Home / Companies / T.K. Kurien | Tough times define organizational culture

Bangalore: Notwithstanding market disappointment, Wipro Ltd’s IT (information technology) business chief executive officer T.K. Kurien continues to see opportunity in challenging times and has no intention of “heading for the hills". He spoke in an interview about how Wipro is faring. Edited excerpts:

In the last few quarters, you delivered earnings above guidance. What happened this time?

Seeing opportunity: Wipro’s IT business CEO T.K. Kurien. Photo: Jagadeesh NV

The fourth quarter saw dips in the financial services vertical, the R&D (research and development) business, and your consulting practice has dipped for the second quarter in a row.

That is because we have moved people from onsite to offshore within the consulting business. Our consulting margins are in excess of 20%, which is among the highest in the industry. But the pipeline is good and we see the pipeline in consulting as a lever for pull-through revenues in IT. As for R&D, the telecom sector (where a lot of Wipro’s R&D business is in) is secularly challenged. No doubt about it. In 2005, our telecom business was 33% of the total revenue. Now it is less than 5%.

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Watch TK Kurien outline the reasons for the dip in earnings, their strategy in their products and platform business and why he doesn’t believe in holding back on wage hikes.

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But you are not holding back on wage hikes?

No. I strongly believe, and I have always believed, that if you talk of employee commitment, at the first sign of trouble you can’t head for the hills. If you expect commitment, you have to be committed to your employees. It is a two-way street. It is easy to message (communicate about) culture in good times, but it is tough times that define culture.

Products and platforms are not core to your business. Would you want to surprise peers by investing more in this line, maybe even make an acquisition?

Our peers watch us closely, so I would be surprised if I can surprise them (laughs). If you look at our strategy, we have laid it out in fair depth in terms of industries and technologies. Traditional work in offshoring is getting commoditized, with very little differentiators. Some are putting in platforms saying, “Can I control the process layer?" That is a great strategy. But you cannot bet the house on one strategy. You have to have a portfolio and over time, maximize strategies that are working. We will invest in platforms, in the process layer, in terms of analytics, and link our rewards to business outcomes. Watch this quarter. We will launch something.

Characterize the tough times that you referred to.

Who said it is tough? It is a time of opportunity. Earlier, Indian IT companies sold services saying, “We have the better building and campuses, better people, or better delivery." We were differentiating on the basis of what we thought were our core assets. But fundamentally, it was the India advantage. Now everybody has that. So there is price commoditization happening in the back-end. So we need to differentiate in the standard set of services. We will get there. Today, clients saying “here is the $100 million RFP" (request for proposal) is not happening. We have to create the deal, and then the client makes you compete for that deal. It is much, much tougher. Very soon, you will see break-outs among the vendors, as over a period of time strategies play out and differentiators come out.

Also Read |Wipro earnings, guidance disappoint investors

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