Wipro CEO TK Kurien has driven Wipro back on to an impressive growth trajectory and uptick in the demand environment in US is certainly helping. In an interview with Debojyoti Ghosh and PP Thimmaya, he says the turnaround journey is not complete and there is a long way to go for Wipro before it can fully emerge from the shadows. Edited excerpts:
US and Europe seem to be playing out well…
US is doing better. It is doing better than what it was last year. There is no question about it. But for Europe, we have to do a lot more in terms of penetrating the market more effectively. We need to get some local flavour. The government shutdown in the US is going to hit retail. Spending is not going to be as good as what people thought it would be. The retail industry is under stress. We have to wait till December to see how it is going to pan out. If government shuts down for a few weeks, it is impossible to assume that there would be no impact. The implications are massive when the government doesn?t pay their debts.
What are the reasons for Wipro growing faster with its top accounts?
We would like to get secular growth across verticals. You need to have balanced growth. Last quarter has been good from that perspective. But on whether I?m entirely satisfied with that? The answer is no. We have a long way to go. This is the first milestone that we have crossed. There are more milestones ahead of us. So, the journey, by no means is complete. I don?t want everyone to think that this is the turnaround quarter. In our business there is no one turn in the road that takes you to the right path.
Is Wipro?s strategy of ?farming and hunting? playing out well?
Farming is paying off, but on hunting we have a little more work to do. If you look at our competition, about 6-7% of their revenue are coming from new accounts over a period of 18-24 months. Our numbers is about 2%. That is what we need to catch up.
Wipro has got two accounts with $200 million in annual revenue. Are there any more in the offing?
Our top 125 accounts is where the major focus will be. We absolutely see more momentum in such large accounts. Our view is that given our size one particular account should not be more than 3% of our topline. It is a very conscious choice.
Will Wipro look at M&A in the European market, just like your peers are doing?
I?m not saying we will never acquire. I?m saying that we got to have a culture into which you acquire. If you don?t know the local market, acquiring somebody to penetrate the market doesn?t make much sense. You need to understand the local market first. And that?s the game we are playing. As part of our localisation plan we are recruiting more freshers locally out of colleges and training them for a period of three years. We are going to have more such programmes going forward. Ultimately the leadership in these countries has to be local. What we are doing over the past few months is that moving a lot of our leadership in front of the customers.
Wipro?s BPO business growth in second quarter has been flat. Reasons?
The BPO business is undergoing a fundamental shift. Services like finance and accounting (F&A) and call-centre based services have become highly commoditised. We will slowly move out of that. Ultimately the market will move towards a model where we will provide software, hardware and BPO services in one stack. And our pricing model will be linked to customer outcomes rather than our own outcomes. BPO will become more closely integrated with IT services. We see this happening in the next 12-18 months.