We are more agile with less internal friction: Wipro CEO
Wipro has sharpened its account-mining strategy to grow its large deals portfolio. Two years ago, Wipro won one of its largest deals under CEO Thierry Delaporte. The Bengaluru-based firm has signed a deal with German retailer Metro, which analysts estimate has a value of $700 million over five years, and has the potential to go up to $1 billion over the following four years.
The Indian IT sector has grown at a scorching pace over the past two years. Some reports point to macro-concerns leading to multiple contractions, especially with the US inflation at a four-decade high, a prolonged war and the crude prices spiralling.
I spend a lot of time analyzing the potential evolution of the market or different patterns which mean inflection somewhere. There are macro signs based on what’s going on in Ukraine and gas and oil prices going up. But from a pipeline and spend standpoint, we are seeing a good demand and the pipeline at an all-time high.
The Ukraine war is a big enough event that could have an impact over time. But today, I’m not seeing it. I haven’t seen clients delaying and postponing programmes. My conviction is that technology continues to be more of a solution than a problem at a time where companies might need to improve productivity and find ways to reduce costs for some of the inflation.
Wipro has evolved in the past 18 months with a new structure in place. How is that aiding growth and driving market opportunities?
I believe we are a much more organized and agile organization with a lot less internal friction, internal barriers, and P&Ls. We are operationally efficient and second, we have a tremendous talent pool at leadership level in the organization and we have become a more global and diverse organization in the past 18 months. The pipeline has grown for the past six quarters. Our annual contract value grew 30% year on year.
The growth has been broadbased. I’m growing in market units and most sectors and all our service lines. We are not dependent on one big account and one big market — not anymore. We have improved our stickiness with our clients in the US. We have grown our large accounts. We have moved the needle with our key partners.
We have strong relationships with Microsoft, AWS and Google and it was very different from where we were I believe in terms of true strategic partners. We are now an engine for big deals and that has not translated into the generation of big deals that I’m expecting. It will come on top of the growth we are driving now.
You’ve won some of the large deals, including Metro and Estee Lauder. Do we see some moderation in large and mega deals and are clients comfortable to break it down into smaller ones?
You win large deals only when you have a special focus on it because it’s a very different way to sell large deals than you’re selling smaller ones. You may win one large deal by luck, but to turn into something that is generating opportunities long term requires different types of investments. We have a bigger pipeline of opportunities than before.
Large deals take more time and I think we have to be patient to win the large deals space. It is true in some cases it happens, not necessarily as a pattern, as you’re progressing on a discussion with a client and the deal goes into different chunks as the client finds it easier to launch phase 0 and phase 1 and get the teams to work on it rather than negotiating a larger one that will take six more months. We are entering a year where we will deliver double digit growth this year too.
The margin pressure continues to weigh down on Wipro with cost overheads and subcontractor expenses. Also, with the US inflation at an all-time high, it will impact onsite hiring costs.
We are not massively dependent on subcontractors. What hadn’t been leveraged in the past at Wipro was the pool of freshers that some of competitors did year after year growing in the organization. We didn’t have this pool of talent. In the 2021 fiscal, we onboarded some 7,000 freshers.
Last year, we onboarded 19,000 and we will double it this year. Those investments are investments, upfront they are impacting our margins as you do it and in the long run. That’s the bet we are taking, we are not short-term sighted, we are preparing for it in the future. We have started to develop large automation programmes across the firm to reduce the dependency on headcount to deliver services with more efficiency.
Do you see signs of great resignation abating?
When we talk about great resignation, I always reflect on the younger generation of talent. It’s a new reality of this world. Our kids will not necessarily spend 20 years in the same company, and we will constantly have to make sure that they understand why it makes sense and it’s a good thing for us to stay with us. I think when you have to join the organization at 25 and shut up and work hard and hope that you keep this job, it is gone.
We are in a world where the new generation is looking for many opportunities. That’s all our strength because Wipro has unique values, culture and absolutely is feeding what this new generation is looking for — freedom, trust and sense of purpose and opportunity to have a global career and diverse global culture.