Organizational Design - HCL Technologies
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The document analyzes the organizational design and impacts at HCL Technologies, highlighting its evolution from a traditional pyramid structure to an inverted pyramid to foster accountability and innovation. It discusses external factors influencing the organization, including economic conditions, competition, and technological advancements, alongside internal cultural transformation initiatives like the 'Employees First' philosophy. Key concerns include overdependence on the infrastructure sector and challenges in R&D and employee training amidst a competitive IT landscape.
Organizational Design - HCL Technologies
- 1. HCL TECHNOLOGIES LIMITED ORGANIZATION DESIGN AND ITS IMPACTS GROUP 3, PGPM SEC B ANKIT AGGARWAL 13P063 M GAUTAM 13P081 MONIKA KHETAN 13P088 NAKRA GOPESH 13P104 SATYAJIT TRIPATHY 13P109 SUYASH NIGOTIA 13P116
- 2. ORGANIZATIONAL ENVIRONMENT Elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization TASK ENVIRONMENT •Shift to Non-linear growth models •Evolved from being a pure play IT service provider to offering end-to-end execution capabilities •Moved up the value chain and positioned itself as a global player 1. Industry •Focus on other verticals such as manufacturing, engineering & healthcare, apart from BFSI •Focus towards opportunities in emerging economies of Latin America, Africa & Middle East •Shift to Tier II/Tier III cities to save on land and operating costs 2. Market •Global IT players like IBM, Accenture & Cognizant have increased headcount in India •Slowdown in the U.S. economy took heavy toll on the Indian IT players •Europe has emerged as the Second largest IT/ITeS Market 3. International
- 3. GENERAL ENVIRONMENT •Proposed H1B and L1 visa restrictions in the new US immigration bill •Rise in Tax Outgo with the ending of STPI tax break1. Government •Recent depreciation in the value of the rupee will have a positive impact as IT/ITeS companies •Sector is heavily export oriented with exports accounting for over 70% of the revenue •Key concerns : Exchange rate fluctuations, Geographical concentration of clients in US/Europe 2. Economy •Offering Remote Infrastructure Management •Enterprise Application Services3. Technology
- 4. ORGANIZATION STRUCTURE Designates formal reporting relationships Includes number of levels in hierarchy and span of control of managers EARLIER ORGANIZATION STRUCTURE FOLLOWED IN HCL TECHNOLOGIES Traditional Pyramid Structure with Senior People on Top Thick layer of middle managers and enabling functions in the middle Frontline workers on the bottom This structure worked well till software industry was like manufacturing industry Aim at that time was to create faster chip, better user interface & smarter features The value chain no longer lay in the technology with the rise of the knowledge economy
- 5. REASONS FOR CHANGE IN STRUCTURE 4 TRENDS DEVELOPING IN INFORMATION TECHNOLOGY IT was becoming more complex & central to business strategy IT Industry was spearheading the technological changes and new innovations required to make business process faster and cheaper Customers‟ business and needs were becoming complex and so the solutions complexity was also increasing Execution and implementation part at customers‟ end were becoming important It was needed that innovation does not become hype Organizational hierarchies were getting in the way of quality implementation of software Different teams involved belonged to different hierarchies Organizational power was proportionate to person‟s position in hierarchy rather than his/her ability to add value
- 6. STRUCTURAL SHIFTS IDEA OF INVERTED PYRAMID In the new age IT Business, centuries old hierarchical structure and matrixes would not work Earlier structure didn‟t support the people in value zone In Traditional organization structure managers and bosses are at the top and do not directly contribute to the value zone So, new idea of inverted pyramid was implemented wherein management as well as people in enabling functions became accountable to those who create value REVERSE ACCOUNTABILITY Certain elements of the hierarchy became more accountable to the value zone New concept of Smart service desk was introduced Technology had become central to creating and sustaining entirely new business models
- 7. HCL – ORGANIZATIONAL STRUCTURE CEO Chief customer office Head - Infrastructure services Head - Consumer & Manufacturing Head - Engineering and R&D Enterprise Services CFO When both the pyramids merge, we end up with Star Organization In this a manager is accountable to their employees & the employees to the organization
- 8. RELATIONSHIP WITH STAKEHOLDERS Investors & Shareholders Provides statutory disclosures to increase transparency Reports numbers on constant currency and also provides its distribution across services and geos Concept of „twin audit‟ as its statutory auditors are PWC & KPMG Analysts Dedicated portal for interaction and hold strategy discussions periodically Annual “Directions” meet & the “HCL Global Meet” – Customers, Investors and analysts all interact together in a free flowing discussion Employees “Employees First” philosophy enables initiatives such as the Five Fold Path to Individual Enlightenment Customers Service Delivery Platform – Customers can access & analyze all kinds of information C-SAT surveys to get regular feedbacks Advisory Councils that allow top customers advise HCL on areas of improvement
- 9. ORGANIZATIONAL CULTURE HCL is considered one of the best companies in India in terms of Organizational Culture Proper work life balance and Employee friendly culture Employee Respect & Employee Involvement is of Prime Importance EMPLOYEES FIRST, CUSTOMER SECOND (EFCS) Started in 2005, it signifies HCLT‟s Transformational journey
- 10. EFCS TRANSFORMATION First established Point A – reality of their business situation through honest, open conversations Established Point B – Vision of the future which inspired & motivated people Shared company‟s financial information (both good & bad) with employees across various groups 360-Degree Review Made enabling functions accountable to those in value zone Creating self-run & self- governing company Value Portal - System that enables employees to offer suggestions and solutions for change
- 11. CORE VALUES 1. EMPLOYEE FIRST Smart Service Desk : Employees with a problem can open a trouble ticket CEO Connect : Online Availability to all employees Talent Transformation : Behavior-based competencies in individuals are built Employees First Academy : Effective leaders are nurtured on three levels - Employees First Lifestyle, Employees First Leadership, and Harvard Emerging Leader Program 2. VALUE CENTRICITY Choses a value-centric nonlinear business model Believes in delivering value by going beyond contractual agreements with the clients 3. TRUST, TRANSPARENCY AND FLEXIBILITY Confidence for investors : Concept of “twin audits” Creating value for clients : Unique Service Delivery Platforms Collaboration for Best Practices : Partnerships & Joint Ventures with several Global 500 companies
- 12. ADDITIONAL ASPECTS IN CULTURE 1. RELATIONSHIP BEYOND CONTRACT POLICY 2. FLEXIBLE WORK TIMINGS 3. INSTITUTIONALIZED INNOVATION 4. BUSINESS ALIGNED IT 5. BELIEF ON EQUALITY CATEGORIZATION OF HCL’S ORGANIZATIONAL CULTURE
- 13. RESULTS OF THIS NEW CULTURE Company has Re-ignited its Growth Engine Maintained a CAGR of 25% in the last 3 years Tripled its employee base since 2005 Ideas submitted by creative employees through HCL‟s value portal generated new streams of revenue Individual Employee Productivity is up Engaged employees have direct effect on bottom line Average revenue per employee is more than $50,000 a year from $37,000 per year in 2006 Employee Attrition is down Net Attrition is down by almost 50% Reduction in attrition among employees rated as “outstanding” is even higher Long-Term Reward of Improved Customer Satisfaction
- 14. AREAS OF CONCERN Over Dependence on Infrastructure Sector Primary source of revenue but high volatility in Infrastructure sector in India Bumpy Growth in Europe Europe is a strategic region as it hosts some of the major clients Slower growth in Europe has raised concerns about its performance R&D and Innovation Challenge Increased automation, changing business models Competition from startups in new-age technology areas such as analytics and cloud-computing Competitive Indian IT Industry Lot of foreign IT companies doing really well in the Indian space in the last few years
- 15. AREAS OF CONCERN CIO Concerns Lowering operational cost without compromising on the overall quality Ineffective IT management processes (development and support) Weak measurement frameworks for measuring IT performance in terms of delivery effectiveness, cost as well as value Training Problems Delivery of relevant training and knowledge in timely manner to over 85000 employees in 31 countries Aligning training with business objectives Enhancing competency levels in keeping pace with rapid organizational growth and fast emerging business opportunities Dependence on external training for diverse training requirements
- 16. THANK YOU
Editor's Notes
- #3: Gautam1. Shift to Non-linear growth models which delink the revenue growth from the employee strength growth2. BFSI is the largest revenue generating vertical3. U.S. accounts for over 60% of the total IT services export revenues4. Europe accounts for 28% of India's IT services exports
- #4: Gautam
- #5: Gautam
- #6: Gopesh1. the position of chief information officer had much more power and prominence than in the past.2.Adopting such technologies also increased the implementation of the hardware and proper compatibility with software3. implementation of software and its customization as per specific need are taken care of. 4.
- #7: Gopesh1. Value zone lies between customers and employees2. Enabling functions -Human resources, finance, training and others
- #8: Gopesh
- #9: Suyash
- #10: Suyash
- #11: Satyajit
- #12: Satyajit
- #13: Ankit
- #14: Ankit
- #15: Monika
- #16: Monika