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Global CIO: Merck Bets Big On HCL In $500 Million Transformation Deal

Focusing on growth and new products as it looks to slash costs by $3.5 billion, Merck is betting long-time partner HCL can help on both strategic fronts.

Bob Evans

May 6, 2010

2 Min Read

**"Each of our top-selling brands from an expanded product portfolio exceeded $1 billion in sales. At the same time, we have a number of product launches underway in major global markets with more to come this year."

**"The real value drivers of our merger will be science and innovation because Merck's long-term strength will come from our ability to develop critical medicines and vaccines."

**Of the Schering-Plough deal, Clark outlined the elements necessary for success: "The clarity of our vision, our ability to hit the ground running, and the thoughtfulness with which we are managing the integration of our businesses, our operations, and our people."

Also, consider HCL president Khorana's comments about how the new contract calls for HCL to overhaul Merck's supply-chain systems and financial systems: the critical need for such an overhaul can be seen in some numbers: with the addition of Schering-Plough, materials and production costs for the fourth quarter soared from $1.5 billion in 2008 to $4.9 billion for the same period in 2009. For the full years, those costs jumped from $5.6 billion to $9.0 billion.

For HCL Technologies, the expanded Merck deal comes just after it announced that its own quarterly revenue grew 21.4% to $685 million. Khorana said growth for HCL Americas for the quarter grew 9.6% over the year-earlier quarter, which he called "a pretty dramatic turnaround."

Khorana also said that of the parent company's $685 million in quarterly revenue, the U.S. accounted for 59.5%.

RECOMMENDED READING: Global CIO: Wal-Mart Picks SuccessFactors For Largest Enterprise Deal Ever Global CIO: Outsourcer HCL To Cut Insurer's Costs By $150 Million Global CIO: Larry Ellison's New Acquisition Underscores Vertical Strategy Global CIO: 10 Tech Acquisitions That Would Rock The Industry Global CIO: Even Oracle & SAP Agree: The Tactical CIO Is Dead GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

About the Author(s)

Bob Evans

Contributor

Bob Evans is senior VP, communications, for Oracle Corp. He is a former InformationWeek editor.

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