HCL PCMM Case Study

© QAI Proprietary & Confidential Do Not Divulge Contents, Store, Copy, Transmit, Sell, Lease, Reverse Engineer, Translate or Modify Without Explicit Prior Written Permission from QAI

HCL Technologies Ltd.- BPO ServicesA Case Study

ORGANIZATIONAL EXCELLENCE USING PCMM®

ORGANIZATIONAL EXCELLENCE

USING PCMM®

INTRODUCTION

PEOPLE CAPABILITY MATURITY MODEL: PCMM®

People CMM® Process Areas

People CMM® Benefits

THE CLIENT

Challenge

Solution

Approach

Objectives

Future Plans

THE CONSULTANT

Center of Excellence

QAI Experience: People CMM® Consulting Clients

+

+

+

+

+

+

+

+

+

CONTENTS


Most of today’s service and knowledge businesses are talent driven and that people are our

biggest assets, historically, (at least the IT & ITes) organizations have focused more on

proactively improving their delivery processes and their investments in technology.

Based on the study done by NASSCOM, the current HR trends within the Indian BPO industry

point that, current accessibility to talent is very high (at around 80-90 percent of total

graduates), but only 10-15 percent of these students have the skills for direct employment

without prior training. Out of this suitable pool, only about 50 percent are willing to join the

industry.

Attrition rate at about 40 per cent annually in Indian BPO industry is likely to create a paucity

of 300,000 BPO professionals by 2009. This will raise expenditure on recruitment, training &

development, depriving the industry of its low-cost benefit. Managing attrition in BPOs has

become a strategic priority for CEOs as it is affecting the bottom-line.

In fact, the current global hue-and-cry on talent shortfalls and high attrition rates in IT/ITES

are only a tip of the iceberg. At the business level, there are imperatives like improving

productivity, moving-up the value chain, enhancing competitiveness and getting closer to the

customers. At the organization level, issues like managing a multi-cultural and multi-

geography workforce, managing rapid growth and creating “cool” work cultures continue to

take a large mind-share of business leaders and HR professionals.

It is also not enough to try solutions (like Business Process Reengineering, Employee Stock

Options, Assessment Centers and 360-degre appraisals) in a piece-meal manner. Instead, the

need of the hour is to take a holistic view of the organization’s business, culture, technology

and talent needs. And adapt solutions based on an integrated and proactive approach towards

developing & engaging talent, growing the business and delighting the customers. To

motivate, attract talent and retain employees organizations need to create an environment

of employee engagement by offering tangible rewards, quality of work, future growth

opportunities, inspiration values, work-life balance and improved workforce policies.

1

INTRODUCTION

PEOPLE CAPABILITY MATURITY MODEL: PCMM® The People Capability Maturity Model® (People CMM®) is a maturity framework developed at

the Software Engineering Institute (SEI) that guides organizations in improving their ability to

attract, develop, motivate, organize, and retain talent. Based on the best current practices

in fields such as human resources, knowledge management, and organizational development,

the People CMM guides organizations in improving their processes for managing and

developing their workforces. The People CMM helps organizations characterize the maturity

of their workforce practices, establish a program of continuous workforce development, set

priorities for improvement actions, integrate workforce development with process

improvement, and establish a culture of excellence.

It provides an evolutionary 5-level improvement path from ad hoc, inconsistently performed

people (or human resources) practices, to a mature, disciplined development of the


Level 1Initial

Inconsistent management

Level 2Managed

Peoplemanagement

Level 3Defined

Competencymanagement

Changemanagement

Level 5Optimizing

ContinuouslyImproving Practices

Measured &Empowered Practices

Competency-Based Practices

Repeatable Practices

Level 4Predictable

Capabilitymanagement

2

knowledge, skills, and motivation of the workforce. The practices included in the People

CMM® have been chosen from past global experience because they have significant impact on

individual, team, unit and organizational performance.

A maturity level is an evolutionary plateau at which one of more domains of the organization’s

processes have been transformed to achieve a new level of organizational capability. Thus, an

organization achieves a new level of maturity when a system of practices has been established

or transformed to provide capabilities and results the organization did not have at the

previous level. The method of transformation is different at each level, and requires

capabilities established at earlier levels. Consequently, each maturity level provides a

foundation of practices on which practices at subsequent maturity levels can be built.

PEOPLE CMM® PROCESS AREAS

Each maturity level of the People CMM®, with the exception of the Initial Level, consists of

three to seven process areas. Each process area (PA) identifies a cluster of related practices

that, when performed collectively, achieve a set of goals considered important for enhancing

workforce capability. The process areas at each level of maturity create an inter-linked

system of processes that transform the organization’s capability for managing its workforce.


Continuous Workforce Innovation Organizational Performance AlignmentContinuous Capability Improvement

MentoringOrganizational Capability ManagementQuantitative Performance ManagementCompetency-based AssestsEmpowered WorkgroupsCompetency Integration

Participatory CultureWorkgroup DevelopmentCompetency-based PracticesCareer DevelopmentCompetency DevelopmentWorkforce Planning Competency Analysis

CompensationTraining and DevelopmentPerformance DevelopmentWork EnviromentCommunication And Coordination Staffing

Optimizing

Predictable

Defined

Managed

Initial

5

4

2

3

1

Source: ©Software Engineering Institute

Source: People Capability Maturity Model by Bill Curtis, William E. Hefley, Sally Miller. (CMU/ SEI-95-MM-02, p30)

Em p lo ye e B e n e f its

y c ne ici f f E s s e c o r P el o e P

D e l i v e r y O p t im i za t ion

tc a p m I s s e ni s u B

PEOPLE CMM

1 2

3 4

Drop in appraisal time from 1 month to 1 week

Indent-to-join cycle time drop from 60 to 40 days

33% drop in attrition

“Structured knowledge Management”

“Improved talent attraction”

[TCS]

[Wipro]

[NovoNordisk]

[Covansys]

[Siemens]

Drop in effort variation by 31%

Drop in rework due to higher competency (21% co-relation)

With 110% increase in training time, improvement in review efficiency by 100%and drop in rework by 45%

“Helped leverage investments in Software-CMM and Personal Software Process”

[Cognizant]

[Infosys]

[TCS]

[Cognizant]

60% increase in ESAT

45% in people exceedingperformance expectations due to

competency-based recruitment

“Higher employee morale”

“Created a sense of realempowerment

[Boeing BRS]

[Covansys]

[CSC, Wipro]

[Club Mahindra]

12% increase in guest feedback scores

“Enabled scalability”

“Increased competitive edge”

[Club Mahindra]

[Techspan]

[CSC]

3

PEOPLE CMM® BENEFITS

The strategic objectives of the People CMM®:

1 Improve the capability of the organizations by increasing the capability of the

workforce

1 Ensure that process capability is an attribute of the organization rather than of few

individuals

1 Align the motivation of individuals with that of the organization

1 Retain human assets (i.e. people with critical knowledge and skills) within the

organization

The People CMM® helps organization to:

1 Characterize the maturity of their human resource practices

1 Guide a program of continuous human resource management

1 Focus on improving individual and team capabilities

1 Integrate people process improvement with business process improvement

1 Establish a culture of performance and professional excellence

1 Align human resource strategies with business goals

Real Benefits Achieved from People CMM®:

The People CMM® initiative enables an organization to gain insight into its capability for

managing and developing its workforce. Organizations need to identify the strengths and

weaknesses of their current human resource management practices in order to understand

what steps should be taken to improve them. The organization can then relate its strengths

and weaknesses of its practices with the best practices indicated in the model, which helps

the organization to prioritize their improvement actions and focus on changes that are most

beneficial in the near term while having a roadmap for the long term objective.


4

THE CLIENT

HCL Technologies Limited – BPO Services (or “HCL BPO”) is a division of HCL Technologies

Limited, a Global Technology and IT enterprise. HCL is a 30-year-old enterprise, with US $ 4.1

Billion revenues and 47,000 professionals operating out of 17 countries. HCL Technologies

Limited – BPO Services is one of the early players in Business Process Outsourcing in the world,

having over 12,800 professionals operating out of India and Northern Ireland. HCL

Technologies Limited – BPO Services focus verticals include Telecom, Retail,

Banking/Financial Services, Insurance, Hi-Tech and Manufacturing. This apart, the company

services various areas of operations that include Supply Chain Management, Order to Cash,

Finance and Accounting Services, Knowledge & Legal Services and Technical Support Services.

HCL BPO follows industry’s best practices and metric based Quality norms for all its processes.

With stringent internal metrics and audit systems, its Quality certifications include COPC

2000 (CSP Release 4.0), ISO 9001:2000, OHSAS 18001 and ISO 14001:2004 for environmental

management; Security Systems certification – BS 7799, ISO 27001 and audit certification in

SAS 70. HCL Technologies Ltd. - BPO Services is the first Indian and third company in the world

to be COPC certified for Collections Process.

CHALLENGE

HCL BPO was hassled with the high attrition rates in the BPO industry of about 40% annually

and the low availability of talent pool with skills for direct employment without prior training.

HCL BPO could foresee the raise in expenditure on recruitment, training & development,

depriving the BPO industry of its low-cost benefit. Managing attrition in became a strategic

priority for HCL BPO. HCL wanted to create an environment of employee engagement by

offering tangible rewards, quality of work, future growth opportunities, inspiration values,

work-life balance and improved workforce policies.

SOLUTION

QAI understood HCL BPO’s concerns and entered into a service agreement to help HCL BPO

achieve the desired results.

Organizational Excellence using People CMM®

QAI identified People CMM® as a global and well-structured approach for assessing and

improving the current people practices. People CMM® was selected as a business strategy to

help HCL BPO retain people and become an employer of choice. The organization recognized

the potential of the model, and appreciated the fact that the implementation of this model

would augment and enhance the existing people practices and procedures.

HCL BPO was already reasonably mature in certain workforce practices (such as

Communication, Staffing, Performance Management, Training and Development) before the

People CMM® journey started. But in light of the best practices in the model, all their people

processes and practices were reviewed, refined and improved.


5

APPROACH

“ World’s First BPO Company to be People CMM Maturity Level 3 AppraisedFirst Indian & Third Company in the World to be COPC Certified for Collections Process”

The core team consisted of Mr. A.P. Rao, Senior Vice President – HR, Mr. R. Rangarajan, Senior

Vice President and Mr. Prahlad Punia, Centre Head along with QAI’s consultants Ajay Batra &

Rajesh Naik. A dedicated HR, Quality and Operations workgroup was constituted to drive this

initiative. A People CMM® workgroup was formed with defined objectives, roadmap, and a

competency based team structure. Domain experts for each process area were selected as

the process leader based on the key functional competencies required. The process leaders

were responsible for creation & documentation of the policies and procedures and also for

implementation of the people practices.

At the beginning of the People CMM® journey the Center Head assigned a specific weightage

in the KRAs for People CMM® implementation for various roles. This was done in order to

ensure intent-full compliance to the model. The KRAs of all employees in the center were

based on the Balance Scorecard approach touching upon all the four quadrants - learning &

growth, internal business process, customer and financial perspective.

The People CMM® journey was initiated with the development of the Competency

Framework, which is the basis for most people practices. The wholly in-house developed

competency framework comprised of identifying the Functional (including processbased) and

Behavioural competencies for each job role in each function. This was developed with the

joint efforts of the Competency Leader and the Competency Team along with all the Function

Heads from the Center as well as the Corporate. The framework details the definition of each

competency and the various proficiency levels. The threshold level for each job role was also

defined. The competency framework is being used during recruitment, training &

development, performance management, career development, micro succession planning

and strategic workforce planning.

Table – P, a methodology from HCL’s COPC implementation was leveraged to identify the key

people centric metrics and their collection/analysis. This in turn helped HCL in monitoring the

necessary measurement and monitoring activities that are necessary to determine the status

and trends related to the people practices performed.

2002 2003 2004 2004 2005 2006 2007

ISO 9001:2000

ISO 9001ISO 14001,

OHSAS,18001

IMPROVINGCUSTOMER

FOCUS(EXTERNAL, INTERNAL)

SAS 70

PurdueBenchmarkCertification

People CMM MaturityLevel 3,

ISO 27001

Informationsecurity

managementsystems(Bs7799)

First IndianCompany to

be CopcCertified


Data Source: HCL/ People CMM Copyright [2007]

6

HCL also introduced Competency Based Career Development Discussions with the aim of

providing platform and guidance to employees for achieving their career aspirations. These

discussions helped the organization to evaluate the competencies available in the internal

talent pool and develop competencies required for the current & future business. At an

individual level the practice helped them to visualize the career path available in HCL. An

employee could not only grow internally in HCL BPO but could also choose career in other

divisions of HCL Technologies.

HCL enhanced their recruitment, transition and training practices to specifically focus on

competency-based selection and recruitment which helped them in improving the quality of

new hires. Competency Communities for Best practice sharing were formed at various levels

(e.g. Commandoes, Achievers, Hi- Flyers) and centralized knowledge repositories were

available for each of these forums. HCL made use of the company’s Intranet to provide easy

access of information on areas such as KRA’s, Competency Levels, and Career Progression

path. This created transparency in the system and left a powerful positive impact on the

employees.

People CMM® helped the organization meet the intent of the following workforce related

Objectives:

OBJECTIVES

Data Source: HCL/ People CMM Copyright [2007]

People CMM® was implemented over a period of 15 months and the final Maturity Level 3

Appraisal was conducted from 20th – 29th June ‘07 by a 9 member appraisal team using

SCAMPI with People CMM® – Class A method.

HCL BPO became the world’s first BPO organization to be successfully appraised at Maturity

Level 3 of People CMM®® v2.0*


Developing individual capability

Estabilishing development programs to help individuals gain capability in the workforce competencies most relevant to their assignment and career objectives. Have formal career discussions with employees and identify development opportunities.

Motiivating and Managing Performance

Adapting workforce practices to motivate development of additional capability in one or more workforce competencies.

Establishing a set of graduated career opportunities designed to motivate and reward people for developing additional capability in their chosen workforce competencies.

Building workgroups and culture

Developing a participatory culture by increasing the availability of information for making decisions and involving the workforce in decisions that affect their work. Create centralized information repositories for easy access of information.Creating competency communities to share best practices.

Shaping the workforce

Identifying workforce competencies required to achieve the strategic business objectives.Developing a strategic workforce plan by identifying the level of capability needed in each workforce competency.Planning for the workforce activities required to meet the capability objectives within each competency.

People CMM®

+ Employee Benefits

- Increase in ESAT from 70.56%

to 87% (post PCMM Level 3

implementation)

- Availability of formal career

development program and

Competency Development

opportunities

+ People Process Efficiency

- Reduction in appraisal closure-

delay to 0 from one and half

months

- Drop in attrition from 17% to

11% per Quarter

! HCL BPO witnessed the

lowest monthly attrition

percentage of 1.74% in the

history of HCL Technologies

2007Dipstick Survey

2006PreviousSurvey

87%12%

4.42% 25.02% 70.56%

Highly Dissatisfied,Dissatisfied

Slightly Dissatisfied,Slightly satisfied

Satisfied, Highlysatisfied

Figure:ESAT Survey (Source: HCL/ People CMM)

0 10 20 30 40 50 60 70 80 90

7

BENEFIT

+ Delivery Optimization

- Training throughput increased from 68% to 84%

- Process-Level Efficiency increased from 75% to 91% which is due to multiple reasons

(including new certifications, improvement projects, People CMM® etc.)

+ Business Impact

- An aggregate of new certifications (COPC), six sigma projects, development

projects People CMM® etc:

- Overall Performance of the center improved by 7.94%

- Revenue increased from 15.2 million to 21.1 million with an headcount increase

from 1354 to 1442

FUTURE PLANS

After witnessing the benefits from People CMM® implementation and being successfully

appraised at Maturity Level 3, HCL BPO Services aims to achieve Level 5 of the model and

institutionalize People CMM® across all its centers.


Figure: Employee Attrition (Source: HCL/ People CMM)

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

16%17%

13%12%

11%

People CMMJourney initiated

AMJ2006

JAS2006

OND2006

JFM2007

AMJ2007

8

CENTER OF EXCELLENCE

QAI and Dr. Bill Curtis have established a “Global Center of Excellence for Workforce Strategy

and Development”. The Center of Excellence, leveraging the widely acclaimed People CMM®

framework, from Carnegie Mellon University, USA will address the area of workforce strategy

and development. The Workforce Strategy and Development (WSD) Global Center of

Excellence has formed a strategic partnership with the Indian School of Business’ Centre for IT

and the Networked Economy (CITNE) for cross-border research, innovation and publications.

The coming together of three leading entities is designed to leverage the research orientation

of CITNE, the real world experiences and deep expertise and process capabilities of QAI, and

the thought leadership of Bill Curtis.

The WSD Global Center of Excellence will leverage the widely acclaimed People

CMM® framework and help equip organizations by:

Undertaking activities such as research, publishing and product and IP creation.

Helping create a global community of practitioners, with access to a repository of Best Practices

Providing consulting, training and assessment services to organizations across industries worldwide

Organizing evens and Conferences world over

Instituting awards

THE CONSULTANT

QAI is a leading global consulting organization addressing ‘Operational Excellence' in IT, BPO

and Knowledge intensive service organizations. Operational Excellence is achieved when

organizations do a great job of Project Management, Quality Management, Process

Management, Human Capital Management, Innovation Management, Service Management…

QAI facilitates the achievement of operational excellence. QAI’s regional bases across the

globe in the US, Singapore, China, Malaysia, UK and India helps to innovatively distribute and

manage engagements across multiple locations. QAI facilitates enhanced competitiveness

through multi-faceted interventions leading to Business Improvement through Consulting,

Training, People, Process &l Assessments, Benchmarking, Certification, Conferences,

Resource provisioning through Quality Outsourcing and e-Learning. QAI clients include IBM,

Accenture, Wipro, Prudential, Genpact, American Express, Sony, Tata Motors and 200 others

across 30 countries. Moreover, QAI believes in contributing to the development of ‘Nations of

Software Excellence’ by working closely with government bodies, research institutions,

defense organizations, software parks, industry associations and World Bank funded projects

in several countries.


9

l Accenture, IDC

l Alcatel

l Birla Soft

l Club Mahindra

l Covansys

l CSC India

l Datamatics

l L & T Infotech

l Tech Mahindra Limited

l Honeywell India Software Operations

l L&T Infotech

l Siemens Information Systems Limited

l Techspan India

l Wipro Infotech

l Lucent China

l LG Seoul

l Bank Muscat

l Nokia Sweden

l Tata Technologies

l Wipro Technologies

l Mastek

QAI EXPERIENCE: PEOPLE CMM® CONSULTING CLIENTS

COPC: Customer Operation

Performance Center

NASSCOM: National

Association of Software and

Services Companies

KRA: Key Result Areas

ESAT: Employee

Satisfaction

Glossary


CMM and PCMM are registered in the U.S. Patent and Trademark Office by CarnegieMellon University. (SM) SEPG, CMMI PSP and TSP are a service mark of Carnegie Mellon University.

[email protected]

Phone: +91-11-26219792, 26220580

[email protected]

Phone: +65-6225-8139

[email protected]

Phone: +86-21-50804311

[email protected]

Phone: +603 2169 6241, 2169 6246

USAPhone: +407-363-1111

[email protected]

UKPhone: +44(0) 1895 256484

[email protected]

QAI is Asia’s largest and amongst the world’s top three firms in the enterprise wide deployment of process initiatives that contribute to ‘Operational Excellence’.

Set up in 1994 as the Asia-Pac hub, QAI’s mission is to facilitate enhanced competitiveness in Software, BPO and other knowledge intensive organizations through multi-faceted interventions in the areas of Process Improvement, be it business, engineering, people management or IT, through our services in:

! Consulting

! Training

! People, Process and Operational Assessments

! Benchmarking

! Certification

! Conferences

! Resource provisioning & Quality Outsourcing

! e-Learning through QAI eSchool

This unique blend of services enables clients using one service to benefit from our experience, knowledge base, network, and learning in other services.

QAI's holistic approach to process improvement consultation is based on the objective of integrating People, Process, and Technology, which are critical to the performance of an organization.

QAI’s helps organizations, achieve their business goals better, faster and cheaper by facilitating Operational Excellence, through: Process Management, Project Management, Quality Management, Change Management, Human Capital Management, IT Service Management and Innovation Management thus helping companies the world over to reduce cycle times, increase productivity and improve quality of service delivery and processes

QAI has provided it’s range of services to over 200 organizations spanning over 30 countries across 5 continents. QAI’s engagements cover implementation of most of the globally accepted and recognized process

® ®frameworks & quality models like SW-CMM , PCMM , ® SM ®CMMI , COPC , ITIL , BS 15000, BS 7799, Six Sigma,

OPM3, etc.

QAI believes in contributing to the development of the ‘Nations of Software and BPO Excellence’ by working closely with government bodies, government funded agencies, research institutions, defense organizations, software parks, local industry associations, and World Bank funded projects in several countries.

Our regional bases across the globe - in USA, Singapore, China, Hong Kong, Malaysia, Middle East and India, help us innovatively distribute and manage engagements across multiple locations.

WHO WE ARE

HCL PCMM Case Study

Documents

Transcript of HCL PCMM Case Study