HCL Does not Need Re-en­gi­neer­ing

The Economic Times - - Disruption: Startups & Tech -

There are op­por­tu­ni­ties in the mar­ket even as there is soft­ness in some sec­tors such as bank­ing, says HCL Tech­nolo­gies’ CEO Anant Gupta. In an in­ter­view to ET’s Surabhi Agar­wal and Neha Alawadhi, he says in terms of or­gan­i­sa­tional struc­ture there is no need for re-en­gi­neer­ing at HCL. Ex­cerpts:

Why hasn’t HCL per­formed bet­ter this time? The mar­ket op­por­tu­nity is there. I think the tra­di­tional mo­men­tum is con­tin­u­ing to be there. Re­bid mar­ket is there... And we’re pretty much first off the block on IoT and we also had four deals in this quar­ter, with IoT cen­tric scope of work. Th­ese are rea­son­able sized deals. They’re not mega, but they’re not like small deals also. I think the mar­ket is turn­ing to more on IoT.

Is the slower growth be­cause of the shift to­wards dig­i­tal? The slower growth is more be­cause of the pack­aged ap­pli­ca­tions por­tion, the ERP, the back-of­fice cen­tric, the on-premises work. That is di­luted to­wards soft­ware as a ser­vice, and that por­tion is find­ing it­self com­pressed.

Is that be­cause of the sat­u­ra­tion in the mar­ket? Of course, sat­u­ra­tion, but also a lot more SaaS of­fer­ing in­stead of on­premises (work).

Should we get used to this kind of a growth rate? I think around those spe­cific el­e­ments, the an­swer is yes. I think the trend around on-premises soft­ware im­ple­men­ta­tion and on-premises soft­ware li­cence for the OEMs has def­i­nitely gone down. What has in­creased is SaaS, that is ap­pli­ca­tions hosted on the cloud, and there­fore when it is hosted on the cloud there is rev­enue shrink­age. Po­ten­tially there could be an ac­cel­er­a­tion in ex­e­cu­tion, but def­i­nitely there is a re­duc­tion in volume. But on the other hand, analy- tics con­tin­ues to grow well, data sci­ence con­tin­ues to grow well, mod­erni­sa­tion of apps will con­tinue to hap­pen and the third area comes to dig­i­tal. Dig­i­tal­i­sa­tion will also hap­pen.

Some large IT firms are talk­ing about a very lean or­gan­i­sa­tional struc­ture. Are you also think­ing of some­thing on sim­i­lar lines? Our or­gan­i­sa­tion is per­fectly fine, (there is) no need to reengi­neer it. There will be changes, which we keep do­ing from our value per­spec­tive, but that’s noth­ing to do with layer. I think what you’re re­fer­ring to is bell curve… that’s an ar­chi­tec­ture of what we will fol­low, but it is noth­ing to do with re­or­gan­i­sa­tion or cut­ting down man­age­ment tal­ent. Of course, there is higher pro- duc­tiv­ity and it’s a con­tin­u­ous process, but it’s not like say­ing we’ll take all mid­dle man­age­ment and change them. No.

By when is the Geo­met­ric deal likely to close? The courts have to con­clude the process. I think it should be done by Jan­uary. The ca­pa­bil­i­ties on the ta­ble are good. We are al­ready quite dom­i­nant in en­gi­neer­ing ser­vices and this will give us more strength to cap­ture more ar­eas of the mar­ket.

ANANTGUPTA CEO, HCL Tech­nolo­gies The slower growth is more be­cause of the pack­aged ap­pli­ca­tions por­tion, the ERP, the back-of­fice cen­tric, the on-premises work

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