Everest Group's PEAK Matrix for Banking AO

TM Topic: Everest Group’s PEAK Matrix for Banking AO

Service Providers

Focus on HCL Technologies July 2015

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

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

Focus of report Banking Capital markets Insurance

 Retail financial services (B2C1)  Investment banking  Life and pensions  Retail banking  Asset management  Property and casualty  Lending  Custody and funds administration  Others  Cards  Brokerage 2 3  Commercial banking (B2B )  Others

Services industry

IT Infrastructure IT Application Outsourcing Business Process Outsourcing (IO) (AO) Outsourcing (BPO) Consulting

 Traditional IO  Application development  BFSI-specific BPO  IT strategy / operations  Remote Infrastructure  Application maintenance  HRO consulting Management (RIM)  Independent testing  FAO  Business consulting  Infrastructure Management  Package implementation  PO  Infrastructure consulting Services (IMS)  ERP services  Contact center  Infrastructure rollouts  Cloud  Business intelligence / data  Knowledge services warehousing

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

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

1  Everest Group’s proprietary database of 500+ large, active, multi-year AO Service providers covered in the analysis

contracts within BFSI (updated annually through primary data collection via 1 1 1 service provider RFIs)  The database tracks the following elements of each large AO relationship: 1 – 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 1 line of business (for example, credit cards, lending, retail banking, and commercial banking) 1 1 1 – 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) 1  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

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

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

Leaders 75th percentile High Major Contenders Leaders TCS Aspirants Cognizant Star Performers

Major Contenders Accenture Infosys

IBM tile

ss Wipro

Mphasis n e Capgemi ni

HCL e c

Tech Mahindra r

HPES e

succ p

CGI

t CSC th

e IGATE k

L&T Infotech 75 r

M Dell Services Syntel Virtusa

Polaris Softtek Luxoft

tile n Unisys Mindtree

e c r Genpact

e Birlasoft Hexaware

Endava th ITC Infotech 25 Attra Infotech

Aspirants EPAM Low Low 25th percentile High Banking AO delivery capability (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 Source: Everest Group (2015) Copyright © 2015, Everest Global, Inc. 5

HCL Technologies | Banking ITO profile (page 1 of 8) Corporate and BFSI overview

>US$500 million US$100-500 million

Company description: Established in 1991, HCL Technologies is a Scale of BFSI subverticals global provider of IT solutions, product engineering, custom & package applications, BPO, IT infrastructure services, IT hardware, systems Banking Capital markets Insurance integration, and distribution of ICT products across select industry verticals. HCL Technologies is the services business arm of the Key financial parameters Revenue1 from the BFSI vertical US$6.5 billion HCL Enterprise, which also includes the hardware Revenue in US$ million Revenue1 from other verticals business unit, HCL Infosystems. The HCL team consists of over 105,000 Operating margin professionals who operate from 31 countries, including over 500 locations in India 24.2% Headquarters: Noida, India 16.3% 20.1% Website: www.hcltech.com 5,360 4,152 4,686 1,019 1176 1,436 Geographical mix Service mix 3,924 3,133 3,510 FY 2014; US$ million FY 2014; US$ million FY 2012 FY 2013 FY 2014 100% = 5,360 100% = 5,360 BPO services Services offered for the BFSI vertical: ADM, application Engineering and Infrastructure RoW maintenance, independent testing, SI, enterprise transformation R&D services services services, product engineering, enterprise application services, 12% 5% 16% infrastructure services, digital transformation services (mobile, 34% cloud, and analytics), and business services 32% 56% Domains – channels, payments, cards, lending, core banking, Europe 17% Enterprise trade finance, and cash management application Major BFSI clients: Commonwealth Bank of Australia, Lloyd's Americas 28% services Custom Banking group, DNB Bank, and Standard Bank of South Africa application 1 FY ends on June 30 Source: Everest Group (2015) Copyright © 2015, Everest Global, Inc. 6

HCL Technologies | Banking ITO profile (page 2 of 8) Banking AO capability assessment and market success

Everest Group PEAK Matrix for Banking AO Capability dashboard 75th percentile High Leade r s TCS Banking lines of business Geographic scope Cogniza nt

Major Contenders Inf osys Accenture Retail Lending North America EMEA

s s l i Capgemini IBM t

Mphasis Wipro n Commercial Cards/payments Latin America APAC cc e s

HCL ce r

u Tech Mahindra e

s HPES

CGI t CSC L&T Inf otech IGATE th Key technology Mobility Analytics

ke Risk & regulatory

r 75

a Sy ntel Dell Serv ices e Virtusa

l spend areas M

i compliance t Sof ttek Polaris Social Cloud n Luxof t

ce Unisys Mindtree r

e Genpact Established: Mature capabilities with high adoption Credible: Strong capabilities

p Birlasof t

Endav a ITC Inf otech th Emerging: Nascent capabilities with limited adoption with rising adoption Hexaware 25 Attra Inf otech Aspirants EPAM Low Low 25th percentile High Market share by active ACV Market share by number of contracts Banking AO delivery capability (Scale, scope, domain inv estments, deliv ery f ootprint, innov ation, and buy er satisf action) 3% 3%

Strengths PEAK Matrix dimensions assessment  Strong portfolio of solutions across various banking domains including consumer lending, commercial Dimension Rating 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, Market success and focus on service delivery quality

 Banking AO services delivered from nearly 30 delivery centers; expanded presence in Europe and Scale United States

Significant focus on vertical systems Integration with specific focus on core banking, customer Scope  experience management, and payments; partnered with CSC to establish a delivery network to enable

Domain investments enterprises to shift from legacy technologies to a cloud-enabled platform

Delivery footprint Areas of improvement  Needs to expand its delivery footprint in nearshore locations to better serve clients Innovation  Improve visibility outside the existing client base

HCL Technologies | Banking ITO profile (page 3 of 8) 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

HCL Technologies | Banking ITO profile (page 4 of 8) AO domain investments

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  HCL’s CEM solution framework can be used across the following areas management – 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

HCL Technologies | Banking ITO profile (page 5 of 8) AO domain investments

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

HCL Technologies | Banking ITO profile (page 6 of 8) AO domain investments

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

HCL Technologies | Banking ITO profile (page 7 of 8) Banking ITO transactions activity

NOT EXHAUSTIVE

1 Recent transaction activity TCV Buyer’ Announcemen estimate Duration s name t date (US$ million) (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

HCL Technologies | Banking ITO profile (page 8 of 8) Key offshore AO delivery locations

NOT EXHAUSTIVE

Confirmed location for banking AO 500-1,000 AO FTEs >5,000 AO FTEs 100-500 AO FTEs

1,000-5,000 AO FTEs <100 AO FTEs

Poland

Mexico Puerto Rico Philippines India Indonesia

Malaysia Brazil Singapore

South Africa

Note: FTE strength represents the total number of AO FTEs across different industries for the particular country Source: Everest Group (2015)

Appendix

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

75th percentile High Leaders Top quartile performance Major Contenders across market success and

nd rd capability tile 2 or 3 quartile performance n

across market success and

rce

capability p

h t

5 7

success

tile

n Market

rce

e p

Aspirants

h t 4th quartile performance 25 across market success and

capability Low Low 25th percentile High AO capability (Scale, scope, domain investments, delivery footprint, innovation, and buyer satisfaction)

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

Dimensions of service providers’ capability and market success underlying the PEAK Matrix

Everest Group PEAK Matrix

ACV of large active AO Leaders

deals s

s Major Contenders e

c c

Number of large, active u

AO deals

Yearly vertical specific AO Market revenue growth Aspirants

Delivery capability

Domain Scale Scope Delivery footprint investments Innovation Buyer satisfaction

Total company Lines of Business Proprietary Onshore, Innovative Customer revenue (LoBs) served solutions nearshore, and solutions experiences with offshore service providers capabilities for vertical Innovative Contribution of AO subfunctions Certifications specific AO vertical specific Number of engagement services AO revenue to delivery centers models the total company Geographies M&A and and regions Client renewal revenue served alliances covered activity

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

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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