The Hindu Business Line : ‘Top line growth is priority’

T.K.Kurien, President, Consulting Services, Global Programs and Strategic Initiatives at Wipro Technologies, the global IT services arm of software-to-soap maker Wipro Ltd, was recently given the additional responsibility of heading the Product Engineering Services (PES) division of the company.

Wipro, which boasts of having the largest third party R&D Services team, has seen a sluggish growth in its PES division trailing the company average, as key customers in segments such as telecom saw a large-scale consolidation.

eWorld recently caught up with Kurien, who is credited with the turnaround of Wipro’s BPO operations, to know about his strategy to put the PES back on the growth track.

Excerpts from the interview:

What is your strategy to stimulate growth in the PES division?

We had gone after the R&D side of the telecom companies and the enterprise segment is pretty much left open. Our plan is to go after those segments targeting enterprise services such as package implementation and BPO. That should last us for 12 to 18 months. We are planning to put together a separate team to drive growth in these areas. Growth will also come from those areas where we are aligned with the customer revenue stream.

The mobile platform that we recently picked up from Nokia is part of the strategy. We believe growth in the communications segment is not going to come from running networks. It is going to come from enterprise side and applications side.

We have broken up our telecom business segments such as consumer, enterprise, media and networks. We believe the networks will ultimately become shared services and the cost of network deployment will actually come down.

We are investing in all four areas and that’s why the content delivery platform becomes very important for us, we need platforms for delivery of content.

How does the Nokia deal work since you haven’t paid for it?

They have a certain amount of cost base (about 40 employees) which we have taken over. Managing a small customer base with a dedicated team was a problem for them.

But, why was the enterprise side of the telecom segment untouched all these days?

We had business on the technology side and we have to go after that. When you sell to R&D and the enterprise services, the sale is different. The R&D guys typically cannot sell to the enterprise guys and vice versa. That has been our problem. We have never been able to demonstrate effectively that R&D side guys could sell to the enterprise side. I think that’s one change we are making.

But many of your telecom equipment customers have been struggling to survive. What makes you confident that they’ll invest?

They may not invest again. Nothing makes me confident in the current environment. If you look at most of the companies today, a lot of them have multiple systems running. You cannot reduce cost until you reduce the multiple platforms. That is what we see going forward. This is with the equipment vendors. We always were working with operators that have shown growth.

In the current market, do you see any signs of investments from customers in new product development?

The fresh investments are slow. LTE (Long Term Evolution, the next generation mobile wireless technology) is a new big thing. We are working with some customers on LTE. Hopefully, there will be investments in that area. To some extent we have already succeeded because some of our competition has slowed down in this space.

Wipro has been targeting healthcare, defence and aerospace for some time now. What’s the update on that?

We have created a new business unit for healthcare. We hope to see that started off. In verticals such as defence and aerospace even now there is an opportunity. However, the opportunity based on offset has been slower than expected mainly because of the government buying. I think it will open up once the elections are over. Semiconductor continues to be weak.

Where do you expect to see PES one or two years down the line?

I can’t give you exact numbers. But the reality is that we will not be able to give you exact numbers until and unless we get the top line moving.

That is priority one, two and three. Once the top line grows, everything will be fine. Last year, it was negative growth. The engineering side of the business is about 22 per cent of the total business. There was 14.4 per cent negative growth.

Where will the consulting piece fit into the PES?

We are rehiring our front-end and creating a new consulting group. We are hiring new people to fit the telecom. We have some 1,180 people. We plan to have 1,400-1,500 consultants by year-end of which half will be overseas. The mandate is to change the face of Wipro. It will also change the quality of the deals coming in. Wipro will be able to give its customers a point of view.

What prompted you to set up this new team?

Our ambition is not to become the largest factory in the world. Our ambition is to become the largest design shop in the world and the factory is incidental. The only way to change is through consulting.

Does it mean a moving away from the much talked about software factory model?

No. Not really. Cost is something that we have. We should improve it and keep it. There is no way I am becoming an Accenture. The key is to build on the core that we have — the delivery model. On the front end side create a group that will go and catch deals proactively. That’s what the job of the consulting group will be.

vishwa@thehindu.co.in

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