Case Study Description of HCL Technologies: Employee First, Customer Second
HCL Technologies, a major Indian IT services company, rolled out a radical new strategy, "Employee First, Customer Second" (EFCS) in 2005. The strategic goals for EFCS were to create a unique employee organization, drive an inverted organizational structure, create transparency and accountability within the organization, and encourage a value-driven culture. The case describes the different aspects of this program, and its impact on employee engagement, customer experience, financial performance, and innovation in 2005-08.
Swot Analysis of "HCL Technologies: Employee First, Customer Second" written by Kamalini Ramdas, Ravindra Gajulapalli includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Efcs Hcl facing as an external strategic factors. Some of the topics covered in HCL Technologies: Employee First, Customer Second case study are - Strategic Management Strategies, Growth strategy, Innovation, IT and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the HCL Technologies: Employee First, Customer Second casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, wage bills are increasing, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, there is backlash against globalization, technology disruption,
there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of HCL Technologies: Employee First, Customer Second
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in HCL Technologies: Employee First, Customer Second case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Efcs Hcl, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Efcs Hcl operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of HCL Technologies: Employee First, Customer Second can be done for the following purposes –
1. Strategic planning using facts provided in HCL Technologies: Employee First, Customer Second case study
2. Improving business portfolio management of Efcs Hcl
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Efcs Hcl
Strengths HCL Technologies: Employee First, Customer Second | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Efcs Hcl in HCL Technologies: Employee First, Customer Second Harvard Business Review case study are -
Highly skilled collaborators
– Efcs Hcl has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in HCL Technologies: Employee First, Customer Second HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Efcs Hcl is one of the most innovative firm in sector. Manager in HCL Technologies: Employee First, Customer Second Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Efcs Hcl are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Efcs Hcl in the sector have low bargaining power. HCL Technologies: Employee First, Customer Second has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Efcs Hcl to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Efcs Hcl
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Efcs Hcl does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Efcs Hcl is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Efcs Hcl in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Efcs Hcl is present in almost all the verticals within the industry. This has provided firm in HCL Technologies: Employee First, Customer Second case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Leadership & Managing People industry
– HCL Technologies: Employee First, Customer Second firm has clearly differentiated products in the market place. This has enabled Efcs Hcl to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Efcs Hcl to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Efcs Hcl is one of the leading recruiters in the industry. Managers in the HCL Technologies: Employee First, Customer Second are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Efcs Hcl is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Efcs Hcl is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in HCL Technologies: Employee First, Customer Second Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Efcs Hcl has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Efcs Hcl has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Efcs Hcl has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses HCL Technologies: Employee First, Customer Second | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HCL Technologies: Employee First, Customer Second are -
Interest costs
– Compare to the competition, Efcs Hcl has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Efcs Hcl has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Efcs Hcl is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study HCL Technologies: Employee First, Customer Second can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study HCL Technologies: Employee First, Customer Second has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Efcs Hcl 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Kamalini Ramdas, Ravindra Gajulapalli suggests that, Efcs Hcl is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Efcs Hcl has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Efcs Hcl has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study HCL Technologies: Employee First, Customer Second, it seems that the employees of Efcs Hcl don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study HCL Technologies: Employee First, Customer Second, is just above the industry average. Efcs Hcl needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study HCL Technologies: Employee First, Customer Second that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case HCL Technologies: Employee First, Customer Second can leverage the sales team experience to cultivate customer relationships as Efcs Hcl is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Efcs Hcl has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Efcs Hcl even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities HCL Technologies: Employee First, Customer Second | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study HCL Technologies: Employee First, Customer Second are -
Manufacturing automation
– Efcs Hcl can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Efcs Hcl can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Efcs Hcl in the consumer business. Now Efcs Hcl can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Efcs Hcl has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Efcs Hcl can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. HCL Technologies: Employee First, Customer Second suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Efcs Hcl can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Efcs Hcl can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, HCL Technologies: Employee First, Customer Second, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Efcs Hcl in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Efcs Hcl can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Efcs Hcl to increase its market reach. Efcs Hcl will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Efcs Hcl to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Efcs Hcl has opened avenues for new revenue streams for the organization in the industry. This can help Efcs Hcl to build a more holistic ecosystem as suggested in the HCL Technologies: Employee First, Customer Second case study. Efcs Hcl can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Efcs Hcl can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Threats HCL Technologies: Employee First, Customer Second External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study HCL Technologies: Employee First, Customer Second are -
High dependence on third party suppliers
– Efcs Hcl high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Efcs Hcl needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Increasing wage structure of Efcs Hcl
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Efcs Hcl.
Environmental challenges
– Efcs Hcl needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Efcs Hcl can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Stagnating economy with rate increase
– Efcs Hcl can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Efcs Hcl can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study HCL Technologies: Employee First, Customer Second .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Efcs Hcl can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Efcs Hcl needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Efcs Hcl in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Efcs Hcl is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Efcs Hcl with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Efcs Hcl demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of HCL Technologies: Employee First, Customer Second Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study HCL Technologies: Employee First, Customer Second needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study HCL Technologies: Employee First, Customer Second is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study HCL Technologies: Employee First, Customer Second is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of HCL Technologies: Employee First, Customer Second is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Efcs Hcl needs to make to build a sustainable competitive advantage.