A hundred deals for 5 million dollars each or five deals worth 100 million dollars each. Come to think of it, though the former leaves you with impressive statistics to boast about what the company has been doing or targets being met, is it the same as brining greater value to a fewer number. And isn?t that what we used to learn in a certain generation in school – that you can do more for less, and that too very successfully.
The model is one that has definitely worked for us at HCL. Whether it is a full services co-sourcing model which was a first in the history of Indian IT in terms of magnitude or other large projects across multiple geographies, there has a been a huge mutual benefit for the customer and IT partner in working on a sustained basis across all facets of the IT set up.
Traditional wisdom might argue against placing so many eggs in a single basket, but I disagree. The two-way benefits that accrue, balance most risks – real or imagined. One of the major obvious benefits is, of course, the understanding that comes about. Rather than fulfilling on a single requirement of a client and attempting to integrate that with the rest of his system without actually delving into its intricacies, the IT partner gets a chance to work on every aspect of the company?s IT infrastructure, thus making for better integration. Proactive innovation and cost cutting follows on part of the IT partner, thus maximizing the customer benefit.
The IT partner, in turn derives a stable environment in which to function; can implement solutions with a view to the mid to long term requirements with the knowledge that it can be tweaked as and when required and has a secure contract, which means drastically decreased ?money worries?. This enables both parties to give their best and get maximum payback.
Another learning that both sides gain is handling projects of this magnitude. The future is bound to throw up more and more such large projects as the world increases its IT reliance and it is essential to build a knowledge bank on handling them, particularly if the Indian IT industry is looking at delivering high-value IT solutions and partnerships.
The demi-god, Hercules didn?t mess around doing lots of little stuff that the world would not remember. Why shouldn?t we do some of the big stuff too?
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I agree. The depth and expertise required for executing large deals of such magnitude can only be from true leaders of the industry. By executing such projects you become the integral part of the customer organization and truly a partner. The trust that can be built over this would be humongous and not only the IT industry, but the customer industry as a whole will also look up to you.
Hercules was only one of a Kind. What about the others who cannot bite more than they can chew.
Based on my background of driving the business of an Indian ESP in France during +8 years, we start by catching numerous small deals (proof of concept and small projects) before growing to large revenues through Master Agreements covering larger and larger parts of IT system of our customers. It is the best way to build confidence on both side before an extended relationship. It is like an engagement before a wedding.
However, you can be lucky sometime and start directly with a first big deal with a new customer. But it is never a chance but a question of preparation and reactivity.
For HCL it would bring lot of benefits managing less clients that generate more revenue. It would also help them leverage in future with repeat orders or another big client. For startups it make more sense to distribute the risk across customers, instead of putting all eggs in one basket. It should help them to not only gain domain knowledge but also access their strengths and weeknesses. After all Taj Mahal was built in 20 years and not 2 months………….(Google is an expection though)
Very much true, the client would be delighted when he gets total end to end solutions. but it is possibe for companies who have huge resources and talent to deliver such comprehensive solutions.
This is my opinion too… I agree to disgree with the traditional wisdom, in the new flat World.
Thanks Vineet,
I am avid reader of your blogs and a great admirer of you.
I have some comments on this article.
On a bigger perspective, this strategy looks great!
As always, the devil is in the details.
The company that gives you big contracts should be "bigger"
If we take the current scenario, bigger behemoths are facing deep cuts while and the companies / enterprenurs who rewrite the rules of the game and are finding new avenues to do business is ruling the roost.
The only way a big company will go (if they don’t innovate) is down. There has been ample precedence for this. All the quotes about fortune 500 companies that don’t exist any more
The small company has to innovate and grow to survive.
It makes good business sense to target smaller companies in emerging markets.
That is how lot of Indian IT companies has grown, like iFlex, Emphasis even satyam etc. They fly under the radar of big IT competition by concentrating on smaller deals, which can grow phenomenally. Isn’t this a un / less contested space where the competition is not so fierce.
HCL, I would say has harnessed the power of emerging smaller companies in the past.
While the likes of TCS has always concentrated on big clients and has to scramble for business from new companies when the new guys become big.
If we are ignoring the emerging small companies, are we not loosing the new market leaders ?
Are we not targeting the big head where the competition is fierce ?
What about the long tail where the competition is not fierce.
Regards
hclemp
It can be argued both ways.. Ono one hand – it will make lot of sense to go for the big-deals, show-case our capability in handling large engagements and rake int eh revenues with relatively simpler internal management overheads. On the other – doing lots of little deals will mean we pick up a wide array of experience and expertise and will be able to handle any requirement that comes up in the market.. we will be more insulated against market volatility and the like. In the end, it all boils down to what we do best.. what business model SUITS US. If can turn around and get clarity on our capability and strength, that will serve as a key driver in deciding what path we choose.. success can be achieved either way.
I partially agree with this, if your a growing organisation, you need to have different/ more clients to build your skills in a particular vertical. But if your a big organistion you have the capability to take up big projects and execute and grow, again if you are looking for something big in the area which your not an expertise you end up in high risk. i feel a balance of both big and small clients will help the organisation growth.
It is always good to have a mix of both the side. Larger organization who can given you 100 M deal have to be more than 100 B companies and they are depleting fast. The emerging markets leaders are those who will become one of the them in the next 5 years and will get you the 100 M by then any way. Larger organization would give you this deal in 1 years after initial contact and patience and persistance is essential here, in that 1 year it is likely that you would have got at least 20, 5 M deals who have far more potential that the larger one.
I am a sales person, and I target 1 large and 10 medium and 20 small customers in my basket and have been successful. The large one give that maximum adrenal, but the bottom line is the other 30 gives me bread.
sourcing…
Information on this subject is not always as straight forward as it first appears. I know I used to just use a common sense approach, but now I do direct research before coming up with my next move. Keep the information coming….
hi…
wonderful…
fjbnheipsssf…
Anyway, you should do your best
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