ORGANIZATIONAL EXCELLENCE USING PCMM®

HCL Technologies Ltd.- BPO Services A Case Study

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ORGANIZATIONAL EXCELLENCE USING PCMM®

ORGANIZATIONAL EXCELLENCE USING PCMM®

CONTENTS
INTRODUCTION PEOPLE CAPABILITY MATURITY MODEL: PCMM®
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People CMM® Process Areas People CMM® Benefits

THE CLIENT
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Challenge Solution Approach Objectives Future Plans

THE CONSULTANT
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Center of Excellence QAI Experience: People CMM® Consulting Clients

ORGANIZATIONAL EXCELLENCE USING PCMM®

INTRODUCTION
Most of today’s service and knowledge businesses are talent driven and that people are our biggest assets, historically, (at least the IT & ITes) organizations have focused more on proactively improving their delivery processes and their investments in technology. Based on the study done by NASSCOM, the current HR trends within the Indian BPO industry point that, current accessibility to talent is very high (at around 80-90 percent of total graduates), but only 10-15 percent of these students have the skills for direct employment without prior training. Out of this suitable pool, only about 50 percent are willing to join the industry. Attrition rate at about 40 per cent annually in Indian BPO industry is likely to create a paucity of 300,000 BPO professionals by 2009. This will raise expenditure on recruitment, training & development, depriving the industry of its low-cost benefit. Managing attrition in BPOs has become a strategic priority for CEOs as it is affecting the bottom-line. In fact, the current global hue-and-cry on talent shortfalls and high attrition rates in IT/ITES are only a tip of the iceberg. At the business level, there are imperatives like improving productivity, moving-up the value chain, enhancing competitiveness and getting closer to the customers. At the organization level, issues like managing a multi-cultural and multigeography workforce, managing rapid growth and creating “cool” work cultures continue to take a large mind-share of business leaders and HR professionals. It is also not enough to try solutions (like Business Process Reengineering, Employee Stock Options, Assessment Centers and 360-degre appraisals) in a piece-meal manner. Instead, the need of the hour is to take a holistic view of the organization’s business, culture, technology and talent needs. And adapt solutions based on an integrated and proactive approach towards developing & engaging talent, growing the business and delighting the customers. To motivate, attract talent and retain employees organizations need to create an environment of employee engagement by offering tangible rewards, quality of work, future growth opportunities, inspiration values, work-life balance and improved workforce policies.

PEOPLE CAPABILITY MATURITY MODEL: PCMM®
The People Capability Maturity Model® (People CMM®) is a maturity framework developed at the Software Engineering Institute (SEI) that guides organizations in improving their ability to attract, develop, motivate, organize, and retain talent. Based on the best current practices in fields such as human resources, knowledge management, and organizational development, the People CMM guides organizations in improving their processes for managing and developing their workforces. The People CMM helps organizations characterize the maturity of their workforce practices, establish a program of continuous workforce development, set priorities for improvement actions, integrate workforce development with process improvement, and establish a culture of excellence. It provides an evolutionary 5-level improvement path from ad hoc, inconsistently performed people (or human resources) practices, to a mature, disciplined development of the

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ORGANIZATIONAL EXCELLENCE USING PCMM®

knowledge, skills, and motivation of the workforce. The practices included in the People CMM® have been chosen from past global experience because they have significant impact on individual, team, unit and organizational performance. A maturity level is an evolutionary plateau at which one of more domains of the organization’s processes have been transformed to achieve a new level of organizational capability. Thus, an organization achieves a new level of maturity when a system of practices has been established or transformed to provide capabilities and results the organization did not have at the previous level. The method of transformation is different at each level, and requires capabilities established at earlier levels. Consequently, each maturity level provides a foundation of practices on which practices at subsequent maturity levels can be built.
Level 5 Optimizing Level 4 Predictable Level 3 Defined Level 2 Managed Level 1 Initial Change management

Capability management

Continuously Improving Practices

Competency management

Measured & Empowered Practices

People management

CompetencyBased Practices

Inconsistent management

Repeatable Practices
Source: ©Software Engineering Institute

PEOPLE CMM® PROCESS AREAS
Each maturity level of the People CMM®, with the exception of the Initial Level, consists of three to seven process areas. Each process area (PA) identifies a cluster of related practices that, when performed collectively, achieve a set of goals considered important for enhancing workforce capability. The process areas at each level of maturity create an inter-linked system of processes that transform the organization’s capability for managing its workforce.
5
Continuous Workforce Innovation Organizational Performance Alignment Continuous Capability Improvement Mentoring Organizational Capability Management Quantitative Performance Management Competency-based Assests Empowered Workgroups Competency Integration Participatory Culture Workgroup Development Competency-based Practices Career Development Competency Development Workforce Planning Competency Analysis Compensation Training and Development Performance Development Work Enviroment Communication And Coordination Staffing

Optimizing

4

Predictable

3

Defined

2

Managed

Initial 1
Source: People Capability Maturity Model by Bill Curtis, William E. Hefley, Sally Miller. (CMU/ SEI-95-MM-02, p30)

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ORGANIZATIONAL EXCELLENCE USING PCMM®

PEOPLE CMM® BENEFITS
The strategic objectives of the People CMM®: 1 Improve the capability of the organizations by increasing the capability of the workforce 1 Ensure that process capability is an attribute of the organization rather than of few individuals 1 Align the motivation of individuals with that of the organization 1 Retain human assets (i.e. people with critical knowledge and skills) within the organization The People CMM® helps organization to: Characterize the maturity of their human resource practices Guide a program of continuous human resource management Focus on improving individual and team capabilities Integrate people process improvement with business process improvement Establish a culture of performance and professional excellence Align human resource strategies with business goals

1 1 1 1 1 1

Real Benefits Achieved from People CMM®:
Drop in appraisal time from 1 month to 1 week [TCS] Indent-to-join cycle time drop from 60 to 40 days [Wipro] 33% drop in attrition [NovoNordisk] “Structured knowledge Management” [Covansys] “Improved talent attraction” [Siemens]
ffic
y ienc

60% increase in ESAT [Boeing BRS] 45% in people exceeding performance expectations due to competency-based recruitment [Covansys]

Pr oc e

E ss

Em plo ye e
Be

“Higher employee morale” [CSC, Wipro] “Created a sense of real empowerment [Club Mahindra]

ne

Peole

1
PEOPLE CMM

2

fits

Drop in rework due to higher competency (21% co-relation) [Infosys]

O

Im

pa c

4

t

Drop in effort variation by 31% [Cognizant]

12% increase in guest feedback scores [Club Mahindra] “Enabled scalability” [Techspan] “Increased competitive edge” [CSC]

With 110% increase in training time, improvement in review efficiency by 100% and drop in rework by 45% [TCS] “Helped leverage investments in Software-CMM and Personal Software Process” [Cognizant]

The People CMM® initiative enables an organization to gain insight into its capability for managing and developing its workforce. Organizations need to identify the strengths and weaknesses of their current human resource management practices in order to understand what steps should be taken to improve them. The organization can then relate its strengths and weaknesses of its practices with the best practices indicated in the model, which helps the organization to prioritize their improvement actions and focus on changes that are most beneficial in the near term while having a roadmap for the long term objective.

Del

ry ive

3
pt
im
iza t

ion

es sin Bu

s

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ORGANIZATIONAL EXCELLENCE USING PCMM®

THE CLIENT
HCL Technologies Limited – BPO Services (or “HCL BPO”) is a division of HCL Technologies Limited, a Global Technology and IT enterprise. HCL is a 30-year-old enterprise, with US $ 4.1 Billion revenues and 47,000 professionals operating out of 17 countries. HCL Technologies Limited – BPO Services is one of the early players in Business Process Outsourcing in the world, having over 12,800 professionals operating out of India and Northern Ireland. HCL Technologies Limited – BPO Services focus verticals include Telecom, Retail, Banking/Financial Services, Insurance, Hi-Tech and Manufacturing. This apart, the company services various areas of operations that include Supply Chain Management, Order to Cash, Finance and Accounting Services, Knowledge & Legal Services and Technical Support Services. HCL BPO follows industry’s best practices and metric based Quality norms for all its processes. With stringent internal metrics and audit systems, its Quality certifications include COPC 2000 (CSP Release 4.0), ISO 9001:2000, OHSAS 18001 and ISO 14001:2004 for environmental management; Security Systems certification – BS 7799, ISO 27001 and audit certification in SAS 70. HCL Technologies Ltd. - BPO Services is the first Indian and third company in the world to be COPC certified for Collections Process.

CHALLENGE
HCL BPO was hassled with the high attrition rates in the BPO industry of about 40% annually and the low availability of talent pool with skills for direct employment without prior training. HCL BPO could foresee the raise in expenditure on recruitment, training & development, depriving the BPO industry of its low-cost benefit. Managing attrition in became a strategic priority for HCL BPO. HCL wanted to create an environment of employee engagement by offering tangible rewards, quality of work, future growth opportunities, inspiration values, work-life balance and improved workforce policies.

SOLUTION
QAI understood HCL BPO’s concerns and entered into a service agreement to help HCL BPO achieve the desired results. Organizational Excellence using People CMM® QAI identified People CMM® as a global and well-structured approach for assessing and improving the current people practices. People CMM® was selected as a business strategy to help HCL BPO retain people and become an employer of choice. The organization recognized the potential of the model, and appreciated the fact that the implementation of this model would augment and enhance the existing people practices and procedures. HCL BPO was already reasonably mature in certain workforce practices (such as Communication, Staffing, Performance Management, Training and Development) before the People CMM® journey started. But in light of the best practices in the model, all their people processes and practices were reviewed, refined and improved.

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ORGANIZATIONAL EXCELLENCE USING PCMM®
ISO 9001 ISO 14001, OHSAS, 18001 Information security management systems (Bs7799) First Indian Company to be Copc Certified
IMPROVING CUSTOMER FOCUS (EXTERNAL, INTERNAL)

People CMM Maturity Level 3, ISO 27001

SAS 70

ISO 9001: 2000

Purdue Benchmark Certification

2002

2003

2004

2004

2005

2006

2007

Data Source: HCL/ People CMM Copyright [2007]

“ World’s First BPO Company to be People CMM Maturity Level 3 Appraised First Indian & Third Company in the World to be COPC Certified for Collections Process”

APPROACH
The core team consisted of Mr. A.P. Rao, Senior Vice President – HR, Mr. R. Rangarajan, Senior Vice President and Mr. Prahlad Punia, Centre Head along with QAI’s consultants Ajay Batra & Rajesh Naik. A dedicated HR, Quality and Operations workgroup was constituted to drive this initiative. A People CMM® workgroup was formed with defined objectives, roadmap, and a competency based team structure. Domain experts for each process area were selected as the process leader based on the key functional competencies required. The process leaders were responsible for creation & documentation of the policies and procedures and also for implementation of the people practices. At the beginning of the People CMM® journey the Center Head assigned a specific weightage in the KRAs for People CMM® implementation for various roles. This was done in order to ensure intent-full compliance to the model. The KRAs of all employees in the center were based on the Balance Scorecard approach touching upon all the four quadrants - learning & growth, internal business process, customer and financial perspective. The People CMM® journey was initiated with the development of the Competency Framework, which is the basis for most people practices. The wholly in-house developed competency framework comprised of identifying the Functional (including processbased) and Behavioural competencies for each job role in each function. This was developed with the joint efforts of the Competency Leader and the Competency Team along with all the Function Heads from the Center as well as the Corporate. The framework details the definition of each competency and the various proficiency levels. The threshold level for each job role was also defined. The competency framework is being used during recruitment, training & development, performance management, career development, micro succession planning and strategic workforce planning. Table – P, a methodology from HCL’s COPC implementation was leveraged to identify the key people centric metrics and their collection/analysis. This in turn helped HCL in monitoring the necessary measurement and monitoring activities that are necessary to determine the status and trends related to the people practices performed.

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ORGANIZATIONAL EXCELLENCE USING PCMM®

HCL also introduced Competency Based Career Development Discussions with the aim of providing platform and guidance to employees for achieving their career aspirations. These discussions helped the organization to evaluate the competencies available in the internal talent pool and develop competencies required for the current & future business. At an individual level the practice helped them to visualize the career path available in HCL. An employee could not only grow internally in HCL BPO but could also choose career in other divisions of HCL Technologies. HCL enhanced their recruitment, transition and training practices to specifically focus on competency-based selection and recruitment which helped them in improving the quality of new hires. Competency Communities for Best practice sharing were formed at various levels (e.g. Commandoes, Achievers, Hi- Flyers) and centralized knowledge repositories were available for each of these forums. HCL made use of the company’s Intranet to provide easy access of information on areas such as KRA’s, Competency Levels, and Career Progression path. This created transparency in the system and left a powerful positive impact on the employees.

OBJECTIVES
People CMM® helped the organization meet the intent of the following workforce related Objectives:

Developing individual capability Estabilishing development programs to help individuals gain capability in the workforce competencies most relevant to their assignment and career objectives. Have formal career discussions with employees and identify development opportunities.

Motiivating and Managing Performance Adapting workforce practices to motivate development of additional capability in one or more workforce competencies. Establishing a set of graduated career opportunities designed to motivate and reward people for developing additional capability in their chosen workforce competencies.

People CMM®
Building workgroups and culture Developing a participatory culture by increasing the availability of information for making decisions and involving the workforce in decisions that affect their work. Create centralized information repositories for easy access of information. Creating competency communities to share best practices. Shaping the workforce Identifying workforce competencies required to achieve the strategic business objectives. Developing a strategic workforce plan by identifying the level of capability needed in each workforce competency. Planning for the workforce activities required to meet the capability objectives within each competency.

Data Source: HCL/ People CMM Copyright [2007]

People CMM® was implemented over a period of 15 months and the final Maturity Level 3 Appraisal was conducted from 20th – 29th June ‘07 by a 9 member appraisal team using SCAMPI with People CMM® – Class A method. HCL BPO became the world’s first BPO organization to be successfully appraised at Maturity Level 3 of People CMM®® v2.0*

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ORGANIZATIONAL EXCELLENCE USING PCMM®

BENEFIT
+ People Process Efficiency - Reduction in appraisal closuredelay to 0 from one and half months
18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 17% 16% 13% 12% 11% People CMM Journey initiated

- Drop in attrition from 17% to !
11% per Quarter HCL BPO witnessed the lowest monthly attrition percentage of 1.74% in the history of HCL Technologies

AMJ 2006

JAS 2006

OND 2006

JFM 2007

AMJ 2007

Figure: Employee Attrition (Source: HCL/ People CMM)

+ Employee Benefits - Increase in ESAT from 70.56%
to 87% (post PCMM Level 3 implementation)

2007 Dipstick Survey

12%

87%

- Availability of formal career
development program and Competency Development opportunities

2006 Previous 4.42% Survey 0 10

25.02%

70.56%

20

30

40

50

60

70

80

90

Highly Dissatisfied, Dissatisfied

Slightly Dissatisfied, Slightly satisfied

Satisfied, Highly satisfied

Figure:ESAT Survey (Source: HCL/ People CMM)

+ Delivery Optimization - Training throughput increased from 68% to 84% - Process-Level Efficiency increased from 75% to 91% which is due to multiple reasons
(including new certifications, improvement projects, People CMM® etc.)

+ Business Impact - An aggregate of new certifications (COPC), six sigma projects, development
projects People CMM® etc:

- Overall Performance of the center improved by 7.94% - Revenue increased from 15.2 million to 21.1 million with an headcount increase
from 1354 to 1442

FUTURE PLANS
After witnessing the benefits from People CMM® implementation and being successfully appraised at Maturity Level 3, HCL BPO Services aims to achieve Level 5 of the model and institutionalize People CMM® across all its centers.

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ORGANIZATIONAL EXCELLENCE USING PCMM®

THE CONSULTANT
QAI is a leading global consulting organization addressing ‘Operational Excellence' in IT, BPO and Knowledge intensive service organizations. Operational Excellence is achieved when organizations do a great job of Project Management, Quality Management, Process Management, Human Capital Management, Innovation Management, Service Management… QAI facilitates the achievement of operational excellence. QAI’s regional bases across the globe in the US, Singapore, China, Malaysia, UK and India helps to innovatively distribute and manage engagements across multiple locations. QAI facilitates enhanced competitiveness through multi-faceted interventions leading to Business Improvement through Consulting, Training, People, Process &l Assessments, Benchmarking, Certification, Conferences, Resource provisioning through Quality Outsourcing and e-Learning. QAI clients include IBM, Accenture, Wipro, Prudential, Genpact, American Express, Sony, Tata Motors and 200 others across 30 countries. Moreover, QAI believes in contributing to the development of ‘Nations of Software Excellence’ by working closely with government bodies, research institutions, defense organizations, software parks, industry associations and World Bank funded projects in several countries.

CENTER

OF

EXCELLENCE

QAI and Dr. Bill Curtis have established a “Global Center of Excellence for Workforce Strategy and Development”. The Center of Excellence, leveraging the widely acclaimed People CMM® framework, from Carnegie Mellon University, USA will address the area of workforce strategy and development. The Workforce Strategy and Development (WSD) Global Center of Excellence has formed a strategic partnership with the Indian School of Business’ Centre for IT and the Networked Economy (CITNE) for cross-border research, innovation and publications. The coming together of three leading entities is designed to leverage the research orientation of CITNE, the real world experiences and deep expertise and process capabilities of QAI, and the thought leadership of Bill Curtis. The WSD Global Center of Excellence will leverage the widely acclaimed People CMM® framework and help equip organizations by: Undertaking activities such as research, publishing and product and IP creation. Helping create a global community of practitioners, with access to a repository of Best Practices Providing consulting, training and assessment services to organizations across industries worldwide Organizing evens and Conferences world over Instituting awards

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ORGANIZATIONAL EXCELLENCE USING PCMM®

QAI EXPERIENCE: PEOPLE CMM® CONSULTING CLIENTS
l l l l l l l l l l l l l l l l l l l l l
Accenture, IDC Alcatel Birla Soft Club Mahindra Covansys CSC India Datamatics L & T Infotech Tech Mahindra Limited Honeywell India Software Operations L&T Infotech Siemens Information Systems Limited Techspan India Wipro Infotech Lucent China LG Seoul Bank Muscat Nokia Sweden Tata Technologies Wipro Technologies Mastek

Glossary
COPC: Customer Operation Performance Center NASSCOM: National Association of Software and Services Companies KRA: Key Result Areas ESAT: Employee Satisfaction

CMM and PCMM are registered in the U.S. Patent and Trademark Office by Carnegie Mellon University. (SM) SEPG, CMMI PSP and TSP are a service mark of Carnegie Mellon University.

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WHO WE ARE
QAI is Asia’s largest and amongst the world’s top three firms in the enterprise wide deployment of process initiatives that contribute to ‘Operational Excellence’. Set up in 1994 as the Asia-Pac hub, QAI’s mission is to facilitate enhanced competitiveness in Software, BPO and other knowledge intensive organizations through multifaceted interventions in the areas of Process Improvement, be it business, engineering, people management or IT, through our services in: ! Consulting ! Training ! People, Process and Operational Assessments ! Benchmarking ! Certification ! Conferences ! Resource provisioning & Quality Outsourcing ! e-Learning through QAI eSchool This unique blend of services enables clients using one service to benefit from our experience, knowledge base, network, and learning in other services. QAI's holistic approach to process improvement consultation is based on the objective of integrating People, Process, and Technology, which are critical to the performance of an organization. QAI’s helps organizations, achieve their business goals better, faster and cheaper by facilitating Operational Excellence, through: Process Management, Project Management, Quality Management, Change Management, Human Capital Management, IT Service Management and Innovation Management thus helping companies the world over to reduce cycle times, increase productivity and improve quality of service delivery and processes QAI has provided it’s range of services to over 200 organizations spanning over 30 countries across 5 continents. QAI’s engagements cover implementation of most of the globally accepted and recognized process frameworks & quality models like SW-CMM®, PCMM®, CMMI®, COPCSM, ITIL®, BS 15000, BS 7799, Six Sigma, OPM3, etc. QAI believes in contributing to the development of the ‘Nations of Software and BPO Excellence’ by working closely with government bodies, government funded agencies, research institutions, defense organizations, software parks, local industry associations, and World Bank funded projects in several countries.
INDIA qaiindia@qaiasia.com Phone: +91-11-26219792, 26220580 SINGAPORE qaisingapore@qaiasia.com Phone: +65-6225-8139 CHINA qaichina@qaiasia.com Phone: +86-21-50804311 MALAYSIA qaimalaysia@qaiasia.com Phone: +603 2169 6241, 2169 6246 USA Phone: +407-363-1111 info@qaiworldwide.org UK Phone: +44(0) 1895 256484 info@unicom.co.uk

Our regional bases across the globe - in USA, Singapore, China, Hong Kong, Malaysia, Middle East and India, help us innovatively distribute and manage engagements across multiple locations.

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