HCL – Today &

Tomorrow
HCL Today

HCL Technologies Highlights HCL Infosystems

R&D and Tech,
Custom Apps, Package
Implementation, Infrastructure and
BPO services company
Total Revenues ----------- $3.9B Hardware & System
Clients ------------------------------ 500 Integration company
Employees -------------------- 41,000
focused on the Indian
Countries---------------------------- 17
market

Vertical Presence
Business Package Emerging Consumer & Telecom Service
Process Implementation Verticals Retail Provider
IT Outsourcing R&D & 8%
20% 10%
Infra Tech
14% 17% Services
Mgmt
12% 24% 26%
36%
Financial
33% Services Hitech/
Manufacturing

53%
Custom Application
 I am HCL
• am value centric and not volume centric
• believe in ‘Employee First’ as they are the ones who provide value

I
to my customers
• believe in listening
• have a value based multi-service approach that combine emerging
services like IT Infrastructure management, BPO, R&D Services
and package implementation with deep domain expertise in
focused micro verticals
• follow a flexible and transparent business model. My pricing
depends on the value I deliver to my customer
• believe in trust, transparency and flexibility
• believe that my relationship would sustain purely based on the
value I deliver to my customers
• am the most hungry team in the IT landscape today
Quick Facts

$ 1.16 Billion in revenues

1 (TTM Dec 2006)

Among the top 2 fastest growing

2 IT Services Company in India
December 2006

Won 5 of the largest engagements

3 during the last 12 months

Featured as the ‘World’s Most Modern

4 Management’ by Fortune Magazine
April 2006

Termed ‘Disruptive Force’ by a

5 leading analyst group
November 2006
About HCL: Service Areas
 About HCL: Industries & Geographies

Industries we serve

Geographies we
have presence in
 2005

HCL saw a big

change in the market. It also saw an
opportunity.

-3-
 The Change
We saw an inflection
point towards value
centricity.
From

Effort and
Input Focus
To
Output /
Outcome
Focus

From

Discrete
Services
To

Integrated
Services

Adapted from The Innovators’ Dilemma” by Clayton M Christensen

-4-
 The Opportunity
Service Provider Diversity
Based on Industrywide Market Share,
the Industry Was More Competitive in 2006

Inflection Point
on Large Deal
– TPI report of Dec ’06
validates HCL’s strategy of April ‘05

India based service providers are

best positioned to make an inroad
into large deals.
TPI says this NOW – HCL saw this 18 months ago.

*
Source: TPI Index, Jan 10, 2007

-5-
 The Opportunity
Service Provider Diversity
Based on Industrywide Market Share,
the Industry Was More Competitive in 2006

Service Provider Market Share: Top 100 Commercial Contracts Our large deal strategy
is based on Value
Centricity.

Projected award timeline of current pipeline HCL, thanks to an early

start enjoys momentum.
Total Restructuring
Pipeline $9.7 bn

*
Source: TPI Index, Jan 10, 2007

-6-
 Three Phase Approach to HCL
Transformation

2005
First phase of the HCL Transformation is a 24 month
plan with 76 initiatives cutting across employees,
customers, operations and new business ideas driving
business growth.
Phase 1
Second phase is a selective partnership approach
to augment domain depth, capability and service
Phase 2 innovation to enhance customer value and
accelerate growth in 18 to 48 months.

2010
Phase 3

Third phase is a radical shift in

business model and unique value
propositions in 36 to 60 months.

-7-
 Facets of HCL Transformation
Employee Experience
 Employee first, customer
second
 Result driven rather than effort
driven culture
 Inverted organization structure
Operating Excellence
 Drive efficiency at gross margin
level
 Improve the quality of SG&A
spend
 Build scalability
Customer Experience
 Output driven strategic
relationship rather than effort
driven
2006  Total outsourcing focus (TCO)
 Building trust and transparency
2005
Business Differentiators
 Create uncontested market
spaces in services propositions
(MSD and Service Innovation)
 Business outcome based pricing
and risk sharing
-8-
How is HCL different?

 Focus on creating
transformational value
through Integrated Services
 Employee First, customer
second philosophy
 Blue ocean thinking to create
uncontested market spaces
 Collaboration
 Evolution of Offshore IT Services Industry

Service Maturity Product Package

Engineering Implementation

IT Infrastructure

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Consulting
Timeline
< 1998 - 2000 2000 - 2002 2002 - 2005 2005 & Beyond

Adaptation from “The Innovators’ Dilemma” by Clayton M Christensen

Transformational Value Creation
– Case Study 1
Global Bank
Business Need: .
• Need to reduce operational cost, increase Return on Equity and reduce operational risk
• Need to reduce ‘Time to Market’ new products and services
• Need to reduce delivery risk and improve business focus

HCL Solution:
• JV with Client divested in favour of HCL with transferred staff
• A truly integrated service offering – Technology, Operations & Infrastructure
• Service includes high end processing in areas of credit default swaps and financial modeling
• Over 3000+ HCL staff serving the client
• Domain focused recruitment strategy
• Focused training through Talent Transformation Programs
• Robust and well tested transition methodologies to reduce transition risk and increase ‘time to
market’
• Robust Governance Model to manage the large engagement
Transformational Value Creation
– Case Study 1
From < 500 to 3000+
Value Beyond Cost Savings
Human Capital Growth
3500 3100
 From $ 19 mn to $ 100+ mn in 4
2800
years
Numbers

 From largely Onsite in 2001, to

Numbers

2100 1867
almost 80/20 Offshore-Onsite
1400 1040 today
486 691
700

0
CY 2001 CY 2002 FY 2003 FY 2004 FY 2005

$19mn
$19mnininCY01
CY01 to $103mn
to $103mn in in
FY FY’05
‘05
Revenue
Revenue Growth
Growth 103
Value to the Bank goes beyond
100 Cost Arbitrage
Revenue in $mn
Revenue in $ mn

80 73
 Quality & Process Improvements
60  Greater Quantum of Work Delivered
38 with Same number of FTE
40 28
19  Replicated in other parts of the Bank
20

0
CY 2001 CY 2002 FY 2003 FY 2004 FY 2005
Transformational Value Creation
– Case Study 1
Key benefits

By reducing client’s IT/Operations …HCL enabled client to

costs by 33% over 5 years… overcome market challenges

Benchmark

Client

17
How is HCL different?

 Focus on creating transformational

value through Integrated Services
 Employee First, customer
second philosophy
 Blue ocean thinking to create
uncontested market spaces
 Collaboration
Employee First

Engagedemployeesleadtoengagedcustomers. Followingthistenet, HCLlauncheditsEmployeeFirst

programtoprovideauniqueanddifferentiatedexperiencetoitsemployees.

1 3
Providing employees with a Driving an inverted
unique environment organization structure
 Smart Service Desk  360 Degree Feedback
 iGen
 Directions

2 4
Encouraging a value Creating transparency and
driven culture accountability

 Trust Pay  U&I (Direct Communication with

 Value Portal President)
 Electronic appraisal system
 Hewitt employee engagement
survey
 Weekly polls on key policy
decisions
19
Great Place To Work!

Fortune features HCL as the

world’s most modern
management

HCL named as a top ICT

employer in the UK

20
How is HCL different?

 Focus on creating transformational

value through Integrated Services
 Employee First, customer second
philosophy
 Blue ocean thinking to create
uncontested market spaces
 Collaboration
Why HCL Technologies is Disruptive and Bears
Watching – IDC Report Highlights

BarryRubenstein, ProgramManager, ApplicationOutsourcingandOffshoreServices, IDC,whoattendedHCL'sAdvisorsMeet inBostononNovember2,

2006, discusseswhyIDCbelievesthat offshoreITservicesvendorHCLTechnologiesisbecomingadisruptiveforceinITandapplicationoutsourcingand

whycompetitorsandcustomersshouldbegivingthecompanyasecondlook. Belowareexcerptsfromthereport hepublished(Report #204262, IDC):

• IDC believes that HCL is further along than all offshore

competition and it is signing significant business in
both infrastructure management and application
outsourcing.
• HCL’s capabilities in investment and dedication to
infrastructure services surpasses that of its offshore
peers.
• HCL is also further down the path of creating
significant business in bundled outsourcing services
Why HCL Technologies is Disruptive and Bears
Watching – IDC Report Highlights

• HCL President Vineet Nayar has expressed the most cohesive and articulate
vision that we have seen so far from an IT services vendor about how his
company will adapt to the on-demand future.
• Backing up all of this is an enlightened approach toward management and HR
policies. Without going into too much detail, HCL has established a well
thought-out and comprehensive set of programs to empower employees.

“
…though it has not received the hype of a salesforce.com or Google,
we believe HCL may very well be one of the contenders to lead the IT
services world of the very near future.

”
How is HCL different?

 Focus on creating transformational

value through Integrated Services
 Employee First, customer second
philosophy
 Blue ocean thinking to create
uncontested market spaces
 Collaboration
Collaboration

We do not believe that

you can create value in
isolation. It can only be
done through collaboration
with partners.
Hence HCL Today
Hence HCL Today

HCLhaswon5ofthelargest6largemulti-million, multi-

serviceITengagementsinthelastoneyear, includingthe

largesteverwonbyanIndianServiceProvider.
HCL of tomorrow
Our Aspirations
HCL stands for trust, transparency and flexibility

Blue Ocean strategy to drive growth

Value based multi-service approach that combine emerging

services like IT Infrastructure Management, BPO, R&D Services
and Package Implementation with deep domain expertise in
focused micro-verticals

Building a sustainable high performance culture

within the organization

Leverage operating efficiencies by focusing

on global delivery model

Collaboration for market dominance

Think BIG
Talk to me