IT major Wipro announced a new Global Business Line (GBL) model a fortnight ago, which analysts believe will result in a greater focus on newer segments that can aid growth for the company amid slowdown in the IT sector and also result in better and faster execution of deals.
Under the new model, Wipro said it will deliver capabilities to clients through four GBLs organised around cloud, enterprise technology and business transformation, engineering and consulting. The changes will come into effect from April 1.
Omkar Tanksale, Research Analyst, at Axis Securities, said: “The new model would result in the simplification of segmental revenues, diversification of data, and alignment of the new-age technologies. This would accelerate the focus on segments that are contributing well to revenues, and as Wipro has lagged behind in the last three quarters, it would be critical for them”
Even as the management is still vigilantly watching out in the current macroeconomic environment, this diversification into new verticals will result in better and quicker execution. The change in the model will, if not in the immediate next quarter, result in better performance in the long run, he added.
“The new model will make the focus and approach of the company more specific rather than it being comprehensive, which makes it a major change. With digitisation and cloud, among other newer verticals picking up better pace than the conventional IT service system, the company would have increased the focus on these high growth segments to aid the growth,” said Mitul Shah, Head of Research at Reliance Securities.
Shah noted that in the current macroeconomic environment, with the sector witnessing a slowdown and the growth of the conventional business segment moderating, IT companies would be looking at measures to take under the pressure of a slowdown. Companies would look at restructuring their business segments, and workforce or look at geography-wise rationalisation, he added
Thierry Delaporte, MD & CEO, Wipro, had said: “This evolution of our business lines will allow us to sharpen our focus on clients and simplify how we orchestrate internally and across our ecosystem. Our new model will accelerate speed-to-market, streamline decision-making, and allow us to channel investments more effectively and efficiently. Deepening our alignment with clients will allow us to adopt a more customized and specialized approach to their needs, unlocking new growth opportunities for our and our client’s business.”
Wipro said: “Creating four business lines aligned to our clients’ business priorities will create a more agile and client-centric organizational structure, allowing us to better capitalize on the growth opportunities in each of these areas and enable us to deliver faster, better and more concentrated capabilities and solutions to our clients.
“There is no change to our operating model and go to market strategy. The 4 Strategic Market Units (SMU) remain intact- Americas 1, Americas 2, Europe, and APAC, and continue to own client relationships.”