Wipro restructures software business, playing catch-up

Wipro is finally getting its act together after underperforming its peers for three quarters in a row.

After doing away with its joint-CEO structure at the top, the third largest information technology (IT) company has now gone in for mid-level structural and management makeover — both vertically and horizontally.

In the latest organisational rehaul, Wipro has vertically split its IT services business into six strategic business units (SBUs) based on industry domains and brought client delivery, sales and profitability under them.

What this implies is that, unlike in the past, each SBUs would now operate as an independent profits centre with higher accountability.

The recent organisational seems to have been driven by complaints that Wipro has been lacking in customer mining due to its complex and bureaucratic structure, which invariably slowed down its decision making and order execution.

The newly appointed CEO IT Business & executive director of Wipro T K Kurien emphasised the change in the structure would bring in agility in customer services delivery.

“With the change in environment, there is a need for a bolder, simpler and more agile organisational structure. The model that we have created now is centred on the customer and designed for swift, impeccable execution and single point accountability. Bottomline, customers can expect a nimbler and more proactive Wipro to deliver value-driven business outcomes to them,” he said in the statement issued by the company on Monday.

He added focusing on building a customer centric structure, better aligned and trained workforce, and by adding depth to the service portfolio and industry solutions, will take Wipro to its vision of global leadership.

The Azim Premji-owned tech company has in the recent past widened its gap with peers as it reported slower rate of growth. Even as that happened, the chasm between it and smaller rivals like Cognizant, HCL Technologies and Tech Mahindra has narrowed as they grew at a faster rate of 6-10%.

An analyst with a domestic broking house, who did not want to be named, said the company needs to accelerate its execution machinery to catch up with the peers and ward off threats from smaller rivals.

“The areas, where Wipro has been lagging, are customer mining and execution of contracts. Only if all this (restructuring) will result in improving the company’s performance in those two areas will it make sense. I expect the outcome of all this to be visible only in the next fiscal (FY12),” he said.

According to the statement issued by Wipro, Anand Padmanabhan will head energy and utilities along with metals and minerals and the finance solutions SBU that would comprise of banking, securities and insurance verticals will continue to be under Soumitro Ghosh.

Mark Fleming will retain leadership of media and telecom while pharmaceutical, healthcare and life sciences and services have gone to Sangita Singh.

Manufacturing and hi-tech have been clubbed together to create a single SBU that would be led by N S Bala and Bhanumurthy (Bhanu) will continue to lead retail, consumer goods, transportation and government.

G K Prasanna, who was leading the technology SBU, will take over as the head of Wipro’s Eco-energy business division and Anand Sankaran will continue to lead the company’s domestic IT services division Wipro Infotech.

The company has realigned horizontally by merging some its existing   businesses and building services and competence for the future businesses.

Under this, it has strengthened its application services solutions by providing application development and testing services as a single service line. Wipro’s new service line business application services, which will headed by Srinivas Palli,  will include packaged implementation, testing and business technology services.

To tap opportunities in the analytics, the company will be consolidating its analytics businesses into a new service line focused on analytics, business intelligence, information management, performance management, data /text mining. This new service line would be headed by K R Sanjiv.

Gangadharaiah CP, who currently heads the testing services, will continue as an advisor for our testing practice.

All other service lines of Business Process Outsourcing (BPO), Technology Infrastructure Services (TIS), Wipro Consulting Services (WCS) and V Product Engineering Services (PES) will continue to be led by the current leaders Ashutosh Vaidya, Deepak Jain, Kirk Strawser and Ayan Mukerji, respectively.

In order to foster entrepreneurial culture, the company is aligning all activities relating to solution delivery, talent management, competency build and talent acquisition under a single organisation.

“This will enable better execution for our customers through better alignment, demand-supply interaction and accountability .This shift will also enable employees by making them more aligned to the customer and build personal responsibility, performance and rewards,” said the statement  issued by Wipro.

The changes will be effective April 1.