Office tech leader saves $700M, sparks innovation
Overview
Our client has a rich, 120-year history of innovation in office technology. However, even legacy organizations need to make sure they’re ready for a future that’s changing faster each day. They turned to HCLTech as their transformation partner due to our engineering heritage and focus on our clients’ business outcomes.
The Challenge
Innovation hampered by high costs, inconsistent processes and manual, redundant workflows
The client faced several challenges that increased operational costs and inhibited growth:
- Fragmented global operations with inconsistent processes across geographies
- High R&D, engineering and product development fixed costs
- Offshore centers had limited scalability and agility
- Legacy systems’ workflows were redundant and manual, lacking integrated digital tools to drive innovation and efficiency
The Objective
Global operations that are agile, connected and ready for the future
The client sought a transformation that would drive $1B in growth through innovation and market expansion. In addition, they sought to achieve $100 million in cost savings through operational efficiencies. Ultimately, they sought to establish a smarter, more connected enterprise that would support evolving business models around the world.
The Solution
An outcome-based model that establishes consistent processes and scales with agility
HCLTech became the client’s business process operations (BPO) partner. Over the course of 13 years, we rebadged 6,000 of the client’s procurement, O2C, supply chain and service delivery employees, including 3,000+ FTEs in BPO services and 1,200+ engineers supporting R&D and engineering. We transitioned work to eight distinct, non-overlapping delivery centers in India, Guatemala, the Philippines and multiple countries in Europe, including Romania and Poland. HCLTech took over four of the client’s offshore centers, integrating them into our global operations.
We also established a 100,000-square-foot lab and 30 scrum rooms dedicated to agile product development.
In addition, we automated key processes such as invoice processing and reconciliation, supplier onboarding, compliance workflows, bug tracking and resolution pipelines and R&D and engineering documentation and version control.
To enable process efficiencies, we established Lean Six Sigma practices and agile delivery frameworks, and we developed digital toolkits for collaboration and reporting.
We also implemented risk/reward financial models. For instance, to ensure predictable cost savings, shared accountability and measurable outcomes, contracts were structured around output-based pricing and performance-linked incentives.
The Impact
A company ready for the next century of innovation and growth
Our client’s transformation was comprehensive, measurable and sustainable:
- 400+ innovation disclosures and 345 patents filed
- R&D, engineering and product cost reduction of $700M+ (7x higher than the client’s initial objective)
- 20% increase in R&D and engineering output
- 30% faster time-to-market
- 40% reduction in bug backlog
- 10%–25% product life extension, depending on the product
- 10% reduction in SG&A expenses
- 2%–3% reduction in supplier spend
- 40% of revenue managed for supplies and maintenance services
HCLTech’s global cost model enabled the client to reinvest in technology innovation, laying the foundation for future growth and agility.
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