HCL offers new service for clients

MUMBAI
The Economic times

HCL Technologies has come up with a novel idea to combat shrinking IT budgets and pressure from clients to cut prices. The IT exporter has launched a new service that intends to deliver business benefits to clients in a manner similar to a consultant but which will work at a far smaller level. Called ‘enterprise transformation services’ the new offering will promise tangible cost savings by reducing business and process time for clients, HCL Tech CEO Vineet Nayar said.

The services will be priced on a revenue-share or outcome-based model. “For instance, if we reduce training time by a day, we can straight away gain around $4 million a year because these people can be deployed on projects. Similarly, by reducing business cycle, our clients can gain from reduced inventory,” Mr Nayar said. Wherever a revenue-share is not possible, the pricing will be outcome-based.

The service has been piloted with four clients resulting in a cumulative savings of $580 million, he added. Around 300-400 employees have been moved to this division to be headed by senior VP Vikram Duvvoori.

“We will approach our existing clients who are under significant cost pressures. We are not approaching it from a consulting muscle angle, but from a business process perspective. I don’t even want to be foolish enough to launch business consulting,” said Mr Nayar.

He also declared that the company will be posting losses in its mark-to-market exposure this quarter because of a weak rupee, adding that “the losses will not be significant." In the last quarter too, its MTM losses stood at $69.7 million. The company has hedged $1.9 billion and has a mark-to-market exposure of $600 million, Nayar said. The company has had "minimalist exposure" to retail banking in North America, which is affected, he said.