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Wipro CEO's mantra: From vision to execution

He laid out a vision of touching revenue milestone of $15 bn with operating profit margin of 23% in the next four years

Bibhu Ranjan Mishra  |  Bengaluru 

Wipro CEO's mantra: From vision to execution

In October 2015, Abidali Neemuchwala, then group president and chief operating officer at Wipro, gave a keynote at the annual technology event Oracle Open World. The topic he chose was on ‘Gaining advantage in a digital world’ in the new service economy. Considering that it was his first keynote at the event, Neemuchwala eloquently spoke about the technological shift happening globally and how Wipro is playing one of the catalysts, alongside global leaders such as Larry Ellison (executive chairman and chief technology officer of Oracle), Brian Krzanich (CEO of Intel), Mark Hurd (CEO of Oracle) and Vishal Sikka (Infosys CEO).

A few months down the line, Wipro elevated Neemuchwala as CEO to helm the company that has been criticised for sluggish growth rate, slower than its peers in the past few years.

By that time, Neemuchwala, a former top executive at largest peer Tata Consultancy Services (TCS), had already spent close to seven months at the Bengaluru-based company, analysing the firm across parameters and devising a strategy to lead Wipro’s 160,000 employees to adapt to the shift in technology outsourcing by global clients.

On April 1, Neemuchwala would complete his first year at Wipro. Even though a year is a short time to evaluate how successful he has been, industry experts, peers, analysts and investors have been unanimous that he has managed to bring in rigour in every area of business.

The Wipro board is also backing Neemuchwala in executing his vision.

A week after Neemuchwala assumed the role of CEO in February, Wipro made a big acquisition, that of Florida-based health tech company HealthPlan Services for $460 million (Rs 3,144 crore). This was the second largest acquisition in the company’s history after Infocrossing in 2007 for $600 million. The Infocrossing acquisition was not the right one for Wipro.

“Abid is focused on transformation of the service and is seeking to position Wipro to succeed in this new market place. Both his language, organisational changes and acquisitions support this new focus,” said Peter Bendor-Samuel, founder and CEO of management consultancy firm Everest Group.

Added Hansa Iyengar, an analyst with London-based global analyst and consultancy firm Ovum: “Wipro has certainly taken an aggressive stance and is trying to show that it has the appetite to take calculated risks when justified. This is quite opposite from its previous image of ‘play it safe’ vendor.”

Wipro, she says, is not too late to join the digital bandwagon where larger players such as Cognizant, Infosys and TCS have already made many calculated initiatives, “since this is a space that is still nascent and there is ample room to find opportunities”.

There is a sense of urgency for Wipro to reposition the company in the marketplace vis-a-vis competitors, which are going all out to market themselves as technology thought leaders. This is primarily due to the fact that there is a greater amount of peer pressure, especially when larger rival TCS is showing steady growth even with a larger base and Infosys, which has already shown early signs of success under new management led by Sikka, widely-seen as an ace technologist because of his long association with the software product sector.

Wipro’s performance has been quite patchy for many quarters. Its Bengaluru-based peer Infosys, under Sikka’s leadership, has been able to break this trend with better financial performance in the past few quarters.

Wipro has now learnt the art of being part of the change and evolve itself instead of keeping itself aloof from the rest of the outsourcing companies. “Wipro is not alone in this shift with every major India-based company seeking in its own way to master this new space. Unlike the last change in the industry when it (Wipro) moved from a factory focus to an industry focus and where it was late to the game, this time Wipro is among the early movers as indicated in its latest acquisition of its health tech company, signalling to the market that it is focused on the change,” said Bendor-Samuel.

In other words, this time Wipro is at the starting line with everyone else, he said. However, like everyone else, it remains to be seen if it can succeed in the race.

One of the first few things that Neemuchwala has done is to lay out a vision of touching revenue milestone of $15 billion with operating profit margin of 23 per cent in the next four years. Although it looks a little ambitious as it needs to grow top line by 23 per cent every year, the company is also banking on acquisitions.

Wipro has made four acquisitions in the past nine months including Designit, a Denmark-based creative agency with design capabilities; German IT consultant firm Cellent AG; US-based Viteos, HealthPlan Services, etc.

“Abid’s to-do-list is pretty daunting. His strategy is focused on accelerating Wipro’s journey toward the As-a-Service Economy while reigniting the company’s sales engine through more localisation and deeper vertical penetration. Wipro’s recent M&A (merger and acquisition) is testimony to these efforts with Viteos and HealthPlan boosting vertical as-a-service assets, while Cellent is providing stronger traction in central Europe,” said Tom Reuner, managing director for IT outsourcing research at HfS Research.

For Neemuchwala, the past year at Wipro has been more about setting the ground for the larger battle ahead. Industry experts would start evaluating the success of his strategy based on financial parameters.

This also depends on how quickly is the company catching up with industry leaders in the new digital age. “It is imperative that Wipro demonstrate success quickly in the new business models and capabilities.

The market is starting to move fast and like any fast-developing market, the early winners tend to be the long-term winners. Wipro needs to show success this year with a building book of business by the end of the year,” added Bendor-Samuel.


What has changed?
  • Strong emphasis on innovation, digital capabilities
  • Focus on sales transformation
  • Aggressive inorganic growth strategy to plus technology gaps
  • Greater adoption of automation tools and platforms
What's in focus?
  • Bringing in rigour in execution of the vision
  • Quickly demonstrate digital capabilities
  • Willingness to adopt new business models
  • Ensure steady senior leadership
  • Deeper account mining and hunting
  • Being perceived by the clients as a cutting edge innovative company

First Published: Wed, March 30 2016. 00:50 IST