Wipro, the third largest IT services company, achieved the lower end of its guidance for the March quarter, primarily because of the bankruptcy of two clients. But the company is banking on its digital business to achieve higher growth for the current fiscal. In an interaction with Uma Kannan and N V Vijayakumar of Deccan Herald, Wipro Chief Operating Officer Bhanu Murthy explains the company's digital and localisation strategy. Edited excerpts:
How are you using digital services in achieving higher growth?
Today, 27% of our business is coming from digital. Besides defining this business in certain fashion, Wipro has made digital in various forms for our customers and defined various methodologies. We have adopted a method via which we can integrate external components to digital. We have acquired Denmark-based design firm Designit and US design consultancy Cooper to expand our capability. Using these acquisitions as the centre of delivering design capabilities, we have established digital hubs across the globe. These digital hubs engage with customers and solve their business problems. These help them address a problem within 24 to 34 hours and come out with a working solution.
How Topcoder is helping Wipro in digital journey?
Topcoder, which became a Wipro company after we acquired Appirio, is a platform where the company has access to close to 1.2 million designers, developers and data scientists across the globe who may not work for any corporate but a sort of freelancers who are ready to solve problems. Topcoder also get challenges from customers and get response very fast and varied. Clients can pay if they like the solution.
How do you approach digital practice in the organisation?
When we look at digital, we approach it from three to four areas. The important fact is what we deliver and that includes service design, imagination capability, built capability and run capability. The next area is how we deliver banking on agile, digital pods, digital hubs and digital rigs. The third component is tooling where the company has made digital rigs and the cognitive automation built around Holmes platform.
How are you addressing the skill gap between the existing staff and freshers?
In digital space certain capabilities you can learn as an individual and some are very difficult to learn. We have a large workforce and we take them to class rooms to acquire skill sets and design online courses. We have also configured a platform called Top Gear where any individual can register and go through the courses one likes. We have all the courses on this platform except for leadership and behavioural courses. All courses are available on video, mobile and online. About 90,000 people have gone through our courses.
What kind of growth are you expecting in various verticals going forward?
It you look at our portfolio in terms of business lines, financial services and manufacturing are our large portfolios. You can see great momentum happening in these areas. The other area is energy and utilities (E&U) and healthcare. E&U had some headwinds during the course of this fiscal. We have a good domain competency and advantage in this space.
In health, HealthPlan Services (HPS ) had some impact. In consumer vertical, there was some impact globally, because of various micro and macro pressures. But since digital is gaining momentum, consumer vertical is also picking up this year. Communication had been a stressed vertical for us this year and we see some headwinds this year. Since digital is the centre of some of these organisations we see some momentum happening in various verticals. Regarding geographies, Wipro picked certain geographies like the US and UK and Continental Europe as focus area. In the Continental Europe, we focus on manufacturing, financial services and certain area of communication. In our service capability, we are ramping up further our digital capability. Application and infrastructure are our traditional service line. Product engineering is witnessing amazing growth quarter on quarter.
How are you looking at income from fixed price projects and outcome based projects?
We are witnessing more income from outcome based projects. Actually fixed price is good as it includes fixed and outcome both. What is excluded is pure input based work, like hour based work. It is growing well and here you can apply all your learning, automation and price is fixed and if you spend less you will get more margin in the fixed business.
How are you utilising the benefits of patent registration?
If you say Wipro has filed a patent it means we can do certain things in a unique way. Now we have to look at how to monetise IPs and there are multiple ways to do it. We can monetise it for better outcome and delivery of services. We avail IPs to deliver services via our cognitive platform Holmes and utilise it in the delivery of assurance service and architecture service among others.
How you are looking at inorganic growth and how Wipro Ventures is helping you in this endeavour?
We are very much focussed on acquisition but our strategy on this is very clear. We acquire for building capability which are hard to make and long time to build to market it. We acquire companies to enter certain market and it will take longer time. For instance, we acquired German IT consulting and software services firm Cellent AG. Our acquisition of Designit helped us gain design capability and Appirio to enhance cloud capability.
The US government is planning to end H-4 visas, which allow spouses of H-1B visa holders to work legally in the US. How are you looking at this?
My personal view is that it is the administrative view. We are looking at how best we can deliver our services at a time when customers are becoming more digital. Also, since things are becoming digital we have to deliver services locally in all geographies and it will help us become compliant to local laws. We are doing it in the US, Singapore, West Asia and Latin America. To give fantastic digital presence, Wipro has made 56% localisation in the US region.