The Hindu Business Line : `Cost advantage is Wipro's strength'

AS part of the top management in the restructured Wipro, Mr Sudip Banerjee heads a business that contributed 45.3 per cent to group revenues, grew 37 per cent year-on-year and is looking to consolidate its service offerings to enable it to go after larger high-value deals.

In an interview to Business Line, Mr Banerjee, President, Enterprise Solutions, defends Wipro's reliance on its presence in India and emphasises the company's move to offer higher value to customers by building capabilities in service lines and across verticals. Excerpts:

What is the outlook for the enterprise business? Is a slowdown in the package implementation business likely since companies such as SAP or Oracle are facing a slowdown in software licence fees?

The enterprise business grew 39 per cent year-on-year last year. While the National Association of Software and Services Companies (Nasscom) has predicted the industry as a whole to grow at about 25 per cent, we will attempt to beat the best in class growth. In the enterprise business, the path is clear for the next couple of years.

Everyone goes through cycles and our strength is that we have expanded our portfolio such that when there is a slowdown in one area, we are not overly affected by that area. Five years ago, Wipro meant offshore and software. Now, we have offshore, onsite and near-shore presence.

It is too early to say if there is a slowdown in package implementation business as there is a lag between when SAP and Oracle might feel the slowdown and we might. Besides, the Indian software industry is still a very small part of the whole and there is a lot of headspace to grow.

Considering that the global SIs are ramping up in India even as they offer other large low-cost locations, how will you offer a truly global service delivery model?

We have facilities outside India — Japan, China, Europe, Scandinavia, as well as the acquisitions we made that give us a reasonable global presence. The strength of our model is from the cost advantage, apart from other factors. India will always be the largest part of delivery chain in terms of people and there will be satellite facilities.

But the fact of the matter is we are the pioneers of this model. We understand what is low-cost; we believe there is currently no one who is beating the cost advantage.

If we have an overwhelmingly large presence here, it is because we believe that is the best location to deliver low-costfrom. If tomorrow some other place is the best location, we will also ramp up in that location.

Are you able to charge higher prices and is the shift to offshore continuing?

New clients came in at better rates because we would have sold them a higher level of service. For instance, package implementation and infrastructure management get higher rates than software development. We can charge higher rates for new and differentiated services. What is your top concern going forward?

People. Hiring, training and building domain and quality expertise is the biggest challenge. We have shifted last year in favour of a younger age group not just because of a positive effect on the wage costs but also because they are of better quality and are more trainable.

How will your service lines enable you to win larger, higher-value contracts and what are your plans to develop them? What specialised skills are customers looking for?

Over the medium-term, there is a need to consolidate and increase the scope of the offerings - especially in new service lines. We will focus on strengthening these offerings. That will enable us to solve our customers' problems better and let us bid for larger, end-to-end projects.

How is traction in Europe, and in North America after Vivek Paul's exit?

Traction is better in Europe. In Continental Europe, there is an education process that involves showing the companies how the US and UK companies have found a better way than requiring the vendor to take people off the balance-sheet.

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`Cost advantage is Wipro's strength'