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IT services provider Wipro plans new US push with one-stop model

Wipro is looking beyond what is known as “classical app dev” to become a one-stop shop for many customers in the US.

, ET Bureau|
Updated: Mar 18, 2014, 08.33 AM IST
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Wipro is looking beyond what is known as “classical app dev” to become a one-stop shop for many customers in the US, exporting a model with which India’s third-largest IT services provider has found a lot of success at home, a senior executive said. 
Wipro is looking beyond what is known as “classical app dev” to become a one-stop shop for many customers in the US, exporting a model with which India’s third-largest IT services provider has found a lot of success at home, a senior executive said. 
BANGALORE: Wipro is looking beyond “classical app dev” to become a one-stop shop for many customers in the United States, exporting a model with which India’s third-largest IT services provider has found a lot of success at home, a senior executive said.

Traditionally, India’s $118 outsourcing industry, led by Wipro and larger rivals Tata Consultancy Services and Infosys, has focussed on application development and maintenance, which still brings in about two-thirds of the sector’s revenue, but the US mid-market is an increasingly attractive proposition. For Wipro, the combination of experience gained in India and the Middle East and greater awareness among US customers of Indians’ capabilities, and therefore their own outsourcing options, is resulting in strong interest in a vendor who can takeover the headache of building their entire back office.

“This has been so successful in India, now we’re extending this even to the global world. We will sell software, hardware, implement and roll it out,” said Soumitro Ghosh, chief executive of Wipro’s India and Middle East business division, Wipro Infotech.

The $1.3 billion unit that has implemented core banking software for 10 Indian banks and built back offices for two telecom companies that entered the Indian market competes in the home market against companies including IBM and TCS, accounting for close to 9% of Wipro’s overall revenues.

The company has been trying out the “systems integrator” strategy globally in the last two quarters, led by Anuj Bhalla, a Wipro vice president and global head for the SI and maintenance business and “he tells me there is a lot of traction,” Ghosh said in a recent interview.

‘We will do everything for you’ used to be more the motto of the largest multinational technology services providers such as IBM and Hewlett-Packard, before the Indian IT industry took large chunks of the ‘services’ opportunity from right under their noses.

The multinational companies fought back, built formidable delivery capabilities in India and went a step further to win important contracts in the backyard of the Indian providers.

The outsourcing industry came to call them the ‘global SIs’ where SI stood for the systems integrators, referring to their ability to purchase, build and put together everything needed by way of information and communications technology.

Today, as ‘offshore’ outsourcing penetrates deeper into the United States, the Indian providers sense opportunity in saying ‘leave it all to us’ as they go beyond the global 2000 companies and into the next set of customers.

“In IT this is a no-brainer, as the Indian providers’ value proposition is very much relevant to the US mid-market,” said Sundararaman Viswanathan, a management consultant at Zinnov that advises global corporations on their IT outsourcing strategy.

“The challenge will be in finding the right customers, figuring payment models and the governance structures,” he added.

The US mid-market was increasingly confident of its future growth, consultancy Deloitte had said in a report last year after surveying 525 executives at companies ranging from those with $50 million in annual revenue to $1 billion businesses.

 
India’s TCS is looking to export its IT-in-a-box solution, iON, to emerging as well as developed markets this year, chief executive N Chandrasekaran had said in an ET interview in January.

At Wipro, “we believe there can be new opportunities with the SI offerings, which otherwise wouldn’t have come to us if we were a pure-play services provider,” Ghosh said.

“It is like consulting. Consulting can bring in a whole lot of downstream revenues, SI can also bring in a whole lot of downstream revenue.” In October, Wipro said Ghosh will move to head Wipro Infotech from running the banking, financial services and insurance unit, the most recent of several organisational changes CEO TK Kurien has made over the last three years in attempting to accelerate the company’s growth.

Ghosh has quickly moved to replicate the verticalised structure that Wipro’s international operations has, in an exercise that was concluded about three weeks ago.

In his next step, he is identifying those customers that are most important and have the most potential, similar to a process Kurien initiated more than two years ago and came up with a list of 125 customers at the Wipro level to pamper with dedicated client partners and extra investments.

Ghosh added: “We are now almost identical in structure. The message is, from a competency perspective, what gets done in the US gets cross sold here. Vice versa is also true.”
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