ORGANIZATIONAL

EXCELLENCE
USING PCMM®

HCL Technologies Ltd.- BPO Services

A Case Study

© QAI Proprietary & Confidential

Do Not Divulge Contents, Store, Copy, Transmit, Sell, Lease, Reverse Engineer,
Translate or Modify Without Explicit Prior Written Permission from QAI
ORGANIZATIONAL EXCELLENCE
USING PCMM®
 ORGANIZATIONAL EXCELLENCE
USING PCMM®

CONTENTS
INTRODUCTION

PEOPLE CAPABILITY MATURITY MODEL: PCMM®

+ People CMM® Process Areas

+ People CMM® Benefits

THE CLIENT
+ Challenge

+ Solution

+ Approach

+ Objectives

+ Future Plans

THE CONSULTANT
+ 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 multi-
geography 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

1
 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 Change
Optimizing management

Level 4 Capability
Continuously
Predictable management
Improving Practices

Level 3 Competency
Measured &
Defined management
Empowered Practices

Level 2 People
Managed management Competency-
Based Practices

Level 1 Inconsistent Repeatable

Initial management 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.

Optimizing
5 Continuous Workforce Innovation
Organizational Performance Alignment
Continuous Capability Improvement

4 Mentoring
Organizational Capability Management Predictable
Quantitative Performance Management
Competency-based Assests
Empowered Workgroups
Competency Integration
Participatory Culture
3 Workgroup Development Defined
Competency-based Practices
Career Development
Competency Development
Workforce Planning
Competency Analysis
Managed
2 Compensation
Training and Development
Performance Development
Work Enviroment
Communication And Coordination Staffing
Initial
1
Source: People Capability Maturity Model by Bill Curtis, William E. Hefley, Sally Miller. (CMU/ SEI-95-MM-02, p30)

2
 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:

1 Characterize the maturity of their human resource practices
1 Guide a program of continuous human resource management
1 Focus on improving individual and team capabilities
1 Integrate people process improvement with business process improvement
1 Establish a culture of performance and professional excellence
1 Align human resource strategies with business goals

Real Benefits Achieved from People CMM®:

Drop in appraisal time from 1 month to 60% increase in ESAT [Boeing BRS]
1 week [TCS]
45% in people exceeding
Indent-to-join cycle time drop from performance expectations due to
60 to 40 days [Wipro] competency-based recruitment
[Covansys]
33% drop in attrition [NovoNordisk] y
ienc Em “Higher employee morale”
“Structured knowledge E ffic plo
ye [CSC, Wipro]
Management” [Covansys] ss e
e

Be
oc

“Created a sense of real

Pr

ne

“Improved talent attraction” 1 empowerment [Club Mahindra]

2

fits
Peole

[Siemens]

PEOPLE
Drop in effort variation by
CMM 12% increase in guest
Del

31% [Cognizant] feedback scores

t

[Club Mahindra]
c
ive

pa
3

Drop in rework due to higher

ry

Im

competency (21% co-relation) O “Enabled scalability”

pt s
[Infosys] im es [Techspan]
iza sin
t ion Bu
With 110% increase in training time, “Increased competitive edge”
improvement in review efficiency by 100% [CSC]
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.

3
 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.

4
 ORGANIZATIONAL EXCELLENCE
USING PCMM®
People CMM
ISO 9001
Maturity
ISO 14001,
Level 3,
OHSAS,
ISO 27001
18001
IMPROVING
CUSTOMER
Information First Indian FOCUS
(EXTERNAL,
security Company to INTERNAL)
management be Copc
systems Certified SAS 70
(Bs7799)
Purdue
Benchmark
ISO 9001:
Certification
2000

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.

5
 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 Motiivating and Managing Performance

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.
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 Shaping the workforce

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.
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*

6
 ORGANIZATIONAL EXCELLENCE
USING PCMM®

BENEFIT
+ People Process Efficiency 18%
16% 17%
- Reduction in appraisal closure- 14% 16% 13%
12%
delay to 0 from one and half 12%
10%
months 8%
11%
People CMM
- Drop in attrition from 17% to 6%
Journey initiated
4%
11% per Quarter 2%
! HCL BPO witnessed the 0%
AMJ JAS OND JFM AMJ
lowest monthly attrition 2006 2006 2006 2007 2007
percentage of 1.74% in the Figure: Employee Attrition (Source: HCL/ People CMM)
history of HCL Technologies
+ Employee Benefits
2007
- Increase in ESAT from 70.56% Dipstick 12% 87%
to 87% (post PCMM Level 3 Survey

implementation) 2006
Previous 4.42% 25.02% 70.56%
- Availability of formal career Survey

development program and

0 10 20 30 40 50 60 70 80 90
Competency Development
Highly Dissatisfied, Slightly Dissatisfied, Satisfied, Highly
opportunities Dissatisfied Slightly satisfied 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.

7
 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

8
 ORGANIZATIONAL EXCELLENCE
USING PCMM®

QAI EXPERIENCE: PEOPLE CMM® CONSULTING CLIENTS

l Accenture, IDC
l Alcatel
l Birla Soft
l Club Mahindra
l Covansys
l CSC India
l Datamatics
l L & T Infotech
l Tech Mahindra Limited
l Honeywell India Software Operations
l L&T Infotech
l Siemens Information Systems Limited
l Techspan India
l Wipro Infotech
l Lucent China
l LG Seoul
l Bank Muscat
l Nokia Sweden
l Tata Technologies
l Wipro Technologies
l 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.

9
 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 multi-
faceted 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
Our regional bases across the globe - in USA, Singapore,
qaiindia@qaiasia.com
Phone: +91-11-26219792, 26220580 China, Hong Kong, Malaysia, Middle East and India,
help us innovatively distribute and manage engagements
SINGAPORE across multiple locations.
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