Our digital activities have been gaining momentum with retailers: Wipro COO3 min read . Updated: 15 Jan 2020, 07:05 PM IST
Consumer sentiments have been good in some markets, B.M. Bhanumurthy told Mint
Bengaluru: Bengaluru-based IT services firm Wipro Ltd, on Tuesday, announced its financial results for the quarter ended December. Top executives of the firm said that they are confident of winning new deals in digital, an area where the company's revenue grew 22.8% on a year-on-year in constant currency terms and now contributes around 40% of their revenues. In an interview to Mint, B.M. Bhanumurthy, President and Chief Operating Officer of Wipro, spoke about company's performance in the December quarter and the outlook and localisation plans for 2020. Edited excerpts:
What is Wipro's outlook for the BFSI and retail segments for this year, and the performance in Q3?
The BFSI segment in Q3 has seen a bit of slowdown. There were multiple factors for this - the last quarter of the year, plus some amount of holidays and furloughs, and there is a certain amount of macro environment for BFSI, as well, that's the uncertainty that we see. For retail, we have seen a good uptick in holiday volumes. It’s a good indicator for how the economy will move and their investments are related to consumer sentiment. And consumer sentiment has been good in some markets. Retail has been good for us this quarter because we have good holiday volume, and a lot of digital activities that we are doing are gaining momentum with retailers.
Did the slowdown and trends you mentioned impact the net profit in the December quarter?
Our utilization would have fallen in Q3 because of multiple factors. We have been hiring freshers and taking them through training to get them ready for projects. The second factor is the lower attrition that we have had and thirdly, the lower volume because of holidays. That's the reason why you would see multiple kinds of cost elements that have come in here.
What are the localisation plans in the US this year?
We started localisation two or three years ago. We did it because given what we are trying to execute, especially the digital projects, it was more important for us to understand the context rather than just the content. The content is the technical capabilities we have, the context of what the customers were trying to solve was important to understand as well. It also turned out that talent mobility became an issue after some time and its important to become a lot more localised. Today we are at about 70% in the US, and implemented similar measures in the UK, Australia, Latin America and other countries. In markets like the US, where we have a large presence, we are trying to build the full pyramid as opposed to just the top of the pyramid. We are getting to colleges, training people. We have centers in the US. If you look at the work we do, we have a very strong cyber security practice, it requires local presence to deliver some of the cyber security activities. We do that kind of work from the cyber defense centres that we are establishing in various countries.
What are some of your levers to improve operating margins?
We have to look at our overall utilisation, as much as we invest in freshers and training programs. We have to look at the nature of projects we do and pricing that goes with it. Third, where are we executing the work - locations, geographies. And also the operational measures we need to have. We have defined a third generation delivery where we are focused on three different levers. One big lever is automation, in automation we are focused on how we can introduce cognitive automation as opposed to task automation. Second one is fact that we can do a lot of crowd sourcing within Wipro for doing projects as opposed to only specific people doing specific projects.
How is Wipro strengthening its digital business?
Apart from building internal capabilities we looked at the overall digital ecosystem and figure out what capabilities we didn't have. We didn't have service design capabilities so we acquired DesignIt and integrated that into our organization and that has grown extremely well. We also have to create an environment where customers can come and solve their specific issue in a short period of time. We have established seven or eight design studios across the world. We have also trained 100,000-150,000 of our people on digital and design capabilities.