Wipro?s new CEO TK Kurien has got off to a busy start. He has been travelling and meeting customers while orchestrating the biggest rejig in the firm?s recent history. He talks to FE?s ,Goutam Das about a new-look Wipro and the firm?s inorganic strategy.
Take us through the restructuring of the last three months. What gaps in the firm does the restructuring aim to plug and how will Wipro look like?
One, we reorganised and simplified our structure. This does not mean anything if it does not impact our customers and employees ? two key stakeholders. Earlier, we used to have seven hops from the time a customer used to give us an order till the time it was delivered. We have brought that down to two. Earlier, we used to have three P&Ls ? geography, the service line and the vertical. Now, we only have the vertical as the P&L. Two, you need to have verticals that mirror the customer organisations. You are going to have technology layers which will drive towards variability of cost. And you have consulting which is the cultural and the change management layer put on top to work effectively. This will be the Wipro of the future. The job of the verticals is to provide impact zones. The job of the horizontals and service lines is to provide technology roadmaps and variability of cost. It is the job of consulting to put the first two together and make it work. The change is all about this.
Has Wipro?s hardware business been reviewed? What is the point in keeping a business with falling margins?
In the future, people will buy solutions and not hardware and software separately. Customers are telling us to quote a transaction price. It is our job to make all the hardware and software work and charge based upon business impact. That?s the way we are going. Hardware remains a very strategic portion of our business. Don?t look at the hardware component alone. Unfortunately for reporting purposes, they hide more than they reveal. If this is the logic, IBM and HP would have a far greater advantage over Indian IT companies in the future. Of course, they would. The funny thing is that IBM treats its outsourcing arm very independently.
Tell us about your M&A strategy. In your short stint so far, we have already seen one acquisition.
We have identified four momentum verticals ? eEnergy and utilities, BFSI, retail and consumer products, healthcare and life sciences. We have to expand our service lines and customer footprint in these. Oil and Gas was an example. We got a wonderful asset that came along and we picked it up.
Are you looking at smaller tuck-in acquisitions that fit into Wipro?s previous ?String of Pearls? strategy?
String of Pearls is a nice catch word. It is not necessarily a strategy.
Would it be fair to conclude that most of the firm?s acquisitions haven?t really worked?
The BPO buy (Spectramind) was a huge success. Then we bought the energy practice of American Management Systems. It was a blow out acquisition because we grew our energy and utility business on top of that. Are rest of the technology investments we made successful? I would say that if you look at the averages of successful acquisitions, it is probably 30%. If you look at our string of pearls, we are batting significantly above the average globally. When you make an acquisition, you have to make it work. The integration is the key part.