Talent mobility will definitely be an issue: Bhanumurthy

Interview with Bhanumurthy, chief operating officer, Wipro

India’s third-largest information technology (IT) firm, Wipro, seems to have offset global uncertainties with stable numbers in the fourth quarter of 2016-17. In an interview with Ayan Pramanik and Raghu Krishnan, Bhanumurthy, chief operating officer, Wipro, says the company aims to drive profitability through growth in cloud-based services and localisation models for clients globally. He also talks about seeing talent mobility becoming an issue in future. Edited excerpts:

You are confident of the year ahead. Are the challenges over?

We agreed upon six themes and started executing them. The results have come out well. 

If you look at digital, our cloud business has almost doubled. On the IP (intellectual property) side, we are working upon data discovery platform. Our cyber risk and defence are doing very well. Domain-specific platforms like Holmes and AI are increasing. Our integrated services are doing very well. In some of the newer themes, like blockchain technology, we are able to show examples of where we have deployed them for customers. 

Operationally, we have seen one of the good quarters in terms of utilisation, and our attrition is low. We are able to see good momentum in terms of how we leverage automation platform Holmes and bots inside the organisation. We specifically talked to you about the uncertainty in health care with the proposed repeal of the Affordable Care Act in the US and softness in the retail sector. 

Your fixed-price contracts/earnings have been the highest in the fourth quarter. Do you still have opportunities to go higher?

We should definitely look at the types of contracts — traditional professional services or fixed-price-based contracts, and outcome-based contracts. 

We are seeing a significant increase in the outcome-based contracts. It is good for us, especially because with IP and automation, we can manage the contract well. It gives us the opportunity to make a client realise the benefits, and to manage our profitability. 

In FY16, your net addition (hiring) was nearly 14,700, but in FY17, you hired 8,500...

Our hiring has been focused on the newer (technology) areas. In addition, when you look at automation it has a certain kind of rhythm on people addition. We touched about 12,000-people worth of work through automation throughout the year. That is an important element how you leverage the people. That is also why utilisation has become much better. 

There is increasing protectionism across countries. At the same time, organisations across the world are shifting towards digital technology. What are your customers saying?
 

We will definitely see talent mobility becoming an issue. We have seen that in the US, the UK, Australia, Singapore and some of the West Asian countries. 

But the good thing is that we looked at it 12-14 months ago. The second trend we have to be watchful of is the nature of some of these digital transformations in the context of the market and local needs. Both the reasons will push the localisation content up. At the same time, the ability to do work wherever you want, almost like a no-shore model, has increased significantly. There are two opposing trends. One trend requires you to be locally available and the other is to have the capability to move the work in a no-shore manner. Which one will win in the long term is a question. 

Does the digital transformation help companies like yours to take advantage?

We have established a good network including in Romania, Poland, Mexico. That number has increased significantly during the last four quarters. 

First of all, we have access to multicultural talent pools. Through global delivery centres, we can catch the trend much faster across the world. The second trend is there is a lot of work that we are doing ourselves, including in the US, to make sure that interest in STEM (science, technology, engineering and mathematics) courses increases and we have worked with certain universities to help them teach STEM better. So the STEM supply locally increases and leverage the talent pool across.