Aiming Big

Just when the effects of the slowdown were sinking in and companies were
losing hope of bagging some big ticket deals, HCL has surfaced strongly and
proved everyone wrong. After a commendable hat trick of large value
dealsReaders Digest, Xerox and Nokiaall in the range of $200-350 mn, HCL is
now poised for similar large and long-gestation deals on the home turf.

HCL ISD, a subsidiary of HCL Technologies, recently bagged a whopping Rs 393
crore contract from National Insurance Company (NIC) in a deal keenly contested
by top Indian IT companies as well as multinationals. One of the largest
domestic deals bagged by HCL in FY 09 and more significantly one of the largest
IT deals in the insurance sector, HCL believes, this will be a turning point for
the company in terms of its positioning in the PSU and government sector. At the
moment, HCL is already in the process of implementing three Rs 100 crore plus
projects, all in the financial services space.

The contract with NIC is a seven-year partnership that involves implementing
a slew of software applications and maintaining them, besides supporting the
insurers IT infrastructure. It is an end-to-end IT services engagement where
we would be starting with a complete BPR for NIC and then going over to rolling
out the entire IT transformational project. This would include rolling out
nineteen different applications, building a datacenter and hosting it, rolling
out the hardware set-up at the branch offices, and operating and managing the
entire set-up for about seven years, says Kiran Bhagwanani, senior vice
president, HCL.

HCL will implement a core insurance solution similar to the one banks
currently use for the insurance provider. Apart from the solution, it will also
implement nineteen other applications for verticals like customer relationship
management, human resources, and business analytics. NIC was looking for a
strategic IT company that could partner them for seven years, roll out the
applications as well as operate them, says Bhagwanani, terming it a
transformational project for all the insurers business processes.

The total rollout will involve an eighteen month implementation cycle. Over
the first nine months, the datacenter, DR-site, core applications and fifty
branches will go live, and over the next nine months, these applications will be
rolled out to the remaining 1,000 branches. After the overall infrastructure and
application rollout, HCL will provide operations management services for the
next five years.

On studying the scope of the contract, it comes across as a very
comprehensive engagement where HCL will have to get down to ground zero and
completely build NICs IT set-up from scratch. The legacy IT infrastructure at
NIC was very basic and rudimentary. Until recently, the company used a
distributed application environment which resided in its zonal offices. The
company had a traditional hierarchical structure where the regions roll up to
zones, and the zonal offices to the head office.

Over a span of seven years, HCL plans to first set up a datacenter for NIC
and connect and rollout applications across 1,034 branches, and then help about
10,000 users in migrating on to the new application suite that will be deployed.

According to Bhagwanani, the complex piece is not just in rolling out this
large IT architecture and design, but also training the end users. There is
going to be a serious need for a mindset change among the end users as they will
have to get used to working on completely automated systems. With the new
application stack, users will be working on a centralized application, where all
the customers will be able to access their accounts from any location. So, we
will have to attack the mindset and impart training apart from rolling out what
is otherwise a standard IT project, says Bhagwanani.

Business-aligned IT

HCL for the past one year has been focusing on the concept of business
aligned IT, where it has been in discussions with customers to try and educate
them on the need to align IT with business imperatives and make
technology-related decisions keeping in mind the business domain, technology and
operations. We used this strategy very effectively in the case of NIC, says
Bhagwanani.

HCL, which has already been working with some of the largest insurance
companies in the world, was not short of domain knowledge and experience and
could easily pick and choose the best practices for implementation at NIC.
However, on the technology front, the complexities were high as there were
nineteen different applications involving the datacenter, servers, storage,
networks, security, etc. Keeping in mind the vast roll-out and the complexities
involved, HCL has partnered with the best of breed in each of these areas. For
HRMS and data base, HCL partnered with Oracle; for anlytics, it is working with
SAS; for networks it has partnered with Cisco and so on.

We have built a very formidable technology stack that meets every
requirement of NIC, and over a seven-year period will meet each of their IT and
business objectives. On the operations front, we have also utilized our years of
experience in the infrastructure management services space and will leverage on
it for the seven year roll-out project, informs Bhagwanani.

The Restructuring

HCL has been a very strong infrastructure roll-out player in the domestic
market. Now, it has plans to diversify and build additional capabilities to stay
ahead of the competition and be able to better execute such large complex
contracts. Keeping this in view, it has carved its existing business as a
separate SBU, focusing on networking and security, and has come up with two more
SBUs for strategic sourcing and SI, and application services and vertical domain
expertise. We are trying to identify skill sets for these new SBUs and are
building on our capabilities further. Today, as companies are getting better at
remote infrastructure managed services, we decided to develop an edge with the
RIM plus model which focuses on infrastructure portfolio optimization from a
consulting standpoint, says Bhagwanani.

Over the next few months, HCL will invest actively in its SBUs and rope in
experienced solution architects and technical specialists into each SBU that has
to successfully restructure its business for the Indian market. It is also
planning to invest in building program management capabilities to be able to
handle more contracts in the league of NIC.

Priya Kekre

priyak@cybermedia.co.in