Although the target was aimed at for year 2000, vice-president Arun Dang now admits it may be reached only by 2001 or 2002. The reasons: the hardware sector of the IT industry has witnessed downsizing in the last two years with quite a few leading players like PCL, Modi-Olivetti and ICIM finding the going tough. Business volumes, too, have shrunk considerably.

Although HCL Corp continued to rework its approach to business, it also had to contend with the one- to three-year gap in the legal system in its attempt to redefine business systems. To be competitive in business, entrepreneurship had to be encouraged and built into the culture of the organisation.

When it found the going tough to push boxes (computers), HCL introduced the concept of fractal corporation. It encouraged smaller units led by chief executives with an entrepreneurial flair to build their own organisations with their own staff and management. Frontline Solutions sold computers not just as stand-alone units but as part of a solution. This helped HCL to energise its services business. Later, Frontline Solutions was merged with HCL Infosystems and has become a division of this company.

HCL Infosytems itself was an offshoot of the HCL-HP joint venture and soon the strategy was to provide value additions. Besides its focus on solutions around the box, the company started catering to large corporate houses by targeting 1,000 large corporate entities with a redefined strategy going under the style of "enterprise 2000".

Between 1993 and 1994, the group began to address four distinct segments: personal buyer, small and medium enterprises, first-time users (FTU) and small office home office (SOHO). By 1996, the HCL group had notched a turnover of Rs 1,000 crore, galloping to become the top IT group in the country last year, posting a turnover of Rs 2,400 crore and growing at a hefty 43 per cent over the previous year.

Dang says that post liberalisation, realities have made the group refocus once again from being "product-centric to India-centric and then as a truly transnational corporation." Its international business trebled from Rs 38 crore in 1996 to Rs 989 crore in 1998.

Now the group is upscaling its existing competencies. Traditional strength of selling in the box area is now moving to designing boxes. "The idea is to leverage our strong solutions-driven application expertise to tailor-made customers by providing boxes with a difference," Dang says.

Hardware design business is being flogged outside India and is becoming a "rewarding business." Again, the success is due to offering expertise developed in application areas outside the country. Lastly, the group is pushing hard to gain a foothold overseas by processing projects fast.

The new strategy revolves around well-defined approaches. According to Dang, these would include opening investment offices at multiple locations, setting up offices for local customers to provide a degree of comfort to customers, move on to time and material business to provide value addition in services and skills instead of just bodyshopping and, lastly, ensure faster growth into offshore operations which will help build up its outsourcing techniques.

"We would like to replicate this process very fast for both the customers' front and back-up front by establishing software development centres," Dang explains.

The group is also moving fast to set up a global network of channels by forging strategic partnerships and joint ventures. Its recent joint ventures with James Martin & Co of the US, Delux Corporation of US and CSK Corporation of Japan will provide the group with technological leadership in India even while it gets market access in the US and Japan for its services.

Dang says the 50:50 joint venture with CSK Corporation would give HCL access to the Japanese market and CSK access to India, Asia and the US market. Deluxe Corporation would be able to access the Japanese market via HCL. Working with James Martin will have the advantage of synergy for all. "We do not have to start from scratch in these markets, we can telescope the time-frame required for advanced technological work into much shorter durations than otherwise possible," Dang asserts.

Although the Indian IT market has seen a slowdown during the last two years and this year too, Dang feels that HCL would be able to maintain its growth rate of around 40 per cent to 50 per cent. But it would necessarily have to restrategise in the next three months to forge ahead and cash in on emerging opportunities. It aims to scout about for more acquisitions overseas which will provide a global resource base as well as technology and market channels. It will use Y2K as an entry strategy into overseas territories but will limit it to under 20 per cent of its business.