Everest Group’s PEAK Matrix for Banking AO Service … · ... those included in the analysis...

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

https://research.everestgrp.com/offerings/peakmatrix/


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


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)


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



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

http://www.hcltech.com/




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%




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





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





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





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


Banking 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

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



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


Appendix


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


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)


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


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

Dallas (Headquarters)

[email protected]

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[email protected] +1-646-805-4000

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+44-207-129-1318

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Everest Group’s PEAK Matrix for Banking AO Service … · ... those included in the analysis...

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