Posts Tagged ‘Wipro’

Wipro inks $150 mn IT outsourcing deal with Allied Irish Banks

January 28th, 2015

Wipro has announced a $150 million IT outsourcing deal with the Allied Irish Banks (AIB), a bank in Ireland to provide infrastructure management services (IMS), data centre and hosting services over five years.Outsourcing59

The Bengaluru-based IT services provider said the IT outsourcing deal is its biggest win in Ireland. The deal may pave the way for Wipro to participate in other IT deals including the Bank of Ireland contract that’s coming up for renewal later this year.

Bank of Ireland had signed a five-year infrastructure contract with IBM in 2010, said a report in Times of India.

Besides Wipro, the bank has outsourced some of its IT projects to Ireland-based telecom company Eircom and IT security specialist Integrity Solutions. Wipro beat incumbent IT vendor IBM to bag the IMS portion of the contract.

AIB is likely to outsource 170 jobs in its IT division to the three IT vendors, and the bank committed that no staff would be made redundant.

Wipro is expected to absorb over 130 AIB employees into its new delivery centre that will come up in Dublin in the June quarter. The 200-seater delivery centre will create a mainframe centre of excellence to maintain and modernize business-critical mainframe applications.

Last year Wipro expanded its employee base at the Shannon development centre in Ireland that provides IT and business process services’ (BPS) offerings to retail banking and insurance customers. The centre employs over 300 professionals delivering services to banks and financial services companies across Ireland and the UK.


Wipro wins Rs 900 crore Irish contract

January 26th, 2015

Wipro has won a $150-million (Rs 900-crore) IT outsourcing deal from the Allied Irish Banks (AIB), one of the big four commercial banks in Ireland. India’s third largest IT services company will provide infrastructure management services (IMS), data centre and hosting services to AIB over five years.Outsourcing55

“We will bring our expertise to build agile and adaptive infrastructure while improving the predictability and cost effectiveness of services,” said Rajan Kohli, senior vice-president and global head (banking and financial services) in Wipro.

The deal is Wipro’s biggest win in Ireland and provides a gateway to participate in other IT deals including the Bank of Ireland contract that’s coming up for renewal later this year.


Nasscom may lower IT sector growth forecast to 12-14% for FY15

January 19th, 2015

India’s software companies such as Tata Consultancy ServicesBSE 0.17 % (TCS), InfosysBSE 0.12 % and WiproBSE 6.04 % may wrap up the year ending March with lower earnings than estimated by industry body Nasscom amid choppy demand, pricing pressure and competition from global rivals.Outsourcing46

“Nasscom is currently compiling its growth estimates of Indian IT in the fiscal year 2014-15. With changing global macroeconomic developments and cross-currency movement, the guidance of the industry and companies have had some impact,” said a spokeswoman. “Given the relative diversity of performance across the industry during the first three quarters of the year, Nasscom concedes that the growth of IT will not be at the upper band of its earlier guidance of 13-15%.”

The industry lobby group may narrow its earlier revenue growth forecast to 12-14% for the $118 billion information and business process management industry in 2014-15 when it meets in the coming weeks, according to two executives familiar with the development.

“The revision will not be significantly different, but yes, it is certain that the way we see, it will be at the lower end,” one of the executives said, adding that it could be pegged at 12 to 14%, although the number is still “being discussed.”

Slowing growth in emerging economies, including Russia and Brazil, coupled with easing demand for enterprise software made technology research firm Gartner cut its global IT services growth forecast to 2.5% for calendar year 2015 from 4.1%. The firm cut its worldwide IT spending outlook to $3.8 trillion in 2015 as against an earlier expectation of $3.9 trillion.

The last time the software industry met the lower band of Nasscom’s guidance was in 2011-12, when growth was 11% against an estimate of 11%-14%.

The country’s 10 largest companies, which account for a little over 40% of exports, were expected to record $88.4 billion from software exports.

The remaining 60% is accounted by the domestic units of foreign companies, including JP Morgan and Citigroup.

Three factors have curbed growth at the largest IT companies. First, many clients have held back on inking deals with IT vendors on account of an uncertain economic recovery. In the first quarter of this financial year, almost every second contract to be awarded got pushed back, according to London-based IT research firm Ovum and reported by ETon August 19.

Second, the commoditised back-end business is facing pricing pressure as companies vie to win deals. “The pricing pressure, yes we have seen that,” Infosys CEO Vishal Sikka told reporters when the company reported a tepid 0.8% revenue growth in the third quarter.

“We are seeing absolute pricing pressure in terms of deal value,” Wipro CEO TK Kurien told ET in an interview after the company posted feeble growth of 1.3% in the third quarter. “As commoditisation happens, that’s the first cycle you see kick in.”

Finally, the limitations of domestic IT firms in building up capabilities in the social, mobile, analytics and digital space technologies comes to the fore as they compete against global outsourcing firms, including Accenture and IBM.

“India IT services market is navigating through its mature stage and external forces such as consumerisation, cloud, digital and startups are pressuring the large players’ performance,” said Bozhidar Hristov, analyst at US-based research firm TBRI. “The IT services market is transitioning from body to mind-type levers.”

TCS, the country’s largest software exporter, reported a flat top line growth in the traditionally weak third quarter.

The Mumbai-based company posted 5.5% and 6.4% sequential revenue growth in the first two quarters while, comparatively, Bengaluru-based Infosys grew at 2% and 3.1%.

“In terms of TCS and Infosys’ end of FY performance, we believe TCS will deliver low-teen double-digit growth. Infosys, however, will barely scratch the bottom end of its fiscal year 2015 revenue guidance of 7%-9%,” said Hristov.

Wipro, which inched up 1.2% in the first three months of the financial year and 1.8% in July-September, is expected to grow between 7-8% for the year, after its guidance of 1.1-3.1% for the fourth quarter.


Wipro’s India division to handover staff recruitment responsibilities to PeopleStrong

December 30th, 2014

Wipro’s India and Middle-East division is expected to handover its entire staff recruitment responsibilities to HR solution provider PeopleStrong in a deal valued over Rs 100 crore, people with knowledge of the matter said. Outsourcing29

Talks are in the final stages and a deal is expected as early as this week, they said. According to the proposal, the Gurgaon-based recruitment process outsourcer (RPO) would handle Wipro Infotech’s hiring for five-seven years.

In recruitment process outsourcing, the employer transfers the entire hiring mandate to a third party, which takes control over the complete process unlike a traditional recruitment firm – from screening the candidate’s profile to interviewing and making the selection. Although this service was nascent in India until a few years ago, it is now expected to grow 40-50% because of an expected uptick in hiring over the next six months, according to a report by Randstad India. More than 70% of Indian employers are expected to outsource complete or parts of their recruitment process over the next five years, the report says. Globally, the RPO market is estimated to be worth about $1.8 billion (Rs11,450 crore) and in India, it is around Rs400 crore. India and China are the emerging RPO markets in the Asia-Pacific region.

PeopleStrong said it cannot divulge customer-specific details. Wipro said it is “considering partnering with leading service providers for specialised services in recruitment technology and processes” at Wipro Infotech. “We constantly evaluate innovative models to administer various functions and processes within the organisation, it said in an emailed statement.

Based on Wipro’s results for the quarter through September, Wipro Infotech contributed 9.2% to the more than Rs10,000-crore revenue posted by India’s third largest IT firm.

Business is already growing quickly for recruitment process outsourcers.

“RPO will grow exponentially now that companies need workforce to scale up and there is insufficient manpower strength within the firms to hire in large numbers. We started our RPO around two years ago and busi-ness has doubled and enquiries from clients are up four times,” said Moorthy K Uppaluri, chief executive of Randstad India.

Although Rs100 crore is a big-ticket deal, a lot depends upon the tenure of the deal and how many employees the client wants to recruit, he said.

Since Wipro doesn’t divulge the number of employees per business, the headcount at Wipro Infotech or the hiring plans for the unit are not known.

Outsourcing hiring will help Wipro Infotech reduce costs because the fee per position can be altered according to the business demand. “PeopleStrong with its analytics and sourcing techniques will conduct video interviews, online tests, match profiles, track the candidate till he accepts the offer, generate leads, complete the on-boarding and be responsible for any drop out,” said one of the people with knowledge of the matter. The employees hired by PeopleStrong will be on the payrolls of Wipro.

PeopleStrong in the past has taken up hiring work for Mahindra & Mahindra and HDFC Life, but the proposed deal with Wipro Infotech will be bigger than those. “This is good news and shows a step in right direction that big firms want to outsource their HR work. If PeopleStrong delivers, we can expect more such clients to sign up,” said Shiv Agrawal, managing director and chief executive of ABC Consultants. The staffing firm’s fouryear-old RPO business is its fastest growing vertical, expanding at 60% a year.


Wipro spending $200 million on building next generation platforms

December 16th, 2014

Wipro is spending more than $200 million annually on building next generation platforms that focus on disruptive technologies including cognitive technologies, automation and machine-to-machine learning as the country’s third-largest software firm seeks to edge out competition in winning large deals. Outsourcing10

Over the past two years, the company has ploughed $400 million in developing about ten intelligent solutions, some of which it has started using internally and a few it is using for customers, said a senior executive. “Wipro has significantly stepped up its funding of the R&D projects in the last couple of years,” said chief technology officer RK Sanjiv.

“This is to not just ensure that we become the next generation services firm of future, but also to be future-ready for our customers,” said Sanjiv, declining to put a number. But he said the company invests more than the industry average in these initiatives.

This focus on building intelligent platforms coincides with the stint of Rishad Premji, son of chairman Azim Premji, as head of strategy, making some believe the younger Premji could be potentially driving this change at the Bengaluru based company.

Incidentally, it was Azim Premji who brought Tata Consultancy Services veteran Satishchandra Doreswamy, now chief business operations officer at Wipro, in 2011 to help transform the company by putting together a team of engineers to focus on these technological platforms. Wipro’s thrust on building internal intellectual property-led platforms comes at a time when cross-town rival Infosys, under new chief executive Vishal Sikka, too is aggressively talking about building platforms.

Homegrown technology companies invest on an average 2-3% of revenue on building platforms. Wipro’s revenue for the fiscal through March 2014 was $6.7 billion, and if it invests more than the industry average, it is putting in $200 million every year in new solutions.

Wipro is now a team of “hundreds of engineers and research scien tists”, according to Sanjiv. His mandate is to focus on three key themes: cognitive technology, machine-to-machine learning and in building smart devices.

According to some experts, information technology companies are investing internally in building these solutions because of the desire to win large outsourcing deals as every customer is looking to its IT vendor to bring in more valuegeneration business rather than merely maintaining the back-end technology infrastructure.

Doreswamy last month told ET that Wipro’s energy and utilities vertical managed to bag its $1.2 billion, 10-year outsourcing deal with Canadian utilities firm ATCO on account of the “transformational benefits” it could help offer.

“(Two other) examples of Wipro’s solutions are Base and Fixomatic suite of tools,” said Tom Reuner of London-based IT research firm Ovum. “The direction of this journey is to protect margins by automating low-level tasks while hiring and retaining talent for value-creating activities.”

Reuner and other experts said the focus of software exporters on intelligent solutions is also driven by their desire to increase revenue without increasing headcount.

In September, ET reported about Wipro’s plans to start with its most ambitious reorganization exercise, under which it aims to become a leaner 1,00,000-strong company from the current levels of 1,52,000 in three years.

The company plans to do this without resorting to mass layoffs but by “selectively filling” in roles of executives who leave.

As Wipro seeks to embrace automation and artificial intelligence, the company can do away with engineers who are currently doing basic-level repetitive work. Already, Wipro has started using, internally, a cognitive platform for its help desk system, thereby simplifying work process for employees. One other intelligent technology platform which the company has started work on for its retail clients is “Wipro Sight.”


Indian IT companies lag behind global peers in SaaS space

December 12th, 2014

The rise of software-as-a-service cloud delivery model poses a threat to the dominance of the homegrown software exporters as most of them lag behind the foreign companies, including IBM and Accenture in offering services to customers.Outsourcing12

Although significant investments are currently being made by Infosys and Wipro in strengthening their cloud offerings, some of the fastest growing SaaS firms globally do not even name any of the country’s largest IT firms as their strategic partners.

“We’ve got strong partnerships with Deloitte and Accenture and IBM and increasingly, PWC and KPMG, Towers Watson and Aon Hewitt,” said Aneel Bhusri, co-founder and co-CEO of Workday, in an analyst call last month, underlining the fact none of the Indian tech giants made the list.

For now, Indian companies are catching up with the foreign IT firms, as Wipro entered into a partnership with Workday in 2011, three years after Accenture first became Workday’s global deployment partner.

“We are there but we may not be matching them (IBM, Accenture)…It requires a lot of investments. They are ahead of us,” said Satishchandra Doreswamy, chief business operations officer at Wipro. “(But) we are also picking up…we are currently building cloud business platforms.”

Software-as-a-service, in which companies pay for software based on their usage, is expected to top $22 billion through 2015, up from about $14 billion in 2012, according to research firm Gartner.

The impact of this is most visible in Indian tech giants losing out to global software exporters when it comes to migrating existing infrastructure to cloud model. One of the examples is when IBM won a 10-year, multi-billion dollar deal to provide computer infrastructure services to Dutch bank ABN Amro running on its cloud systems. As in most deals, the biggest names, including Infosys and Wipro were in the race to bag this contract.

Another wrinkle for Indian tech majors is the inability to offer IPs in cloud space which can help them bag large contracts when competing for large deals.

“We have acquired industry leading cloud intellectual properties (IPs) which help us provide our customers with a strong orchestration layer to manage diverse cloud platforms in a seamless manner,” claims Anand Sankaran, president, Infrastructure and cloud computing at privately-held Dell services.

For this reason, some analysts believe cloud could pose a long-term challenge, capping upside potential in a sector growing at 13-14% annually.

“In the long run (5-10 years), we think cloud will eat into the enterprise application services (EAS) revenues of India’s IT services companies (15-20% of total), assuming ‘ERP on cloud’ becomes a reality,” Yogesh Aggarwal, an analyst with HSBC Securities said in a report dated November 25. “In the near term, the risk is more manageable at just 5-6% of total business, as cloud companies have achieved little in terms of operating metrics.”

To be sure, some of that impact is already showing. The time-and-material model of payment, where companies pay for the effort rather than the outcome, has been dropping steadily over the past few years.

“Clients are asking for a significant sub set of the existing work to be converted into a pay for use model. This will pose significant challenges to the Indian based providers which currently utilize an FTE base model,” said Peter Bendor Samuel, CEO of outsourcing advisory firm Everest. “Its impacts are already showing in the slowing growth and the increased need for investment.”

A senior executive of Infosys acknowledges the company’s limitations, with lack of certified consultants who can help customers to move to cloud space.According to the HSBC Securities report, Accenture leads the pack among IT outsourcers, with about 3100 certified Workday consultants. Additionally, the outsourcer also has 1800 Salesforce-certified consultants. In comparison, top five Indian IT firms collectively have a little more than 2,000 Salesforce certified professionals.

Still all is not lost as some believe a recognition by the leading IT firms to increase their investment can help them battle again the likes of Accenture when it comes to winning large deals.

“The two things that they need to do is to build these strategic alliances with companies that have cloud-based products and second is to have hosting either in their own data centres in geographies where they want to provide these services or they should have tie-ups with data centres in those regions,” said Biswajeet Mahapatra, research director at Gartner.

To combat the long-term threat, companies will also have to change how their services are delivered as the lowered complexity of cloud-based solutions will reduce the need to employ armies of engineers.

“Companies will have to invest in robotic process automation, artificial intelligence, analytics tools and capabilities, business process skills, consulting talent. They will need to change the revenue model from one driven by selling just labour to one selling products and expertise weaved into those services,” Phil Fersht, CEO of advisory firm HfS Research, said.


Wipro, Infosys outpacing each other to meet demands in unfavourable global environment

December 9th, 2014

Battling to regain lost glory, Wipro and Infosys are stepping up their age-old rivalry, this time to out-innovate each other as the two Bengaluru-based software exporters invest in disruptive technologies pegged to artificial intelligence and design thinking to bring greater efficiencies for themselves and their customers.Outsourcing11

Infosys Chief Executive Vishal Sikka, at an analyst event in Pune on Thursday, said some of his company’s rivals were imitating it and went as far as labeling their moves proverbially as “imitation is the best form of flattery”. While he did not name any rival, for veteran watchers of Bengaluru’s software scene, the company he was referring to was clear: cross-town rival Wipro, which, on its part, claims to be investing “heavily” since 2012 in building data analytics and other next-generation platforms to help customers in the retail and healthcare space to improve their businesses.

In the past few years, both Infosys and Wipro have lost quite a bit of their sheen as they struggled to adjust with changing customer demand in an uncertain global business environment, leaving Mumbai-based bigger rival Tata Consultancy Services record phenomenal numbers since 2011. The original posterboys of India’s IT sector are trying cover the ground lost – by investing in technologies that can shake up the industry by disrupting the existing order and processes that are customer-focused – and their initiatives pit them against each other more than ever in the past.

The unfazed response of Wipro to Sikka’s comments was a testimony to the increased rivalry between the two. “I can say that we have a competitive edge,” said Satishchandra Doreswamy, chief business operations officer at Wipro. “We have been investing heavily in building the next-generation platforms for over two years with a focus on AAA (automation, artificial intelligence and analytics).

Platforms such as ServiceNXT, CloudCLM have started delivering value for some of key clients,” said Doreswamy, who was hired by Chairman Azim Premji three years ago to help transform Wipro by bringing in some of these advanced technologies. Although Doreswamy declined to quantify the impact of these disruptive technologies in Wipro’s growth, he said the range of productivity improvement differed from client to client. The former TCS veteran also said Wipro had over the last 24 months seen a “20-30% efficiency improvement” in the application development, maintenance and infrastructure management space.

Sikka, ever since he took the role of the first non-founder CEO at Infosys on August 1, has outlined a strategy of “building a new Infosys” by making fresh investments in bringing machineto-machine and automation platforms to the company’s traditional approach of delivering outsourcing services to customers. Sikka, who earlier this week completed four months at the company, said in Thursday’s analyst meet that he would share more details of what it was doing in this area in April next year.

For now, Infosys is training its software engineers on design thinking – a creative and systematic approach to problem-solving by placing the user at the centre of the experience – and is also in the process of launching an online training module on artificial intelligence for its employees. Doreswamy said Wipro has already brought in the customercentric approach and its overall net promoter score – a tool to gauge customer loyalty – has improved 30 percentage points.

Some experts, including Tom Reuner of London-based IT research firm Ovum said some of the next-generation service-delivery methods are still in nascent state and IT outsourcers are coy to talk in public as the full impact is still not fully understood. “(Nonetheless) Indian providers are at the forefront of this development as part of their push on nonlinear models,” said Reuner.

“Providers like TCS or Wipro have invested significantly in proprietary tools. The key to a broader adoption of robotic process is to build out robust cognitive engines (RPA) and artificial intelligence. These will be the conduit to moving RPA to the core of service delivery backbones.” Doreswamy said the immediate target for the company remains to adopt these disruptive technologies for at least 50% of customers. He declined to share further details.

Both companies are also looking to engage with startups to get access to new technologies. Wipro, after making minority investments last year in data analytics firm Opera Solutions and machine-to-machine learning-focused Axeda – although it exited Axeda this year – is setting up a corporate venture arm to be spearheaded by Rishad Premji that will initially invest up to $100 million (Rs 619 crore) in startups. Infosys too has set aside $100 million and is actively scouting the San Francisco Bay Area to find potential startups which could help the company with the missing innovation strand.

The focus of both companies is to win back the lost glory as rivals TCS and Nasdaq-listed Cognizant consistently outpaced them, and the industry, in revenue growth. Infosys, which was once the bellwether of the country’s information technology and commanded a premium in pricing compared with rivals, has been struggling to expand revenue in the last three years – it reported below-industry growth numbers for two years and was even forced to call founder Narayana Murthy back from retirement to steer the company last year.

In the last one year, Infosys even conceded to the fact of bidding for projects at prices which the company would not have done a few years earlier. Wipro has also been reporting disappointing growth numbers. Since the appointed TK Kurien as the CEO in January 2011, Wipro’s sequential quarterly revenue growth rate has not crossed 3% since the September 2012 quarter, making analyst Viju George of JP Morgan call Wipro’s situation as “a Curate’s egg”: good in parts but it must get multiple engines firing in tandem for it to qualify as a secular pick.


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