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Topic: Everest Group’s PEAK MatrixTM for Banking AO
Service Providers
Focus on HCL Technologies July 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
Rise of digital consumers, need for business agility, growing costs of regulatory compliance, and threat from non-banking
competitors in areas such as payments were the key challenges faced by banks in 2014. Banks are aligning their technology
priorities around cost containment, efficiency, risk & compliance management, and transformation. Banks continued to invest
in development of specific applications for regulatory compliance, risk management, channel-specific initiatives (social, mobile,
etc.), and customer analytics
The service provider landscape is intensifying as providers ramp up their capabilities, invest in innovative technologies, form
alliances, and acquire strategic targets to address the growing and complex application services needs of banks and financial
institutions
In this research, we analyze the capabilities of 30 leading AO service providers, specific to the global banking 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 30 service providers in detail including a comprehensive picture of their
service suite, scale of operations, domain investments, delivery locations, and buyer satisfaction specific to banking AO
services
This document focuses on HCL Technologies’ banking AO experience and includes:
Overview of the banking AO service provider landscape
Everest Group’s assessment of HCL Technologies’ delivery capability and market success on PEAK matrix
Detailed banking AO profile for HCL Technologies
Copyright © 2015, Everest Global, Inc. 3
This Everest Group report is a compendium of detailed
profiles of 30 service providers featured on Everest Group’s
banking AO PEAK Matrix
BFSI NOT EXHAUSTIVE
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
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.)
Consulting
IT strategy / operations
consulting
Business consulting
Infrastructure consulting
Infrastructure rollouts
IT Infrastructure Outsourcing (IO)
Traditional IO
Remote Infrastructure Management (RIM)
Infrastructure Management Services (IMS)
Cloud
IT Application Outsourcing (AO)
Business Process Outsourcing (BPO)
Application development Application maintenance Independent testing Package implementation
ERP services Business intelligence / data
warehousing
BFSI-specific BPO HRO FAO PO
Contact center Knowledge services
Services industry
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
Focus of report
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, Endava, Hexaware, HPES (HP Enterprise Services), 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
banking 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 analysis
1 1
1
1
1 1 1
1
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, credit cards, lending, retail banking, and
commercial banking) – 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
HCL Technologies is positioned as Star Performer and
Leader on Everest Group PEAK Matrix for banking AO -
2015
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for large banking AO relationships1
High
Leaders
Major Contenders
Aspirants
Star Performers
Low
Low
25th percentile
Banking 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 banking sector (retail banking, wholesale
banking, credit cards, loans, and mortgages); excludes capital markets and insurance Note: Assessment for Accenture, Capgemini, CSC, Endava, Hexaware, HPES, 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 banking buyers
Leaders
Cognizant TCS
Infosys
IBM
Accenture
Wipro
HCL
75th percentile
Major Contenders
Mphasis Capgemi ni
Tech Mahindra
CSC
L&T Infotech
HPES
Syntel
Softtek
Unisys
Virtusa
Luxoft
CGI IGATE
Dell Services
Polaris
Birlasoft Endava
Attra Infotech
Aspirants
Mindtree Genpact
Hexaware
ITC Infotech
EPAM
Mar
ke
t su
cc
es
s
25th
p
erc
en
tile
75th
p
erc
en
tile
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 6
HCL Technologies | Banking ITO profile (page 1 of 8)
Corporate and BFSI overview
>US$500 million US$100-500 million <US$100 million
Scale of BFSI subverticals
Banking Capital markets Insurance
Key financial parameters Revenue1 from the BFSI vertical
Revenue in US$ million Revenue1 from other verticals
Operating margin
24.2%
16.3% 20.1%
4,152 4,686 5,360
1176 1,436
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), and business services
Domains – channels, payments, cards, lending, core banking, trade finance, and cash management
Major BFSI clients: Commonwealth Bank of Australia, Lloyd's
Banking group, DNB Bank, and Standard Bank of South Africa
1 FY ends on June 30
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
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
1,019
3,510 3,924 3,133
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 7
HCL Technologies | Banking ITO profile (page 2 of 8)
Banking AO capability assessment and market success
Areas of improvement
Needs to expand its delivery footprint in nearshore locations to better serve clients Improve visibility outside the existing client base
Needs to enhance its offering in digital transformation for banking clients
Strengths
Strong portfolio of solutions across various banking domains including consumer lending, commercial
and corporate lending, cards & payments, trade finance, treasury, cash management, and core banking
Maintains a strong reputation for proactive investments in technology, innovation, customer intimacy,
and focus on service delivery quality
Banking AO services delivered from nearly 30 delivery centers; expanded presence in Europe and
United States
Significant focus on vertical systems Integration with specific focus on core banking, customer
experience management, and payments; partnered with CSC to establish a delivery network to enable
enterprises to shift from legacy technologies to a cloud-enabled platform
Mar
ke
t su
cce
ss
25th
pe
rce
nti
le 75
th
perc
en
tile
Everest Group PEAK Matrix for Banking AO
75th percentile High
Leade r s TCS Cogniza nt
Major Contenders Inf osys Accenture
Mphasis Capgemini IBM Wipro
Tech Mahindra HPES HCL
CSC CGI L&T Inf otech IGATE
Sy ntel Virtusa Dell Serv ices
Sof ttek Luxof t
Polaris
Unisys Mindtree Birlasof t Genpact
Endav a ITC Inf otech Attra Inf otech Hexaware
Low Aspirants EPAM
Low 25th percentile High
Banking AO delivery capability (Scale, scope, domain inv estments, deliv ery f ootprint, innov ation, and buy er satisf action)
PEAK Matrix dimensions assessment
Dimension Rating
Market success
Scale
Scope
Domain investments
Delivery footprint
Innovation
Buyer satisfaction
High Low
Capability dashboard
Banking lines of business
Retail Lending
Commercial Cards/payments
Geographic scope
North America
Latin America
EMEA
APAC
Key technology spend areas
Risk & regulatory compliance
Mobility
Social
Analytics
Cloud
Emerging: Nascent capabilities with limited adoption with rising adoption Established: Mature capabilities with high adoption Credible: Strong capabilities
Market share by active ACV Market share by number of contracts
3% 3%
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 8
HCL Technologies | Banking ITO profile (page 3 of 8)
AO domain investments
Proprietary solutions (representative list)
Line of business Solutions
Banking CCAR: Comprehensive capital analysis and review (CCAR) framework for stress testing and capital assessment (launched in 2014):
Managed mobility: Mobile payment engine (launched in 2013)
FATCA framework: Framework to assist banks in amending IT architecture to comply with FATCA
regulations (launched in 2013) HCL PEAK (process enhancement automation Kit): Testing accelerator for functional and regression
testing across HCL’s partner products like Misys Summit, Loan IQ, etc. Test data management workbench: Solution for mining of test data (launched in 2013)
HCL TOSCANA - automated paperless solution for business services: Banking operations workflow
methodology to improve efficiency through automation (launched in 2012) Offers a Web 2.0-based commercial customer onboarding solution Iphone-based mortgage origination solution
Mortgage/Loan self service: Helps customer/stakeholder perform loan related transactions on "self service mode”
Loans Loan Syndication Portal: Portal that facilitates origination of syndicated loans across multiple lenders and agent bank (launched in 2012)
Digital system integration Digital transformation services including: Justification and prioritization of digitalization
Creation of a digitalization blue print for its strategic view
Focus on transforming processes which create the maximum value
Legacy modernization and cloud enablement Creation of a seamless data fabric
System integration approach
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 9
HCL Technologies | Banking ITO profile (page 4 of 8)
AO domain investments
Proprietary solutions (representative list) (continued)
Line of business Solutions
Trade finance SCF portal – Framework for end-to-end supply chain finance portal
Overall BFSI Finedge: Financial services CRM solution
Offers solutions for risk and compliance leveraging assets such as the HCL BRICS framework, and the Oracle Financial Services Analytical Applications (OFSAA) CoE, a factory operating model for regulatory
reporting and alliances with partners providing risk and compliance services
Customer experience management
HCL’s CEM solution framework can be used across the following areas – Customer experience blueprinting and measurement
– Behavior and experience analytics
– Channel optimization and innovation – Business process integration and operations
– Integrated view of the customer
– Self-service enablement – Workforce productivity improvement
– Customer-centric application reengineering
Acquisitions (representative list)
Target Date Capabilities added
Axon (United Kingdom) 2008 Expansion of HCL SAP practice to provide the full lifecycle suite of services
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 10
HCL Technologies | Banking ITO profile (page 5 of 8)
AO domain investments
Key alliances (representative list)
Alliance partner Purpose of alliance
CSC Strategic partnership formed in 2013 for application modernization and transitioning to cloud
KOFAX Implementation partnership formed in 2013
COREFILING Alliance formed in 2013 for reporting solutions
AXIOM Alliance formed in 2013 for AXIOM ControllerView, a regulatory reporting tool
Misys Strategic partnership for offering Misys products in the areas of banking and capital markets
Fundtech System integration and go-to-market partner for Fundtech in the area of payments and cash management
Oracle End-to-end partnership leveraging Oracle’s suite of products including Oracle Flexcube and OFSAA
Avaloq Strategic partnership formed augmenting HCL’s experience in wealth management IT services
SIMCORP Alliance formed to provide customers with automated client reporting and communications solutions
Microstrategy Channel partnership
Mulberry consulting Channel partnership
LineData Partnership for lending stream
Callatay&Wouters(Thaler) Core banking partnership
Flexcube Core banking partnership
Source: Everest Group (2015)
Copyright © 2015, Everest Global, Inc. 11
HCL Technologies | Banking ITO profile (page 6 of 8)
AO domain investments
Key alliances (representative list) (continued)
Alliance partner Purpose of alliance
Kony Partnership leveraging Kony’s mobile application development platform and solutions
Accumulate Partnership leveraging Accumulate’s mobile payments solutions
SAS Partnership leveraging SAS’ business analytics solutions
SAP Strategic partnership leveraging SAP’s suite of products
Microsoft Gold certified 360-degree partnership
Pega Alliance leveraging Pega’s BPM and CRM solutions
EMC Global SI partner for the suite of EMC products including EMC Documentum
IBM Global partnership across products such as FileNet and Cognos
HCL Technologies | Banking ITO profile (page 7 of 8)
Banking ITO transactions activity
Copyright © 2015, Everest Global, Inc. 12
NOT EXHAUSTIVE
Recent transaction activity1
Buyer’s name
Announcement date
TCV
estimate
(US$ million)
Duration
(years)
AO/IO/Both
Contract details and services
DnB May 2014 107.66 N/A AO Manage the IT infrastructure services and application operations; also includes running the online banking
application
Citibank July 2012 200 N/A N/A Setting up back-end processes for loans, financial products and customer service
1 Publicly-announced banking ITO transactions during 2012 to 2015 Source: Everest Group (2015), Transaction Intelligence database
Copyright © 2015, Everest Global, Inc. 13
HCL Technologies | Banking 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 Source: Everest Group (2015)
500-1,000 AO FTEs
100-500 AO FTEs
<100 AO FTEs
Confirmed location for banking 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
ccess
25
th p
erc
en
tile
75
th p
erc
en
tile
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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