HCL Technologies - Everest Group’s PEAK Matrix for ......integration, and distribution of ICT...
Transcript of HCL Technologies - Everest Group’s PEAK Matrix for ......integration, and distribution of ICT...
Topic: Everest Group’s PEAK MatrixTM for Capital Markets
AO Service Providers
Focus on HCL Technologies August 2015
Copyright © 2015 Everest Global, Inc.
This document has been licensed for exclusive use and distribution by HCL Technologies
Copyright © 2015, Everest Global, Inc. 2
Background and scope of the research
Background of the research
Capital markets industry is grappling with high regulatory pressures, intense competition, and an uncertain economy. Market participants are
adopting disruptive business models to contain cost and improve profitability. As the financial services industry undergoes a technology revolution through adoption of digital technologies, capital markets players are investing in next-generation technologies to stay ahead of
competition. Buy-side and sell-side participants, as well as financial intermediaries are investing in risk & compliance management solutions, automation, cloud & open-source technologies, mobility, high-end analytics, and third-party platforms as they focus on cost reduction,
standardization, and portfolio rationalization.
With the capital markets industry witnessing a number of changes, IT service providers are looking to capitalize on the opportunity by
tailoring their offerings with next-generation technologies, providing commoditized services, collaborating with buyers to invest in innovation, and forming alliances with leading platform providers.
In this research, we analyze the capabilities of 24 leading AO service providers, specific to the global capital markets sector. These providers
were mapped on the Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix, which is a composite index of a range of distinct metrics related to each provider’s capability and market success. . Additionally, Everest Group has also profiled the capabilities of
these 24 service providers in detail including a comprehensive picture of their service suite, scale of operations, domain investments, delivery locations, and buyer satisfaction specific to capital markets AO services
This document focuses on HCL Technologies’ capital markets AO experience and includes:
Overview of the capital markets AO service provider landscape
Everest Group’s assessment of HCL Technologies’ delivery capability and market success on PEAK matrix
Detailed capital markets AO profile for HCL Technologies
Copyright © 2015, Everest Global, Inc. 3
This Everest Group report is a compendium of detailed
profiles of 24 service providers featured on Everest Group’s
capital markets AO PEAK Matrix
BFSI NOT EXHAUSTIVE
Focus of report
Banking
Retail financial services (B2C1)
Retail banking
Lending
Cards
Commercial banking (B2B2)
Capital markets
Investment banking
Asset management Custody and funds administration
Brokerage
Others3
Insurance
Life and pensions
Property and casualty
Others
IT Infrastructure
Outsourcing (IO) IT Application Outsourcing Business Process
(AO) Outsourcing (BPO)
Application development BFSI-specific BPO
Application maintenance HRO Independent testing FAO
Package implementation PO
ERP services Contact center Business intelligence / data Knowledge services
warehousing
Consulting
Traditional IO Remote Infrastructure
Management (RIM) Infrastructure Management
Services (IMS) Cloud
IT strategy / operations consulting
Business consulting Infrastructure consulting
Infrastructure rollouts
Digital Services
Services in next-generation technologies leveraged by enterprises to enable transformation including social, mobility, analytics, cloud, and others (artificial intelligence, robotics process automation, internet of things, machine-to-machine, etc.)
1 Business-to-consumer relationships
2 Business-to-business relationships 3 Includes other capital markets functions such as structured finance, treasury, FX, and horizontal functions including risk management
Services industry
Copyright © 2015, Everest Global, Inc. 4
Everest Group’s BFSI research is based on two key sources of
proprietary information
1 Assessment for Accenture, Capgemini, CSC, Hexaware, IBM, and Mphasis excludes service provider inputs, and is based on Everest Group’s proprietary
Transaction Intelligence (TI) database, service provider public disclosures, and Everest Group’s interactions with capital markets buyers Note: We continuously monitor market developments and track additional service providers beyond those included in the analysis
Confidentiality: Everest Group takes its confidentiality pledge very seriously. Any information, that is contract-specific, will be presented back to the industry only in an
aggregated fashion
Service providers covered in the analysis1
1 Everest Group’s proprietary database of 500+ large, active, multi-year AO
contracts within BFSI (updated annually through primary data collection via service provider RFIs)1
The database tracks the following elements of each large AO relationship: – Buyer details including industry, size, and signing region
– Contract details including TCV, ACV, term, start date, service provider FTEs, and pricing structure
– Activity broken down separately for banking, capital markets, insurance, and by line of business (for example, investment banking, asset management,
custody, fund administration, and brokerage) – Scope includes coverage of buyer geography as well as functional activities
– Global sourcing including delivery locations and level of offshoring
2
Everest Group’s proprietary database of operational capability of 20+ BFSI AO service providers (updated annually through primary data collection via service
provider RFIs)
The database tracks the following capability elements for each service provider:
– Major BFSI AO clients and recent wins – Overall revenue, total employees, and BFSI employees
– Recent BFSI-related developments
– BFSI AO delivery locations – BFSI AO service suite
– Domain capabilities, proprietary solutions, and intellectual property investments
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 5
Leaders
TCS Wipro Cognizant
Infosys Accenture
HCL IBM
Hexaware Birlasoft
Syntel
Virtusa
NIIT Technologies Aspirants
75th percentile
Major Contenders
Luxoft
CGI
Capgemi ni
L&T Infotech
Mphasis Tech Mahindra
IGATE
EPAM
CSC
Polaris
Genpact
Dell Services
HCL Technologies is positioned as a Star Performer
and Leader on Everest Group PEAK Matrix for capital
markets AO - 2015
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for large capital markets AO relationships1
High
Leaders
Major Contenders
Aspirants
Star Performers
Low
Low
25th percentile
Capital Markets AO delivery capability
High
(Scale, scope, domain investments, delivery footprint, innovation, and buyer satisfaction)
1 PEAK Matrix specific to large (>US$25 million TCV), multi-year (>3 years) application outsourcing relationships for the capital markets sector (Investment
banking, asset management, custody, fund administration, and brokerage); excludes banking and insurance Note: Assessment for Accenture, Capgemini, CSC, Hexaware, IBM, and Mphasis excludes service provider inputs and is based on Everest Group’s proprietary
Transaction Intelligence (TI) database, service provider public disclosures, and Everest Group’s interactions with capital markets buyers
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Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 6
HCL Technologies | Capital markets ITO profile (page 1 of 8)
Corporate and BFSI overview
>US$500 million US$100-500 million <US$100 million
1 FY ends on June 30
Company description: Established in 1991, HCL Technologies is a
global provider of IT solutions, product engineering, custom & package
applications, BPO, IT infrastructure services, IT hardware, systems integration, and distribution of ICT products across select industry
verticals. HCL Technologies is the services business arm of the US$6.5 billion HCL Enterprise, which also includes the hardware
business unit, HCL Infosystems. The HCL team consists of over 105,000 professionals who operate from 31 countries, including over 500
locations in India Headquarters: Noida, India
Website: www.hcltech.com
Geographical mix
FY 2014; US$ million
100% = 5,360
RoW
12%
Europe 32% 56%
Americas
Service mix
FY 2014; US$ million
100% = 5,360
BPO services Engineering and Infrastructure
R&D services services 5%
16% 34%
Enterprise application
services
17%
28% Custom application
1176
3,924
3,133 3,510
Scale of BFSI subverticals
Banking Capital markets Insurance
Key financial parameters Revenue1 from the BFSI vertical
Revenue in US$ million Revenue1 from other verticals
Operating margin
24.2%
16.3% 20.1%
4,152 4,686 5,360 1,436
1,019
FY 2012 FY 2013 FY 2014
Services offered for the BFSI vertical: ADM, application
maintenance, independent testing, SI, enterprise transformation services, product engineering, enterprise application services,
infrastructure services, digital transformation services (mobile, cloud, and analytics), reporting services & business consultancy,
and services and process transformation Domains – asset management, wealth management, risk &
compliance, investment banking & exchanges and securities and fund services, channels, and payments
Major BFSI clients: Commonwealth Bank of Australia, Lloyd's
Banking group, DNB Bank, and Standard Bank of South Africa
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 7
Wipro
Leaders
Cognizant TCS
Inf osy s Accenture
HCL IBM
Hexaware Virtusa Birlasof t
Sy ntel NIIT Technologies
Aspirants
PEAK Matrix dimensions assessment
Dimension Rating
Market success
Scale
Scope
Domain investments
Delivery footprint
Innovation
Buyer satisfaction
Everest Group PEAK Matrix for Capital Markets AO
75th percentile
High
Major Contenders Luxoft
CGI
Capgemini
EPAM
L&T Inf otech CSC
IGATE Polaris Mphasi s
Tech Mahindra Genpact
Dell Serv ices
Low
Low 25th percentile Capital Markets AO delivery capability
High
(Scale, scope, domain inv estments, deliv ery footprint, innov ation, and buy er satisfaction)
High Low
HCL Technologies | Capital markets ITO profile (page 2 of
8)
Capital markets AO capability assessment and market success
Market share by active ACV Market share by number of contracts
6% 6%
Areas of improvement
HCL needs to expand its delivery footprint in nearshore locations to better serve clients and improve
visibility outside the existing client base
HCL need’s to evolve its proposition for digital and next-generation IT services specific to capital
markets
Strengths
Strong and sustained growth of capital markets AO revenue across Europe and North America
Challenger positioning in the marketplace through innovative and flexible engagement models
Strong focus on investment banking and asset management subvertical, also serves custody & fund
administration and brokerage LoBs across all AO subfunctions
Though delivery footprint for banking AO is concentrated in India, it expanded its presence in Europe
with three new delivery centers
Launched new solutions for regulations compliance, reference data management, and reporting tools
for investment banks to reduce cost, time, and effort for software development activities
Capability dashboard
Capital markets lines of business
I-banking Brokerage
Asset mgmt. Custody & fund admn
Geographic scope
North America
Latin America
EMEA
APAC
Key technology
spend areas Risk & regulatory compliance
Mobility
Social
Analytics
Cloud
Established: Mature capabilities with high adoption Emerging: Nascent capabilities with limited adoption
Credible: Strong capabilities with rising adoption
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Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 8
HCL Technologies | Capital markets ITO profile (page 3 of 8)
AO domain investments
Proprietary solutions (representative list) (continued)
Line of business Solutions
Overall BFSI CoRep/FinRep: An accelerator framework to help banks and NBFC (credit and investment firms) to publish reports
that are mandated by European regulatory authorities CCAR: An accelerator framework with one click, pre-built reports for banks and NBFC that are mandated by the
U.S. regulatory authority Mobile Tracer: Solution enables tracing mobile users within a wi-fi range
Finedge: Financial services CRM solution HCL MBark: A customer onboarding framework (launched in 2011)
Payments Accelerators: Payments accelerators developed for various clients
PRIZMTM: This is a proprietary application portfolio assessment and optimization tool
Capital markets HCL Report: A reporting solution which allows Summit users (business and IT users) to create reports on the fly
through a GUI based interactive tool. This solution is part of the HCL eXcite Suite (launched in 2014) HCL Convert: An accelerator to fast track data migration of static data, market data and trade data, especially
useful during Summit upgrades and merger of multiple instances. This solution is part of the HCL eXcite suite
SFDC-Wealth CRM: CRM solution for the wealth management industry, enabling wealth managers / advisor community with advisory functions and client-centric engagement tools
ExactTM Framework: Tools for application portfolio rationalization Decommissioning Bluebook: Application Portfolio Assessment and Optimization tool for decommissioning
execution XekData: Data management solution which offers a cross asset, cross trading, and cross referencing platform
InvesIT: A research management solution XekPost – Fund Order Management Solution (FOMS): An STP solution for middle- and back-office fund users
FinEdge Wealth: CRM solution for wealth management, insurance, and corporate banking to deliver customer interface enabling customer retention and loyalty management
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 9
HCL Technologies | Capital markets ITO profile (page 4 of 8)
AO domain investments
Proprietary solutions (representative list)
Line of business Solutions
Capital markets
(continued) TradeXek: Handles reporting for exchanges and financial Institutions through automatic TRS reporting and
enabling full compliance with MiFID regulations regarding reporting requirements for the financial institutions and
exchanges (launched in 2014) Invest IT: Global research and content management platform monetized from a leading I-Bank and is productized
today (launched in 2014) BestXek: Selects the best venue for trade execution using built-in algorithms based on market performance factors ICON: A primary investments pricing and accounts system
HCL PEAK: Test automation framework for COTS products such as Summit
Others Mobility frameworks: Mobility solutions built around ipad and iphone Alt ASM: Business Aligned Target Operating Model with committed operational gains and optimal service levels
through LEAN and ITIL practices GreenfieldTM: A framework to industrialize custom application development in the Java and .Net space that
enables greenfield projects to execute faster, cheaper, and better
Regulatory
Reporting CoRep/ FinRep: An accelerator framework to help the banks and NBFC (credit and investment firms) to publish
the reports that are mandated by European regulatory authorities (launched in 2014)
CCAR: Comprehensive capital analysis and review (CCAR) framework for stress testing and capital assessment (launched in 2014)
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 10
HCL Technologies | Capital markets ITO profile (page 5 of 8)
AO domain investments
Acquisitions (representative list)
Target Date Capabilities added
Software assets
from a Fortune 50 universal bank
2011 HCL acquired software assets in the custody space from a Fortune 50 universal bank and
rebranded these as TradeXek suite of products
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 11
HCL Technologies | Capital markets ITO profile (page 6 of 8)
AO domain investments
Key alliances (representative list) (continued)
Alliance partner Purpose of alliance
Axiom Alliance formed in 2013 for AXIOM ControllerView, a regulatory reporting tool
CSC Strategic partnership formed in 2013 for application modernization and transitioning to cloud
Misys Strategic partnership for offering Misys products in the areas of banking and capital markets
Chordiant Software
Inc.
Consulting and system integration services for the BFSI industry
Avaloq Strategic partnership augmenting HCL’s experience in wealth management IT services
Swisscom Strategic service partnership at enterprise level
Orbium Preferred implementation partner of Avaloq solutions, another partner of HCL
DerivIT Alliance in the capital markets domain
Kony Global integrator in the mobility domain
Fenergo Tactical partnership to provide client onboarding solution
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 12
HCL Technologies | Capital markets ITO profile (page 7 of 8)
Capital markets ITO transactions activity
NOT EXHAUSTIVE
Recent transaction activity1
Buyer’s name
Announcement date
TCV estimate
(US$ million)
Duration
(years)
AO/IO/ Both
Contract details and services
U.S.-based financial
services company
January 2013 N/A N/A AO SAP deployment
1 Publicly-announced capital markets ITO transactions during 2012 to 2015
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 13
HCL Technologies | Capital Markets ITO profile (page 8 of 8)
Key offshore AO delivery locations
NOT EXHAUSTIVE
Poland
Mexico Puerto Rico
Brazil
India
Philippines
Indonesia
Malaysia
Singapore
South Africa
Note: FTE strength represents the total number of AO FTEs across different industries for the particular country
500-1,000 AO FTEs
100-500 AO FTEs
<100 AO FTEs
Confirmed location for Capital markets AO
>5,000 AO FTEs
1,000-5,000 AO FTEs
Copyright © 2015, Everest Global, Inc. 14
Appendix
Copyright © 2015, Everest Global, Inc. 15
Everest Group’s PEAK Matrix is a composite index of a range of distinct metrics related to a service provider’s scale, scope, technology/domain investments, delivery footprint, innovation, buyer satisfaction, and resultant market success in the context of a given
outsourcing function
Leaders
Top quartile performance
across market success and capability
Aspirants
4th quartile performance across market success and
capability
75th percentile
Major Contenders
2nd or 3rd quartile performance
across market success and
capability
The service providers were mapped on Everest
Group’s Performance | Experience | Ability |
Knowledge (PEAK) Matrix
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for Application Outsourcing
High
Low Low
25th percentile
AO capability
High
(Scale, scope, domain investments, delivery footprint, innovation, and buyer satisfaction)
Mark
et su
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25
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75
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Copyright © 2015, Everest Global, Inc. 16
Dimensions of service providers’ capability and
Total company
revenue
Contribution of vertical specific AO revenue to
the total company revenue
Lines of Business
(LoBs) served
AO subfunctions
Geographies
served
Proprietary
solutions
Certifications
M&A and
alliances
Onshore, nearshore, and
offshore capabilities
Number of delivery centers
and regions covered
Innovative
solutions
Innovative engagement models
Innovation
Buyer satisfaction
Customer experiences with
service providers for vertical
specific AO services
Client renewal activity
market success underlying the PEAK Matrix
Delivery capability
Scale
Scope Domain
investments
Delivery footprint
Leaders
Aspirants
ACV of large active AO
deals
Number of large, active AO deals
Everest Group PEAK Matrix
Major Contenders
Yearly vertical specific AO
revenue growth
Mark
et su
ccess
FAQs (page 1 of 2)
Copyright © 2015, Everest Global, Inc. 17
Does the PEAK Matrix assessment incorporate any subjective criteria?
The Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service provider RFIs and the Everest Group’s proprietary databases containing providers’ deals and operational capability information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction, and provider briefings
Is being a “Major Contender” or “Aspirant” on the PEAK Matrix an unfavorable outcome?
No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical. There are a number of providers from the broader universe that are assessed and do not make it to the PEAK Matrix at all. Therefore, being represented on the PEAK Matrix is in itself a favorable recognition
What other aspects of the PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK Matrix position”?
The PEAK Matrix position is only one aspect of the Everest Group’s overall assessment. In addition to assigning a “Leader”, “Major Contender” or “Aspirant” title, Everest Group highlights the distinctive capabilities and unique attributes of all the PEAK Matrix providers assessed in its report. The detailed
metric level assessment and associated commentary is helpful to the buyers in selecting particular providers for their specific requirements. It also helps providers showcase their strengths in specific areas
Copyright © 2015, Everest Global, Inc. 18
FAQs (page 2 of 2)
What are the incentives for buyers and providers to participate / provide input to the PEAK Matrix
research? Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment Participation incentives for providers include adequate representation and recognition of their
capabilities/success in the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of PEAK Matrix providers” profiles
What is the process for a service provider to leverage their PEAK Matrix positioning status ? Providers can use their PEAK Matrix positioning in multiple ways including:
– Issue a press release declaring their positioning/rating
– Customized PEAK Matrix profile for circulation (with clients, prospects, etc.) – Quotes from the Everest Group’s analysts could be disseminated to the media
– Leverage the PEAK Matrix branding across communications (e-mail signatures, marketing brochures, credential packs, client presentations, etc.)
The provider must obtain the requisite licensing and distribution rights for the above activities
through an agreement with the designated PoC at Everest Group
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