Wipro says delayed deal closures boosting IMS biz

How will investment in IT360 help to increase profits for Wipro?

As per industry sources, an enterprise spends about 60-65% of its overall IT budget on infrastructure. Therefore, IT infrastructure usually figures high on cost optimisation initiatives. IT360 is a platform which helps companies measure business outcomes on IT investments, by tracking leakages in the system and suggesting ways of saving costs using lesser inventory.

IMS is expected to be key for IT firms’ revenues. Can you quantify Wipro’s investment in this space and the returns you have received on the same from customers?

Wipro has been a pioneer in this space and the largest player today. IMS is the second most important vertical for IT firms after outsourcing, and becomes all the more relevant today, considering delayed outsourcing deal closures. Global Infrastructure and Services (GIS) – under which IMS revenues fall -- contribute approximately 30% to Wipro IT services. Wipro has also won some marquee deals in the past few years, with a growth rate of 25% CAGR. Again, 3-5% of total revenues is farmed back into IMS investment.

Companies like Infosys and iGate have adopted a new ‘outcome sourcing’ based approach, replacing traditional outsourcing. Will Wipro be adopting the same?

Wipro signed a contract with Uninor six years ago, where Wipro’s payment was directly linked to Uninor’s subscriber additions. This again makes us the pioneer of outcome-based pricing model. While this model provides additional flexibility for offering services, we believe the market isn’t ready for the shift from traditional outsourcing yet. However, profit sharing of proven cost savings between clients and IT companies is becoming a trend today.

As part of effort to reduce costs, will Wipro hire less, going forward - on a project-need basis only?

We conduct periodical quality analysis to determine business profitability. We believe reducing hiring or hiring only on a project basis will be detrimental in the long run. While managing utilisation as part of daily business, we would rather have a larger bench to be prepared for an upcoming project, and we also hire contractors onshore if needed for a large project to ensure fastest possible time to market.

How far has Wipro progressed with automation and M2M? 

Wipro has received decent returns after aggressively pushing automation since the last 18 months. While people will be replaced from monotonous jobs, this gives them a chance to move up the value chain, with specialised training we provide at every step.

What is the latest Wipro is doing on a managed services and SMAC front? 

We made two SMAC acquisitions in the last two months, and believe there will be more. We believe in differentiation from the front and standardisation at the back-end. Cloud has already started generating return on investment for us.

How much is cloud computing and bring-your-own-device (BYOD) being used at Wipro?

Wipro built its private cloud platform three years ago. It flagged off its BYOD policy two years ago. We believe we are ahead of our IT peers in internal use of BYOD and SMAC.