Posts Tagged ‘Wipro’

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.


Wipro Healthcare & Life Sciences emerges star performer in Everest Group Peak Matrix

November 27th, 2014

Wipro, a leading global information technology, consulting and business process services company has been named a Star Performer in the Everest Group Life Sciences ITO PEAK Matrix 2014.Outsourcing10

The company  strengthened its position by ramping up proprietary solutions, augmenting resources, deepening domain expertise and demonstrating an increased traction with large life science firms.

It has seen success in delivering help desk, end-user computing, application development management, testing, enterprise resource planning (ERP) and package implementation services for life sciences clients. The geographical scope of these contracts spans North America, Europe and Asia Pacific. Wipro’s solutions address emerging industry needs to drive patient-centric solutions and optimize cost.

“A new surge in life sciences IT outsourcing is driven by application portfolio modernization, infrastructure transformation, and analytics. Life sciences enterprises are increasingly preferring service providers who can provide a blend of traditional and next-generation services”, said Abhishek Singh, practice director, Everest Group.

“In the past year, Wipro has significantly improved its market presence through improved industry focused technology capabilities. Wipro has thus strengthened its major contender positioning and achieved a Star Performer rating on the Everest Group Life Sciences ITO Peak Matrix,” he added.

Speaking on the recognition, Sangita Singh, chief executive – healthcare & life sciences, Wipro Ltd said that  this recognition could  be attributed to our domain focus, best-of-breed technology and delivery excellence in a comprehensive portfolio of services equipped to address the demands of rapidly-modernizing industries.”

Healthcare and Life Sciences is one of the fastest growing business units of Wipro and has seen an upswing in large wins, due to its focus on domain-led solutions coupled with capability and global scale.


Wipro to appoint new vertical heads by year-end: Sources

November 25th, 2014

India’s third-largest software exporting firm, Wipro, will name some new vertical heads by the year-end, according to two people familiar with the matter, as part of chief executive TK Kurien’s strategy to improve growth numbers.

India’s third-largest software exporting firm, Wipro, will name some new vertical heads by the year-end, according to two people familiar with the matter. 

WiproBSE 0.23 % has already made more than a dozen changes at its 50-odd verticals and practices since December last year. It is now expected to name bosses for product engineering services and global SAP practice, while some of the other verticals may see new faces, the people quoted earlier told ET.

“TK realises that vertical heads now have the most important role to execute our long-drawn work,” said a head of a vertical at Wipro. “Obviously, elevations also brings in more accountability (for these leaders).” A company spokesperson, however, said, “Wipro has no plans to announce any organizational restructuring and any such suggestion would be purely speculative.” Kurien, who took charge as CEO in February 2011, was tasked with the job of steering the Bangalore-based company back to industry-matching growth numbers.

However, Wipro’s sequential quarterly revenue growth rate has not crossed 3% since the quarter ended September 2012, when it had reported 4.6% growth.

For the second quarter ended September this year, Wipro posted a sequential growth of 1.8%, much lower than peers InfosysBSE 0.68 %, which reported 3.1% growth, and TCS, which recorded a 6.4% growth. Kurien in the past has told this newspaper that a key measure of his success will be hitting the 4% sequential growth mark.

Although Wipro has won some large deals under Kurien’s leadership— including a $1.2-billion outsourcing contract from Canadian utilities company ATCO last year which was Wipro’s largest ever-—some analysts, including JP Morgan’s Viju K George, believe the company has been “good in parts but must get multiple engines firing in tandem for it to qualify as a secular pick”.

Although Wipro has won some large deals under Kurien’s leadership— including a $1.2-billion outsourcing contract from Canadian utilities company ATCO last year which was Wipro’s largest ever-—some analysts, including JP Morgan’s Viju K George, believe the company has been “good in parts but must get multiple engines firing in tandem for it to qualify as a secular pick”.

At present, Wipro’s product engineering services is being overseen by Ayan Mukerji, who is also chief executive of the company’s media and telecom businesses. Since December last year, Wipro has brought in new leaders to head many of the verticals and practices, including making two changes in the banking, financial and insurance verticals.

The Bangalore-based software firm named Roop Singh as head of securities and capital markets vertical in April while in August it named Gaurav Chadha as the new head for its insurance vertical. Both Singh and Chadha report to BFSI vertical head Shaji Farooq, who in turn reports to Kurien. Wipro BPO also saw a new leader in Nagendra Bandaru, who was appointed as head of the back office unit in August after his predecessor Manoj Punja left the company.

In April this year, Vishal Arora was made head of Wipro’s manufacturing and hitech vertical for India and the Middle East. Two months later, Neeraj Sahdev was made the new boss of Wipro’s government and defence vertical for India, Gulf and South Africa.


Indo-US trade wars Part 1: The great outsourcing debate

November 14th, 2014

No issue has the ability to spark an online conflagration as much as a debate on outsourcing. So you can well imagine how much of a role it could actually play in either strengthening or destabilising US-India relations. After all, all of India’s tech biggies, from Infosys to Wipro, to TCS, to Cognizant, and many of its smaller players (Mindshare, Happiest Minds, Tech Mahindra) have their futures firmly in Uncle Sam’s backyard. Any attempt to jeopardise that trough of revenue is likely to cause shrill alarm, while the continued trend of using low-cost tech labour — specifically H-1B workers — by shipping them over to the US to work at clients’ sites will continue to get the American techie worked up.Outsourcing33

It is a greatly divisive issue that could have major spill-over effects, with disastrous tit-for-tat outcomes — but Narendra Modi and Barack Obama would fervently hope that it doesn’t come to that, since the business stakes are high for both countries.

It doesn’t help that the recent Immigration Reform Bill (S744), passed last year in the Senate by a comfortable 68 to 32 margin, has simply poured jet fuel over this issue. However, the temperature is going to really shoot up into the stratosphere if the House of Representatives decides in the coming months to go ahead and pass what is essentially a very similar-looking Bill.

Meanwhile, the Indian software industry is on tenterhooks. The Indian American Advisory Council (IAAC) which advises US House of Representatives on India-related issues, estimates that the Indian economy could take a $30 billion hit if the Bill goes through.

On the other side of the debate, US observers say the Bill could be disastrous for US tech workers, who in effect are being let down by American companies as well as their governments. Who to believe depends on what kind of math you end up doing. (Ironically, it’s probably the first time in recent history that both parties in a rancorous debate on protectionism are in agreement.)

Broadly speaking, the proposed Immigration Bill actually boosts the number of H-1Bs from the current 85,000 to 195,000, but that’s just candy coating that hides the bitter medicine underneath, say pro-outsourcing critics of the Bill. This cohort is horrified by the clause that states that a company with more than 15 percent of its workforce on H-1Bs will be barred from placing H-1B workers at client sites. Companies using L-1s (another short-term visa similar to the H-1B) would have to prove that it didn’t replace any American workers in the same field 90 days before or after the L-1 filing. Lastly, no company can use L-1s or H-1Bs to make up more than 50 percent of its workforce after October 2016.

If this weren’t bad enough, say pro-H-1B critics of the Bill, the killer blow is in the fees that would be levied on companies currently exceeding the future caps: $2,250 for L-1 petitions and $2,000 for H-1B petitions for companies that have more than 50 percent of their workforce on these visas. That fee would rise to $5,000 per visa in fiscal 2015 for companies with 30 to 50 percent of employees on these visas, and a whopping $10,000 per employee for a company that has 50 to 75 percent on them. To add to all of this, there is a requirement that employers pay H-1B workers no less than the mean wage for the occupation that could boost a $60,000 per year entry-level job to $92,000.

No Indian company thought that when Barack Obama used the tagline “Say no to Bangalore and yes to Buffalo” in 2009, in an effort to revive the post-meltdown American economy, it would come to this.

“The Senate Bill unfairly targets American companies trying to remain globally competitive by reducing their ability to contract with global IT service providers and restricting their access to the international expertise they need,” said Ron Somers, former president of the US-India Business Council, a year ago. He also cautioned that it could strangulate innovation and job creation, and compel businesses to move jobs outside the country.

Not true, say anti-outsourcing critics of the Bill, who think that in reality, this is just one more nail in the coffin of the American tech worker who has a long history of being replaced by low-cost H-1B workers. That is apparently because of what has been widely dubbed as the Facebook Loophole — a clause in the Bill stating that if companies help their H-1Bs and L-1 workers to apply for Greencards (which can take a few years to materialise), they can reclassify them as “immigrants in waiting”, and duck the new requirements altogether.

“I think it’s a pretty large loophole, and it defeats the purpose of trying to get these firms that are heavily dependent on H-1B visas to hire American workers. Now, they have an additional way to avoid hiring American,” said Ron Hira a year ago, a policy guru who researches outsourcing at the Rochester Institute of Technology. “Really, the tech industry wrote it.”

Even if this loophole wasn’t exercised, whatever these companies fork out in additional fees is a trifle compared to how much they would save because of the cheaper labour that they utilise, say pro-labour critics like Neeraj Gupta, CEO of the IT services company Systems in Motion.

Who to believe? That’s a tough call. The widespread stereotype on the American side of the fence is of Indian engineers of poor calibre replacing boatloads of talented American techies who are denied what is rightfully their jobs. These workers also bring wages down, it is believed, and since they are willing to work for peanuts, they help foster unfair work practices.

For instance, a Zogby International poll conducted many years ago discovered that 71 percent of Americans felt that outsourcing jobs overseas negatively impacted the US economy, while 62 percent said that the US government should tax or legislate to try to stem the tide.

Conversely, the pro-outsourcing side of the fence says that the myth of low-quality Indian engineers is way overblown (“look at all the people who work in Silicon Valley — they come from the same stock”, they say). Many Americans are simply not qualified for these jobs, whose technical requirements change rapidly, and that many Americans are simply not interested in these entry-level, grunt positions that are not capable of paying back debilitating student loans that Americans are often saddled with. Indeed, many American employers complain that retaining an American, who often take flight to jobs that pay a few dollars more, is a monumental pain and an expensive proposition.

So, where does the truth lie? For a real measure of the economic impact of H-1B workers on the American jobs, it is probably only logical to analyse the job market and wage growth for this sector. It turns out that Ian Hathaway, research director at Engine, an American economic research outfit, has conducted an analysis that shows the job market in science, technology, engineering, and mathematics fields (STEM), as well as computer and math sciences (CMS), is actually a whole lot tighter — which means a lot more jobs available per unemployed worker where employers must compete to get employees — than for other fields. Apparently, At the end of 2012, there were 2.4 CMS job openings for each unemployed CMS worker, and 1.4 STEM openings for each unemployed STEM worker versus four unemployed workers in non-STEM and CMS fields per job opening.

What’s more, Hathaway shows that wage growth for STEM and CMS workers with at least a bachelor’s degree was far more “robust” in the last 12 years compared to other fields. “Not only did wages grow at the median for these fields while wages in all other professions fell substantially; that growth also reached workers with a broader set of income levels,” pointed out Hathway. In fact, it is “irresponsible for researchers to claim there is an oversupply of STEM workers,” he added.

Hathaway also pointed to another study, conducted by William R Kerr, a Harvard business professor, who examined 300 American companies and found little empirical evidence that pointed to American engineers being displaced by foreign ones. In fact, Kerr’s study suggested quite the contrary, where the growth of immigrant workers apparently “helps younger American technical workers — more of them are hired and at higher-paying jobs — but has no noticeable consequences, good or bad, on older workers”. Kerr also said that “In the short run, we don’t find really any adverse or super-positive effect on the employment of Americans,” adding that “People take an extremely one-sided view of this stuff and dismiss any evidence to the contrary.”

This is more or less borne out by another study done by academics at the University of California at Berkeley, which says that foreign-born STEM workers increase employment and wage opportunities for high-skilled native-born American workers (STEM and non-STEM).

The study found that over the span of a decade in an urban area, a 1 percentage (of total employment) increase in foreign STEM workers during a decade actually increased the wages of native-born American college graduates by 4 to 6 percent, with small effect on their employment. Moreover, “the technologies introduced in the period 1990-2010 by STEM workers likely increased total production, and even more strongly the productivity of college-educated. We also found that college-educated natives moved in response to foreign STEM workers to more human capital-intensive sectors of the city economy, they increased the ‘creative’ skills used in production, and their house rent increased, eroding part of their wage gain.”

This is all startling stuff and an overwhelming refutation of the widespread scaremongering regarding outsourcing and H-1Bs. The inevitable conclusion, then, is that the American tech worker has no reason to fear H-1Bs, regardless of what they hear through the grapevine or their own occasional bitter experiences. What these studies overwhelmingly point to is that paradoxically, H-1Bs actually help them.

There are other reasons for outsourcing opponents to perhaps revisit their positions. Today, as this New Republic piece points out, many large global American firms in fields from finance to healthcare have gargantuan back-end systems that require careful tending to, something that the lower-end H-1B worker is perfectly suited for, allowing American tech workers to focus on climbing the employment value chain. Not doing so could stymie growth prospects for these companies, thereby making it even harder for American workers to find the kinds of jobs they want.

Several hundred years ago, economist David Ricardo postulated his theory of comparative advantage by saying that the essence of a sound, free-trade system is that which allows countries to focus on their core skills, thereby producing something that they are the most efficient at, instead of a product that someone else is better at churning out. Here, outsourcing is simply a service instead of a good, and by protecting low-end service jobs instead of trying to create higher-end ones, the US is simply being more inefficient.

And while the new areas of tech employment, rife with self-driving cars, bots, and other forms of artificial intelligence may be disruptive and appear to be “anti-people”, they actually require a whole new wave of techies to code, build, and manage them. This is the emerging, new world of employment, along with analytics and big data, that Americans should be focused on conquering, instead of fretting over the inconsequential lower-end ones.

As David Clark, a senior research scientist at MIT’s Computer Science and Artificial Intelligence Laboratory, has observed, “the larger trend to consider is the penetration of automation into service jobs. This trend will require new skills for the service industry, which may challenge some of the lower-tier workers, but in 12 years, I do not think autonomous devices will be truly autonomous. I think they will allow us to deliver a higher level of service with the same level of human involvement.”

Getting replaced by someone else at work is a humiliating experience. If it happened to me, I would probably be angry, bitter, and vengeful. And I would, if I were American, not be able to appreciate the thick irony that the biggest proselytiser and enforcer of opening up markets, especially in developing countries, has been the US.

However, considering all of the evidence that points to outsourcing and H-1Bs having a negligible — indeed, a positive — impact on the US worker, never mind the US economy, maybe it’s time for the American tech worker to deep-six his or her understandable animosities toward H-1Bs and the likes, and focus on ruling the emerging technology landscape, just as their predecessors have been doing for decades.

Which means that any debate on the Immigration Bill going ahead should take this into account, lest a flawed conception of what H-1Bs do to the American economy result in torpedoing what could be a fertile era for Indo-US trade and cooperation.


Wipro secures $143 million outsourcing deal from Levi Strauss

November 13th, 2014

IT services major WiproBSE 0.69 % has bagged a $143 million 5-year outsourcing deal from Levi Strauss as the US-based denim apparel maker looks to cut 500 jobs in a restructuring exercise. Outsourcing28

The move, first announced in March 2014, is expected to generate net annualised cost savings of $175-200 million once fully implemented.

Levi Strauss & Co has entered into a Master Services Agreement with India’s third-largest software services firm to outsource “certain global business service activities within the functional areas of information technology, finance, human resources, customer service and consumer relations.”

“The initial term of the agreement is five years with activation of certain components of the Outsourced Services commencing during the first quarter of 2015. The company has the right to renew and extend the agreement for up to two additional one-year periods.

“The company will pay Wipro for the services through a combination of fixed and variable charges, with the variable charges fluctuating based on the company’s actual need for such services. The company expects to pay Wipro a minimum of approximately $143 million over the initial term of the agreement,” Levi said in a regulatory filing to the US SEC.

Earlier this week, Levi had said that its next phase of the global initiative includes “elimination” of around 500 positions primarily reflecting the Outsourced Services as well as a further reduction of management layers, an increase in spans of control, the removal of duplicative roles and other structural changes.

“The company anticipates the elimination of positions will be substantially completed within the US within the second half of fiscal 2015 to accommodate the transition of Outsourced Services to Wipro.

“The Final estimates for headcount, timing and charges in certain areas of the international business are subject to completion of applicable local works counsel and other consultative processes.”

The San Francisco-based jeans maker said it expects to incur restructuring and related charges in the range of $45-55 million, the majority of which will be recognised in the fourth quarter of 2014.

In a statement, Levi said: “In this next phase of the productivity initiative, approximately 500 positions will be eliminated, primarily due to the decision to partner with Wipro.”

Wipro will provide support for certain business services within information technology, finance, human resources, customer service and consumer relations, it added.


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