The Hindu Business Line : `Growth now is in size, duration of deals'

VETERAN Wiproite and Chief Operating Officer, Dr A.L. Rao, is part of the new top management team at Wipro reporting to the Chairman, Mr Azim Premji, since Vice-Chairman Mr Vivek Paul left.

Dr Rao spoke to Business Line on his new mandate - as COO, CIO and with CTO reporting to him, apart from technology R&D services.

You have been named COO (Chief Operating Officer) after Mr Vivek Paul resigned , what is your mandate for this role?

Essentially the decision taken is to have no replacement for his position in Global IT services. Then, there's a combination of certain business, operations and roles that are now grouped together. We had business unit heads and functional heads reporting to Mr Vivek Paul - that has changed.

My mandate is to oversee CTO operations, information management facilities (CIO's role) as also administration and facilities. In addition, Japan as a region is under the COO.

What will the reorganised product engineering services (PES) division focus on now that product development capabilities are under one roof?

We used to run product engineering in two business units earlier - telecom and non-telecom. We have created this large PES business - a large charter, significant from the point of view of size 10,000 people and skill sets, from designing a chip all the way to designing a telecom switch.

Verticals focus continues - this is no single mass of 10,000 designers - we focus on telecom, computing, storage and peripherals, consumer electronics, industrial automation. It is because the nature of work is product design and development and needs some platform skills and product design skills in common that the group was reorganised.

So far, Wipro has been doing contracted product design services. Now, we hope to become strategic partner to our customers in their R&D strategy. From contract services to strategic partnering is the shift that we need to take. We need to bring much higher value to the customer.

What IP protection and strategic/competitive issues do you foresee in such an engagement with customers. How will this type of upstream R&D efforts help your bottomline?

We have robust IP practices, even subjecting ourselves to customer audits apart from process certifications etc. Further, when we say R&D services, we offer product development in areas that are common in products across the industry, not in the proprietary patentable space that technology companies develop themselves.

Our role is in ensuring the product meets industry-standard interfaces, or meet quality and performance criteria etc.

Essentially, PES is a growth area and customer relationships will be critical for us.

The focus for us will be on new product development. We already have joint product development with customers in the telecom space. There is a joint risk-reward nature to the relationship - we will have to invest in the product development and have incentives from product success.

We expect relatively higher growth from the mobile space - both from infrastructure and devices - broadband, wireless mobility, voice and computing and storage products will be initial growth areas.

Which issue is of most concern to you in foreseeing growth?

Talent is the single-largest constraint - not opportunity. If you have the team, growth is simple. The domain skills and the depth of knowledge and expertise are difficult to find. We will see growth based on ability to ramp up at the right time. We hired 2,000 people from campuses in the past 18 months for this business alone and are still doing so.

Will the growth momentum in telecom of the past two years continue? How do you judge your competitive position in this space?

The past two years were exceptional growth for telecom. That may not continue. There was a large drive for outsourcing to reduce costs to manage their current product portfolio and spend the saved R&D dollars on new product services. The big growth came from large end-to-end technology projects. Also, there was a backlog on new products and services and applications for mobile data (3G) applications, the development reopened - the 50+ per cent growth cannot be sustained.

Growth now is in the size of deals and the duration of the contracts. This will give us stickiness. Telecom engagements from the US and Europe are roughly equal while in the embedded space, we have a significant presence in Japan. Since the integration we cannot address new markets, such as semiconductor companies developing chips for telecom companies. The focus will be on tapping opportunities requiring a combination of skills.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page