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 - – cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing commodity prices,
supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, 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 -
Training and development
– Efcs Hcl has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in HCL Technologies: Employee First, Customer Second Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Efcs Hcl has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study HCL Technologies: Employee First, Customer Second - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Efcs Hcl digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Efcs Hcl has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
Analytics focus
– Efcs Hcl is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Kamalini Ramdas, Ravindra Gajulapalli can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
Strong track record of project management
– Efcs Hcl is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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 -
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.
Products dominated business model
– Even though Efcs Hcl has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - HCL Technologies: Employee First, Customer Second should strive to include more intangible value offerings along with its core products and services.
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.
Low market penetration in new markets
– Outside its home market of Efcs Hcl, firm in the HBR case study HCL Technologies: Employee First, Customer Second needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
No frontier risks strategy
– After analyzing the HBR case study HCL Technologies: Employee First, Customer Second, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study HCL Technologies: Employee First, Customer Second, in the dynamic environment Efcs Hcl has struggled to respond to the nimble upstart competition. Efcs Hcl has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Efcs Hcl needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
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 -
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Efcs Hcl to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Efcs Hcl to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Efcs Hcl can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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 -
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Efcs Hcl business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Efcs Hcl.
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.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Efcs Hcl will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
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.
