In September 2022 HCLTech launched its new brand identity and mantra, “Supercharging Progress,” which aims to bring together the best of technology and people to drive long-lasting positive impacts for HCLTech’s clients, people and communities, and for the planet. In this special report we recap our recent conversation with Santhosh Jayaram, Global Head of Sustainability at HCLTech, about the company’s efforts to adopt sustainable business practices and build a portfolio of sustainability solutions for its customers.
Taking a Big Picture Approach Is Key to Integrating Sustainability Across HCLTech’s Business
As TBR has repeatedly heard in the market, driving broader change for clients and partners requires services vendors to act first. In other words, walking the talk is essential for building trust and making a true impact. HCLTech’s three guiding principles — Act, Pact, Impact — for sustainability start with a focus on how the corporation acts. Under the Pact principle, HCLTech acknowledges that it is part of a much bigger ecosystem, and collaboration with clients, partners and stakeholders results in the whole being greater than the sum of its parts. Ultimately, making a sustainable lasting impact is HCLTech’s desired outcome of the Act and Pact principles.
TBR recently had the opportunity to speak with Santhosh Jayaram, Global Head of Sustainability at HCLTech, and learn more about the company’s efforts to adopt sustainable business practices and build a portfolio of sustainability solutions for its customers. HCLTech’s story in the world of sustainability and environment, social and governance (ESG) began when the company established its Diversity Committee in 2016 — several years before the global focus on ESG — but HCLTech recently ramped up its commitment to making sustainability a key pillar of its overall corporate strategy. As with any new initiative, the change lies in the details.
Overall, what stands out to TBR in HCLTech’s approach is the understanding that sustainability is not separate from the rest of the business. As Jayaram pointed out, sustainability is following a similar trajectory to the buzz around quality and Six Sigma in the 1990s, which eventually was integrated into everything.
HCLTech Recognizes It Is Most Valuable to Clients as a Sustainability Partner by Sticking to What It Does Well
Another key component of HCLTech’s strategy around sustainability and ESG is the company’s desire to remain an IT services provider. In our discussion it became clear the company recognizes that it cannot do everything itself and needs to draw from a larger network of partners. The company believes that staying close to its core capabilities and finding the harmonious overlaps with sustainability will be the best option for the long-term success of its clients and its own performance. HCLTech’s deep engineering and R&D capabilities (these services account for roughly 16% of the company’s total sales) and solid traction around its IT infrastructure, applications and cloud offerings provide natural bridges for the company to support clients’ sustainability initiatives. HCLTech has developed solutions such as responsible product design and manufacturing, re-engineering services (green IT), and sustainability performance and monitoring.
HCLTech also drew from its investments in software to support its go-to-market strategy around sustainability, focusing on bridging IT and OT initiatives related to energy/emission management with HCLTech’s Net Zero Intelligent Operations (NIO) solution. NIO is an AI-, IoT- and digital twin-powered cloud solution that enables the monitoring and reduction of energy consumption and greenhouse gas (GHG) emissions by connecting enterprise IT and OT systems.
Based on the complexity of the solution, it naturally requires a layer of consulting, but Jayaram was clear the company is not building a consulting business and believes the solution will create alliance opportunities around consulting in the long run. TBR views this is a pragmatic and achievable vision that the company can execute on by leveraging its internal capabilities and software including NIO with industry-oriented partners especially around areas where HCLTech has deep expertise, such as manufacturing, which accounts for approximately 19% of the company’s overall revenue.
Successfully Executing in the Market Hinges on HCLTech’s Strategy to Stay True to its Strengths and Core Business
Executing on the big picture will require HCLTech to take three necessary steps: training its workforce, partnering well across the broader market, and marketing its capabilities to clients. Related to the first step, TBR has observed that HCLTech regularly demonstrates its understanding of the importance of investing in its people, such as through its groundbreaking apprenticeship program, and the company has carried that approach into its sustainability strategy by incorporating companywide training efforts through its Sustainability School. Jayaram believes this is critical, as the company needs to integrate sustainability into everything it does, rather than treat it as a single vertical, similar to quality or cybersecurity.
For instance, the company recently launched role-based learning modules, giving specific roles within the organization, such as IT or finance professionals, career-specific training on how they can contribute within the organization. When it comes to partnering, the company is already working with a broad network, including more technology-oriented partners such as Salesforce (NYSE: CRM), Amazon Web Services (AWS) (Nasdaq: AMZN) and Microsoft (Nasdaq: MSFT), as well as sustainability-oriented vendors including Waterplan, EcoVadis and Ecorithm.
But, importantly, Jayaram emphasized the company’s desire to continue fostering new relationships that add value to its portfolio and for its clients. Lastly, marketing HCLTech’s capabilities to clients will be supported by both training and partners, as employees become well-versed in the company’s capabilities around sustainability, and partners can provide joint marketing efforts while helping vouch for HCLTech’s proficiency.
HCLTech’s Value Proposition Around Sustainability Is Aligned with the Company’s Broader Strategic Direction
Although positioning in a new market such as sustainability requires a bit of risk-taking and luck, TBR believes HCLTech’s strategy to stay close to its core capabilities such as digital engineering, systems integration and software, and remaining open to partnerships with companies that offer complementary capabilities is a smart move that will ultimately pay off in the long run as sustainability becomes embedded within broader digital transformation initiatives. Continuing to think big will be key to the company’s ability to navigate evolving competitive and market dynamics in the coming years.
For example, in terms of HCLTech’s scope 3 emissions, the company’s leadership realized that the change to working from home during the pandemic was not as clear cut as it seemed. While the company used less emissions internally with fewer employees in the office, emissions actually increased on an individual basis as energy use became decentralized. As Jayaram put it, HCLTech could not arrange purchase power agreements for more than 200,000 people in their own homes. The solutions will require awareness, which HCLTech can offer as the company refines its role in the market based on its traditional engineering mindset.
HCLTech is among the IT services vendors closely tracked by TBR, with quarterly reports analyzing the company’s strategy and financial performance as well as coverage in TBR’s quarterly IT Services Vendor Benchmark, which evaluates vendors, metrics and trends across the broader IT services landscape including sustainability and decarbonization. Based on TBR’s research, we believe the company’s overall strategy around sustainability has created a foundation for growth, provided it can continue to attract talent, retain clients and live up to its sustainability commitments.