The Hindu Business Line : Lessons from Wipro

Wipro is the subject matter of Steve Hamm's Bangalore Tiger, from Tata McGraw-Hill (www.tatamcgrawhill.com) . "There are plenty of tech tigers in India," writes Hamm, giving as examples TCS (Tata Consultancy Services) and Infosys. "Yet it's Wipro, the number 3 player, that stands out as an icon," he declares.

Why so? "Wipro has the broadest array of services, including software programming, tech systems integration, systems management, business process outsourcing, consulting, and hardware product engineering," reasons Hamm. Also, the company of his choice "pioneered the strategy of developing expertise in a wide range of different industries, from banking to retail, which is proving to be hugely successful."

Of interest is a discussion in the book on `zero-politics culture'. This is one of the two core management principles in Wipro, says Hamm.

The first principle is that the chairman is not king. Azim Premji owns a controlling stake in the company, but `he shares authority and responsibility with his lieutenants.' On the second principle, a quote of Premji cited in the book reads thus: "The openness with which we run the company brings politics to the surface. A person can't outsmart the system. Things can't be hidden."

And the top man passes on information of importance that anybody gives him... on to whoever has to know, `the next morning or within a couple of days'. Since Premji doesn't keep anything to himself, `people don't feel comfortable giving him gossip.' Thus, Wipro has "an environment where backstabbing, self-dealing, playing favourites, lying, and kissing up to the boss don't work," as Hamm finds. "Many of the tactics that occupy so much of the time and energies of American executives simply aren't tolerated."

To retain the culture, the company is careful about who get in. "Premji has a strong voice in recruiting and choosing key people who are hired from the outside. He wants to make sure these people will be a cultural fit before he brings them in."

Which explains why "he spends hours with people, encouraging free-flowing conversations, finding out how they think and operate, and exploring their values."

Another Wipro trait that the book discusses is `knowing when to quit'. Not from the organisation, but from ventures. "The executive group constantly monitors the progress of initiatives to see if they are panning out. The leaders are very patient if it looks like a long-term investment will eventually pay off. In other cases, the group decides to back out."

Hamm narrates, as example the company's foray into ISP (Internet service provider) business in 1999. "Within three years, it became obvious Wipro didn't have much value to add to this business by leveraging its software and computer management skills. Also, ISP margins couldn't match those for software development and product engineering." So, what did Wipro do? It got out, handing off its customers to other ISPs and folding the employees back into its other businesses.

The final chapter is on innovation. Wipro believes in `grassroots innovation', drawing upon its entire workforce, not just a few, says Hamm. Wipro's Innovation Council works like `an internal venture capital firm'.

Do you know that "as the world's largest provider of engineering for hire, Wipro each year helps more than 100 clients take products from concept to the marketplace"? This happens not through the traditional `pay-for-labour' model, but by sharing the risk with clients "by taking lower fees up front in exchange for a share of the profits once a product enters the market."

A tiger worth staking out... for insights.

On shifting the centre of gravity

The book deals elaborately with offshore venture models, delivery engagement models, infrastructure issues, and staffing matters.

What is the difference between information technology (IT) outsourcing and offshoring? Outsourcing is about "hiring an independent IT services vendor, to take responsibility for the delivery of some or all of a business' IT functions, possibly including governance," defines Mario Lewis in IT Application Service Offshoring, from Response (www.indiasage.com) . Offshoring refers to `moving the centre of gravity, or a major part of the effort required to execute a set of tasks or operations, to a remote location for execution'.

The book deals elaborately with offshore venture models, delivery engagement models, infrastructure issues, and staffing matters. Choose a location taking into account "political stability, the threat of natural disasters, the attractiveness of the economic environment, and the maturity of capability and availability of human resources," advises Lewis.

Cultural diversity is a question that arises `at the very early stages of the decision to offshore'. Lewis emphasises the need for a balance between retaining the corporate way and adapting to local conditions. Not a problem only for multinationals, but also Indian companies operating in different parts of the country, he says. "Those that are located in areas where they do not have much competition are in a position to enforce the corporate way much more easily." In contrast, `those that move to cities like Bangalore' discover that competitive human resource market demands adapting to local conditions rather than sticking to corporate way.

"Forming an understanding of how to transact with alien cultures takes time," counsels Lewis. Until the relationship builds up to one based on trust, depend more on formal written communication, he guides. "Relying on formal processes that include written records, minutes of meetings and documented specifications during all stages of deal negotiations, project management and delivery is always a must for overcoming some of the potential difficulties in working with remote staff."

What is the future of IT application service offshoring that India has been benefiting from?

The author foresees continuing demand for `data warehousing, business intelligence and CRM (customer relationship management)', which in turn would spawn demand for `sophistication in data capture and wireless technologies'.

The future, according to Lewis, will see a strong need for work in R&D (research and development) and IP (intellectual property) "for corporate clients in the West that need to continuously come up with new innovations or products with which to retain their customers and attract new ones."

Educative read, with cartoons by Manoj Vijayan as a bonus.

Tailpiece

"I stopped hiring smart managers ever since... "

"They became too expensive to recruit?"

"No, after I offshored business intelligence!"

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