Term Paper

Wipro and HCL Technologies

Prof. Dr.Vidyashankar

MS 5840 – IT CONSULTING

Submitted from Group 3

Kristina Dess Rahul Lexmann Theodora Barth Tuhina

Roll Nr.: Roll Nr.:

Roll Nr.: Roll Nr.:
MS17F028 MS17F029

M. Sc. BA M. Sc. BA M. Sc. BA

theodora.barth@outlook.de
kristinadess@web.de

Submission date: 02/11/2017

 2

Index
Index .......................................................................................................................................... 2
Index of Abbrevations............................................................................................................ 3
Table of Figures ..................................................................................................................... 4
List of Tables ......................................................................................................................... 4
1. Section 1............................................................................................................................. 5
Introduction Rahul Lexman................................................................................... 5
2. Section 2............................................................................................................................. 5
IT-Strategy Drivers Kristina Dess ...................................................................... 5
Pricing Models Kristina Dess & Theodora Barth ............................................. 10
Growth Potentials Theodora Barth ........................................................................ 12
3. Section 3........................................................................................................................... 18
Criteria List for the evaluation of the RFP Tuhina Tanmay ...................................... 18
List of Literature .................................................................................................................. 23
4. Appendix .......................................................................................................................... 23
 3

Index of Abbrevations

Abbrevation Definition
ADM Application Development and Maintenance
AI Artificial Intelligence
BPaaS Business Process as a Service
CoE Center of Excellence
IoT Internet of Things
IP Intellectual Property
 4

Table of Figures

Figure 1: Fixed priced contract shares on revenues of Wipro, Infosys, MindTree and
Cognizant ................................................................................................................................. 11
Figure 2: Select a Company ..................................................................................................... 22

List of Tables

Table 1: Wipro's geography wise performance regarding revenue (2015-2017) .................... 13

Table 2: Wipro's business unit wise performance (2016-2017) .............................................. 14
Table 3: HCL's geography wise breakup of revenues ............................................................. 15
 5

Wipro and HCL

Kristina Dess, Rahul Lexman, Theodora Barth, Tuhina Tanmay

Abstract
Keywords:

1. Section 1

Introduction Rahul Lexman

 Introduction to the two companies’ complete set of Service Offerings

 Comparing ADM and Business Consulting Services of the two companies

Wipros Business Consulting Services are structured into:
 Business Transformation Practice (BTP)
 Functional Excellence Practice (FE)
 Process Excellence
 Risk Compliance & Assurance Practice (RCA)
 Enterprise Architecture (EA)

The Application Development Line includes following Services:

 Enterprise Application Service
 Connected Enterprise Service
 Mobility Solutions
 Enterprise Architecture
 Open Source
 Testing Service

 Comparing the Geographical and revenue spread of the business consulting services and
ADM of the two companies
 What initiatives have the two firms taken to reach out to their clients to address the IT-
Risk outlined in the 4A-Framework. How has these initiatives impacted the service offer-
ings?

2. Section 2

IT-Strategy Drivers Kristina Dess

 6

Todays enterprises have to cope with the difficulties and chances of the 21th century and the
development towards the Industry 4.0 Technology has never been so essential. It is essential
for the creation of new business models, products and services and enables more rewarding
customer experiences. For companies it is necessary to find the right business strategy in the
digital age to stay competitive and to gain market shares. They need to respond quickly to the
changing market conditions and therefore to realizing the business strategy of 21st century
enterprises, it is necessary to align the IT-architecture with their Enterprise Architecture. (Ian
Cox, 2016) That’s the part where IT Service Companies, like Wipro and HCL, can create
value for those enterprises.

Wipro

Strategy
Wipro strives to be a future-focused company as a differentiator to their competitors. Hence
they laid out a strategy based on two themes to enable their clients being ready for the tech-
nological requirements of the future. On the one hand, Wipro follows the theme “Drive the
Future”, a change strategy, that focuses on transforming the client's company into a digital
and agile one and on the other hand the “Modernize the Core”, also calles the “Run” Strategy,
that focuses on efficiency and optimizing the core operations of clients - everything enabled
via modern technologies.

The "Modernize-the-Core"-strategy follows the recent trend to integrate multiple services and
technologies into “as a Service” consumption models. This is the case for services like appli-
cations, infrastructure services and analytics. Moreover, the strategy conzentrates on simplifi-
cation of the technology landscape through consolidation, elimination and automation pro-
cesses. One example is the Application Service Framework “FAST” which covers app devel-
opment, rationalization, optimization and modernization, cloud app services, new agile
methologies and next generation quality assurance. In addition, Wipro developed
"HOLMES", an Artificial Intelligence Platform, to adopt hyper-automated processes. Its ben-
efits are reflected in cost efficiency, agility and enhanced user experiences.

Within the "Driving the Future Strategy", Wipro continues to invest and build capabilities in
digital strategy, design, architecture and engineering. Wipro strengthens existing engage-
ments, horizontal offerings, Intellectual Property (IP) and platforms and developed new Cen-
ters of Excellence (CoE) in areas as marketing technology, digitization, cloud development
and outcome-based business constructs. By this change strategy they have created a consult-
ing ecosystem to consolidate and leverage advisory capabilities within different units. By
delivering growth and improving quality they want to expand business relationships and cre-
ate integrated deals. (Wipro Annual Report 2016-17, Business Strategy)

To reach this, Wipro indentified client service tracks based on client feedback. They
strengthened their digital services and build up their consulting capabilities through industry
specific solutions and by creating more localized teams, enabling technology projects that
transformed the business outcome over routine operational upgrades in measuring results.
 7

Wipro’s expertise in various industries is a valuable asset to the customers to solve complex
problems on enterprise scale and make them an agile and knowledgeable partner.
(Lampel, Redefining the Consulting DNA)

The statement of Rajan Kohli, Senior Vice President and Global Head, Wipro Digital under-
pins the drivers behind the strategy: “Our clients’ need for velocity agility (...) is the driving
force behind their growing demand for digital services and business transformation. Creating
new product-service experiences or evolving existing ones, requires an experience-led and
human centric approach, industry and domain consulting capabilities, enabled with wold-
class engineering and technology.” (Equity Bulls, 2017)

HCL

Strategy
HCL Technologies strategy is based on technology evolutions like Digitalization, Analytics,
Cloud, Security, IoT and Automation. As these technologies are, according to HCL, at the
core of any enterprise that is trying to reinvent itself. Enterprises have a high demand for
these services. To accelerate the evolution to a next-generation technology service firm HCL
Technologies set up the “Mode 1-2-3 strategy”. This Mode 1-2-3 strategy should help their
customers to thrive the digital transformation to a “21st Century Enterprise”. HCL classifies
the 21st Century Enterprise as followed:
 Experience-centric (ability to offer consumers a unified experience across all delivery
platforms)
 Service-oriented (operating model focused on customer satisfaction)
 Agile and Lean (stay flexible and adapt rapidly to technology developments)
 Ecosystem-driven (extension of the technology ecosystem beyond the enterprise)
 Outcome-based (outcomes shouldcut across value chains)

Mode 1-2-3 Strategy Commented [TB1]: Also wenn du davor schon was über die
startegie erzählst, dann würde ich hier nicht noch mal mit Mode-1-
This Strategy is a 3-point spotlight on the existing core business, their growth areas and the 2-3...beginnen..
future.
Mode 1 – Core Services focus on expanding in market share, existing product and service
offerings through adaption to newer technologies to differentiate from competitors. HCL
aims with the delivery of its core services to make clients’ business and IT landscape lean and
agile. Mode 1 service portfolio contains:
 Application Services
 Infrastructure Management Services (IMS)
 Engineering and R&D Services
 Business Services (Innovation Flexibility)

Mode 2 – Next Generation Services focus on realizing high acceleration and high-growth
business opportunities, enabled through IoT, Digitalization, Analytics and Cyber-security
capabilities. Mode 2 services represent:
 Digital and Analytics Services
 8

 Cyber Security & GRC

 DRYiCE

DRYiCE is the comprehensive Autonomics & Orchestration platform that drives the Mode 1
& 2 offerings from HCL Technologies. “It combines Automation and Artificial Intelligence
(AI) technology across 54 interconnected modules that can automate any number of standard
and non-standard tasks across infrastructure, application, business processes and engineering
services.” (HCL Annual Report 2016/17, P. 7)

Mode 3 – Products and Platforms is about the alignment with future trends. Changing to re-
quired business models and align with strategic partners through products and platforms. It
contains:
 Change and Configuration Management
 Data Management, Modelling and Construction

IT Strategy Drivers
Wipro
Customer Need  Help clients to adapt to future
trends and modernize the core
business
 Identification of client service
tracks, based on client feed-
back
 Integrated end-to-end technol-
ogy solutions
 Cost reduction through simpli-
fication processes
 Partner Ecosytem to serve
new markets, niche markets
and expand in key verticals
 Cycle time and cost reduction
 Re-developing applications to
cater to mobility needs, social-
media compability of the digi-
tal offerings
Service Orientation  Agile Approach in Consulting,
with AgileBase and DevOps
 Creation of new product-
service experiences or evolv-
ing existing ones, requires an
experience-led and human
centric approach, industry and
domain consulting capabili-
ties, enabled with world-class
engineering and technology
 Lean and agile practices to
HCL
 Offering a comprehensive
suite of services which are
flexible, scalable and custom-
ized
 Offering of tailored solutions
to clients and the needs of
their industry and sector
 Delivery Model: on-site busi-
ness transformation consulting
services near and offshore
technical development and
support to ensure that clients
receive the ideal systems inte-
gration solutions at the right
price
 Development and manage-
ment, systems integration, en-
terprise package services and
testing services across industry
verticals und functional areas
 Offers full – lifecycle of con-
sulting services
 Offshore CoEs

deliver ADM services in
shortest possible time lines
and costs
Technology  Cost optimization in opera-
Appropriateness tions by hyper-automation
 HOLMES Artificial Intelli-
gence to drive hyper-
automation across IT and
Business operations for clients
through offloading specific
cognitive tasks
 IP and Digital CoE
 Smarter Applications enabler
to align IT landscape with
business goals
Quality  Next generation quality assur-
ance, app support and trust
management
 Knowledge virtualization
through HOLMES
 High quality of IP and patents
in emerging technologies
Risk  Security platforms Risk intel-
ligence Center, Data Govern-
ance Center, Security Intelli-
gence Center, Security Assur-
ance Center, Security man-
agement Center
Table 1: IT-Strategy Drivers
The applications service market today is going to shift from systems of record to systems of
innovations. The overall spend on traditional applications has reduced. Emerging technolo-
gies like Cloud, Analytics, IoT, etc. are the fields of growth potential. Wipro as well as HCL
invest in Artificial Intelligence (HOLMES - Wipro vs. DRYiCE – HCL) and products, plat-
9
 HCL’s alternative approach
helps organizations to make
the right investments in the
right solutions in parallel with
key business objectives
 Applications are structured
around various integrated hor-
izontal capabilities, offers cli-
ents a unified approach in de-
veloping the right solution for
their business needs
 HCL provides deep experience
in industry verticals to ensure
that every one of their en-
gagements adds transforma-
tional value
 End-to-End-IT capabilities to
deliver value-driven solutions
to maximize ROI, enhance
business productivity and re-
duce total cost of technology
ownership.
 Strong partner network to de-
liver best-in-class solutions
 SAP, Oracle, Microsoft
 Niche partners to develop so-
lutions in specialized technol-
ogy areas
 Differentiated solutions and
service offerings
 Extension of markets and
geographic reach
 Enhancement of product and
service offerings
 Reducing risk and costs asso-
ciated with global deployment
through offshore centers of ex-
cellence
 10

forms centred around them to chance and simplify the IT delivery model. (HCL Annual Re-
port 2016/17, P. 7 ff.)
HCL and Wipro offer a comprehensive suite of services that meet clients’ needs across indus-
tries and vertical functions like Human Resource Management, Finance, Supply-Chain Man-
agement and Customer Relationship Management. Both companies rely on tailored solutions
for their clients to add value to their business in measurable terms. To enable a flexible busi-
ness, they invest in new technologies like cloud, analytics and IoT. Wipro has a bigger Con- Commented [TB2]: das hatten wir oben schon

sulting Unit and enables clients different Consulting Services with specific and knowledgable
tools and services, moreover they can accompliment their Consulting Services with their Ap-
plication Develoment Line. Wipro has according to the outcome of the “IDC MarketScape:
Worldwide Digital Transformation Consulting and SI Services 2017 Vendor Assessment
(June 2017)” Report the ability to transform critical business processes to digital solutions
and to achieve the desired outcome of the client. That’s probably one reason why they are
one of the global Leaders in the Digital Transformation Consulting. According to Phil Dun-
more, Vice President and Global Head, Consulting, Wipro Limited, "These… reveals that
business leaders are increasingly relying on us to help them bring together business strategy,
user experience design, and IT solution delivery." He added, ".. In the face of aggressive
competition, the big asks from our clients are how to strengthen customer loyalty, create new
sources of value, drive organizational efficiency, and disrupt the market with new business
models. We work with our clients to help them build their vision and roadmap and to execute
on it with pace and agility." (Equity Bulls, 2017) Overall Wipro has a complexer 360 Degree
Approach with a more comprehensive approach to align their ADMs with their Consulting
Services.

Pricing Models Kristina Dess & Theodora Barth

Wipro

Fixed price contracts (compared to time & material priced contracts) contribute 57.1 % of
Wipro's revenue and increased compared to 2016. “The amount of fixed price projects we run
is directly proportionate to the confidence on your business model and ability to deliver. Such
models make us responsible for outcomes. We can also manage our delivery the way we
think is most optimal,” said Jatin Dalal, chief financial officer of Wipro. Wipro is following
the industry trend and implementing more fixed-price contracts and moving away from time
and material based pricing (table 1).
 11

Fixed priced contract shares on revenues in %

60

57.1
55.2
50 52.8
49.4
47.2
40 44

37 38
30 2016
2017
20

10

0
Wipro Infosys MindTree Cognizant
Figure 1: Fixed priced contract shares on revenues of Wipro, Infosys, MindTree and Cognizant

As there is slowing business in traditional services and clients are cutting costs, but demand-
ing for more efficiency, most of the IT companies opt for fixed-price contracts to reach their
client's needs better than with the former preferred time and material priced contracts. Also
the shift from traditional maintenance of software on-premise towards cloud-based delivery,
it makes more sense to offer those new service deliveries on a fixed-priced base. Also the
focus on IP-based service offerings changed the focus towards fixed price projects. “The
amount of fixed price projects we run is directly proportionate to the confidence on your
business model and ability to deliver. Such models make us responsible for outcomes. We
can also manage our delivery the way we think is most optimal,” said Jatin Dalal, chief finan-
cial officer of Wipro. With 1,662 patent applications in the domain of digital technology by
the end of 2016, Wipro is focusing strongly on this area in the future. As Wipro expects fur-
ther growth concerning IP-Platforms, recent aquisition of IP Data Discovery Platform, DDP
is a Insight as a Service, which accelerates Time-to-Insight. It is offered as Pay-Per-Use and
also fixed price per use. Neverless, fixed price contracts could turn out to be a double-edged
sword, if processes and operations are not done well. As in time and material priced contracts
the margin is more or less fixed due to the pre-defined contractual rate, in fixed price settings
the management of costs is crucial to maintain the margin. So in fixed price settings, a pro-
fessional and accurate management of costs and manpower is crucial for the outcome on the
client's side as well as on the supplier's side. (Pramanik, A., Krishnan, R., 2017)
So the shift towards fixed-priced projects definitively makes sense for Wipro regarding their
IP-based ServiceASaService solutions.

HCL

HCL is also following the business trend towards an increase of fixed price projects. In 2013
fixed priced projetcs represented 51.3% of the revenue and in 2017 fixed priced projetcs con-
 12

tributed already 61.8% of the companies' revenue. (HCL Technologies, Fourth Quarter &
Annual Results FY 2017 Investor Release, 2017)

Both companies could turn their pricing strategies more towards a value-based pricing
approach. Within this pricing strategy the price of a product or service is based on the
perceived benefits of the product or service by its customers. Contrary to that, cost-plus
pricing (e.g. time and material priced or fixed priced approaches) always is based on the
amount of money it takes to produce the product.
Value based pricing is commonly used in the fashion industry. For instance, H&M and
Adidas may offer the same white cotton socks, but Adidas promotes these socks having
special features as sweat-wicking, extra-padded, etc.. Combined with their strong brand as an
additional quality assurance sign Adidas adds more value to these simple, plain white socks
than H&M. Products and services which are actually relatively indistinguishable from those
of their competitors become distinguishable and unique.(Investopedia: Value based pricing)

Growth Potentials Theodora Barth

Wipro

Geography
As you can see in table X, the American market contributes the most to Wipro's revenue (al-
most 54 % of total revenue) in the fiscal year of 2016 to 2017. Also this market has the big-
gest growth rate (9.0%) compared to the other markets. So Wipro should definitively go on
with investing in the American market. Also the European market represents, as the second
most important revenue contributor, in future an interesting growth opportunity. Assuming a
constant currency development in Europe, the growth potential especially of the economical-
ly strong countries in the D-A-CH area (Germany, Austria, Switzerland), Benelux (France,
Netherlands, Belgium, Luxemburg) and in the Northern part of Europe (Sweden, Denmark,
Finland, Norway) is immense. This is reflected in the already strong growth rate of the Euro-
pean market of 8.4% from 2016 to 2017. Another advantage for technology companies like
Wipro in Europe represents the fact that Europe generally lacks strong technology compa-
nies.

Geography wise performance (Figures in $ millions except otherwise stated)

2016-17 Growth 2016-17 Growth
Geo 2016-17 2015-16 YoY% in reported YoY% in constant
currency currency
Americas 4213 3873 8,8% 9,0%
Europe 1877 1857 1,1% 8,4%
APAC and OEM* 833 823 1,1% 1,2%
 13

India and Middle

782 793 -1,4% -0,1%
East
Total 7705 7347 4,9% 7,0%
*Asia-Pacific and Other Emerging Markets
Table 2: Wipro's geography wise performance regarding revenue (2015-2017)

Thus, Wipro should expand their investments in the European and American market through
their already applied strategy of "localization". They have already started to strengthen their
local presence via setting up local centers and employing local workforce (e.g. Wipro set up
IT development centers in Munich, Meerbusch, Nuremberg and sales offices in Frankfurt,
Munich, Cologne and Meerbusch and also an on-shore datacenter capability in Meerbusch
offering IT infrastructure management services). As many key accounts are based in Europe-
an countries, it is important also for Wipro as a consulting company to be locally present.
Also setting up major multi-client delivery centers, like Wipro did this year in the US in
Mountain View, California, and Farmington Hills, California, is the right step to increase
business in key markets and will be one growth driver in future.
Also co-operations with European universities (e.g. setting up common trainee-programs with
the University of Munich) and employing mainly local workforce is also very important, as it
will help Wipro in two aspects: First, not being perceived as a foreign company and therefore
getting faster in contact with possible future client companies as being noticed as more trust-
fully. Second, gaining extra market and technical knowledge through the co-operations with
universities and via the employment of highly skilled local workforce.
The "localization" strategy in the key markets includes also the aspect of mergers and acqui-
sitions and should also be applied in future. This could happen in current and future key mar-
kets of Europe and America, e.g. with similar acquisitions to Health plan Services, a BPaaS
company, located in the US and operating in the US healthcare market. By a future expand of
acquisitions of local technology and market experts, Wipro will easier get into the local busi-
ness, too.
Not yet key markets, but having a huge growth potential, Wipro should foster their activities
in Canada, South Africa and also Latin America. Especially Canada and South Africa have in
general a very constant currency development and similar to Germany a general lack of tech-
nology companies similar to Wipro. So going on with setting up local subsidiaries to be more
present for clients will be also crucial in these markets. Also fostering mergers and acquisi-
tions in these countries to gain more local market knowledge is one step, Wipro has to do. So
future acquisitions like the one of Info server, a Brazilian IT service provider specialized in
Banking, Financial Services and Insurance will be beneficial towards the enhancement of the
footprint in the growth market of Latin America.

Innovation
As Wipro follows their "Six-Pronged Strategy", which aims to align some of their business
practices (mainly consulting) with digital, this is definitively something what clients from all
industries are looking for right now and especially in future, as systems and technologies are
getting more and more complex. As consulting is already one special business unit of Wipro
and the company has already localized management teams in key markets with strong com-
 14

panies from all industries (e.g. Germany with major automotive players), the provision of an
IT solution in combination with an excellent consulting part is definitively something espe-
cially future oriented companies are looking for. But not only for big players this offering is
interesting, also for new market players an ideal IT infrastructure and solution is already cru-
cial to get the foot into the market and to gain future market share. So Wipro definitively
should refine and extend their combined consultancy and IT technology solutions. Moreover,
Wipro should go on improving their technology knowledge, especially of future trends as
automation, AI and Cloud. This could happen through further cheap acquisitions of special-
ized Start-Ups, e.g. similar to the acquisition of Danish company Designit, which brings in
interface design knowledge and provided its solutions already to major industry players like
Audi, NTT Data and Samsung. Future acquisitions of specialized Start-Ups are a very cost
efficient way to bring in great domain knowledge and to get easy access to a new customer
base.
Another aspect Wipro should make a major advantage out of it is their strong focus on sus-
tainability as it is part of their company culture. The business unit Energy, Natural Resources
and Utilities (ENU) contributes 13% of their total revenues in the fiscal year 2016-2017 with
the second highest growth rate of all business units (5.9%). As the future will definitively ask
for more energy efficient solutions across all industries, Wipro should take the initiative here
and strengthen their IT solutions concerning this trend. This could happen through co-
operations and alliances with energy suppliers and a common development of efficient ener-
gy provision services. Also the HLS (Healthcare and Life science sector) will be one major
sector for Wipro in the future. No yet one of the major revenue contributors for the company,
but by far with the highest growth rate of nearly 37%, solutions for this sector will represent a
major chance for Wipro.

Ganesh,V. (2016): WIPRO CEO outlines strategy for future, in: The Hindu Business Online,
http://www.thehindubusinessline.com/info-tech/wipro-ceo-outlines-strategy-for-future-to-
focus-on-localisation-client-mining/article8500156.ece (30/11/2017)

Business unit wise performance (Figures in $ millions except otherwise stated)

2016-17 2016-17
Growth YoY% Growth YoY% Margins Margins
Business unit 2016-17
in reported cur- in constant cur- 2016-17 2015-16
rency rency
BFSI 1977 2,4% 5,1% 18,3% 21,8%
CBU 1216 1,4% 3,1% 17,4% 17,1%
COMM 567 1,4% 5,0% 15,9% 16,2%
ENU 1006 (5,9)% (1,1)% 20,9% 19,0%
HLS 1206 36,9% 37,3% 11,5% 20,6%
MINT 1733 1,4% 2,0% 19,7% 21,4%
Total 7705 4,9% 7,0% 18,0% 20,2%
Table 3: Wipro's business unit wise performance (2016-2017)
 15

HCL

Geography
Geography wise breakup of revenues
The Group also reviews its business on a geographic basis. The following table classifies total reve-
nue by geographic areas: Rs in Crores
Year ended
Particulars 31 Machr 2016 30 June 2015
% %
(Nine months) (Twelve months)
US 17925 58,2 20140 54,9
Europe 8212 26,7 10065 27,4
India 957 3,1 1457 4,0
Rest of the World 3687 12,0 5039 13,7
Total Revenue 30781 36701
Table 4: HCL's geography wise breakup of revenues

Also for HCL, the US and European markets are by far the most important ones, looking
back to last year's contribution to the whole revenue. More than half of all revenue stems
from the United States, followed by Europe with 26.7%. Indian market only contributes 3.1%
to the company's revenue. HCL should definitively go on and strengthen their presence in
these countries, e.g. through acquisitions similar to the previous acquisition of UK-based
SAP consulting company Axon, which contributes approximately 10% to HCL's consolidated
revenues and is named HCL Axon now. So setting up new subsidiaries in these two regions is
definitively urgent to keep business running in these areas. But HCL should also have a look
in other fast developing markets, like China (GDP growth rate of almost 7%). China as coun-
try with major players in diverse industries, e.g. ICBC and China Construction Bank in bank-
ing, Petro China in oil and gas industry or China Mobile in the telecommunication sector,
needs intelligent and future oriented IT solutions and intelligent infrastructure settings.

Worldbank: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG (30/11/2017)

Innovation
As HCL is calling itself "A partner of the 21st century for companies across all industries",
they stand for innovative concepts and solutions, what is also reflected in their growth strate-
gy "Mode 1-2-3". Mode 1 concentrates on applications, infrastructure, engineering and busi-
ness services. Mode 2 stands for Next Generation Service Delivery and Mode 3 for products
and platforms. So different than Wipro, HCL is focusing more on system integration services,
which includes ERP implementations and upgrades, e.g. of Oracle and SAP ERP systems. So
HCL possesses strong alliances with ERP giants like Oracle and SAP which enables them to
offer companies expertise concerning these ERP systems. Also, HCL is focusing a lot on
BPO services and its next generation version of it which includes front-to-back office trans-
 16

formation and end-to-end-software and technology platform implementation. Also next gen-
erations services as Digital & Analytics, Cloud Native Services, Cyber security and IoT
WorksTM are in the center of their growth strategy. HCL should build upon their BEYONDig-
ital service offering which strives for more disruptive design thinking approaches. Reaching
this, HCL has already set up eight global "Xperience Labs". So one future growth lever could
be to increase and invest in future technology labs, also via further acquisitions of specialized
industry and technology companies. Software services (59.8% of total revenue) and IT infra-
structure services (33.5% of total revenue) are by far the most important contributors to
HCL's revenue. HCL should, as mentioned above, concentrate on next generation’s services
and technologies (IoT, Automation, AI) and try to integrate them in their software services
and IT infrastructure offerings. As BPO services just contribute 6.7% to their total revenue,
they definitively should also focus on this business, as it has the highest growth rate concern-
ing its contribution to the company's revenue of all three categories.

Segment wise revenue contribution 2016 (Rs in Crores)

Year ended
Particulars 31 Machr 2016 30 June 2015
% %
(Nine months) (Twelve months)
Software services 8034 59,8 10457 61,0
IT Infrasturcture services 4504 33,5 5693 33,2
Business Process Out-
896 6,7 1003 5,8
sourcing services
Total Revenue 13433 17153
Table 5: HCL's segment wise revenue contribution (2016)

Revenue Growth (in Constant Currency)

30-September-17
Particulars Segments
QoQ YoY LTM YoY
Consolidated For the Company 0,9% 10,6% 13,9%
Americas 1,5% 12,7% 14,6%
Geography Europe 4,4% 7,4% 12,7%
Rest of the World -12,0% 6,3% 13,3%
Application Services 0,0% 5,0% 6,8%
Infrastructure Services -0,2% 4,8% 17,0%
Services
Business Services 2,9% -1,3% -7,3%
Engineering and R&D Services 4,4% 38,4% 28,2%
Financial Services 1,2% 14,2% 15,4%
Verticals
Manufacturing 2,4% 21,9% 22,3%
 17

Lifesciences & Healthcare 1,8% 3,8% 7,4%

Public Services -4,6% 6,2% 14,5%
Retail & CPG -0,5% -1,0% 9,2%
Telecommunications, Media,
1,7% -6,3% -1,8%
Publishing & Entertainment
Note: Public Services Include Oil & Gas, Energy & Utililities, Travel – Transport – Logisitcs and Government.

Table 6: consolidated revenue contribution and revenue growth rates of HCL

Even if HCL has strong alliances with Microsoft, Cisco, EMC, SAP and Oracle, the company
should avoid to repose on these alliances, but turn their huge knowledge in next generation
services into account and extend their Mode 3 segment which includes innovative products
and platforms. An extension and upgrade of their product and platform portfolio to solve
complex business problems for clients could be one major lever to grow for HCL in the fu-
ture. This is also reflected in the growth rate of engineering and R&D services (38.4%) from
2016 to 2017. Relating this to the vertical revenue contribution where the manufacturing
business unit also has the biggest growth rate (21.9%), HCL could definitively benefit from
extending their engineering and R&D product and service portfolio (including next genera-
tion technologies, like AI, Cloud, Robotics and automation) for the manufacturing industry.

HCL Technologies (2016): Partner of the 21st enterprise - Annual Report 2015-2016,
https://www.hcltech.com/sites/default/files/annual_report2015-2016.pdf

Pricing
One innovative pricing concept, interesting for both companies could be the concept of reve-
nue sharing. Revenue sharing means that profits and losses are distributed between stake-
holders, applied regarding this scenario, between two or more cooperating companies. Strate-
gic alliances become for both companies more and more important in the future, so the con-
cept of revenue sharing supports this kind of co-operations. If the profits are shared, it will
enable separate actors to act more coactively and efficiently and this will be mutually benefi-
cial for both sides. Also through the application of profit-sharing, it is ensured that each entity
is compensated for their efforts.
As Wipro could grow in the area of consultancy, they could here apply more outcome orient-
ed pricing schemes and move especially for this kind of business away from T&M or fixed
based pricing. Outcome based pricing is related to value based pricing (already mentioned in
section X) and is contrary to traditional service delivery models where the buyer owns service
delivery and procures inputs or components of outputs from the service provider. In emerging
models, like outcome based pricing, the service provider owns service delivery and is respon-
sible for providing outputs. Especially for the consulting and service provision this represents
one lever to increase customer satisfaction and even revenues, as the customers are willing to
pay more if the output is perceived as outstanding.
Especially for HCL, but also for Wipro, for their platform based ServiceAsAService product
portfolio, they could develop intelligent pay-per-use schemes and adapt them to varying cus-
tomer needs and conditions, as customer preferences differ a lot. So an extensive and precise
 18

customer segmentation and building on those intelligent pricing schemes could be also one
lever of future growth, because customer target groups can be addressed more precisely and
their needs will be matched better.

Cognizant: Output and Outcome based service delivery and commercial models,
https://www.cognizant.com/InsightsWhitepapers/Output-and-Outcome-Based-Service-
Delivery-and-Commercial-Models.pdf (30/11/2017)

Ross, S. (2017): How does revenue sharing work in practice,

https://www.investopedia.com/ask/answers/010915/how-does-revenue-sharing-work-
practice.asp (30/11/2017)

So summing it up, both companies should foster their presence in key markets (which are
mainly America and Europe for both of them), but also consider future growth markets. For
Wipro, which is also very strong in consulting, the local presence in key markets is even
more important than for HCL Technologies, as personal relationships are especially in the
domain of consulting very important.
The huge advantage for Wipro and HCL Technologies of the European and American market
is the fact that the demand in these markets is not only driven by cost-efficiency require-
ments, but they are both demanding for high-quality services for enterprise applications and
long-term oriented efficient solutions. For both of them markets with strong GDP growth
rates and strong industry players, e.g. China, countries in Latin America, Canada, but also
South Africa are interesting places to grow. Concerning their business strategy, Wipro should
focus more on the combined offering of consulting and application services, as they have
already good general business consulting knowledge through local management teams all
over the world. HCL's major growth potential will consist on the one hand definitively in
their strong alliances with major ERP providers, like Oracle or SAP, but on the other hand,
HCL has huge growth potential in their next generation services knowledge (IoT, AI, Cloud).
Here, they could grow by extending and upgrading their product and platform portfolio.

3. Section 3

Criteria List for the evaluation of the RFP Tuhina Tanmay

For a RFP (request for proposal) by the Reserve Bank of India concerning a Core Banking
and Business Application requirement, the following criteria will be evaluated for HCL and
Wipro. Through an MCDM (multi criteria decision making) approach, it will be analyzed
which company is matching the RFP better.
Criteria list for the response to the RFP:
 Company existence and operations of the bidder for at least 5 years at the time of the
bidding
 19

 Possession of quality certifications of the bidder with regard to quality of their internal
processes and services delivered (e.g. ISO certifications)
 No involvement of the bidder in any litigation. If so, the bidder has to prove that it is
not related to its consulting business
 Bidding company should not have been barred/black listed by any regulatory/ statutory
authority
 Adequate financial standing to undertake assignments of this magnitude and positive
net worth of the bidding company continuously for the past three financial years (war-
ranty of financial solvency)
 Experience in similar project consultancy of the bidder at least for a period of three
years
 Domain, technical and legal knowledge in Banking and Information Technology (in-
cluding core banking solutions, all facets of banking, various delivery channels, vari-
ous components of core banking systems such as application software, hardware, oper-
ating systems, middleware, etcs...) of the bidding company
 Prior experience of implementation of a CBS and Business Intelligence Application in
at least 3 prior companies by the bidding company (KPIs, service levels and total
scope of costs should be disclosed for every project)
 Robust project management methodology (experience in the area of project planning,
project reviewing, resource planning, clear role and responsibility definition, etc..) of
the bidding company
 Pool of talented professionals of the bidding company (preferably with accreditations
like CAIIB, CISA, CISSP, CCNA, CCNE, CSQA, etc...)
 Experienced professionals in the BFSI (Banking and Financial Services Industry) do-
main of the bidding company
 Established offices with the right workforce in India

If the bidder does not meet all of the criteria listed above. His response to RFP will not be
considered. The criteria for evaluation for the firms that met the above criteria are given be-
low.

Criteria Parameters Marks

If a team member has prior experience in 40

implementation of CBS
If any member has certifications such as CA, 30
CFA, PMPI, etc.
Performance of the teams in License to 50
Work technical tests and psychometric tests

Knowledge of the CBS application suite 40

Knowledge of the scope of activities of the 30

 20

RBI
Level of understanding of the bank’s CBS 50
requirements
Number of members present in the team 60

Performance track record of implementation 50

on other projects
Value of the bid 60

Quality of enhancements and improvements 30

proposed
Estimated time frame of implementation and 40
rollout
Experience of project manager on similar 30
projects
Minimum overall qualifying marks to be- 210
come eligible for the overall bidding

If the number of marks exceeds the minimum overall qualifying marks, the bidder is eligible
for the overall bidding. For the bidders who score greater than 210, the bids will be fully
evaluated and compared and a suitable bidder will be given the contract.

Evaluation
Analytic Hierarchy Process as a method of measurement with ratio scales and illustrate it
with two examples. We then give the axioms and some of the central theoretical underpin-
nings of the theory. Finally, we discuss some of the ideas relating to this process and its rami-
fications. In this paper we give special emphasis to departure from consistency and its meas-
urement and to the use of absolute and relative measurement, providing examples and justifi-
cation for rank preservation and reversal in relative measurement.
There are four major steps in applying the AHP technique:

1. Develop a hierarchy of factors impacting the final decision. This is known as the AHP de-
cision model.

2. Elicit pairwise comparisons between the factors using inputs from users/managers.

3. Evaluate relative importance weights at each level of the hierarchy.

4. Combine relative importance weights to obtain an overall ranking of the candidate EIT
alternatives.

Wipro

Wipro enable banks in shaping the future in payments, digital channels, credit services, digi-
tal core, and commercial and corporate banking. They have higher revenue as compared to
 21

HCL. Wipro has many success stories in different kind of banking system. Wipro has created
robust capabilities through investments in emerging technology products and by leveraging
crowdsourcing platforms such as TopCoder, service design innovation through Designit, and
partnerships with emerging fintech players, and innovation labs across the globe. Their team
of consultants enable banks in shaping the future in payments, digital channels, credit ser-
vices, digital core, and commercial and corporate banking. By leveraging HOLME, their AI
platform, banks drive higher efficiency in functions such as application, and infrastructure
management and testing. We have also created niche IP in areas such as mortgage loan origi-
nation, eKYC, and data discovery and cyber security.

HCL

HCL holistic banking service offerings via innovative engagement models help you to keep
up with customers' expectations while meeting regulatory requirements. HCL provides range
of services in Retail & Corporate Banking, Capital Market Services and Insurance Services.
They provide different products for Retail & Corporate Banking, Capital Market Services,
Solutions. They have over 11 years experience in Financial Services and they handle 100+
global customers. HCL provides End-to-end IT services and solutions like- ADM, ASM, In-
frastructure Management and Operations. They do continuous investments to provide innova-
tive solutions for competitive differentiation – H-Suite, Asset Monetization, MergeIT, and
Utility Services. One of the largest verticals in HCL. 13000+ HCL ‘transformers’ transform-
ing technology into competitive advantage for some of the largest global financial services
organizations . It has horizontal services - Enterprise Transformation Services (ETS), Inde-
pendent Verifi cation & Validation (IV&V) services and Integrated Operations Management
Center (IOMC). On top of it it has technology CoEs adding value to offerings
 22

Select a Company

req
Prior uire Impro
Test Domain Knowle me Tea vemen Project
exp Certifi dge of Val time
of perform knowledg nts m Track ts/Enh Manager
cation ance e RBI record ue ancem frame
the gat size Exp
team heri ents
ng

WIPRO HCL

Figure 2: Select a Company

 23

List of Literature

Ian Cox, Developing the right IT-Strategy https://www.cio.co.uk/it-strategy/developing-

right-it-strategy-how-support-business-strategy-with-technology-3430400/

http://www.wipro.com/microsite/annualreport/2016-17/business-strategy.html

https://www.hcltech.com/application-development-services

(Equity Bulls, 2017)

(http://www.equitybulls.com/admin/news2006/news_det.asp?id=213969)

(Investopedia: Value based pricing)

https://www.investopedia.com/terms/v/valuebasedpricing.asp

Appendix

Appendix A
Appendix B