We’ll get back to industry average growth in 2018-19, says Wipro CEO
BENGALURU: Wipro CEO Abidali Neemuchwala , who completes one year in office in February, talks about his first year, and the challenges and opportunities of the future. Edited excerpts :
The numbers are disappointing for this quarter and the revenue guidance for the next one is equally modest. The $500m Appirio acquisition was completed and but it doesn’t seem to have contributed to revenues as expected?
The Appirio acquisition took longer than expected. It was expected to close on November 1, but it was closed on 24th of that month. That’s more an issue of revenue consolidation. Overall, from a business perspective, I’m quite comfortable on the traction we are getting for our strategic themes in our core business. But there is a bit of restructuring that needs to be done in some parts of our business -primarily India and Middle East – that we have started. What you see is the net effect. The demand environment is good and we have started mining effectively. We had added a $100 million in the last quarter.
The guidance for the next quarter is lacklustre at 1%-2%. If you factor in the revenue upside from the Appirio acquisition alone, the guidance is subpar. Is the core engine really struggling to fire up?
The core engine is not the issue. There are certain sectors that we have participated in that we are not doing well in. We have made significant investments in telecom and telecom equipment provider segment, of course energy is now starting to look better. But it had its own set of headwinds…We are seeing a lot of traction in BFSI and digital.
What calls for a restructuring in the India and Middle East business? Why does it have to stretch into a couple of quarters?
In the Middle East, the business is changing quite significantly – it’s becoming a market where they are manufacturing, localizing and the whole rhythm of the business is different. Keeping it separate helps bring in focus. In India, there are certain businesses based on the older business model that’s no longer relevant. Due to cloud, digital, IoT deals, we need to have product-assisted service with our product partners. The whole business is changing and we are aligning ourselves to the new market conditions. There are certain government projects where we have seen challenges.
You complete one year in office in February. When you look back on the journey, what are some of the challenges and what remains unfinished on the table?
I feel good about the changes on the delivery side. If you compare Wipro in 2014 and 2016, we went from 15 analysts’ reports positioning us as leaders to 43 of them. It’s a threefold jump. Now the focus is on the sales transformation. I feel quite good about it, with certain green shoots emerging. On the sales side, the team is being trained on how to sell digital, consulting and vertical-based selling. We have done a good job of demand capture and it’s now about demand creation. We want to include more consulting professionals and solution architects and selling it in an integrated manner rather than by service line is important; evaluation of current team and hiring new people is part of sales transformation. We have had a good run on the operational side. The synergy effect of DesignIT and Cellent acquisitions is coming along well. HealthPlan started off very well, but it’s an external timing issue.
The worst in energy and utilities seems to be behind you. How will Trump’s agenda of repealing Obamacare hurt Wipro as you have a sizable exposure in healthcare?
When the Affordable care Act came, there were opportunities. The insurance payer, provider and insurers changed their systems accordingly. Whatever modifications happen, we have the domain expertise to help customers and intermediaries where they have to redo their IT systems. We need to know what the target state is to offer our services.