We’ve just been updated by the management team at Wipro on the company’s business strategy, and heard from some of its customers - including Philips and Lloyds Banking Group. The general theme to emerge from the feedback was that Wipro has helped to introduce some quite transformative approaches, to schedule and without drama.
Despite this, Wipro does face some challenges in Europe versus its peers. It is currently the slowest growing firm amongst the top five Indian-centric firms (3% in Q3 – see TMV’s OffshoreView Q3 2012), which is significant given that Europe accounts for 28% of its revenue. In the UK specifically, Wipro now sits firmly among the leading lights of the SITS market (it placed 17th in our most UK Software and IT Services Top 20 Supplier ranking, behind TCS at 12 but ahead of Infosys at 19). To move further up those rankings, our view is that it needs to develop a more differentiated approach - not only in the commercial sectors, but the public sector too.
The requirement for a more differentiated approach was also highlighted by TK Kurien, Wipro’s CEO, who explained that his vision for the firm is around creating more “differentiation at the front” and increased“standardisation at the core”. What this means in practice is developing more industry-focused solutions, more of its own IP, and creating expertise around vertical-specific business processes. At the same time, Kurien wants to standardise the delivery of services wherever possible – condensing costs at every opportunity. It’s a sound approach, so we look forward to seeing what fruit it bears in the coming quarters.
In parallel, there should be opportunities for Wipro to grow revenues by improving its mix of clients. Of the top five Indian firms, Wipro has the greatest percentage of clients that are sub-$1m per annum (49% - based on Q3 TMV data). Kurien is taking steps to address this by stepping back from smaller deal opportunities and existing contracts as they reach their natural conclusion – and focusing in on larger contracts. Simply put, Wipro needs to fry more of the bigger fish in a more profitable and differentiated way.