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(originally published by Booz & Company)


Navigating Turmoil in the Global Technology-services Sector

For Girish Paranjpe, co-CEO of India’s Wipro Technologies, the best response to economic crisis was reinvestment: in people, green technology, and expansion.

Wipro Technologies, one of India’s largest and fastest-growing providers of information technology and engineering services, consulting, and business process outsourcing, has become a global market leader. But it didn’t start out that way. Wipro was founded in 1947 as a producer of hydrogenated cooking oils, laundry soap, and tin containers. In the 1970s, the company set up a division to manufacture hydraulic and pneumatic cylinders. In 1977, when the Indian government forced IBM out of the country, Wipro — then led by Chairman Azim H. Premji, who was also the founder’s son — became one of India’s first local computer makers. Later, as it moved from computer making to its current status as an outsourcing company, Wipro grew dramatically. Its revenues, which were under US$1 billion in 2002, reached $6 billion in fiscal year 2009 with profits of $1.2 billion, and its workforce is now made up of more than 100,000 people worldwide.

In April 2008, Premji appointed two of the company’s longtime senior executives, Girish Paranjpe and Suresh Vaswani, to share the chief executive role for the businesses globally. Five months later, the collapse of Lehman Brothers and the crisis in the global financial system shook Wipro to the core. (At the time, the company’s global growth included projects it was working on for Lehman in New York, London, and Tokyo.) At a recent meeting with s+b in New York, Paranjpe reflected on that period and the opportunities the turmoil brought: opportunities for greater efficiency, enhanced employee skills, revenue growth, and innovation.

S+B: Much of Wipro’s past business growth has been driven by the growth ambitions of its customers. How is Wipro repositioning itself as clients become more focused on containing and cutting costs?
Before the financial crisis, clients were raising their budgets 8 to 10 percent every year. Our only question to clients was, “What else can we do for you?” Until the events of September 2008, we were probably having our strongest quarter ever.

The financial meltdown hit us very suddenly. For three quarters in a row, we had reductions in business. At one point we had almost 12,000 to 13,000 people on the bench. We had no idea how long this whole downturn was going to last and how strong the recovery would be when it came, or even whether it would come.

But despite all kinds of pressures to cut costs, we didn’t lay people off. Instead, we developed a retraining strategy to bring people up to speed on newer technologies. Before then, we had felt investing in the continuous training of our workforce was important; now we instituted a program to push people to upgrade themselves technologically by one level every year. We ran this program for more than 2,000 people on the bench. Each month, they had two weeks off; the other two weeks they went through formal training to upgrade their skills. This was not just training; people had to pass an exam to go to the next level.

The program is still in place today. People who come into our organization in their early 20s move through various technical levels for the next eight years. If they are coders, they may learn project management and architecture skills. After those eight years, they may either go into a specialist team or become project managers.

S+B: How did the tougher economic environment affect the long-term demand for Wipro’s services?
Our clients have a better sense of their needs. They see more value in what they’re getting from us, and they trust us more. Since the financial meltdown, we are more aware of our strengths and what we need to develop. We are having much deeper conversations about our outcomes and our clients’ desires rather than focusing only on renegotiating the price of our services. The question now is how can we help them achieve a better outcome and enable them to be more competitive.

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