Ask three Wipro execs about their structure, and you could get three
different diagrams. But they'll tell you one thing: Wipro is flatter now.
Earlier, SBU heads reported in to vice-chairman Vivek Paul, who in turn reported
to Premji. With Paul moving on, one of the layers is now eliminated, and the SBU
presidents directly report to Premji.
The structure has horizontals and verticals. Finance, telecom, and enterprise
solutions are the 'verticals'. The horizontals are TIS (technology
infrastructure services), testing, EAS (enterprise application services) and BPO.
Suresh Vaswani, once responsible for only the domestic side (Wipro Infotech),
now also heads all the horizontals except for BPO (T K Kurien heads that). There
is also a product-engineering group.
Azim Premji |
Acquisitions, Employee A Launch |
Kurien was a key member of the BPO team under Raman Roy, when he drove the
transaction processing business initiative. The unit grew 17% in FY 2005-06 and
is now more focused on the non-voice part, drawing on synergies between BPO and
IT services and the end-to-end selling proposition. It exited the outbound voice
business last year and now has a more process approach, which is integrated with
IT services. The unit does voice work like technical helpdesks, and, on the
banking side, support for credit cards.
Global Strokes
In the exports market, Wipro has also come out strong in testing. Good
growth, besides the financial front, was reported from energy, utilities and
R&D. Europe saw good momentum, its contribution to Wipro's kitty going up
from 27% to 33% last year. Innovation initiatives, which constitute 5% of Wipro
Technologies' revenue, are 'strategic', as they could help make business
growth non-linear. The traditional services model of people equaling revenue
limit future growth. That's why the company is investing in innovation
dollars; in terms of delivery models, in areas it had not looked at before, or
in simply launching new service lines.
The conservative Indian IT industry is tasting inorganic growth. Wipro, like
TCS, has realized that acquisitions can fill in the blanks-in service lines,
geography or verticals-and boost growth. Wipro went all out with a Rs 347
crore shopping bag in 2005-06, picking up three targets.
The first purchase was New Logic, an Austria-based company in the
semiconductor space. While Wipro is the largest third party R&D service
provider in the world with a strong presence in the embedded space in US and
Japan, its European footprint was limited. New Logic, with centers in Austria,
Germany and France, fitted the bill, and also brought along 15 patents.
The other two buys were US-based firms, mPower and cMango. The financial
services vertical has been going well for Wipro. The company had an insurance
practice, a security practice and a banking practice, but none in the payment
services area, where mPower fitted in. cMango, in the Business Service
Management (BSM) area, provides impact analysis to customers. Wipro's
infrastructure services business is growing over 50% annually and now forms 9%
of its IT services: this, with the BSM add-on, are a significant value
proposition.
Source: Company data and DQ estimates CyberMedia Research |
Total Gains
In the domestic business, which grew 22%, the game changer for the company
was total outsourcing services. In these long-term deals, clients outsource most
IT requirements: infrastructure, apps, assets, even people.
Wipro Infotech, the group accountable for Middle East and APAC countries
besides India, has managed to outplay multinationals in the domestic market, in
at least four major deals in the last 12 months-Sunmar, Optimix, a global
energy major, and HDFC Bank. The HDFC deal was Wipro's top IT outsourcing
deal, worth Rs 360 crore over 10 years.
Other differentiators were its investment in a software template approach for
SAP where it now pre-configures and gets the standard vertical-based best
practices into the software before offering it to customers. It had 11 wins on
that offering.
Overall, these efforts are part of the transformation from Wipro's old
hardware position of six years ago to an integrated IT solutions provider now.
In India, the group does a lot of infrastructure business-and product sales:
65% of its revenue is enterprise products; the rest, services. Software is a
significant part of the former; consulting, of the latter. About 200 consultants
bill at two to three times the rate of 'applications' people.
While Wipro looks at SI and TOS
for the exports market, it also aims to bring home some global experience.
Indian customers tend to buy onsite services. The Infotech division has now
launched an integrated service delivery facility for remote apps and
infrastructure management in Mysore, a center that now services 20 local
clients.
Goutam Das
goutamd@cybermedia.co.in