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Business News/ Companies / News/  Wipro to name B.M. Bhanumurthy as chief operating officer
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Wipro to name B.M. Bhanumurthy as chief operating officer

Bhanumurthy's appointment comes after Abid Ali Neemuchwala was appointed chief executive

As part of the latest restructuring, executive vice-chairman T.K. Kurien will oversee Wipro’s two most strategically-important business units—Wipro Digital and Business Outcome Services (BOS)—for a few months, after which Neemuchwala will take complete control of the company.Premium
As part of the latest restructuring, executive vice-chairman T.K. Kurien will oversee Wipro’s two most strategically-important business units—Wipro Digital and Business Outcome Services (BOS)—for a few months, after which Neemuchwala will take complete control of the company.

Bengaluru: Wipro Ltd has named B.M. Bhanumurthy as its chief operating officer (COO), after elevating Abid Ali Neemuchwala as chief executive on 4 January, an executive familiar with the development said.

Also, as part of the latest restructuring, executive vice-chairman T.K. Kurien will oversee Wipro’s two most strategically-important business units—Wipro Digital and Business Outcome Services (BOS)—for a few months, after which Neemuchwala will take complete control of the Bengaluru-based company.

“Bhanumurthy will be the COO and all service lines (software delivery side of business, including SAP and Oracle practices and product engineering) will report to him. All vertical heads will continue to report into the CEO," said the executive, who did not want to be identified.

Bhanumurthy currently heads application services and strategic alliances at Wipro.

India’s third-largest software firm is expected to make a formal announcement in the coming days.

The real test for Neemuchwala, some believe, will be how the former Tata Consultancy Services Ltd executive marshals his team to keep Wipro’s growth comparable to cross-city rival Infosys Ltd in the coming fiscal.

Wipro, which had revenue of $7.1 billion for the year ended 31 March, generated $463 million in incremental revenue in that period to edge past Infosys, which got about $462 million in additional business to end the year with $8.7 billion in revenue. However, Wipro’s underperformance in the first two quarters of the current fiscal suggests that it runs the risk of growing at the slowest pace since 2010 even as a resurgent Infosys looks to win back the bellwether tag from Mumbai-based TCS.

On Wednesday afternoon, Neemuchwala and Kurien briefed senior executives over lunch at upscale Crowne Plaza hotel on the move to have a COO.

Additionally, G.K. Prasanna, president and head of Wipro’s infrastructure practice, will head a new unit called Marketing, Innovations and Technology (MIT). Bhanumurthy and Prasanna are expected to appoint heads of the businesses they oversee in coming days.

A Wipro spokesman confirmed these developments and said the new structure will come into effect from 1 February.

“MIT will comprise of the CTO & CIO Offices, marketing, strategic engagements, and integrated solutions group. This new team will focus on non-linear growth engines, products and platform-based services, integrated solutions, research, and new technologies," the company spokesman said, adding that Bhanumurthy and G.K. Prasanna will continue to report to Neemuchwala.

Hand-holding

The rationale behind keeping the digital business with Kurien is to let him hand-hold Neemuchwala through the transition period in the coming months, according to the executive cited above. It was under Kurien’s watch the firm embraced automation and other new-age technologies.

A Wipro spokesman said the digital arm will come under Neemuchwala by the first quarter of 2016-17, while BOS will come under his direct watch only over the next few months.

“I think this is a case of Abid putting his team in place and creating the space he needs to be an effective CEO," said Peter Bendor-Samuel, chief executive of Everest Group, a US-based outsourcing advisory firm. “I think it’s wise of him to recognize he needs some space from the delivery issues and focus on clients, and the difficult decision he must get the board to take regarding industry consolidation and new business models."

Wipro last recorded a double-digit revenue growth in dollar terms of 13.4% in 2011-12 and since then, the company has lagged behind larger rivals TCS and Infosys. Wipro’s revenue in dollar terms grew 7% last year, 6.4% in 2013-14 and 5% in 2012-13.

“The challenge ahead of Wipro is not if HCL Technologies will catch up with them as HCL battles through its own problems. But Abid should see that Infosys should not widen its lead," said a Singapore-based analyst at a foreign brokerage on condition of anonymity.

For this reason, some believe Neemuchwala could perhaps take a leaf out of Vishal Sikka’s first 15 months at work, a period in which Infosys grew faster than industry bellwether TCS in each of the first two quarters of this financial year. Since becoming the first non-founder CEO of Infosys in August 2014, Sikka has taken a methodical approach to revive the company. Infosys first brought down attrition rates, with Sikka later putting his trusted lieutenants in important roles, and finally going for an organizational restructuring.

“All of these steps have helped Infosys win the confidence of clients and so far, Sikka has not put a foot wrong. Yes, it is still early to say if Infosys has made a turnaround but it is heartening to see an aggressive Infosys again," said the analyst cited above.

Since joining Wipro as COO in April last year, Neemuchwala has pushed it to emulate TCS’s operational model. Each business unit head at Wipro is now responsible for the delivery of software in addition to managing sales.

Wipro believes that this move will help it arrest any fall in profitability as clients seek lower prices from software services firms, and at cross-selling services.

Neemuchwala has also entrusted his former TCS colleague with the task of leading a new initiative that promises to improve Wipro’s ability to generate more business from existing clients.

“Every change of guard leads to some people leaving. So, there could be a few senior exits at Wipro too (in the coming months)," said the head of research at a Mumbai-based brokerage firm. “But like Vishal (at Infosys), Abid should be able to get the best people at Wipro. And how they all execute as a team, I believe will be the key."

Wipro, for now, said it does not “foresee any departure of leadership talent."

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ABOUT THE AUTHOR
Varun Sood
Varun Sood is a business journalist writing on corporate affairs for the last fifteen years. He also writes a weekly newsletter, TWICH+ on the largest technology services companies. He is based in Bangalore. Varun's first book, Azim Premji: The Man Beyond the Billions, was brought out by HarperCollins in October 2020.
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Published: 07 Jan 2016, 09:13 PM IST
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