HCL Does not Need Re-engineering
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