If anyone had told you a few years ago that Wipro would have a market cap of more than $30bn, you would have made a few discreet calls to their doctor, or perhaps their math teacher.
But today, the Bangalore-headquartered firm has firmly shed the tag of That Indian IT firm which makes the vegetable oil, to become a genuine leading global IT services and BPO enterprise, with 105,000 employees. And Wipro has not only become a tough top tier IT services competitor, but it also firmly holds its own in the BPO industry, with some landmark client wins in finance/accounting, HR and procurement/supply chain services, in recent times. The firm loves the process work and getting down to the minutia with its clients - just take a few visits to its delivery centers and you will see metrics you never thought existed.
So when we launched our recent series of Sourcing CEO discussions(more to follow folks), Wipro was on the first round of invitations, and we are flattered that Suresh Vaswani dragged himself away from his beloved TelePresence unit to spend a few minutes talking to us about how the firm has come through the tough times, and what are the plans for the future...
Phil Fersht: Good evening, Suresh, and thanks for your time today. How did Wipro tackle the recession when it first hit, and what measures were taken to ensure it came through the worst times?
Suresh Vaswani: There is always an opportunity in an adversity, the recession provided us with an opportunity to work closely with the clients. We anticipated the slowdown early, with first signs of the impending slow down coming from our Infrastructure business, much before we saw the impact on our IT business. We used this early warning to improve our operations and gear up for slow down and invested in solutions which were relevant to our clients as they looked at minimizing their operating and capital expenses.
The economic crisis called for strategies which could counter the negative effects of the slowdown to get businesses back on track. The challenge is in knowing how to be effective, ascertaining the future of business, learning to thrive under pressure, using techniques to motivate and promote innovation and employing innovative technologies or services to stay competitive.
We invested in Non Linearityand this is a huge movement within the organization and we are driving this initiative across the organization within Delivery as well on the Revenue side. We have created several tools, like Cigma, a tool for Business KPI measurement across application and BPO or in Productized services like the Cloud based mortgage loan origination system.
In difficult times it is even more important to understand the customer challenge and priorities. We put in place a team of people who understood the local market and most importantly the customer better. We are thrilled at the results of this move and continue to further expand this. Today, 56% of our sales force in US and Europe is local.
Phil Fersht: How has Wipro emerged as a company? Is the culture any different? What lessons were learned and what’s the company doing differently as a result with your people and your overall strategy?
Suresh Vaswani: We have emerged stronger than before, confident of our investments in the last two years, ready to reap the benefits of these decisions. Over the last two years we have invested in new technologies that may define the future of IT industry. These are Cloud, Collaboration, Green Technologies, Mobility Force, Social Technologies, Information management and Security.
As we emerge from the recession we are clearly focused on going up higher-up the value chain through our acquisition of domain competency and consulting capabilities. This approach is helping us address and transform customer business processes.
Our strategy now is centered on addressing the needs of the 21st century Corporation. Our view of the 21st century corporation is an organization that is taking a detailed look at core and non-core processes and is working towards value chain models where it optimizes what it does best and partners for the rest. The 21st Century Corporation model provides a roadmap to improve our clients’ speed, productivity, flexibility and financial performance. This model mandates that partners working as part of a customer’s value chain would have the business imperative to drive higher productivity and flexibility in the non-core processes and some core processes.
While we are moving up the value chain, we are also simplifying the ‘run the engine’ work we do by automating several tasks and de-skilling these tasks. These moves impact our people mix. On one side we are hiring extremely talented, high end specialized resources and on the other hand we are working out ways to deploy non engineers for many of the lesser complex tasks. This has impact on our recruitment, training and talent engagement processes.
Phil Fersht: From your perspective, how is the IT-BPO industry different today than it was prior to the downturn and how is Wipro adapting? Where do you see continuing challenges, and what do you see as the prime opportunities for the firm, where you are making your future investments?
Suresh Vaswani: The first 12 months of the downturn clients focused hard to driving down cost. Over the last 6-12 months we are seeing clients make more fundamental shifts to their products and business processes to drastically improve their agility, flexibility and cost variability. When clients do this invariably, they have to look at BPO and IT together. This is the same transformation we have undergone in our go-to-market strategy over the last 18 months.
We have integrated the BPO and IT value proposition, taking a process transformation approach. Given the fact that we are one of the leaders in BPO and have the whole stack of IT, we are in a unique position to deliver that sort of transformation to customers. Our joint HR platform solution (with Oracle, Hackett) simPlify, is delivered on a Software-as-a Service (SAAS) model allowing employers to pay for what they use and reduce complexity, time and investment. Wipro's next generation service management platform, Cigma, enables the integration of BPO, IT and Device Management Services. Cigma enables customers to manage IT outsourcing engagements through business linked KPI’s.
Clients are now more comfortable with outcome-based contracts, making the non-linearity model stronger. The aim is to double fixed, outcome-based, kind of revenues in the next 12-18 months. Consulting, more than a role of advisory, is giving us downstream revenue. While it’s only about 4% of our topline business, its downstream contribution will be three or four times that.
Our strategy going forward is to invest in our large accounts, is to invest in our growth accounts and when I say invest, we are talking about strong client engagement investments, strong business advisory and consulting investments, co-innovation with them in terms of driving some transformation and the cost structure and the business models.
Long story short, the economy is slowly recovering, Customers have decided to move on, to make the investments, to build their future based on the new reality. Wipro’s opportunity is in delivering lasting value by being a transformation agent and virtual corporation partner of discerning clients worldwide.
Phil Fersht: And finally, what is your advice for today’s young practitioners in the sourcing industry? If you were to start all over again in this business in today’s environment, would you do anything different?
Suresh Vaswani: Young professionals in the sourcing industry should look beyond rates and start thinking about value and the Total Cost of Ownership (TCO). They should build a strong understanding of Business KPIs, Outcome based models. Risk Management frameworks and Governance should be high on the agenda too.
Phil Fersht: Suresh, we thank you so much for your time, at Horses. Our readers will appreciate reading your views.
Suresh Vaswani (pictured top right), is Chief Executive Office of Wipro technologies. He jointly carries the overall responsibility for the strategy and business operations of Wipro’s IT Business. Suresh has been with Wipro for more than 24 years in various leadership positions across differentiated IT Services and has provided a strong platform for growth and leadership in emerging markets for Wipro. He is very passionate about the themes of ‘Green’ and ‘Diversity’ and is the executive sponsor for gender diversity at Wipro. Suresh is married to Sonia and they have two sons. You can also follow him on twitter @sureshvaswani