everest group’s peak matrix for banking ao service providers · integration, and distribution of...

Topic: Everest Group’s PEAK MatrixTM for Capital Markets

AO Service Providers

Focus on HCL Technologies August 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

Capital markets industry is grappling with high regulatory pressures, intense competition, and an uncertain economy. Market participants are

adopting disruptive business models to contain cost and improve profitability. As the financial services industry undergoes a technology revolution through adoption of digital technologies, capital markets players are investing in next-generation technologies to stay ahead of

competition. Buy-side and sell-side participants, as well as financial intermediaries are investing in risk & compliance management solutions, automation, cloud & open-source technologies, mobility, high-end analytics, and third-party platforms as they focus on cost reduction,

standardization, and portfolio rationalization.

With the capital markets industry witnessing a number of changes, IT service providers are looking to capitalize on the opportunity by

tailoring their offerings with next-generation technologies, providing commoditized services, collaborating with buyers to invest in innovation, and forming alliances with leading platform providers.

In this research, we analyze the capabilities of 24 leading AO service providers, specific to the global capital markets 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 24 service providers in detail including a comprehensive picture of their service suite, scale of operations, domain investments, delivery locations, and buyer satisfaction specific to capital markets AO services

This document focuses on HCL Technologies’ capital markets AO experience and includes:

Overview of the capital markets AO service provider landscape

Everest Group’s assessment of HCL Technologies’ delivery capability and market success on PEAK matrix

Detailed capital markets AO profile for HCL Technologies

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


This Everest Group report is a compendium of detailed

profiles of 24 service providers featured on Everest Group’s

capital markets AO PEAK Matrix

BFSI NOT EXHAUSTIVE

Focus of report

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

IT Infrastructure

Outsourcing (IO) IT Application Outsourcing Business Process

(AO) Outsourcing (BPO)

Application development BFSI-specific BPO

Application maintenance HRO Independent testing FAO

Package implementation PO

ERP services Contact center Business intelligence / data Knowledge services

warehousing

Consulting

Traditional IO Remote Infrastructure

Management (RIM) Infrastructure Management

Services (IMS) Cloud

IT strategy / operations consulting

Business consulting Infrastructure consulting

Infrastructure rollouts

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.)

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

Services industry


Everest Group’s BFSI research is based on two key sources of

proprietary information

1 Assessment for Accenture, Capgemini, CSC, Hexaware, 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 capital markets 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 analysis1

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, investment banking, asset management,

custody, fund administration, and brokerage) – 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)


Leaders

TCS Wipro Cognizant

Infosys Accenture

HCL IBM

Hexaware Birlasoft

Syntel

Virtusa

NIIT Technologies Aspirants

75th percentile

Major Contenders

Luxoft

CGI

Capgemi ni

L&T Infotech

Mphasis Tech Mahindra

IGATE

EPAM

CSC

Polaris

Genpact

Dell Services

HCL Technologies is positioned as a Star Performer

and Leader on Everest Group PEAK Matrix for capital

markets AO - 2015

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for large capital markets AO relationships1

High

Leaders

Major Contenders

Aspirants

Star Performers

Low

Low

25th percentile

Capital Markets 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 capital markets sector (Investment

banking, asset management, custody, fund administration, and brokerage); excludes banking and insurance Note: Assessment for Accenture, Capgemini, CSC, Hexaware, 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 capital markets buyers

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HCL Technologies | Capital markets ITO profile (page 1 of 8)

Corporate and BFSI overview

>US$500 million US$100-500 million <US$100 million

1 FY ends on June 30

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

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

1176

3,924

3,133 3,510

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 1,436

1,019

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), reporting services & business consultancy,

and services and process transformation Domains – asset management, wealth management, risk &

compliance, investment banking & exchanges and securities and fund services, channels, and payments

Major BFSI clients: Commonwealth Bank of Australia, Lloyd's

Banking group, DNB Bank, and Standard Bank of South Africa

http://www.hcltech.com/



Wipro

Leaders

Cognizant TCS

Inf osy s Accenture

HCL IBM

Hexaware Virtusa Birlasof t

Sy ntel NIIT Technologies

Aspirants

PEAK Matrix dimensions assessment

Dimension Rating

Market success

Scale

Scope

Domain investments

Delivery footprint

Innovation

Buyer satisfaction

Everest Group PEAK Matrix for Capital Markets AO

75th percentile

High

Major Contenders Luxoft

CGI

Capgemini

EPAM

L&T Inf otech CSC

IGATE Polaris Mphasi s

Tech Mahindra Genpact

Dell Serv ices

Low

Low 25th percentile Capital Markets AO delivery capability

High

(Scale, scope, domain inv estments, deliv ery footprint, innov ation, and buy er satisfaction)

High Low

HCL Technologies | Capital markets ITO profile (page 2 of

8)

Capital markets AO capability assessment and market success

Market share by active ACV Market share by number of contracts

6% 6%

Areas of improvement

HCL needs to expand its delivery footprint in nearshore locations to better serve clients and improve

visibility outside the existing client base

HCL need’s to evolve its proposition for digital and next-generation IT services specific to capital

markets

Strengths

Strong and sustained growth of capital markets AO revenue across Europe and North America

Challenger positioning in the marketplace through innovative and flexible engagement models

Strong focus on investment banking and asset management subvertical, also serves custody & fund

administration and brokerage LoBs across all AO subfunctions

Though delivery footprint for banking AO is concentrated in India, it expanded its presence in Europe

with three new delivery centers

Launched new solutions for regulations compliance, reference data management, and reporting tools

for investment banks to reduce cost, time, and effort for software development activities

Capability dashboard

Capital markets lines of business

I-banking Brokerage

Asset mgmt. Custody & fund admn

Geographic scope

North America

Latin America

EMEA

APAC

Key technology

spend areas Risk & regulatory compliance

Mobility

Social

Analytics

Cloud

Established: Mature capabilities with high adoption Emerging: Nascent capabilities with limited adoption

Credible: Strong capabilities with rising adoption

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AO domain investments

Proprietary solutions (representative list) (continued)

Line of business Solutions

Overall BFSI CoRep/FinRep: An accelerator framework to help banks and NBFC (credit and investment firms) to publish reports

that are mandated by European regulatory authorities CCAR: An accelerator framework with one click, pre-built reports for banks and NBFC that are mandated by the

U.S. regulatory authority Mobile Tracer: Solution enables tracing mobile users within a wi-fi range

Finedge: Financial services CRM solution HCL MBark: A customer onboarding framework (launched in 2011)

Payments Accelerators: Payments accelerators developed for various clients

PRIZMTM: This is a proprietary application portfolio assessment and optimization tool

Capital markets HCL Report: A reporting solution which allows Summit users (business and IT users) to create reports on the fly

through a GUI based interactive tool. This solution is part of the HCL eXcite Suite (launched in 2014) HCL Convert: An accelerator to fast track data migration of static data, market data and trade data, especially

useful during Summit upgrades and merger of multiple instances. This solution is part of the HCL eXcite suite

SFDC-Wealth CRM: CRM solution for the wealth management industry, enabling wealth managers / advisor community with advisory functions and client-centric engagement tools

ExactTM Framework: Tools for application portfolio rationalization Decommissioning Bluebook: Application Portfolio Assessment and Optimization tool for decommissioning

execution XekData: Data management solution which offers a cross asset, cross trading, and cross referencing platform

InvesIT: A research management solution XekPost – Fund Order Management Solution (FOMS): An STP solution for middle- and back-office fund users

FinEdge Wealth: CRM solution for wealth management, insurance, and corporate banking to deliver customer interface enabling customer retention and loyalty management





Proprietary solutions (representative list)

Line of business Solutions

Capital markets

(continued) TradeXek: Handles reporting for exchanges and financial Institutions through automatic TRS reporting and

enabling full compliance with MiFID regulations regarding reporting requirements for the financial institutions and

exchanges (launched in 2014) Invest IT: Global research and content management platform monetized from a leading I-Bank and is productized

today (launched in 2014) BestXek: Selects the best venue for trade execution using built-in algorithms based on market performance factors ICON: A primary investments pricing and accounts system

HCL PEAK: Test automation framework for COTS products such as Summit

Others Mobility frameworks: Mobility solutions built around ipad and iphone Alt ASM: Business Aligned Target Operating Model with committed operational gains and optimal service levels

through LEAN and ITIL practices GreenfieldTM: A framework to industrialize custom application development in the Java and .Net space that

enables greenfield projects to execute faster, cheaper, and better

Regulatory

Reporting CoRep/ FinRep: An accelerator framework to help the banks and NBFC (credit and investment firms) to publish

the reports that are mandated by European regulatory authorities (launched in 2014)

CCAR: Comprehensive capital analysis and review (CCAR) framework for stress testing and capital assessment (launched in 2014)





Acquisitions (representative list)

Target Date Capabilities added

Software assets

from a Fortune 50 universal bank

2011 HCL acquired software assets in the custody space from a Fortune 50 universal bank and

rebranded these as TradeXek suite of products





Key alliances (representative list) (continued)

Alliance partner Purpose of alliance

Axiom Alliance formed in 2013 for AXIOM ControllerView, a regulatory reporting tool

CSC Strategic partnership formed in 2013 for application modernization and transitioning to cloud

Misys Strategic partnership for offering Misys products in the areas of banking and capital markets

Chordiant Software

Inc.

Consulting and system integration services for the BFSI industry

Avaloq Strategic partnership augmenting HCL’s experience in wealth management IT services

Swisscom Strategic service partnership at enterprise level

Orbium Preferred implementation partner of Avaloq solutions, another partner of HCL

DerivIT Alliance in the capital markets domain

Kony Global integrator in the mobility domain

Fenergo Tactical partnership to provide client onboarding solution




Capital markets 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

U.S.-based financial

services company

January 2013 N/A N/A AO SAP deployment

1 Publicly-announced capital markets ITO transactions during 2012 to 2015



HCL Technologies | Capital Markets ITO profile (page 8 of 8)

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

500-1,000 AO FTEs

100-500 AO FTEs

<100 AO FTEs

Confirmed location for Capital markets 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

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75

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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]

+1-214-451-3000

New York

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

Toronto

[email protected]

+1-647-557-3475

London

[email protected]

+44-207-129-1318

Delhi

[email protected] +91-124-284-1000

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About Everest Group

Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading

enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in

making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve

organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-

solving skills and original research. Details and in-depth content are available at www.everestgrp.com and research.everestgrp.com.

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