Despite posting better-than-expected results, HCL Technologies? CEO Vineet Nayar is skeptical about the environment and deals his company would chase in the next few quarters. In an interview with FE?s Diksha Dutta and Kirtika Suneja he said his focus area is increasing market share in terms of clients and eating someone else?s lunch to achieve this. ?The next quarter will have no big deals as they have already happened. But we will earn through transformational deals and smaller deals,? he added.
All top IT players are going through restructuring of verticals and horizontals? Will we see HCL doing the same in the future?
My philosophy is that every single decision you take has to be of competitive differentiation. A structural decision can be for two purposes ? to run your operations better and the purpose is for winning. At HCL, the purpose is to develop higher value for customers and employees. And it does not matter how the management configures itself.
This is a typical matrix organisation structure. We have horizontals and verticals superimposed on each other. Thus, our customers do not get frustrated by going layer after layer to talk to the top guy. We have not consolidated any verticals. We do not believe in consolidation, but in micro verticals. We are far way from aggregation.
How do you train your next generation leaders? This is a challenge faced by many IT companies.
A succession plan is already done and bucked in with a committee. It has planned my succession plan and the corporate vice presidents’ succession plan. We train all managers by exposing them to opportunities. We are not a top-run company. We do not run our company where everybody has to look at the CEOs and he takes all the decisions. We are a ?band of brothers?. The CEOs role is like a coach. The evaluation of managers is done by employees. Even my evaluation is done by 76,000 employees and the results are posted on the web.
HCL Technologies has 70% laterals as employees. Why?
We want to do more out-based pricing and fixed pricing. This makes the number of people in a project immaterial. This industry works on time and material and I am trying to focus in a different direction. Why should I take a fresher and train him? I can take a lateral and can get work done faster and can earn higher margins. Through convergence, HCL is trying to do more fixed price, less time and material. We will still go to campuses but our focus is on the experienced guys.
How is the domestic market and emerging markets shaping up?
The rest of the world is showing high a growth rate of 58% on LTM basis. We will step in further in India, South Africa, Egypt, Turkey in a big way. We have identified these countries which are moving into the new business models. Today these markets have strategic deals unlike the past and there is substantial opportunity. And our focus areas here continue to be banking, insurance and energy utilities.
What are the kind of deals that we will see in the future?
It is very difficult to predict the shape and size of long term deals. October, November and December saw big deals but then it cooled down. This flow varies by vertical, geography and environment. We have added 58 clients in the last 12 months.