Whats common to these firms A privately held

What’s common to these firms? A privately held Fortune 500 Company that provides various services to residences and firms. “It is not just what we are doing but what we are becoming in the process that gives us our distinct value. ” - William Pollard, Chairman The largest airline in the United States by number of passengers carried domestically per year. The largest coffeehouse company in the world, with 15, 012 stores in 44 countries. “We built the Starbucks brand with our people, not with consumers. Because the best way to meet and exceed consumer expectations was to hire and train great people. We invested in employees. ” “To Provide the Best Customer Service, Put your - Howard Schultz, Chairman Employees First. ” - Colleen Barrett, President

Guarantees Made to HCL Employees • We will not give you responsibilities • We will not respect your aptitude • We will not treat you equally

Guarantees HCL to Employees • We will not give you responsibilities – You will have to take responsibilities • We will not respect your aptitude – We will respect your attitude • We will not treat you equally – We will treat you fairly

Stepping back in Time STATE OF BUSINESS IN 2005

State of Business - Assessment of 2005 § Employee driven market conditions § Recruitment, engagement and attrition needed new approaches § Traditional outsourcers extending focus from cost to innovation, productivity, resilience and flexibility § New generation outsourcers looking for transformational gain § Disruptive technologies and new business models Customers Employees Competition 2005 § Strong aspiration quotient to be leaders in the service space HCL Leadership § The “Me too” phenomenon and the need to differentiate § The value volume conundrum – linear extension of business model largely through application business Shareholders § Increased revenue growth rate and profitability to be in line with peers

The Big Change HCL TRANSFORMATION

Four basic questions 1. How do you differentiate in today’s world • By adding value 2. Who adds Value? • Employees 3. Where do they add value? • Value Zone – the interface between the Service provider & Customer

4. If Employees add the ultimate value. . What should the role of management be? Enable, Engage & Empower employees

Cycle of Transformation Implementation Challenge Vision, Mission & Values “What” of strategy New Products New Propositions New Markets Change Management Implementation “How” of strategy How the business runs Engagement Empowerment Owners of change

What Changed in HCL From Effort and Input Focus Discrete Services To Traditional ADM Services To Output / Outcome Focus To Integrated Services New Services From Indian IT competition To Global & Indian IT competition EMPLOYEE From COMPETITION From Factory approach To Individual Identity -4 - LEADERSHIP CUSTOMER From Aspiration To Empowerment and Enrichment

Departing from Traditional Leadership Model Customers Customer Employees The Value Zone Employee Enabling Function Management

Why Employees First ? Customer Maximizing the WOW in the value zone The Value Zone Employee Enabling Function Management In a knowledge intensive industry, value gets created in the interface between the customer and the employee Employees First Enables, Engages and Empowers employees to maximize the value by creating the WOW in the value zone

EFCS is not…… If we took away all the enabling functions, the fancy infrastructure and air conditioning, would Employee First still exist? ? EFCS is about the individuals, their individuality and their diversity

What is Employees First is a philosophy that recognizes employees as strategic to the ownership of the companies functions and its way of working.

The tenets of Employees First 1 Mirror, Mirror… 2 Accepting imperfections as catalysts for transformation 3 Inverted Pyramid Reversing accountability by bringing the bottom to the top Trust through Transparency Seeding trust by stretching the envelope of transparency 4 Recasting the role of the CEO Decentralizing decision making

EFCS…. inspiring change

Our Approach-achieving EFCS @ HCL Process Practices Tools Our Approach: P(Processes)P(Practices) T(Tools)

The U&I Portal U&I, is an online forum was formed to bring a new level of transparency in the organization. Employees can post any question, which the CEO, along with his Leadership team, would answer. Stretching the envelope of transparency, it gives a voice to all its employees and ensures that it is heard.

Transferring CEO’s Responsibility To strengthen the Concept of EFCS further a new section called “MY PROBLEMS” was introduced in the U&I portal where the CEO shares a problem faced by him with the employees who then respond with unique/innovative ways to deal with it.

Employee Passion Indicative Count EPIC Passion being the essence of an “HCL-ite”, EPIC was designed with the aim of enabling the individual measure and identify his/her passion drivers which would eventually assist him/her in utilizing those identified passion drivers in their jobs, thereby, increasing productivity and satisfaction. HCL’s top five Passion Indicators Customer support Collaboration Creativity Planning & Organizing Interest

Open 360 Degree Feedback, Employees can rate their managers, even the CEO, and the feedback/rating is made public across the organization. This inverts the pyramid and makes the employee a part of the development journey of the manager and the CEO.

Smart Service Desk (SSD ) Smart Service Desk 2. 0, an online problem management system to resolve issues that employee face with the enabling functions. Only employees can close these tickets, if satisfied. This brings in a culture of reverse accountability.

Value Portal, is about incorporating the efforts of every employee into a business strategy that will support performance and profits over the long haul. It requires each member of a team to take ownership of the organizational assets he or she manages and translate organizational strategy into a personal plan of action.

But does EFCS Really work?

Proof of the Experiment In 2011 HCL , In 2005 HCL , 18000 Employees CAGR of 30 % $ 700 Mn in Revenues 79, 000 Employees Operations in 18 Countries CAGR of 30 % $ 5. 7 Bn in Revenues Operations in 31 Countries

EFCS: Impact Across The Organization

Evidence of BUSINESS SUCCESS:

Evidence of CUSTOMER IMPACT Evidence of PEOPLE SUCCESS: • HCL has grown by 3. 3 times in terms of employees from 18, 000 employees in 2005 to 79, 000 in 2011. • Won awards and accolades, e. g. Hewitt No 1 Best Employer in India and amongst the Top 25 Best Employers in Asia, one of Britain’s top employers 4 th year in a row, one of the 44 most democratic workplaces in the world by World. Blu.

Proof of the Experiment: • In 2009, during recession, HCL grew +23. 5% while most of its competitior de-grew to the extent of -11. 8%. Forrester In a survey done by (external organization) among clients served by multi vendors, HCL has been voted as No. 1 by its customer in application outsourced

Transformational Impact Created by EFCS

HCL- Large Pharma Relationship Growth Pattern 2010 2009 2008 2007 2006 } GTS – Univadis } 2005 } RIS- CDS, CGA support, ADF, CBT } INFRA support } First in Man Research } Managed care } Process Consulting } MMD Data 3 } IS EMEA - HCM } EAI – TIBCO } GHH IS - MSI } ESS – Multiple } MRL- CDS Support Application Support } Short listed Global Vendor } MRL Testing } IS AP – Payroll support Team Size 34 Packaging } } support, CALM, Partnernet GHH - M&O MSD Thailand – DW Integration IS AP –PS HCM IS EMEA Team Size 225 } } } } support SAS support Business Intelligence Ent Architecture. METIS App Rationalization Strategy MSD Singapore Volume Deal MSD EMEA PDA SFA DBA support Team Size 450 } GTS – Comet 2. 0 } EMEA - Portfolio } } } } Mgmt/Univadis Portal Mgmt HH – CDB, Email Marketing Campaign, DAY & FAST support HH Banyu ISS – Production support Infra – DC Tracks, IBM AS 400 , Preclinical M&O PTP BPO services MRL- Integration Program Mgmt GDS support PS enhancements Web e. Voc Team Size 700 } } } } } Directory services EIC, One Large Pharma portal Solution manager & Global Banking MMD M&O MRL App Dev FACTS DSS BI Migration ECCM Search Technical Architect ISM Framework Creation Infra GSOC MGCS Project Large Pharma BI Support EMEA M&O ETL Portal Development (PR 1909312) Large Pharma HH Siebel Call Center MMD EA OSI PI Support MMD Handel M&O MMD IT Quality portal Team Size 790 } GDAM_Integration } Infosec_Sustenance Engg } GSHardware_Apps } HPC Support } Large Pharma HPC MRL DBA } MRL_Basic. Researc h&Licensing_M&O } Large Pharma O 2 C } SAP Htr Support } SM SOP Creation Phase } Data Centre Consolidation Team Size 1075

Key Performance Parameters Resource Mix Service Quality 12, 000 11, 206 27. 8 30. 0 74% 800 10, 041 26. 6 10, 000 700 8, 384 8, 112 25. 0 22. 4 8, 000 22. 8 8, 285 59% 62% 75% 80% 64% 70% 600 21. 3 500 60% 41% 38% 20. 0 400 50% 36% 40% 6, 000 26% 25% 300 30% 15. 0 4, 000 1, 943 1, 732 1, 161 259 1, 366 10. 0 1, 328 2, 000 20% 100 200 189 188 10% 34 226 507 708 XXXX 2005 2006 2007 2008 2009 (Q 1) 0 5. 0 - Q 1 '08 Q 2 '08 Q 3 '08 Q 4 '08 Q 1 '09 0% 0. 0 Standard High Priority Emergency Total MTTR (Hrs) Headcount Vs Attrition Offshore% Onsite % CSAT KEY HIGHLIGHTS 5% 1075 4% 3% 708 790 507 1% 1% 1% 2008 2009 2010 226 A- CSAT Score HCL Large Pharma Engagement HCL Average 2010 59. 1 47. 8 2009 47. 2 39. 5 34 2005 2006 2007 Attrition % Headcount HCL CARES C SAT Rating of 6. 2 on a 7 point scale for Nov 2010

Value Dashboard (2010) Value Scorecard - for December 2010 Division Wise Idea Split 9 100% Value of ideas Idea/Value Split across different areas 24% 80% 60% 72% 20% 12%Cost Reduction Support Process Improvement 40% Operational Cost 64% Reduction 11% 17% 0% # of Ideas 0. 4 0. 35 0. 3 0. 25 0. 2 0. 15 0. 1 0. 05 0 Millions Co SB # of ideas Value of Ideas 1 0. 01 RL 0 1 0. 02 M $432, 912 0. 04 D Value of completed idea 0. 02 M 14 M Ideas completed/realized 0. 35 3 1 H $464, 596 GH Value of Large Pharma Accepted ideas 3 C 17 & Large Pharma Accepted Ideas AS $469, 528 IT Total Value of Ideas rp 18 S Total Ideas generated Number of Ideas 10 0. 04

Service Maturity Map Managed Services (HCL BA-IT Framework) • Integrated Service Management SBS IT, $5. 14 MRL Preclinical , $1. 46 HH M&O, $6. 18 Gene. SYs, $1. 38 GTS GDS M&O, $1. 92 • Project –based PLatform Infra, $4. 49 Banyu Ops Center, $0. 11 • Transactional EMEA Ptp, $0. 48 Staff Augmentation MRL Clinical, $7. 70 • Discrete Managed Services Co-Sourced MMD IT M&O, $0. 29 Business Alignment Managed Strategic Sourcing Service Maturity Transactional Project Based Discrete Managed Service Integrated Service Mgmt No SLA for Vendor SLA for provider Box End to End SLA Outcome Based SLA T&M Fixed/Rate Card Fixed + Service Catalog NA 0 -5 % 5 -7 % 10 % + All M&O Resource Mgmt, L 3 Application Mgmt Service Strategy, Governance Dependency People, Tool, Process Cost Savings Baseline: Labor Arbitrage 5 % Incremental 10 % Incr. to Baseline 15 -25 % Incr. to Baseline Key Metrics Attrition, On-boarding Response/ Resolution MTTR, Biz. Case Cycle Time, Productivity Maturity^ SLA Pricing Model Productivity (Yo. Y) Big Pharma Role

Studio Workshops– 1. Strategic Partner Workshop (A workshop moderated by industry though leaders like Tarun Khanna, brings Big Pharma & HCL Sr. Leadership onto a common platform to identify a shared vision for the relationship: A Value Roadmap) 2. Axon: ERP Benefit Realization Deriving greater ROI on SAP Investments Moderated by Chris Beiswenger, COO HCL Axon 3. Asset Rationalization & Archival Execution Plan to accelerate IT Portfolio Optimization in a M&A Scenario HCL Enterprise Architect Dharmender Kapoor Towards a New Thought Relationship

Taking EFCS Beyond Boundaries

EFCS @ Speaking Forums v v v v v Henley Business School Harvard Business School MIT Sloan School of Management Oxford University ICEDR LRN CIPD La Fosse CIO Submit Leadership Spectrum, Nasscom Wall Street Journal-Leadership Submit

There is something unique about HCL’s management model that the world is talking about…

Most Influential – Five companies to watch: Facebook, HCL Technologies, Craigs List, SKS Micro. Finance, LI & Fung Acknowledges HCL Technologies as the “world’s most modern management” “HCL’s Employee First and ‘democratization’ of management concept could ‘bring about a corporate renaissance. ” HCL wins FT Arcelor. Mittal Boldness in Business Award 40

HCL Technologies was amongst the two examples of companies with Authentic Leadership which was presented at the WEF discussion in 2008 Why HCL Technologies is Disruptive and Bears Watching – Barry Rubenstein “…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. ” “HCL’s Employee First as a new and radical management philosophy which will catch on with the world sooner or later. ” HCL Technologies is Best Company(listed in India) in Investor Relations 41

HCL is taught at Harvard as a premier case study on strategy and organizational leadership HCL is featured as a case study in a global best-seller Darden School of Business has done a case study on the impact created by HCL through its “Employee First Customer Second” practice IBM and the other multinationals are becoming increasingly nervous about HCL Technologies… 42

What if we invest in our employees, and they leave?

What if we don’t invest in our employees and, they stay ?

Thank You For your attention and participation! Twitter: Anand__Pillai Th