When you are at No.4, you are almost like a Bear Grylls who has lost his way. But the fog of lost strategic opportunities and the valleys of revenuedips should only sharpen one’s survival instincts. And swiftly enough
When you are at No. 4, you are almost like a Bear Grylls who has lost his way. But the fog of lost strategic opportunities and the valleys of revenue-dips should only sharpen one’s survival instincts. And swiftly enough.
Wipro IT Services witnessed some palpable inconsistency & volatility in revenue growth during the FY. The management’s aggressive thrust on cost rationalisation could have stifled the company’s participation in a demand environment and hence, also slowed down its revenue momentum. The revenue clocked during the year was close to US $8,190 Mn and it grew by 9.56 percent on constant currency.
Wipro’s strategy seems to be one of divestment of non-core assets and investment in strategic initiatives like IIoT. The company secured some welltimed alliances with vendors such as Rockwell Automation to develop IIoT solutions. The company has bolstered its portfolio offerings around some emerging opportunities to offset the struggles faced by itslegacy services business-like Global Infrastructure Services. Meanwhile, Modern Application Services and Cloud & Infrastructure Service segments contributed close to 70 percent of the business. Wipro’ Digital services galloping at 35 percent of revenue, acquisitions and in-house investments – these are areas that are driving substantial growth and could help it find future-forward footprints.
The digital business is turning out to be a river worth pursuing. This domain has exhibited remarkable improvements– Data Analytics and AI seem to be on a good trajectory and the company’s decision to deploy HOLMES automation platform on AWS will, in all possibility, see some notable takers.Taking the impetus forward on its partnerships, Wipro is offering security services for Microsoft Azure environment. Wipro also launched a Loan Orientation System (LOS) for the financial lenders’ segment. Nonetheless, a decline in non-digital business segment is a cause of worry that cannot be easily dismissed.
Among other positive strides worth of note, the period exuded some impressive flag-posts for Appiro. Wipro also won top-crust customers like New South Wales Roads and Maritime Services Group for $110 million for the area of application management services. The well-performing areas spurred more good news as the company added close to 270-plus customers in the fiscal year. What is also commendable here is that its top 10 clients contributed close to 20 per cent of the business.
Zooming in the lens of contributions further, we can see that America continues to be the biggest contributor in terms of geography. It reigns over well with more than 56 percent revenue share. Like most of its peers, Wipro also increased its focus on the US market and strengthened its localization abilities by hiring more freshers during the year. It has a total headcount of close to 186 K with a utilization rate around 85 percent.
Revenues from European market were, albeit, a bit of a concern as the numbers stayed volatile across the quarters all through the fiscal year. An overall, and continued, drift of downswing augurs some uncertainty here.
Wipro must deepen its investments in digital and talent areas to leverage a strong demand environment. The company must accelerate the development of its IIoT software portfolio, else it will jeopardize some precious IIoT opportunities sitting just around the corner. It can, perhaps, wield possibilities with some stronger-positioned vendors that have shaped up better software portfolios. The company can gain a new pace and a firm foothold by building an integrated play around its IIoT offerings and functionalities (Ex- with Predictive Analytics). In other words, half-baked efforts and solutions would not help Wipro pick up the steam it may have lost in legacy and non-digital areas. A digital kit and a new strategic instinct will show it the path it needs to follow. IT players in the new digital forests cannot afford to bark up the wrong tree any more.
—ABIDALI Z.NEEMUCHWALA CEO