‘We’re thinking of re-engineering our business lines’

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: It’s introspection time at $1.9 billion HCL Technologies. The tough global environment reminds CEO Vineet Nayar of the time when he took over as president three years back. The software exporting company was virtually written off. He has led the transformation journey taking HCL among the fastest growing companies in the IT landscape. His big deal strategy and radical employee initiatives have been case studies at the Harvard Business School. His personal growth is no less remarkable. Having joined HCL as a management trainee in 1985, he now serves on the board of the company as a wholetime director.

As the IT industry struggles to tide over the possible slowdown in US economy, Nayar is “thinking of re-engineering the company’s strategy, business lines and go-to-market strategies”. In an interview with Pragati Verma, he narrates his fresh plans to steer the company beyond 2010; describes the new goal posts and the next phase in the company’s transformation journey. Excerpts:

We have heard of your three-phased transformation journey till 2010. But you have recently talked of restructuring your offerings including remote infrastructure management?

If you go back to all our conversations since 2005, I have always said that the business model of IT companies will need to change radically. I have also said that value will dominate volume in our business equation. Third thing, I have said is that this whole input-based pricing as a business model is going to die and we need to have output-based pricing. Two years in a row, we have expanded operating margins and our revenue has grown ahead of manpower growth. We are already moving towards skin in the game business. Look at our Cisco and Computer Associates deals, where we earn more if we help increase client’s revenue. Our payout is tied to the revenue growth of the client.

If we get things right, this will be a big part of our business model 2010 onwards. We have been aiming at becoming the most valued company by 2010. We might be in the services business, but we would like to create value more like that of a Google or an Apple rather than a Dell, IBM or HP. We are now getting ready for a business plan for 2010 and beyond. We are thinking about re-engineering our business lines and our go-to-market strategy. Obviously this will impact our business plan and our organisation construct.