Posts Tagged ‘Wipro’

Wipro’s chief business officer Satishchandra Doreswamy steps down

April 3rd, 2015

India’s third-largest software services provider Wipro Ltd’s chief business officer Satishchandra Doreswamy has stepped down to pursue opportunities outside the company, the company said.Outsourcing18

The development comes just a fortnight after the Banglore-based company announced a new organisational structure and appointed former TCS business process outsourcing unit head Abid Ali Neemuchwala as chief operating officer (COO) as well as group president.

Before joining Azim Premji-led Wipro in 2011, Doreswamy was working with Tata Consultancy Services as vice president and global head for infrastructure services. Neemuchwala also joined Wipro last month from TCS where he spent almost two-and-a-half decades.

As chief business officer at Wipro, Doreswamy was responsible driving large and strategic transformation deals and inducting next generation tools, processes and practices.

In March this year, Wipro had announced a series of internal changes, including creation of positions of group president and chief operating officer (COO). The position is being seen as a clear number two position in the company after that of the CEO.

The appointment of Neemuchwala also possibly sets a new line of management in place as a potential succession plan after 55-year-old Kurien hangs up his boots.

Kurian was named CEO of Wipro four years ago after the IT services major scrapped its previous top leadership structure involving two joint CEOs. Kurien had taken over from Girish Paranjpe and Suresh Vaswani.


Infosys, Wipro, TCS caught in outsourcing price war

March 26th, 2015

Top software service exporters are under pressure to drop prices to retain contracts with marquee customers such as American Express and Home Depot that are up for renewal this year, according to executives and experts involved in the contract negotiations.Outsourcing17

Rates have fallen by double digits for some of the biggest customer accounts in the past six months, with companies such as Infosys and Wipro sacrificing profit margins to gain market share and incremental revenue from these key accounts, they said.

Retaining strategic outsourcing contracts — that generate at least $100 million annually — is crucial to top IT firms such as TCS, Infosys and Wipro.

“We’re definitely feeling the heat in some of our key accounts — and there’s no way we can afford to lose a top customer since gaining new logos to make up for the shortfall is not an option,” said a Wipro executive, who requested anonymity.

An executive at another top IT firm, also declining to be identified, said as traditional businesses have become commoditised, no company could afford to charge a premium.

“Top customers are more aware now of the changing dynamics in the market and are taking the opportunity to negotiate multi-million dollar contracts at lower prices,” this person said.

Experts tracking the contract negotiations said prices could drop further over the next 3-4 quarters.

“It’s become a dog-eat-dog business more than ever,” said Phil Fersht, chief executive of outsourcing advisory firm HfS Research. “There is a clear downward pressure on all IT services pricing. We estimate this is a 3% price decrease per FTE (full time equivalent) per deal, on average, over the last 6 months.”

TCS, Cognizant and Infosys declined to comment for the story.

Infosys, TCS and Wipro are increasingly automating commoditized businesses like infrastructure management to improve margins but are forced to pass on a majority of the benefits to key customers such as Bank of America and Citigroup.

“We are seeing big price movement, some of it betting on increased maturity of autonomics. TCS, Wipro and Infosys have all signaled their move away from (automation company) IPSoft and towards internally developed autonomics solutions. I assume that this will give them more pricing flexibility than they were getting with third-party software,” said Bill Huber, a former IBM executive and managing director at outsourcing advisory firm Alsbridge.

For Infosys and Wipro, which have lagged average industry growth rates over the past three to four years, gaining market share at the cost of margins seems to be their best option in the near term to revive double-digit growth rates.


Wipro’s long search for a dogma breaker

March 20th, 2015

Ten months. Five candidates. Three countries. That is the journey Wipro Ltd chief executive officer T.K. Kurien and human resources head Saurabh Govil undertook before the company named Abid Ali Neemuchwala as chief operating officer (COO) on 16 March. Outsourcing8

Kurien and Govil, who flew to London, Seattle, Dallas and New York between April and November on this mission, had at least a dozen meetings with external candidates.
So secretive was the management about the hunt for a COO that even the Wipro board was informed only a day before India’s third largest software services exporter announced the appointment.

“This thought process started in March (2014), but we kept it under wraps. For a long time, only two of us knew,” Kurien said in an interview on Wednesday. One executive privy to the developments said on condition of anonymity that he got to know about the COO search only in November.

In the summer of 2014, Wipro reported another set of feeble growth numbers, recording annual revenue growth of 6.4 % for the year ended 31 March last year. Although this was better than the 5% growth in 2012-13, Wipro’s revenue increase paled in comparison with that of larger rival Infosys Ltd, which posted 15% growth.

Both Kurien and Govil realized that it was time to act.

Kurien, who took the helm of Wipro in February 2011, had first discussed the need for a COO with Govil in March.

One theme that recurred during Kurien’s interactions with many of Wipro’s 986 customers was the impact of technology on the way the traditional outsourcing work was done by Indian outsourcers. Is Wipro embracing open source software to which many of its biggest clients, including Citigroup Inc.,were switching? Is it investing enough in next generation technologies, including automation of back-end infrastructure maintenance?

Although by now Wipro had a team working under intelligent technology platforms, Kurien knew it would take some time before results start to show up. He needed someone who could execute his plans.

“If you look at the way technology is being bought, it is very different from the way three years ago,” said Kurien. “Three years ago, CIOs (chief information officers) took infrastructure from us, took application from someone else, and acted as integrator. But now more and more specific workloads are getting stack-based. People take a process view and say how do I integrate applications, hardware and data. So which means how can you (an IT vendor) integrate applications, infrastructure and data together, and present it before the customer.”

“So we started meeting people from April,” said Kurien, who a few days later read in the press that cross-city rival Infosys, too, had started its hunt for a CEO to replace S.D. Shibulal, who wanted to leave. Infosys asked two search firms, US-based Development Dimensions International, a specialist in executive evaluations, to rank leaders within the company and executive search firm Egon Zehnder to help it identify leaders outside the company.

“Executive names normally come through referencing. But TK is one CEO who is always meeting clients and he knows most people well enough,” said Navnit Singh, country head for India at executive search firm Korn/Ferry International. “I think that explains why they did not seek any outside help,” said Singh, whose firm helps companies, including Wipro, fill senior management ranks.

Two months later, in June, Infosys named Vishal Sikka as the first non-founder CEO and MD-designate of the company. Unlike Infosys’s hunt for Sikka, which took two months, spanning three continents and the three-member nominations panel of the company meeting a dozen external and internal candidates, Wipro’s search was a long-drawn affair.

By now, Wipro leaders had just had two meetings with executives, names of which the management declined to share. Mint now learns that these executives were from Microsoft Corp. and Google Inc. But Kurien knew their decision to bring in an outsider was the right one.

“We wanted someone who could challenge the existing dogmas that sat within the enterprise. Within an enterprise you typically don’t question things which are done for many years. We wanted a little bit of external challenge the way we have worked,” Kurien said, explaining the rationale for selecting an external candidate.

A few months later in August, both Kurien and Govil first met Neemuchwala in Dallas over dinner, according to the executive cited above.

Neemuchwala, 48, was no stranger to the outsourcing sector: He is credited with having doubled the revenue at Tata Consultancy Services Ltd’s (TCS’s) back-office division in the six years he headed the business and also helping the company win some billion-dollar deals, including a multi-year contract with Nielsen.

Wipro’s management declined to share details of what transpired in the dinner meeting, but this it was followed by at least two more meetings in Dallas, according to the executive cited above, before Neemuchwala flew down to Bengaluru to meet Wipro chairman Azim Premji in late December.

“Such meetings with chairman are never so short,” Kurien laughed when asked if it was a quick 15-20 minute meeting, again declining to share details.

To be sure, once Premji approved of the choice, Wipro knew by February it had found the right candidate to lead the operations team. But it wanted to wait for another six months before naming Neemuchwala as COO.

“Things in the last month moved way too fast than we had anticipated. He (Neemuchwala) left TCS (in early February) and by then, other than Wipro, he had four other offers (including one from a private equity-backed technology firm). So he took a decision and we are happy he joined us,” said the executive cited above.

“The biggest quality he (Neemuchwala) has is the ability to execute. He integrates all these stacks. All the stacks (technology service lines at Wipro) report to him. He will be building service integration layer that sits on the top,” said Kurien.

“He (Neemuchwala) genuinely understands how to marry business process delivery with IT delivery—an expertise also shared with T.K. Kurien, who used to lead Wipro’s BPO business before becoming the company CEO,” said Phil Fersht, CEO of US-based HfS Research, an outsourcing-research firm. “He can truly help globalize an indian-heritage provider with his experience, which is essential for a firm like Wipro.”

For now, Neemuchwala lives with his family in Dallas. But Wipro won’t dictate where Neemuchala should work from. “He will be wherever he wants to be, be it in India or the US,” said Kurien.

Neemuchwala declined to comment.


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.


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