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(originally published by Booz & Company)


Navigating Turmoil in the Global Technology-services Sector

We do an annual customer satisfaction survey of between 2,000 and 3,000 client managers and executives. This is done by a third party on our behalf, and respondents can choose to fill it out anonymously. One of the key highlights of the survey that came back a month ago was that the level of trust has actually gone up. We believe this is because our clients see us supporting them in times of adversity without cutting back on our service levels or backing away from our commitments. Clients are also more willing to sign multiyear, full-scope engagements. In some ways, this is good for us because it makes us more accountable, and it helps us become more efficiency oriented.

Growth issues have come back into focus not only for us, but for our clients. They all realize that they have to come up with a value proposition for the emerging markets, because at least for the next few years, that’s where most of their growth will come from. We have a lot of credibility in India, because this is our home territory. For example, consider the growth that is taking place in wireless communications. Fifteen years ago in India, telecom penetration was 3.6 million phone connections. This year, we are pushing 500 million, and all that growth is based on wireless connectivity extending into rural India.

We are designing new products for this market. As you go into the hinterland, there is a need for more rugged products that can withstand the heat, dust, and power fluctuations. A typical signal relay base station in India also needs to be half the weight and volume of products designed for developed countries. And the price point has to be lower. So we are talking about designs for base stations with less weight, less volume, and at one-fifth the price. We have a mandate for a client right now to engineer one of these products from the ground up; we have 18 months to build and design this new product.

S+B: Four years ago Wipro set a goal to become carbon neutral by 2014. In what ways has that led to business process or product innovation?
It has definitely exposed process improvement ideas we would not have thought of otherwise. One study revealed that our weekend power consumption was almost 80 percent of our weekday power consumption. It turned out that the bulk of that power consumption was coming out of labs we run for clients, where there is heavy-duty equipment that needs to be run 24 hours a day, with air-conditioning that needs to be on 24 hours, too. It took us a year, but we figured out how to create a smart meter to shut the equipment off to reduce weekend energy use from 80 percent to 50 percent without affecting the quality of the service to the client. This has also created a whole new line of business for us, because we are starting to provide power consumption monitoring services for our clients. Just as we streamline your IT infrastructure, we can do the same for your energy infrastructure.

S+B: How has the cost arbitrage value proposition for outsourcing evolved since Wipro got into this business?
When we started, we were pioneers in doing the same work better and at lower cost than our clients could do themselves, but the reality is that everybody, including large global systems integrators, has followed our model. We don’t have a monopoly on hiring people in India. Anybody can do that. What differentiates us now is not the cost of people, but the processes and tools we design for them to use. Fifteen years ago all our clients wanted us to replicate their tools and processes in our premises in India, China, or wherever. A couple of years ago, we realized we have better tools and processes than many others. We began offering them a shared-services center so that they could get the benefit of the concentration of intellectual knowledge but did not have to pay for a dedicated facility. Plus, they only have to pay for what they use. This has dramatically changed our value proposition to clients and changed our competitive position.

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