1. Table of Contents
1. Table of Contents 2
2. Introduction 3
3. The Need for Off-Shoring 5
4. Off-Shoring and Wipro InfoTech 8
5. Differentiators for Wipro InfoTech 11
6. Key Success Factors 13
7. Conclusion 16
8. References 17
2. Introduction
Wipro Infotech India is the information technology services, solutions and products division of Wipro Limited. Wipro was set up in the backdrop of a small town in Maharashtra, India in 1945. The company was then called Western India Products Limited with a modest presence in Maharashtra and Madhya Pradesh (http://www.wipro.co.in). In the early 80's Wipro made its first foray into the information technology arena. A team of professional Research and Development as well as Marketing Managers came together in Bangalore in 1980 with the sole objective of forming a dynamic, energetic and reliable information technology company. At present Wipro Infotech operates from over 20 locations across the nation.
Andrew Carnegie, American businessman and philanth...
Wipro campus1
WIPRO Campus, HITEC CityWipro Infotech has since transcended from being a service provider to being a consultant, guide and trusted partner. Today, Wipro Infotech stands at the firmament, as a trusted and experienced provider of a comprehensive range of IT services, solutions and products across the globe (http://www.wipro.co.in).
One of the key areas of growth and differentiation for Wipro Infotech has been its capability to provide Total Outsourcing Solutions to its client base in the western world. Wipro Infotech was the pioneer, along with InfoSys Technologies India, in the development of off-shoring capabilities within India (Ramachandran & Ghoshal, 1997). In the early days it was mainly blue collar and lower end work, like Call Centres, Help Desks etc, that was outsourced to Wipro Infotech. However, over the past few years more and more white collar positions have migrated across the seas to India as well.
3. The Need for Off-Shoring
The information technology (IT) revolution has made location much less important for work for which inputs and outputs can be transmitted digitally. In little more than a decade, governments of nations constituting more than half the world's population (China, India, Eastern Europe) have decided to join the world market system. These countries have large and rapidly growing pools of talented and educated people with much lower incomes than people with similar skills in the developed world.
Most discussions of white-collar off-shoring fail to properly identify just how much the IT revolution has opened up opportunities to import white-collar work. A large share of white-collar work now done in the west could potentially be done offshore. Substantial technological and economic barriers have impeded importation of white-collar work in the past. Until now, importation of white-collar work has been impeded by the cost of establishing sufficient bandwidth, compatible software connections or video hook-ups, and a secure relationship. With the costs of overcoming those three barriers falling rapidly, many employers are attracted by the opportunity to replace local employees with much lower-cost foreign employees.
According to a McKinsley Report (Connell, 2003) off-shoring is a win-win arrangement both for the country exporting the work and for the one importing it (refer Figure 1).
Figure 1: Financial Benefits of Off-Shoring
India boasts the most highly skilled and lowest cost white-collar labour force in the world (Shekar, 1999). This is a powerful combination, particularly when its experience in off-shore business processing is factored into the mix. India is expected to retain its leadership position for the foreseeable future, and is likely to become the location of choice for high-value analytical tasks. This is reinforced by the total software imports into the US from India Figure 2.
Figure 2: US Software Imports from India
4. Off-Shoring and Wipro InfoTech
The management of Wipro InfoTech realised the potential of off-shoring very early and wanted to ensure that they were well placed to ride the wave when demand increased. To this effect they formulated an Off-Shore Composite Scoring Matrix (see Figure 3) to form the basis of their organisation goals and targets.
Figure 3: Off-Shore Composite Scoring Matrix
This matrix highlights the 3 key areas of competition between off-shoring companies
Cost: The primary reason for off-shoring work is to reduce the total cost of development and implementation. To this effect, Wipro InfoTech needed to ensure that they were competitively priced within their industry.
Environment: This is a combination of internal and external issues and relates to, among other things,
1. Economic and Social Climate
2. Government Rules and Regulations
3. Security
4. Infrastructure - both technological and traditional
5. People: Finally, and most importantly, Wipro InfoTech needed to ensure that their staff were highly skilled and comparable to those in the western world. They also needed to overcome the barriers of language while retaining a large number of qualified staff.
Wipro InfoTech aimed to ensure that its total rating would be higher than any of its local competitors. In their annual study (Rajsekar, P, 2000) of 4,894 Indian companies, done in association with the Center of Monitoring Indian Economy (CMIE), Business Today has ranked Wipro InfoTech with the highest cumulative score (Figure 4). Wipro InfoTech was also successful in creating a company which provided the highest value in terms of Cost and People.
Figure 4: Composite Scores by Company
Wipro InfoTech has thus been able to establish itself as one of the leaders among the Indian IT service industry.
5. Differentiators for Wipro InfoTech
As of the 31st of March, 2003, Wipro InfoTech boasted a total head count of approximately 19,870 employees with an estimated 17,000 focussed on client facing work and 150 focussed on sales. This success has been possible due to their ability to focus not just on the matrix (refer Figure 3) but also on the following key differentiators.
Methodologies: Wipro InfoTech has achieved Level 5 certification in Carnegie Mellon's Software Engineering Institute (SEI) Capability Maturity Model (CMM) (Alam et al, 2000). Beyond the actual certification, Wipro InfoTech's differentiator is the significant investments it has made in applying Six Sigma methodologies and techniques to improve software quality, and utilise the metrics and benchmarks to focus on continuous improvement and constant refining of its application development methodologies. Wipro InfoTech has also gone on to become the first company in the world to achieve SEI CMM Level 5 as well as People-CMM Level 5 (Rajghatta, 2001).
Acquisitions: Wipro InfoTech has been one of the pioneers in growing the business through takeovers and mergers, with three significant deals thus far. Rather than to buy one large organisation that may prove difficult to integrate, Wipro InfoTech's acquisition strategy appears focussed on buying small companies in niche areas for industry skills or business process expertise (Jayashankar, 2004).
These differentiators have been crucial to Wipro's plan to diversify into various industries and is evident by the fact that they now have clients in all of the following sectors:
1. Banking and Finance
2. Government
3. Healthcare
4. Oil and Gas
5. Telecommunications
6. Utilities
6. Key Success Factors
Wipro InfoTech's business is seen as one that is professionally managed as well as being a trusted and reliable company.
Figure 5: Customer Perception of Wipro InfoTech
Strengths
1. Excellent execution of their original plans by complying and continuing with their matrix
2. Technologically competent staff with skills in required areas
3. Very entrepreneurial and strong HR
4. Strong vision for adding value and actions being taken in that direction
5. Positive balance sheet along with strong growth prospects (refer Figure 6)
6. Renowned for customer retention and considered to be highly reliable (refer Figure 5)
Weakness
1. Pricing differentials between other major Indian players constantly declining coupled with increased outsourcing to China and Eastern Europe.
2. By trying to deliver a range of solutions, Wipro InfoTech finds itself in the unenviable position of not having any industry depth or domain knowledge of any particular section.
3. There is a need to move from regular grunt work (like coding and development) to more value-add and high margin services like consulting.
4. Lack of a global workforce which is critical for making in-roads based on consulting.
Opportunities
1. Expansion into areas such as Business Process Outsourcing (BPO), Infrastructure Services, Enterprise Application Services etc.
2. Commitment to undertake larger and more profitable projects, rather than smaller low margin activities.
Threats
1. A lack of development centres in non-India emerging markets like East Asia, Eastern Europe etc (Vishwanathan, 2001)
2. Strengthening Rupee is making off-shoring less viable
Wipro InfoTech have leveraged their two-decade old expertise and experience in meeting the IT needs of enterprises that enables them to offer comprehensive IT solutions that encompass best-of-breed products, best-practice IT services and best-in-class enterprise solutions (http://www.wipro.co.in). This has ensured they can maintain a strong growth rate through the dot com bust and in the future as well. According to Sukumar (2002), Wipro InfoTech is expected not just to maintain its current growth rate but to increase it over the next 3-5 years.
Figure 6: Expected Growth Rate
7. Conclusion
Wipro InfoTech has established itself as one of the leaders among Indian IT service providers. Its challenge for the future, is to differentiate itself from the top-tier competitors from India and other nations, and to make the shift to being a global IT service provider that competes effectively with large western external service providers (Alam et al, 2000). To achieve this Wipro InfoTech mush focus on brand equity, global delivery balance and consulting and systems integration penetration through a more vertically focussed strategy that goes beyond horizontal technology skill sets (Sukumar, 2002).
By collaborating with Wipro InfoTech, organisations can garner the power of tried and tested frameworks, strong domain knowledge, a large pool of certified technology specialists and best of breed alliances. They are able to bring to market tailor-made, industry specific solutions that help meet the various business challenges while increasing operational efficiency (http://www.wipro.co.in).
8. References
Wipro InfoTech India: http://www.wipro.co.in Accessed 30th September, 2004
Ramachandran, J. & Ghoshal, S. (1997), Wipro Corporation, Balancing the future, London Business School Case.
Shekar, M. (1999), "The Churn at Wipro", Businessworld, December 13, 1999, pp.21-26.
Rajsekar, P. (2000), "Flowering of a logo", The Hindu Business Line, July 6, 2000.
Alam, S., Dubey R. & Saxena, V. (2000), "For Software's Big Boys Which Is The Real Face?", www.business-today.com, September 30, 2004.
Rajghatta, C. (2001), "The Horse that flew-How India's silicon gurus spread their wings", Harper Collins Publishers India.
Vishwanathan, V. (2001), "Wipro Offsprings", Businessworld, November 12, 2001, pp. 38-48.
Sukumar R. (2002), "Wipro's New New Thing", Business Today, June 23, 2002.
Prasad, S. (2003), "Coping With Changing Times", Businessworld, September 1, 2003.
Connell, P.O. (2003), "Business Lessons from Wipro's Chief," Businessweek Online, October 8, 2003.
Jayashankar, Mitu, "India Today, The World Tomorrow," Businessworld, April 12, 2004, pp.40-41.