

Store: it is defined as a process through which captured information is kept in safe and
secure manner and, which can be further accessed when required. For example, hard disk,
USB, etc.

Retrieval: it is defined as a process through which stored information can be called upon
when required. For example, RAM, hard disk, USB, etc.

Manipulation: it is defined as a process through which captured and stored information


can be transformed. This transformation could be the arrangement of data, calculation,
presentation, etc., For example, computer software.

Display: it is defined as a process of projecting the information. For example, computer


screen, printer, etc.

Innovation and Information Technology


The last two decades of development and evolution in information technology is around six
functions. The innovation driven by information technology has been the by-product of the six
functions. Some of the significant development which has been achieved is as follows:

Portability: advances in information technology have made portability of all electronic


gadgets possible.

Speed: computing is now done at speed at which earlier generations of super computer
were working.

Miniaturization: another innovation is in form of hand-held computing devices as well


as an information system, like GPS, Smartphone, IPad etc.

Connectivity: information technology has transformed communication capability.

Entertainment: proliferation of multimedia and digital information has been


tremendous.

User Interface: advancement in information technology has changed way users interact
with computing devices. The advent of touch screen has made computing intuitive and
interactive.

From above cases it can leave no doubt that information technology and development in the
driving force within todays innovation.

Industry Players and their strategies


Tata Consultancy Services
TCS is an IT services, consulting and business solutions organization that delivers real results to
global business, ensuring a level of certainty no other firm can match. TCS offers a consultingled, integrated portfolio of IT, BPS, infrastructure, engineering and assurance services.
TCS Strategies:

Strategy for Longer-term Growth

TCS is focusing on longer-term growth and continually extending the core IT services business
by expanding its geographic reach, industry coverage and service capabilities and deepening
existing client relationships, building or acquiring emerging businesses and adopting or creating
new business models and business solutions through continuous innovation.

TCS CEO N Chandrasekaran creates new layer to oversee verticals

In the first significant organisational change since taking charge as CEO of Tata Consultancy
Services, N Chandrasekaran has created a small group of leaders to oversee the company's
various verticals.
These leaders will report directly to him and will take charge of businesses with sizes ranging
from few hundred millions of dollars to over a billion. The new layer is aimed at freeing up the
CEO's time for strategy issues and customer calls, people with knowledge of the development
said.
Verticals will also get an opportunity to work closely with each other. The new structure will
provide more management bandwidth and allow leaders to engage with customers closely.
The last major re-organisation TCS undertook was in 2008 when the company moved from a
geography-based structure to a customer and vertical-led structure. Under this, the 23 vertical

heads reported to the COO. But after Chandrasekaran became the CEO, the COO position has
been vacant and the 23 leaders were reporting directly to the CEO.
The company will continue to have 23 vertical heads except that these heads will now report to
one of the seven group leaders. More importantly, the leadership layer also offers a new career
path into roles with more responsibility and a larger P&L for TCS' existing pool of leaders,
which did not exist prior to the re-organisation.
The vertical-led structure helped the company maintain revenue growth during the recession and
gain more business from clients. Among its peers, TCS and Cognizant have been more
successful in mining clients for more share of business. The structure has served TCS well
helping it grow revenues from Rs 18,685 crore in FY07 to Rs 37,325 crore in FY11.

TCS gains as TCS BaNCS to drive digital strategy for insurance carriers

TCS rose 1.49% to Rs 2,115 on BSEafter the company gains TCS BaNCS for Insurance. This
will enable Carriers to leapfrog the digital divide through Analytics and by leveraging ISO
Electronic Rating ContentTM information.
TCS BaNCS is a holistic suite of insurance solutions encompasses a transformational digital
strategy that builds on Data Analytics, Mobility, Portal and Social Media.
TCS BaNCS has integrated ISO ERC and offers a richly functional core platform that not only
helps carriers serve today's customers better but also embrace customer's changing aspirations
and needs of the future. The anticipated shifts in the industry will compel significant changes by
all players and it is an opportunity especially for technology players to make a difference.
As an ISO ERC Integration associate, TCS integrates ISO loss costs, rules, rating information
and policy form attachment logic into the TCS BaNCS rating engine and Policy Administration
System. In line with the TCS digital strategy, the ISO ERC integration provides the possibility of
utilizing ISO rating information and changes as input into automated rate comparisons,
predictive modeling and other advanced analytical methodologies. As part of the product

roadmap, TCS BaNCS has also expanded its capability to drive transformation leveraging Big
Data and Analytics, Mobility, Social Media and Portal.

TCS prepares for restructuring; may ask non-performers to leave

TCS has decided to undertake a restructuring exercise, under which senior executives which the
country's largest information-technology Services Company believes are non-performers will be
asked to leave.
But details of this remain sketchy. These senior and mid-level executives who the company
believes are non-performers will be asked to leave and the process is expected to be over by
February next year.
TCS move to look internally among the 300,000 strong organization for non-performers mirrors
the trend being followed by other homegrown software exporters.
Some experts believe this trend also underscores the challenges facing the country's $108-billion
( Rs 6-lakh crore) technology industry and mirrors the hiring trend at the large outsourcers.
Between April 2013 and March 2014, the IT industry added only 13,000 employees for every
billion dollars of revenue, as against 26,500 employees in the previous year, according to
software industry grouping Nasscom.

Performance
TCS has maintained a momentum and delivers steady performance in Q3.
Revenues at $3.44 billion; up 17% Y-o-Y

International revenues grow 3.8% in dollar terms sequentially

Hiring Target for FY14 increased further to 55,000 from 50,000

Net Income at $ 858 million up 31.7% Y-o-Y

Operating Profit at $1,023 million up 27.3 % Y-o-Y

TCS' consolidated net profit rose 2.3% to Rs 5297 crore on 1.2% growth in revenue to Rs 21551
crore in Q4 March 2014 over Q3 December 2013.

WIPRO
Wipro Technologies, the global IT business of Wipro Limited (NYSE:WIT) is a leading
Information Technology, Consulting and Outsourcing company, that delivers solutions to enable
its clients do business better. Wipro Technologies delivers winning business outcomes through
its deep industry experience and a 360 degree view of "Business through Technology" helping
clients create successful and adaptive businesses. A company recognized globally for its
comprehensive portfolio of services, a practitioners approach to delivering innovation, and an
organization-wide commitment to sustainability, Wipro Technologies has 135,000 employees
and clients across 54 countries.
Wipro Strategies:

Wipro Establishes Strategic Partnership with Success Factors

It has formed a strategic partnership with Success Factors, an SAP company, the global leader in
cloud-based business execution software. As part of the agreement, Wipro will become a
Strategic Success Consulting Partner helping to market and provide consulting and
implementation services for Success Factors Business Execution (BizX) suite globally. Success
Factors will invest in marketing and sales efforts to increase Wipro's presence across its own
customer base. The two companies plan to develop a joint business plan for the two year
engagement and offer software solutions and services to help organizations leverage technology
to manage the evolving needs of today's workforce. This partnership is expected to further
establish Wipro's position in support of the SAP ERP Human Capital Management (SAP ERP
HCM) application and cloud space.

Wipro change strategy to win large contracts

Wipro has spent $195 million to buy the IT unit of ATCI as part of a $1.2 billion recent
outsourcing deal with the Canadian utilities company.One of the biggest cost components for IT

companies is manpower, and technologies like artificial intelligence and automation for
completing repetitive low-end work have helped them cut down on this cost. There is still
delayed payment by the customers and upfront spending could prove to be an issue in the event
of turbulence in the markets these companies operate in, or if the customers face financial
troubles. Promising tough-to-achieve milestones is another problem that could affect expected
cash flow. Therefore, Wipro has decided to change its strategy to outsourcing.

Wipro Boosts Intellectual Property Capabilities to Enhance Business Strategy

Wiprohas continued to drive its momentum around our Intellectual Property, in line with our
customers changing business environment to ensure that they are able to take advantage of any
shift in their markets.The IAM editorial team researched the Asia IP Elite intensively for two
months from both a qualitative and quantitative perspective to understand whether companies are
engaging in constructive and sustainable use of intellectual property. The research focuses on
how IP assets are being utilized and integrated into a companys overall business strategy.
Although Indian companies are beginning to acknowledge the importance of intellectual
property, Wipro is one of the two Indian companies that has been recognized as a leader in this
space and can compete on an international scale.

Going green for business growth

Green practices are the way forward and make a great marketing tool as they highlight the
engaged side of a company. They are focussing on return, not cost. They have adopted moves
such as fleetmodernization and innovative technologies that carrysignificant upfront costs, these
are offset in the longerterm by fuel savings and efficiencies. So, the company has changed its
business approach to be compatible with global objectives for stabilizing greenhousegas
emissions to limit climate change.

The business strategy that Wipro uses is differentiation on a global level. Wipro
differentiates their services and products by being the number one provider for integrated
business, technology and process solutions. Wipro delivers these services on a global

platform. Wipro has IT Services, Product Engineering Solutions, Technology


infrastructure Services, Business Process Outsourcing, and Consulting Services.

Wipro's strategy is to capitalize on its current momentum of rapid growth with an


entrepreneurial approach, as it seeks to be the pioneer in many new areas.

Performance
The CEO T.K. Kurien had expected the company to perform better in the next fiscal year, after
Indias third largest software services exporter posted third quarter (Q3) earnings that beat
analysts estimates and forecast healthy revenue growth for the next three months, signalling that
its top clients are now willing to spend more on technology services.
Wipro is the only one among Indias top five software services companies to provide quarterly
forecasts. It estimates revenue in the range of $1.71-1.75 billion for the March quarter, indicating
a growth in the range of 2-4% from the preceding three months. For the December quarter, its
net profit rose around 27% to Rs.2,014 crore from Rs.1,589 crore a year earlier and Revenue rose
18% to Rs.11,327 crore. Analysts on average had expected a profit of Rs.2,005 crore on revenue
of Rs.11,315 crore, according to Bloomberg estimates.

The company also benefited from a stronger performance from its India business, which grew at
more than 5% sequentially during the quarter. A majority of this quarters growth came because
of improved spending from its top 10 clients, with revenue from the top 10 customers rising
3.8% from the September quarter.

The company will pay shareholders an interim dividend of Rs.3 per share. As the global
economy is progressing towards stability, we see optimism amongst clients, especially in the
West. Corporations are leveraging technology to reduce operational costs and investing resources
in differentiating themselves in the marketplace.

Over the past five years, Wipro has consistently lost market share to the likes of TCS and
Cognizant. Since T. K. Kurien took over as CEO, Kurien has collapsed complex organizational
structures that earlier reported to the two joint chiefs, shifted decision-making powers to leaders

managing different business units and poached top executives from rivals to create a new
organization.

The company, however, continued to lag behind rivals in overall growth. Barring its performance
in the energy and utility business, Wipro continued to underperform rivals in the banking,
financial services and insurance (BFSI), and manufacturing sectors. The BFSI sector contributes
30-40% of revenue for Indias IT sector.

Wipro would take a few more quarters to regain industry-level growth rates. Last year, Wipro
streamlined its focus on its bread-and-butter IT services business, hiving off its non-IT
businesses and is trading as a stand-alone IT stock from April. Later during the year, the
company decided to exit its hardware business, after years of underperformance.
Wipro has won a multi-year engagement with a global retailer to enable the transformation of its
multichannel customer experience platforms and drive cost takeout from ongoing operations.
Wipro will integrate its capabilities in analytics, technology and process and leverage actionable
insights to enable the customers business objectives.
Wipro was awarded a five year strategic infrastructure management contract by Philip Morris
International. PMI is the leading international tobacco company, with products sold in more than
180 markets. Wipro has been engaged by a leading Hi-Tech manufacturer to support their
consumer and market facing applications.

HCL INFOSYSTEMS
HCL Infosystems Ltd. with revenue (LTM) of US$ 1.6 billion (Rs. 9,040 crores) is Indias
Premier Distribution and IT Services and Solutions Company. HCL Infosystems has one of the
largest sales & distribution network in the country and provides value added distribution for
partners including last mile connect and support in marketing and promotions for Telecom, IT ,
Office Automation and Consumer Electronics products covering more than 15000 towns across
664 districts in India. Our distribution business has an unparallel network that reaches more than

100,000 retail outlets, over 800 Direct and Micro Distributors and over 12400 Channel Partners
across India. In the services space the Company has robust services offerings such as a
comprehensive portfolio of Infrastructure Managed Services, Enterprise Application Services,
System Integration Services, Office Automation Services, Managed Print Services, Life Cycle
Services and After-Sales Support Services. HCL Learning, the Companys learning solutions
business, serves the entire spectrum of education and training requirements across schools
colleges, individuals and enterprises and offers Digital Content & Learning Solutions.
HCL InfosysyemsStrategies:

Lenovo India and HCL Infosystems form strategic partnership

Lenovo India and HCL Infosystems Ltd., Indias Premier Distribution, IT Services and Solutions
Company have formed a strategic alliance that would strengthen Lenovos consumer retail and
commercial business by leveraging HCL Infosystems strong sales, distribution and after-sales
support network. Under this partnership, HCL Infosystemswill sell and support Lenovos entire
portfolio of PCs and Tablets, as well as enhance their existing cooperation in the distribution of
tablets, through its wholly owned subsidiary named, Digilife Distribution and Marketing
Services (DDMS), the distribution arm of the company with an exhaustive last mile connect and
support in rural markets and urban markets across India. The partnership is poised to trigger
growth and extend businesses for both companies.
This partnership is a step forward to build on the companys strength in the PC business, while
fortifying its PC+ ambitions. Furthermore, this is also expected to enhance Lenovos presence in
the BFSI and mid-market verticals, where HCL Infosystems has been traditionally strong, and
improve its service footprint substantially. Lastly, this will enable HCL Infosystems to maintain
its stronghold in the Indian market, while simultaneously increase its services business.

HCL Infosystems Scheme of Arrangement comes into effect: Three New


Subsidiaries become Operational

HCL Infosystems had adopted on restructuring of its businesses from 1st Nov 2013. Under the
restructured organization, the Companys businesses of Solutions, Services and Learning have
been transferred to the wholly-owned subsidiaries HCL Infotech Ltd., HCL Services Ltd, and
HCL Learning Ltd respectively while the Products Distribution business would be with the
Parent entity HCL Infosystems. Earlier in January this year, the Board of Directors of the
Company had approved the alignment of Solutions, Services and Learning businesses of the
Company along the three subsidiaries through a Composite Scheme of Arrangement. This
restructuring of the business into separate subsidiaries is part of the Companys strategy to
enable sharper focus on each core business and adopt a customized strategic approach for each
business area.

HCL Infosystems announces changes in the composition of its Board of Directors

HCL Infosystemshad appointmentDr. Nikhil Sinha as the Non-Executive Chairman of its Board
as well asthree Non-Executive Directors Mr. S.Premkumar, Mr. D.K. Srivastava and Mr. Pawan
Kumar Danwarin the Board of HCL Infosystems Ltd. Mr. J V Ramamurthy continues to be
associated with the Company as a Director on the board of HCL Infotech Ltd., a wholly owned
subsidiary of HCL Infosystems Ltd.
In February 2014, the Company had appointment two new Independent Non-Executive
Directors, Mrs. SangeetaTalwar and Mr. Kaushik Dutta on its Board. Thishas been effected to
fulfill the upcoming requirements of the new Companies Act, as well as to get the board
augmented with capabilities as relevant for the future growth direction of the Company.
The change in leadership structure has reflected an increase in the shareholding of the company
in the past few months.Therefore, HCL Corporation has increased its shareholding in HCL
Infosystems from 42.85% to 49.97%.

HCL Infosystems Partners With MongoDB to Advance its Big Data Offerings

MongoDB and HCL Infosystems have announced a global partnership which will allow HCL
Infosystems to broaden its solution offerings in the emerging big data segment by developing
services around MongoDB.
Big data is more than just addressing increasing volume. Organizations need solutions that can
manage increasing data variety and velocity. Today, businesses need to quickly ingest, store, and
access useful information from massive pools of multi-structured data.This is where MongoDB
excels. HCL Infosystems will offer innovative solutions and services for organizations to gain
value from their data and make smarter and faster business decisions
The collaboration will enable us to broaden our market reach in the fast growing big data
segment.
According to a joint study by NASSCOM and CRISIL Global Research & Analytics, the Indian
big data industry will grow from $200 million (about Rs 1,200 crore) in 2012 to $ one billion
(about Rs 6,000 crore) in 2015 at a CAGR in excess of 83 percent.

INFOSYS
Infosys is a global leader in consulting, technology and outsourcing solutions. We enable clients,
in more than 50 countries, to stay a step ahead of emerging business trends and outperform the
competition. We help them transform and thrive in a changing world by co-creating
breakthrough solutions that combine strategic insights and execution excellence.
Infosys Strategies:

Change in Leadership

With Vishal Sikka as new CEO, there has been a change in the leadership. Sikka joined Infosys
on August 1 from German enterprise software maker SAP, where he was chief technology
officer. He had not plan to introduce any grand changes to the strategy. Sikka, with his
background in the software products space, is widely expected to enhance Infosys focus on the
platforms and solutions side. While products, platforms and solutions are seen as strategic areas
for technology companies, several observers have raised concern that any major thrust on these

could also lead Infosys to lose focus on its core bread-and-butter services business.The strategy
focuses on cost rationalization, sales effectiveness and delivery effectiveness.
Infosys has been struggling to revive high growth for two years.The company has committed to
maintain margins between 24 to 25% for the current financial year (2014-15).

Infosys working to improve sales teams efficiency, revamps training

Infosys has tied up with training firms to improve its sales team's efficiency. As Infosys adapts to
the rapid pace of change in the way technology services are delivered. Sikkawants the sales team
to be able to articulate the company's ability to deliver cutting-edge, tailored solutions.
Apart from enlisting the help of three training firms, the company has also revamped the
evaluation method for its sales force by abandoning the traditional 'bell curve' in favor of a more
direct system of measuring performance. Partnerships have been forged to help teams learn the
nuances of strategic selling, consultative selling, and effective negotiations.
Sikka wants to reinstate Infosys as the growth leader in the IT services industry. He has been
promoting what is known as "design thinking", which involves a user-centric problem-solving
approach and embracing automation to reduce costs and improve efficiency.
Infosys has over 9,000 employees in its sales and support team out of a total workforce of over 1,
60,000.
Infosys put in extensive sales training. This is more about helping clients see the solution. The
positioning will help Infosys position itself into higher value strategic services.
Infosys is already in the midst of putting together a new staff appraisal practice that includes
some of the best practices followed at new-age companies, including Google and Facebook, and
will start evaluating all 1,60,000 employees from October.
The company has also increased the average bonus payouts offered to the sales team, a step, it
believes, will further help in retaining high-performer sales executives.

Infosys Board inducts Professor John Etchemendy as Independent Member of the


Board

Infosys has appointed John W. Etchemendy, Provost of Stanford University and Patrick Suppes
Family Professor in the School of Humanities and Sciences, as an Independent Member of its
Board of Directors to strengthen the company, and indeed reinvent their core foundation of
learning and education.

Infosys expands its CSR activities with Infosys Foundation, USA

Infosys has announced that it would expand its Corporate Social Responsibility (CSR) activities
in the Americas through its philanthropic arm, the Infosys foundation, USA. It would focus on
making quality computer science education widely and easily accessible across communities in
the Americas. The company also announced the appointment of Mrs. SudhaMurty, Mrs.
VandanaSikka and Mr. Sandeep Dadlani as the trustees of Infosys Foundation, USA. The initial
outlay for Infosys Foundation, USA, would be USD 5 Million per annum.
Computing literacy is becoming increasingly important for an average person to be more
productive and valuable to the economy, while purposefully contributing to our future. Through
Infosys Foundation, USA, the company want to ensure that lack of resources; prior skills and
STEM proficiency are no longer barriers for individuals, in the Americas, seeking to advance
their computing skills. From enabling computer education in K-12, to supporting research in
computer science and empowering adults with IT training that enhances their employability, and
help bring computing literacy to people of all ages, backgrounds and abilities.
In India, Infosys Foundation supports several programs aimed at alleviating hunger, promoting
education, improving health, assisting rural development, supporting arts and helping the
destitute. For the fiscal year 2015, Infosys Foundation plans to deploy approximately USD 40
Million towards these initiatives in India.

Infosys positioned as a leader in Magic Quadrant for International Retail Core


Banking by Gartner, Inc

Infosysannounced that following the evaluation of Finacle Core Banking Solution, it has been
positioned as a leader in Gartners Magic Quadrant for International Retail Core Banking report.
This is the eighth time in a row that Infosys has been named a leader in this Magic Quadrant.
This Magic Quadrant assesses the suitability of core banking system providers and their product
offerings to address current IRCB market trends. This evaluation uncovers the leading strategies
of these vendors and products, reveals their underlying product/service capabilities, and affirms
their relevance to the changing conditions of the banking industry.
With its comprehensive multi-channel capabilities, Infosys Finacle e-banking helps banks keep
up with changing customer preferences and demands. The solution is currently deployed in over
52 countries.

Infosys collaborates with Stanford Graduate School of Business to Develop Worldclass Education and Training

Infosys announced that it will collaborate with Stanford Graduate School of Business (GSB) to
create a comprehensive executive education program. As part of this agreement, Stanford GSB
will team with senior Infosys executives to design and deliver a customized strategic leadership
development program for the companys executives, clients and partners.
The executive education program will include a suite of business management skills, as well as
courses in corporate innovation processes to help Infosys balance business discipline and
entrepreneurial spirit. The office of Executive Education at Stanford GSB and Infosys will
deliver the leadership program through in-person and online instruction, as well as live sessions
enabled by distance-learning technology.

The initiative will include 200 executives who will each participate in a part-time, year-long
program in groups of 40 over three years. Executives will be able to test and apply their learning
to real business challenges in parallel.

Performance
Infosys Ltd performance over the past two years has been less than satisfactory and that the
former sector bellwether needs to regain consistency even as it tries to recapture industry-leading
revenue growth. For the 2014-15 fiscal year, Infosys has forecast revenue growth that is much
lower than average industry expectations, indicating that a turnaround is still very much a work
in progress. For this fiscal year, Infosys has forecast revenue growth of 7-9% as compared with
the 13-15% growth forecast for software exports by industry lobby Nasscom. In his last earnings
press conference before leaving the company on 31 July, Shibulal also emphasized that despite
the challenges that Infosys had faced over the past few years, his successor Vishal Sikka would
inherit a robust company that had put most of those challenges behind it. UnderSikka, Infosys
experienced the worst period in its history, missing its own revenue forecasts several times,
conceding market share to rivals like Tata Consultancy Services Ltd and in the process, giving
up its prized crown of the bellwether of Indias $118-billion information technology industry.
In April 2013, the company announced one of its worst quarterly financial results, prompting
investors to punish the stock and wipe away more than one-fifth of its market value in a day. The
performance ultimately prompted the company to recall founder N.R. Narayana Murthy from
retirement to script a turnaround and visualize a viable long-term succession plan for the
company. Last year, the company reached a $34 million settlement to end a US investigation
related to the alleged practice of flying workers to client sites in the US on temporary visas. The
reference to 3.0 is an allusion to the companys strategy of earning more revenue from newer
areas of technology such as big data, analytics and cloud computing.

Performance of Key Players IT Industry

Tata Consultancy Services


Tata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT)
services, business solutions and consulting company headquartered in Mumbai, Maharashtra.
TCS is the largest Indian company by market capitalization and is the largest India-based IT
services company by 2013 revenues.

Product Development Strategy:


Current Market:USA and Europe
New Product: Consultancy and package implementation services in relatively growing sectors
esp. Life sciences & healthcare, aviation sector, and KPO services.
Recommendation:Concentrate on building expertise in these domains by strategic acquisitions.

Market Penetration Strategy:


Current Markets: USA and Europe
Current Products: ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail)
and software products (financial products).
Recommendation: As most large clients in US and Europe are cutting costs, TCS needs to be
more aggressive on cost and quality front.

Market Development Strategy:


New/Emerging Markets: India, Middle-east and Australia
Current Product:ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail)
and software products (financial products).
Recommendation: Since these are fast developing IT market, TCS needs a paradigm shift in
focus from US and EU markets to these markets.

Other global strategies

Since last few years TCS is successfully leveraging labor cost in Eastern Europe, South
America and China.

Getting big foreign names on board of directors is also one of the key strategies forTCS.
The current three foreign directors are: Clayton M Christensen (HBS Professor, joined in
2006), Dr. Ron Sommer (former Chairman of the Board of Management of Deutsche
Telekom AG, joined in 2006) & Laura M Cha (member of the Executive Council of the
Hong Kong Special Administrative Region (SAR) and Non-Executive Chairman of
HSBC Investment Asia Holdings Limited)

Look beyond US and UK for growth and beyond India for skills to emerge as a global
firm. Clearly bullish with successes such as ABN Amro in continental Europe, Qantasin
Australia, and almost 18% to 20% revenue from the Asia Pacific market, TCS wants to
grow its businesses in global markets including India.

Recent acquisitions in Ireland and Latin America demonstrate its ambition to create
delivery centers of respectable size outside of India

TCS was the first one to set up a delivery centre in China

Infosys

Infosys is an Indian multinational provider of business consulting, information technology,


software engineering and outsourcing services. It is headquartered in Bengaluru, Karnataka.
Second largest India-based IT services company by 2013 revenues.

Corporate level strategies:

Core Strategies:

1. To maintain low-cost advantage they have opened offices in Czech Republic, Mauritius,
Poland, Philippines, Thailand and Mexico.
2. Invested in developing training centers
3. Improved quality capabilities CMM level 5i Company.
4. Infosys Consultancy established to provide high end services in value chain.
5. Has hedged currency for more predictability of revenues (risk management).

GENERIC STRATEGIES:

1. Low cost Global delivery 24/7 Model.


2. Little differentiation in low-end services of value chain; high differentiation in high end
services of value chain like software products and package solutions.
3. Focus on quality, customer relationship management, and timely-delivery.

MARKET PENETRATION STRATEGY:


Current Markets:USA and Europe

Current Products:ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail)
and software products (financial products).
Recommendation:As most large clients in US and Europe are cutting costs, Infosys needs to be
more aggressive on cost and quality front. Result of strategy: Unlikely to yield well results

MARKET DEVELOPMENT STRATEGY:


New Market:India, Middle-east and Australia
Current Product:ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail)
and software products (financial products).
Recommendation:Since these are fast developing IT market, Infosys needs a paradigm shift in
focus from US and EU markets to these markets. Result of strategy: Likely to yield good result.

PRODUCT DEVELOPMENT STRATEGY:


Current Market:USA and Europe
New Product:Consultancy and package implementation services in relatively growing sectors
esp. healthcare, life sciences and aviation sector, and KPO services.
Recommendation:Concentrate on building expertise in these domains by strategic acquisitions.
Result of Strategy: Likely to have good result. (Better the company acquired, the better the
result).

HCL Technologies Limited

HCL Technologies Limited is a global IT services company, offering an integrated portfolio of


services including software-led IT solutions, enterprise transformation, remote infrastructure
management, engineering and R&D services, and business process outsourcing (BPO).Fourth
largest India-based IT services company by 2013 revenues.

From a company that used to sell boxes, HCL has now emerged as a leading systems integrator,
selling solutions, while also offering IT services and consulting services. It is interesting to trace
the transformation of a company that was earlier identified by the hardware tag to an end-toend solutions provider, with interests across domains such as software, networking, and
consulting. A look at the strategy followed by HCL throws interesting pointers for the rest of the
industry. The number one tag on the PC front has come as a result of clever marketing strategies,
and aggressive expansions. HCL has always been very strong on the government front. But when
things started going bad on other frontsfor instance, when the metros were showing stagnation
rates, HCL went ahead and expanded aggressively in B&C class cities to boost volumes. In
addition, the company initiated schemes like consumer finance to lure the reluctant PC buyer.

DIFFERENT STRATEGIES FOR DIFFERENT SEGMENTS

But the strategy to gain market share in difficult times and reap benefits when the industry
recovers has come at a cost. For instance, industry analysts say that HCL has given massive
discounts in the products business to gain market share. In addition to the segment, the company
also took several innovative initiatives in other sectors to boost revenues. Take for instance the
strategy of the company in the notebooks segment. The move to enter newer segments like
education and consulting in the notebooks business has yielded great results. Proof of success
lies in the fact that HCL has already bagged big orders from the Indian School of Business and
PricewaterhouseCoopers. The second part of the notebooks strategy has been to aggressively

woo the SME segment with newer, cost-effective models. The telecom business has also
recorded impressive growth. For instance, the company bagged telecom equipment orders from
IIT Kanpur for 5,000 lines of MD EricssonEPBAX and 500 lines of an ADSL solution. Looking
at the robust growth from this segment, the company has set up the India remote support center
for providing support services to all HCL Info systems customers. And while there have been
doubts on the long term viability of the retail ISP business, HCL Infinet, the fully-owned
subsidiary of HCL Info systems, is betting big on its technical expertise to boost revenues.
Positive indications can be seen in the fact that the subsidiary has acquired 30 new corporate
clients for VPN implementation. These new clients come from different verticals such as
manufacturing, finance, and the FMCGindustry. Company officials are also betting on the VoIP
segment, which has recently been opened up to ISPs for Net telephony, but there is still doubt on
whether this sector will generate enough volumes for any ISP, leave alone HCL Infinet.To take
advantage of the boom in the call centre business, the company has also started audit that it terms
as call centre consulting. Under this initiative, the company will help prospective clients
wanting to enter the call centre business with its knowledge base of hardware and systems
integration, and experience in call centre operations itself.

Software services
Though the majority of HCLs revenues continue to come from hardware sales and related
services, the relatively small software services portion could be a surprise packet for the future.
The company has a good de-risking model through this segment, and has spread its business over
different geographies. Going forward, the company expects 40 percent of revenues coming from
the domestic and export services, about 30 percent from products and system integration and
about 30 percent from software exports.
Other strategies
In line with offering competitive pricing keeping in mind the price-sensitive nature of the Indian
market, HCL has made significant investments in the Professional Services Organization (PSO),
the Support Services Organization (SSO) and in its manufacturing plants at Noida and
Pondicherry. The build-up of the services business (both PSO and SSO) enables HCL to offer
complete solutions as well as raise manufacturing volumes in line with international standards.

The increasing focus on integrated enterprise solutions has also strengthened HCLs SSOs
capabilities in supporting installation types ranging from single to large, multi-location orders.
The SSO, which comprises of a direct support force of over 800 members, is operational at 150
locations across the country and is the largest such force in the IT business. One more important
arm in HCLs strategy has been the Frontline division that markets national and international
brands of computer systems (including Toshiba notebooks) and peripherals within the country.
With its extensive network of 800 resellers across 300cities, the division actively promotes the
penetration of PCs in the home and the small office/home office (SOHO) segments.

SWOT ANALYSIS FOR AN IT INDUSTRY:


Every industry or a company has to perform swot analysis before going to start its
operations to analyze the performance of a company or that particular industry. Every industry
will have its own strengths,weaknesses,opportunities and threats with related parameters.Now
we will see the SWOT analysis for IT sector.

STRENGTHS:
Highly skilled human resource
Low wage structure
Quality of work
Initiatives taken by the Government (setting up Hi-Tech Parks and implementation of egovernance projects)
Many global players have set-up operations in India like Microsoft, Oracle, Adobe, etc.
Following Quality Standards such as ISO 9000, SEI CMM etc.
English-speaking professionals
Cost competitiveness
Quality telecommunications infrastructure
Indian time zone (24 x 7 services to the global customers). Time difference between India
and America is approximately 12 hours, which is beneficial for outsourcing of work.
Flexibility, adaptability and reliability in operations
Experience in working on large projects

OPPORTUNITIES
High quality IT education market
Increasing number of working age people
India 's well developed software infrastructure
Upcoming International Players in the market
Rapid proliferation of the Internet in the domestic and global markets

Shift in the global markets from legacy systems to more of web-based systems
Indian governments thrust towards increased computerization of offices, banks
etc
IT enabled services in the country and across the globe is forecasted to explode
Instant development of world software industry

WEAKNESSES
Inadequate marketing skills
Absence of practical knowledge
Dearth of suitable candidates
Less Research and Development
Contribution of IT sector to India 's GDP is still rather small.
Employee salaries in IT sector are increasing tremendously. Low wages benefit will soon
come to an end.
Depending on software outsourcing and less domestic demand
Weakness of hardware industry

THREATS
Instability of political environments
Lack of data security systems
Countries like China and Philippines with qualified workforce making efforts to
overcome the English language barrier
IT development concentrated in a few cities only

MATRIX REPRESENTATION BASED ON PARAMETERS OF AN INDUSTRY:

Threats (T)
Confront

Avoid

Exploration
Exploit

Search

External
Environment

Opportunities (O)

(more for IT indust)


Strengths (S)

Weaknesses (W)

Internal Environments

The Indian IT Industry has more strengths rather than weakness in the Internal Environment. In
an External Environment Software Industry have opportunities and Threats almost equally. But
due to of Internal Strengths and External Opportunities the Software Industry is in Exploration.
For any industry to sustain in market or to earn the profits it needs to analyze all these
parameters. when the strengths are more than weaknesses n opportunities are more than threats
then the industry can get better position in that particular segment.

QUALITATIVE AND QUANTITATIVE PARAMETERS:

Quantitative Factors
o

Investment Appraisal

Payback period

NPV

ARR

Break-Even Analysis

Market Research

Sales Forecasting

Critical Path Analysis

Decision Trees

Growth

Quality certification
How Quality Certification will affect Productivity and Growth
Reducing overall cost
Increasing revenues
Through higher rates or higher value projects
Bidding for new clients
Learning to bid accurately

Performance
We therefore use revenue per employee (productivity) as a measure of

Performance for Indian companies. Since organizations recruit their employees from the
same labor market, we assume that the average wage rate is approximately the same
across all organizations3. Software companies are located in big cities where the cost of
living is approximately the same.

QUALITY STANDARDS:
ISO

CMM

REFRENCES

The Sunday Indian Magazine

4Ps Business and Marketing

Business India

www.economictimes.indiatimes.com

www.wap.business-standard.com

www.timesnow.tv

www.livemint.com

www.tcs.com

www.infosys.com

www.wipro.com

www.hclinfosystems.in

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