Wipro’s turnaround strategy working well, says CEO Abidali Neemuchwala
Wipro CEO Abidali Neemuchwala, however, maintained silence on the Alight Solutions deal, saying the company is still in discussions to complete the transaction
Bengaluru: Wipro Ltd chief executive officer Abidali Neemuchwala says his strategy to bring about a turnaround is working well, although the company is still not out of the woods. The Bengaluru-based IT firm faces uncertainty on account of the company’s internal restructuring of business in India and West Asia and falling revenue in its healthcare business division, HealthPlan Services (HPS) business. In an interview, Neemuchwala declined to comment on the company’s multi-year, mega deal of more than $1 billion with Alight Solutions, saying Wipro is still in discussions to complete the transaction. Edited excerpts:
How would you rate Wipro’s performance in this quarter?
I’m very happy with our performance in this quarter. Because when we were getting into the quarter, we guided for our growth to between -2% and staying flat, which would have been our best scenario. Through the quarter, we were able to get to the upper end of our guidance. So our team has done a fantastic job in rising up to the occasion and executing it well.
What are some of the biggest positives with regards to the demand outlook?
The demand situation looks good. I see two major positives. First is that we are seeing digital at scale. Our customers are now making us enterprise-level digital partners, which means large transformational deals for us. Second is what we at Wipro call large modernising projects. Like the Alight Solutions strategic engagement, in which we are modernizing the IT and operations landscape. We will be deploying (AI platform) Holmes for the entire operations. So those are sizeable projects.
What is this strategic partnership with Alight Solutions? I understand that this is a mega IT outsourcing deal, valued at over $1 billion. Is this correct?
It’s a strategic partnership as you have read in the press release we issued. Beyond this, I cannot comment on it because we have still not completed the transaction and it won’t be correct to talk about this now. We can explain better on this partnership when we make it public.
So would it be fair to say this is a multi-year partnership?
We have already said in the press release that we have announced a long-term strategic relationship with Alight Solutions. I cannot talk beyond what we have already shared in the press release. All I can say is that I’m happy that our strategy which we outlined in 2016 has started to play out and we can talk about this strategic partnership when we have closed the transaction.
About the digital business?
When we started (in 2015-16), digital was all about proof of concept. So earlier, say, if we do 10 engagements, all 10 were proof of concepts. Now at least two or three of those same 10 digital engagements are big in size.
So take for example our AI platform, Holmes. Holmes was being deployed as a bot in some individual case in the past. Now we have engagements where Holmes is getting deployed across operations, like in the case of our of our large banking customers. Again, about 60% of digital is coming from existing clients while the remaining 40% is from new clients which we are getting because our digital proposition is superior to the incumbents.
The outlook for the remaining year?
We have got the momentum. The people within Wipro have also understood what transformation is, so there is more alignment. Our core business is very strong and we are executing and moving in the right direction. I would not hurry to say that we are out of the woods.
My only worry is two things. First, some of our internal restructuring in India and Middle East is still taking time. The second is the declining business in HPS (Wipro spent $460 million to buy HealthPlan Services in February 2016 but on account of a legislative change that ended Obamacare, Wipro’s planned revenue from this acquisition took a hit). That still is an uncertainty, again for no fault of us.
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