We haven’t done so well on execution: Wipro CFO

At a time when its rivals are tackling macro-economic and market environments, the third largest IT firm Wipro is trying to put its house in order, to speed up growth. Suresh C Senapaty, chief financial officer (CFO) of Wipro, tells DNA the company’s growth will get a boost once “execution rigour” is injected into its system.

This is the third time in a row that you have underperformed peers, volume growth has been disappointing at 1.5% and revenue growth is pricing-led? Is this only because of your business portfolio (lower presence in BFSI and high in tech/telecom) or are there other reasons too?
It’s (underperformance) a function of two things. First is financial services and healthcare are contributing higher proportion of their (Infy and TCS) revenues while they are lower for us. And second, in some form, is our customer mining has not been as efficient and effective as it has been for our competition.
These are the two basic reasons why we haven’t delivered as well as our peers.

Why is customer mining lagging?
It (customer mining) requires some amount of organisational change and some amount of execution rigour. On that front, we haven’t done as well as we need to.
Is the execution rigour lacking …
The thought and strategy is place, but we need to do better in terms of achieving outcomes.

How do you measure that?
We judge it on the basis of how accounts grow. Either you have accounts that do not have potential or there are accounts that have potential but have not grown fast enough. While there are cases of customers that do not have as much potential as our peers, but there are some customers, who have potential but we have not done good enough. Customer mining managers work like CEO and have to get delivery time right, get the right pricing, valuation proposition for the customers and partner with customers to achieve targets.  When you talk about the client engagement manager, he or she is the CEO of that account and trying to deliver BPO, IT and engineering solutions and consulting to get a higher share of the wallet and ensure that customers sees a higher benefit in partnering with us than anybody else.

What is the company doing to scale up presence in the BFSI and healthcare verticals? Would you look at acquisitions to catch up on growth in these segments?
Yes and no. I don’t think we are looking at acquisition for aggregation to improve from 27% to 30% or 40%. As long as we have a scale of 27%, we should be able to go to other customers and increase our share of wallet or get more customers. But while that may be case, we have certain other properties which are growing well. In energy and utilities and telecom, we have a large presence but unfortunately telecom is not doing so well in terms of OEM piece and so therefore we are rejigging that part of the business. Retail and manufacturing are doing well. So you need to play on your own strengths. If you remember, before the slowdown in late 2008, we were consistently growing for seven, eight  or 12 quarters faster than our peers. Now, we are growing well, but not as fast as the competition. This is one way of looking at it.

Your guidance of 3-5% growth is higher than Infy (1-2%), what is making you confident of that kind of growth?
Our guidance is bullish based on the headcount add that we have seen in the current quarter and headcount adds that we are planning. Also, some of the deals that we thought we would be getting in the third quarter got pushed to fourth quarter. Some of that will fructify in this quarter. It’s a combination of all and we think that this is something that is reasonably achievable.

What is the customer sentiment in the market?
It’s pretty decent. If you look at financial services, healthcare and energy utilities, we are getting responses from customers where they want to expand their IT budgets. While others expect budget to marginally expand but outsourcing will go up. They are moving money from lights-on to discretionary spending. So, from that point of view, we have opportunities to capitalise on.

Some analysts believe Wipro’s volumes could have been low due to fulfilment issues, which could have restricted participation in some discretionary IT spending related projects. Is that true?
Possible. I can’t deny that. Some of that could also be because of that.

Do you see that getting corrected?
Yes, so we are adding people. From that point of view, you saw our utilisation drop, which means we have bench strength available to capture on opportunities.

Why has utilisation dropped?
It has dropped because of higher attrition and bulge-mix (proportion of experienced and non-experienced people) change that we are orchestrating, where we are looking at hiring more freshers.

What are the challenges you are likely to see in the current quarter?
It would be ensuring that some of funnels are converted into orders. The faster we close those (deal in the funnel), we can get revenue in the current quarter and also ensure that people add takes place. Transition of CEOs, of course, is another challenge. They would co-operate along with (T K) Kurien to ensure we make least changes so that the momentum is not lost or more momentum needs to be engineered than what it has been. The other would be to bring down attrition even further.