Early 2011 Wipro dismantled its joint CEO model and appointed TK Kurien as CEO who restructured Wipro into more simple, agile and customer centric with focus on core momentum verticals and the four key industry verticals included 'Banking, Financial Services and Insurance (BFSI)', 'Energy & Utility', 'Retail and consumer products' and 'Healthcare'. Wipro has been undergoing a massive restructuring exercise under TK Kurien, who is making extensive cultural changes within the organization, to bring back sustained growth for Wipro as it lost its number three position to Cognizant Technology Solutions. Some of the changes are aligning the organization structure with demand generation process and efficiency, variable component of management and mid management salaries linked to client and employee satisfaction, focusing more on existing accounts for more revenues, new team for chasing the change the business deals and focusing on increasing the non linear revenues from emerging areas like cloud, mobility and Analytics. “The future is clearly the non-linear model. We are already seeing signs of it. The linear model will break. Our focus will now be on cloud, mobility and analytics,” said Kurien. “I want to leave behind a legacy of growth. Thought leadership will not bring revenues.”
Wipro is focusing on analytics, social media (for enterprises), cloud and mobility for its future revenue growth and hopes these new service lines grow by 30% YoY and it is aggressively investing on these non linear initiatives. Wipro is looking to invest $1Bn in overseas acquisitions over the next 18 months and looking at deal size of around $50Mn - $300Mn and looking for specialized companies in analytics, cloud computing and mobile communications. Wipro is focused on industries including health care, financial services, energy and utilities, and retail and is looking for regions like
and in parts of Northern Europe and Asia for
their acquisitions. The company recently
acquired Promax, an Australian company specializing in trade promotion for
strengthening its analytics practice which gives it a head start over
competitors in a segment where its peers are looking to enter for future
growth. According to industry sources, Wipro had around 250 analytics clients
and the company is strongly betting on Analytics for non linear revenue growth.
Wipro has been showcasing client wins in new areas like analytics and cloud.
"The company's keen focus is to grow its new focus areas like Analytics
(35 new accounts in the year), Cloud (40 new wins in this quarter) and Mobility
(50 new customers added in FY13)," reads a recent report from brokerage
house Prabhudas Lilladher.
Wipro is also focusing on mining its 138 largest clients by using dedicated engagement managers and a report by Motilal Oswal highlights the fact that post restructuring, Wipro has seen impressive client additions and mining of large clients to increase its number of customers in the higher contribution buckets (USD100m+ clients up from 1 to 7 in 5 quarters). In a recent conference call with analysts, Kurien also mentioned that the company was investing in sales capabilities and had divided its sales teams into hunting (new client acquisition) and farming (mining existing customers) teams. Consequently, Wipro's sales and marketing expenses were the highest since the fourth quarter of 2003-04, adds the Prabhudas Lilladher report. Wipro restructuring is almost complete and company is looking at specializing in sub -verticals with longer revenue cycles, build capabilities in analytics and cloud computing through acquisitions and standardize its back-end using lean manufacturing principles for revenue growth. Another area where Wipro is betting big is mobility and company had less than 150 people working on mobility solutions earlier; the number now stands at over 1,500. Wipro Technologies has announced that Wipro’s Mobility Solutions will collaborate with Kony Solutions, Inc., a mobile application development platform provider and will offer an integrated portfolio of mobile application technology and services to enterprise customers in the US, UK, Australia and West Asia.
Wipro revenue growth for IT services was lowest among peers in Q4 FY 12 and its guidance for the first quarter of FY13 was muted and the company blamed it on certain delays in deal closures during the fourth quarter FY12 and lackluster domestic market revenues, especially in the telecom and government verticals. Wipro is also seeing pricing pressures, challenges in its key BFSI vertical and problems in some of its largest clients who are slowing down spend and internally with in Wipro it has to improve its cost structure and CEO Kurien also said that he is looking to trim the middle management and encourage them to improve their performance. Wipro is also targeting a different strategy which will allow its clients increasingly look at it as a combination of a consultant and technology company and have a say at the management or board rather than being just looked at as technology providers. Analysts believe Wipro will log a net profit of 15% CAGR FY12 through FY15 fueled by a significant contribution form these non linear initiatives.