Wipro looks at new acquisition target to fire its automation drive

Written by P P Thimmaya | Bangalore | Updated: Feb 10 2014, 19:40pm hrs
Wipro LtdWipro is looking at a target acquisition that deals with advanced technology areas such as mobile, social and cloud.
Wipro, Indias third-largest IT services exporter, has intensified its search for an acquisition target that will help increase its level of automation besides delivering a business solution in the market place. The IT firm is looking at a target acquisition that deals with advanced technology areas such as mobile, analytics, social and cloud.

Talking to FE, Satishchandra Doreswamy, chief business operations officer, Wipro, said, We continue to look at these options and there is a continuous evaluation. There are multiple areas we are looking at which may either relate to the areas of business or technology.

Wipros inorganic strategy over the last two years has witnessed them getting access to different kinds of technologies. In April 2012, it acquired an Australian firm Promax Applications Group (PAG) for A$35 million, giving it a strong foothold in the analytics space. Similarly, it acquired a US-based company Opus CMC in December 2013 for $75 million, providing them access in the mortgage space of the financial services sector.

However, the IT major has also gone about making strategic investments by picking up minority stakes in companies which will provide them the edge in emerging technology areas. In May 2013, it made a strategic minority investment of $30 million in another US-based big data analytics firm Opera Solutions.

On the various kinds of acquisitions made by Wipro, Doreswamy said, We want to have access to these types of technologies which will help us innovate, integrate with our solutions and also build new things together.

Wipro has been on the drive to automate its various business processes which not only brings in higher internal efficiencies but also the ability to showcase at the marketplace of the various business solutions they are able to bring to the table.

The traditional model of IT outsourcing and offshoring has witnessed a rapid change where the market is demands that they not only deliver a service but also provide them with a technology solution to their business problems.

Doreswamy said that some of new technology platforms built by them like ServiceNXT or FixOmatic leading to higher automation has resulted in a 20-30% uplift in their productivity. Automation is becoming a key portion of our strategy, he remarked.

The automation drive within Wipro has resulted in it becoming an important contributor towards improving the operating margins (OPMs) of the company. At the end of Q3FY14, it reported an OPM of 23%, a rise of 3% in the last nine months and the aim is to take it even higher.

The automation drive and building new technology solutions has also helped Wipro in bagging new deals in the market. Doreswamy said that it has helped in converting numerous business deals and they are positioning automation as one of its key strategic advantage.

Wipro is now ensuring that in the all new businesses being generated, automation, coupled with IT solutions & platforms, would act as a key differentiator. It is not only implementing the various new technologies in the way they deliver their services but also create solutions which would cater to different business verticals.