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Krishnan Thiagarajan

Richard Garnick of Wipro Technologies sees no change in his company's business model in the next three to five years.

2,500 years ago, Heraclitus (a famous Greek philosopher) reminded his listeners that you could never step into the same river twice - it was forever changing, as was life.

So states the flyer of a book, published in 1995, titled Beyond Certainty, by management guru Charles Handy.

Echoing a somewhat similar view and applying it to the IT services and BPO business, Richard Garnick, Chief Executive-Americas, with Wipro Technologies, says, "The only thing I guarantee is change".

Reiterating this in the course of a call from Bangalore, Garnick talked to eWorld of the growing credibility of offshoring, the Indian and Multinational (MNC) vendor tussle, and the potential revenue growth engines of Wipro — such as infrastructure services and package implementation.

THE offshoring model is doing so well because there is an element of predictability that is built into it, in terms of the revenue growth, repeat orders from clients, etc. Over a five-year time horizon, do you sense a significant change in this business model?

I do not see any tectonic shift on the horizon in the basic premise of our model in the next three to five years.

Change could happen. But I like our model and we are executing to that model. As an organisation, our strategy is to grow deep in verticals and develop technology expertise across service lines.

We are at the intersection of both those components (verticals and technology) across a wide portfolio of customers, industries and geographic reach. That gives us the flexibility and a good portfolio mix that mitigates risk.

I think we are still in the early stages of penetration of our customers and building relationships with them. That is why I am pretty confident of the next three-to-five-year roadmap.

Since multinational vendors such as Accenture or IBM Global have recognised the utility of the Global Delivery Model, (capitalising on high-quality software development from low-cost countries such as India), how do you think Indian players need to reorient their strategy to take on the MNCs?

By coming to India, the MNCs have validated our model. From my standpoint, they have validated what I saw five years ago when I started engaging with Wipro.

We need to embrace competition and adjust accordingly to win in the marketplace. If you take the last four to six quarters and try to extrapolate the future, I guarantee, if that is the way you have done your forecasting, it will be a rip-off.

There are going to be twists and turns in this business and the key is to be nimble and anticipate those changes in external and internal conditions.

How important is relationship building for Indian companies, given that a significant chunk of the MNC vendor revenues accrue from this source?

We are building relationships in the marketplace and as we build those we are winning bigger deals ourselves.

One of the things that we bring to the party, which India has undersold so far, is the disintermediation (giving the project directly to Indian vendors) of the incumbents, of some of the names you mentioned. This disintermediation is not on labour arbitrage, but on execution excellence.

Building a platform of predictability (using the Global Delivery Model) is now 15 years old and bringing that quality to the IT industry is proving to be a big differentiator. We are competing head to head with some of the incumbents and in some cases we are winning some deals. Relationships matter, but they matter less than good execution.

How are infrastructure services, one of Wipro's key growth areas, contributing to the revenue pie?

On a year-on-year basis, the infrastructure services business has grown by over 81 per cent. From an overall standpoint, Infrastructure services are the next wave of potential offshoring and Wipro is well poised to take a significant lead.

Wipro Infotech has really incubated that business with our infrastructure capability. In India, we have won large end-to-end outsourcing deals and as we gained comfort in the domestic markets, it has given us referenceability at a global level. It may not have been so compelling in the past.

However, in the last year or year-and-a-half, the story of Wipro and India overall in the IT services industry has amplified in the global marketplace. And the credibility that we bring to the global marketplace today is much stronger than in the past.

In infrastructure outsourcing, the general impression is that offshoring is slow and there are security issues relating to this stream of business.

In your view, will offshoring be restricted purely to desktop management or technical helpdesk, which may turn to be low-margin businesses?

First of all, for Wipro, this is a line of business that is profitable and is growing rapidly. And we would not do anything that is low margin.

The overall maturation of Wipro's capabilities and our acceptance in the marketplace is not something that should be measured over the last 60 to 90 days. It is where we are going in this journey.

We will not go after any of the market offerings just because it is sexy. It may be sexy in high tech, but it may not be profitable. But what may not look sexy will have a lot of growth and margin opportunities.

After two strong years for the package implementation business, in your view, is this business likely to slow down, especially after the PeopleSoft-Oracle merger?

The prospects are positive for the package implementation business, long-term. I have global responsibility for it. In this business, we have seen annualised growth of around 50 per cent reported at the end of the third quarter and remain optimistic about it. There are more than 80,000 implementations of PeopleSoft, Oracle, SAP or Siebel. There is plenty of room to grow since you need somebody to architect, blueprint, design and implement the systems and then, manage and maintain them on a global basis.

maverick@thehindu.co.in

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