DXC

DXC

Who Is This Key Vendor Assessment For?
NelsonHall's Key Vendor Assessment for DXC Technology is a comprehensive assessment of DXC Technology's offerings and capabilities, designed for:
- Marketing, sales and business managers developing strategies to target service opportunities within the IT services and BPS markets
- Sourcing managers monitoring the capabilities of existing suppliers of IT outsourcing services and identifying vendor suitability for IT services
- Consultants advising clients on vendor selection
- Vendor markketing, sales and business managers looking to benchmark themselves agianst their peers
- Financial analysts and investors specializing in the IT services/BPS sectors.

Key Findings & Highlights
DXC Technology's three-year financial targets for the three- year FY20-22 period include:
- Stable revenue growth, achieving 2-4% CAGR by FY22 (including 1-2% inorganic), and movng to postivie growth from H2 FY20. Expects the mainstreem business will deline by 4-7%, Industry & BPS (has been underperforming; recently boosted by Molina) to grow by 4-6% and Digital (again growth has been slower than expected; recently boosted by Luxoft) by 20-30%. By FY22, the Digital and Industry & BPS businesses should represent over 50% of total revenues, wth Digital representing over 33% (currently ~20%): this would place DXC on a much firmer footing
- Adjusted operating margin expansion of 250-350 bps. Maanagement beleives there remain significant opportunities from pulling various levers, the most significant being further workforce optimization iniatives
- Adjusted FCF at 100% or more of net income.

Also, capital allocation policy: 40% capital return to shareholders, 12% on tuck-in acquisitions in Digital, 9% on busineess reinvestment

With the portfolio, acquistions remain key to the business mix shift. we expect to see further tuck-ins to expand the geographic coverage of ECA particies, also possibly in analytics, cybersecurity and CX design.

There are various iniatives to stregthen the CTM around ditigal including Digital account general managers. THe partnership with PwC and the build out of the Integrated Pratice model with straegic partners and also critical.

A key priority for the delivery organization is scaling out the Bionix iniaitve and the use of Platform DXC.

Scope of the Report
The report provides a comprehensive and objective analysis of DXC Technology's IT services and BPO offerings, capabilities, and market and financial strength, including:
- Analysis of the company's offerings and key service components
- Revenue estimates
- Ientificiation of the company's strategy, emphasis and new developments
- Anaysis of the profile of the company's client base including the commpany's targeting strategy and examples of current contracts
- Analysis of the company's strengths, challenges and outlook.