HCL takes on the world

Raja Sawhney, European president of outsourcing giant HCL, tells Stuart Lauchlan about the firm's global ambitions


I started in soft-wear and ended up in software," laughs Raja Sawhney, European president of outsourcing giant HCL, talking about a not entirely obvious progression from high fashion to high technology that he's going to have to explain in more detail.

But for the moment there's a more important topic of conversation: Slumdog Millionaire, the smash-hit movie that has captured the imagination of audiences around the world. There are those who have argued that its image of India is not necessarily as inspirational as the marketing blurb would suggest, but Sawheny sees it very differently.

"It's reflection of the Indian race," he enthuses, demanding to know if I've seen it yet. "It shows the adversity that creates the desire in people to reach out and create. You know, you find that by and large the entire Indian nation is full of people who have lived through very hard times, but during those hard times their aspirations have only increased in proportion to their adversity. With each adversity they face, there is a greater desire to reach out and do something more. India is a nation that has fought back."

But back to Sawheny's rag trade origins: how does someone get from there, to heading up a major outsourcing firm? "My working career started with high fashion garments," he recalls. "The reason I got into the fashion industry was that it was at its boom, an industry where you could get into it and get a boost to your career," recalls Sawhney. "The time I spent in that industry gave me a lot of insight into areas such as manufacturing, client service and all the business elements that go into the manufacture of high fashion garments."

But the fashion world was not a place for Sawhney to stay for long, especially as its nature changed. "Other counties came along as competitors, such as Thailand and the Philippines," he says. "It only takes a few bad apples to destroy an industry. I found that the garment industry started to go downhill rapidly. That all happened as I saw an advert that was looking for people to hire in computer manufacturing.

"It all sounded very interesting, but I realised that I didn't have the skills or the academic qualifications to understand what the hell a computer could do. I took tutorials on the subject and realised that I didn't actually need to be a computer whizz-kid. What I needed was to understand the applicability of computers. I concentrated on that aspect."

Indian economy

The technology market in India was not then as it is now. "At the time, the Indian economy was a very closed one. Companies were necessarily self-reliant and did their own research and development. We couldn't get access to US technology, so we wrote our own operating systems and our own device drivers and we marketed them and all the applications software around them," says Sawhney. "There were only two computer companies in India at the time, ICL and IBM. The Indian government introduced a regulation that said that any company had to include Indian stock participation or they could pack up and go. IBM packed its bags, while ICL diluted its capital. IBM's withdrawal created a vacuum in the market."

Starting point

HCL's origins lie in a move by Hewlett Packard to enter the Indian market in 1990, which resulted in a joint-venture called HCL HP. "The economy had opened up and we could now get access to world-class technology and the best processes," says Sawhney. "This was a very successful joint venture for HP. Nowhere else in the world was HP the number one vendor. India was the only place they got to be number one in the market. HCL was a well-respected name in India. It had the highest unaided brand recall. Children go to school and play with HCL computers, use them at university, all the government and public sector businesses use HCL. It was all pervasive in the market."

The HP joint venture was limited to a five-year period and around 1999 HCL went global. "We found ourselves as a relatively young global IT services company, but with a very, very rich heritage," notes Sawhney. "I moved to the UK in 2000, to a small office in the back of beyond in Maidenhead. We had two customers, single digit revenue and 1.5 salespeople. That's when our grind began, when we started to build up brick by brick."

HCL's culture

Entrepreneurialism is a key tenet of the HCL culture, argues Sawhney. "HCL started with a bunch of five entrepreneurs who set out to build microcomputers that would do the same thing as mainframes," he notes.

"You can still tell an HCL person from a mile off. I think there is a particular DNA for an HCL person. It includes a very high need for achievement and very persuasive skills. HCL people are very energetic, they want to do lots of thing and to take risks on behalf of the company."

Presumably there's more of demand for computer skills than there was when Swahney got into the market? "The proportion is different," he suggests. "At the time when I entered the market, we were still selling the concept of computerisation, which you don't need to do now. You need consulting skills to be able to look at business and see what the needs are there. You need some commercial acumen. You need computer engineers to manufacture and design stuff.

"At the high end, you don't need to be computer literate as much as business savvy and be able to see the business pain points. But at an operating level, understanding what technology can deliver is a base level requirement."

Sawhney says there is little backlash against offshoring despite the seemingly never-ending stream of polls of the Great British public that seem to show the contrary. "Fujistu is a Japanese company operating here, IBM is an American company operating here - do people look at them differently?" he asks.

"We happen to be a company that has an origin in India, but our global delivery centres are in Ireland, China, Malaysia, Krakow and so on. We have capacity and presence across the globe. We have demonstrated our commitment to the UK. We have set up in Northern Ireland, where even UK businesses haven't flourished and we have made it flourish. We've got people from Northern Ireland working there who were scared they were going to lose their jobs previously. We are creating jobs there. In Carolina, we are creating jobs. We create local and global employment. Some 75%-80% of our staff is locally-sourced."

Apart from the success of Slumdog Millionaire, India has been in the news of late due to the scandal surrounding the financial mismanagement of Satyam, which some commentators argue could cast a long pall over the entire Indian outsourcing industry.

Sawhney is phlegmatic. "Satyam happened in India; Enron happened in the US," he says. "It's very sad when these sorts of things happen, but they are about individuals, not about an industry. Even today, Satyam has some wonderful people. In some ways, it can be good for the industry. The whole thing has been debated in the Indian parliament - there's been a tightening of corporate governance and public disclosures have been made. It is unfortunate, but some good can come."

But going back to his comments about the arrival of countries like China and the Philippines coming in and damaging the fashion industry, does he not worry that the same may happen to India and outsourcing, especially on the back of such a scandal? "Fashion, like music, has no language. You can speak Chinese and manufacture clothing, it doesn't make a difference. Unfortunately - or fortunately for us - you do need language in IT and most businesses are run in English. India has a distinct advantage and that makes all the difference for us."

New opportunities

Sawheny also adds that rather than fearing the impact of Indian offshoring, UK firms ought to be exploring the opportunities of themselves moving into India. "I regret that UK businesses don't seem to be seeing enough opportunity in the relationship that the UK has with India," he says.

"UK businesses ought to be out there and selling themselves into the re-building of parts of India. There is so much work to be done in service areas where UK firms could be seriously benefiting. There's a great opportunity for UK businesses to seize, but they need to make the move to do it."

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