CIMdata's Vice President, Stan Przybylinski, recently sat down with HCL Technologies' GH Rao – President, Engineering and R&D Services (ERS), HCL Technologies (HCL) so that he could learn more about HCL's digitalization strategy.
Let's find out what Mr. Rao had to say!
First some context ... According to CIMdata’s global PLM market research, HCL is one of the leading global providers of systems integration services in the PLM market.
How important is digitalization to the strategy of HCL?
Digitalization is an important part of HCL’s growth strategy. Companies across the globe are going through digital transformation to stay competitive. At HCL, we do understand that digital is a journey into fundamental business transformation that begins with reimagining existing business processes and user experiences. To ensure digital continuity across product and solutions portfolios, we help companies revamp the entire lifecycle (from ideation to launch) of the product and/or solution.
A major transformative revolution is underway in the manufacturing industry too. Technology-fueled disruptions under Industry 4.0 enable enterprises across industries achieve step-change improvements in traditional areas and drive strategic advantage with a paradigm shift in value creation. With technologies at the core of any enterprise that is trying to reinvent itself, HCL is uniquely differentiated as a leading global technology company to lead the coming decades of technology revolution through HCL’s Mode 1-2-3 strategy.
The success of Industry 4.0 journey will be determined by the ability of the enterprises to expand into new growth areas leveraging existing business synergies and continuously create evolving experiences. HCL’s Xpand 4.0 approach simplifies the Digital Transformation journey for our customers. With Xpand 4.0, HCL expertly manages customers’ product lifecycle (which is the core of transformation) to deliver phenomenal digital experiences!
To reinforce just how important digitalization is to our strategy, take a deeper look into HCL’s Xpand 4.0 methodology which offers solutions across key transformation levers aligned to critical dimensions of Industry 4.0 namely revenue growth and operational efficiencies, to eventually drive valuation for our customers.
What about the ecosystem of infrastructure, applications and other partners that are part of your offerings?
The ecosystem is very important to provide holistic solutions. In addition to indigenous technology prowess and domain knowledge/expertise, the ecosystem will be incomplete without, as you rightly pointed out, infrastructure, applications and partners!
To explain, digital-led innovations are reshaping the way businesses create and deliver value to customers. The pressure on maximizing returns on investments in new capabilities is ever-increasing, and the required expertise is increasingly moving beyond the enterprise walls. The evolving technology landscape is in dire need of a broadened and heterogenous set of enabling ecosystems. A right mix of infrastructure and applications go a long way in addressing the changing needs of the market.
System Integrators like HCL have recognized the advantage of providing best-in-class solutions that meet customers' business requirements with the best leverage of ecosystem partners. Since our inception, our alliances have played a critical role in our drive for ecosystem-based innovation. Our ecosystem consists of diverse companies in various technology areas with which we form go-to-market alliances, specialist partnerships for niche technologies, and partnerships for specific customer requirements. Our service offerings and solutions across industry verticals are strengthened by alliances with global technology vendors, academia, industry consortiums, customers, niche solution providers and startups.
HCL maintains vital partnerships with key industry leaders in a range of solutions applied during the product lifecycle, including Atlassian, Dassault Systèmes, IBM, Microsoft, PTC, Siemens PLM Software, and many others. In fact, HCL has taken over development of many IBM products used in the product lifecycle, including several Rational-branded products, WebSphere, and Lotus Notes. We also support solution development at other leading PLM solution providers, which deepens our knowledge of those offerings that we can bring to bear in customer engagements.
HCL is active in a range of industry consortia and academic partnerships. For example, HCL maintains partnerships with leading academic institutions. Also, we are working with multiple startups on connected vehicle initiatives around blockchain and mobility. HCL was first service provider to be certified and is a key member of Codex of PLM Openness (CPO) initiative and thereby, supports the movement of providing quicker access to technological innovations and industry best-practices in the world of PLM systems.
We strongly believe Industry 4.0 transformation can be truly realized with the best leverage of key ecosystem partners.
How does your solution and its go-to-market address the issues raised by your customers and prospects?
While we see digital transformation as top priority for manufacturing companies today, we see many companies struggle to achieve the broader objective. Some manufacturers struggle to get started with digital factory value chain initiatives, while others find it difficult to maximize business case projections or scale their use cases across the enterprise. Investing in the capabilities needed to optimize the digital factory value chain is expensive, and manufacturers must work to overcome the challenges and maximize their return on investment.
Based on some insightful discussions we have had with our customers, here are the top reasons which we feel are holding back the transformation:
Strategy: Often, companies that are failing simply haven't painted a clear picture of what they want or need to be when they digitally "grow up.” Enterprises that are in the initial steps of a digital transformation must develop a vision and strategy that will evolve over time as they justify and implement new initiatives. These enterprises (in early stages of digital transformation) must architect an innovation-led strategy and corresponding transformation roadmap as a holistic approach together with the C-level team of your company.
Security: Security is the backbone of digital business but is often overlooked in digital transformation. The evolution of security from defense to differentiator drives the urgency to accelerate digital transformation. Security issues arise (and are tackled) in virtually all digital transformation projects sooner or later. If the enterprise is ill-prepared or stepping in too late to tackle these issues, the digital transformation project is slowed down. Thus, involving security in an integral and timely way in digital transformation initiatives accelerates the journey. Digital transformation will continue to impact how organizations approach business and technology. As their networks become more complex, organizations must adjust their approach to security to ensure there are no gaps in protection. A smarter security approach is an enabler and accelerator of digital transformation and of today’s digital and connected business overall, among others driven by increasing regulatory needs.
Investment / Business Case: The one reason why organizations lack budget for transformational projects is because a large amount of that budget is allocated to existing technologies. How can organizations increase the budget available for transformational projects to more effectively compete with digital disruptors, or become a disruptor itself? The answer may lie in the commoditization of existing infrastructure as thoroughly and quickly as possible. We have often seen companies struggling to achieve return on investments and the long-term value that they had expected (sometimes expected across the enterprise). Manufacturing needs to measure performance from the bottom up, working the details from the individual use cases and business case justifications specific to each use case. Enterprises that pilot initiatives with smaller-scope use cases and suboptimal analysis can dampen the acceleration of their digitalization vision and strategy.
Digitalization Readiness: Legacy systems pose lot of challenges in digitalization efforts, as companies need to balance between managing their legacy and at the same time investing in new age technologies. Because of the focus on the technology components, the people-side of the changes required for digital transformation often go under-addressed, yet arguably are the key success factors.
Merely adopting technology is not enough to emerge from digital transformation successfully; organizations need to reinvent themselves and their culture.
HCL’s unique data-driven approach helps customers leverage their existing investments and achieve incremental results aligned to their business goals. Our GTM, aligned to our Mode 1-2-3 strategy helps customers define their digitalization goals and develop a roadmap. We leverage our experience of working with customers across industries to offer differentiated services.
In addition, we work with our global network of partners to develop solutions aligned to specific business challenges. We have joint GTM with leading ISV partners to offer industry specific solutions.
Can you provide any Information on your digitalization/digital transformation efforts: how many customers, their industries, etc.?
If we look at our Mode 1-2-3 strategy, digital transformation is an integral part of our strategy. While Mode 2 predominantly focuses on Digital and IoT, in Mode 1, as a part of our Engineering and R&D Services business, we have been helping companies achieve their digitalization objectives by leveraging their existing investments. Mode 3 businesses are HCL IP and products that we license to our customers. HCL Technologies’ combined Mode 2 and Mode 3 revenue stands at 34% of our overall revenue with Mode 2 grows at 23.5% YoY and Mode 3 by 55% YoY. HCL is working with several automotive, industrial, aerospace, medical device, retail and high-tech organizations to realize use cases supporting digital transformation.
- An aerospace engine maker wants to create a digital twin of their engines and is working with HCL to define mechanisms to enable their digital thread
- HCL is working with a wind energy harvesting company to help improve train gearbox reliability and to also improve future designs using data obtained from the field.
- HCL helped a leading global provider of commercial foodservice equipment launch its digital services platform - a digital solution designed to help restaurants and large chains to optimize their operations through a better-connected kitchen.
These are just a few of our many examples of how HCL is helping customers reach their digital transformation objectives.
How are your offerings going to evolve in the short to medium term (1-3 years)?
As enterprises embark on technology-led transformation journeys, they need comprehensive offerings that enable them to navigate change; solutions that propel these enterprises to thrive on the new opportunities. To drive this, HCL has evolved beyond the scope of ‘IT Services’ to an all-encompassing Technology Solutions organization. Not just the next three years, HCL’s strategy is all about technology for the next decade, today!
Our offerings include core services capable of creating or unlocking the potential of IP for key verticals, further transitioning into a suite of solutions that combine HCL’s best practices, IPs and accelerated frameworks - ultimately evolving into products and platforms built on the strength of our product engineering legacy coupled with industry leading services and unique platform-based capabilities facilitating success in businesses digital transformation journey.
Let us know your thoughts!
Stan