Presentation title goes here Presentation title goes here London Now!
Ian Gomes, KPMG London's window of opportunity - how much longer?
London within Europe – IT/BPO opportunity SEPTEMBER 2009 HIGH GROWTH MARKETS KPMG
Strategic imperatives facing global IT players in Europe Globalization is a natural consequence of the development of the worldwide IT industry Strategic Imperatives Key Challenges
Service offering (IT, Services, Consulting)
Market Focus (sector, geography)
Outsourcing capabilities (onshore, offshore)
Scale (growth, consolidation)
Language and cultural differences
Acceptance of outsourcing
Customer Behavioral pattern UK Germany France Italy Spain Price H M M H H Quality of solution L H M L M Personal relationships M M H H H Local culture L M H H M Importance of local staff L L H M L Impact of local regulation L M M H L Responsiveness/Service levels M H L L L Vendor Reputation H M M M M Openness to outsourcing H M M M H Openness to offshoring H M M M H
European IT/ITES Market Landscape UK Computer hardware, Software products, IT services Germany Software products, IT services France Datacom and network equipment, Software products, IT services Italy Datacom and network equipment, Software products , IT services Spain Computer hardware, Software products, IT services Source: EITO What do the important European markets buy? Revenues 2006 € million 2007 € million 2008 € million 2009 € million 2008-09 CAGR UK 40,627 43,380 45,528 48,033 5,5 % Germany 28,517 30,767 32,806 34,950 6,5% France 22,091 23,478 24,837 26,308 5,9 % Italy 10,005 10,040 10,126 10,248 1,2 % Spain 6,831 7,333 7,808 8,313 6,5 %
Emergence of the Offshoring Market in Europe Weight of FS, Services and Public Sector in UK economy and their current pressures to rationalize costs/improve efficiencies makes it an interesting Offshore market Source: Holway/Ovum Growth in Customer Segments (2005-10) Traditional Coverage Outsourcer Offering Sample Products Appetite in important European sectors Manuf. Financial Services Telecom/ Retail Public Sector Front Office Sale, Marketing, Distribution CRM Originating sale, after sales service L H H M Internal Office Production, Services, Delivery Develop New/ Administer Application New Proposal Processing L M M M Back Office Maintaining Efficiency in Cost Functions EAD/BPR F&A/HRO M H H H Upkeep of Efficient IT Systems Systems Integration, Maintenance ITO H H H H
UK Offshoring Market continues to surge Share of BPO has grown from less than a third of UK outsourcing to just under half UK has emerged as the dominant Offshore Market in Europe Source: Forrester Source: Ovum Market EUR Mn 2004 2005 2006 2007 2008 2009 CAGR UK/Ireland 768 1076 1453 1882 2332 2766 29% Germany 115 126 53 185 223 266 18% France 97 111 134 157 183 212 17% Nordics 40 52 67 86 110 138 28% Benelux 38 50 65 83 105 133 28% Italy 39 43 49 63 74 86 17% Spain/Portugal 16 18 21 27 31 36 17% Total 1,113 1,476 1,943 2,483 3,057 3,636 27%
How does the UK IT market compare with Rest of Europe ? vs UK Rest of Europe Size Second largest Offshore market after US Relatively lower sized Offshore market Appetite Large and growing. Entirely driven by considerations of saving cost and improve efficiencies Not yet as widely accepted. Customers less familiar and more wary Language Hub for tapping English speaking geographies viz. UK, Ireland, Benelux, Nordics Language continues to be a barrier Immigration and labour laws Easier mobility and Home Office regulations on UK WP & Business Visas Often tougher labour laws and unions can impede staff transfers and BPO supplier options Talent pool Easier availability of Indian nationals and even UK nationals that are well-versed with the ‘Indian Offshore Delivery Model’
Apple Computers Alcatel-Lucent AT&T Corporation Atos Origin Axill Europe Canon China Netcom Cisco Systems China Telecom DoCoMo Europe Eedo Knowledge Corporation Electronic Data Systems EMC2 EYP Mission Critical France telecom Fujitsu Services Holdings Google HCL Hutchison Whampoa IBM Infosys Innopath Larsen & Toubro Infotech KG International McKeesson Corporation Microland Microsoft UK NCR Nokia NTT Organge Perot Systems Qualcomm Radiant Systems Raytheon Samsung Sharp Siemens Communication Sony Ericsson T-Mobile Tata Consultancy Services Telenor Telesonera Telstra Europe Unisys Corporation WIPRO
Contacts Ian Gomes Chairman High Growth Markets Practice KPMG LLP +44 (0) 20 73114211 [email_address]
Think London Udayan Guha Vice President, Europe 28 th September 2009
The HCL Enterprise A culture of trusted partnerships with large customers including JVs with organizations like Hewlett-Packard (1991), Deutsche Bank (2001), British Telecom (2002), NEC (2005), to name a few Founded 33 years ago, by Shiv Nadar, a globally respected visionary, a Forbes billionaire and the recipient of the Padma Bhushan, one of the highest civilian recognitions bestowed by the Govt. of India HCL Technologies Highlights HCL Infosystems The software services arm Total Revenues $5B Employees 60,000 Countries 26 Systems integration arm
Headquartered in UK - Offices in London and Greater London ( Croydon and Romford)
Continental Europe: Offices in Germany, Netherlands, Belgium, France, Italy, Switzerland, Sweden
Total number of employees in Europe today ~ 4500
Total number of employees in UK as on 31 Mar 09 ~ 3725 employees
Three of the largest customers of HCL are from UK
Executed one of largest IT acquisitions in UK. £441 million acquisition of AXON Group plc (2000 employees, £205 million revenue)
Growing faster than any other geography, HCL’s Europe business contribution has increased from 7% of the company’s revenues (FY01) to 35% (FY09). European revenues have grown by 54% year-on-year to 30.5% of total revenue.
Recognitions for HCL in Europe One of Britain’s Top Employers in 2007 and 2008 by CRF UK. Recognized for its long standing commitment to supporting employee productivity in a culture and working environment in which they feel appreciated and innovation is allowed to thrive. Third successive year that HCL has been shortlisted and nominated as one of Britain’s Top Employers The FT ArcelorMittal Boldness in Business Award. Presented the ‘Readers’ Award’ in recognition for the strategic acquisition of Axon, Employee First philosophy and exceptional contribution to client success The International Investor Of The Year Award - presented by the Greater Paris Investment Agency in recognition of the investment made by HCL in the greater Paris area in 2008 Commended Vendor of the Year by the National Outsourcing Association (NOA) in the UK for the Best Practice Winner Awards Investor of the Year - HCL UK was recognized as Top Investor of the Year 2006 by the UK Trade and Investment Board. HCL Technologies Chairman, Shiv Nadar was conferred the UK Trade and Investment Business Person of the year award for 2009 London Business School published a report in their annual “Business Strategy Review” recognizing “Organizational Innovation” in 10 notable global organizations, including HCL Technologies, the lone Indian company featured. Report talks about “Employee First” as a new model of management and talks about “HCL heading in the right direction”
Hub of international travel routes, making it the world's best-connected city. Major Airports include Heathrow, Gatwick, Luton, City ,Stanford all operating multiple carriers to all major cities in the world.
Eurostar makes it easy to travel to Paris and Brussels
Convenient international time zones making it the most ideal place for setting base to conduct business with organisations in Europe, Middle East, South Africa and Asia.
Business friendly city – hardly any red tape to start a company
Flexible labour laws
Ease of starting business
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