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(originally published by Booz & Company)


Navigating Turmoil in the Global Technology-services Sector

S+B: How do you see China emerging as a new challenge in your industry?
The reality is that 1.3 billion people amount to something. They have a tradition of engineering and applying themselves to problems. And the home market is sufficiently large for them to build scale. Currently, most of their IT industry is really concentrated on serving their home market; they’re also relatively big in Japan and in other parts of Asia near them. But I’m sure they’ll become major competitors.

At Wipro, we are setting up centers in China to serve global clients with Chinese operations and to cater to the local demand. Last year we set up a global services delivery center in Chengdu in southwest China. This center is targeted for customers in the U.S., Europe, and other markets outside India. We are also planning to expand our offices there, so that we can build scale to serve local Chinese clients as well.

S+B: Wipro is one of the very few companies with a shared CEO position. What was the rationale for setting it up that way?
It had a lot to do with our breadth of services. For many of our competitors, software development is their core business. They tend to serve a more narrow set of clients in a more concentrated set of geographies than we do. Of course, a big part of our work is in software development as well, but we do a lot on the engineering side — helping our clients to develop new products — and we provide more business process outsourcing.

This diversity in our business portfolio was one reason we felt we needed more management bandwidth at the top. The other reason for having two CEOs is growth. If we were in a steady-state industry, we might have thought differently. We have been doing this for two and a half years now, and we think it has been working well.

S+B: How do you divide up responsibilities between yourself and Suresh Vaswani?
We established our approach and agenda jointly from the beginning, and we didn’t jump into the arrangement. We took our time thinking about how it should work. We came up with the operating rules and mechanisms together, and we have stuck to those rules fairly religiously. And there is our relationship: There is no substitute for human chemistry. Because we have known each other for a long time, and our relationship is a good one, we can make this work. I don’t think it could work for everyone. Many companies choose this path for the wrong reasons, particularly when it is the result of a compromise in a merger or an acquisition.

Some decisions are jointly owned: strategy, all people issues, anything to do with the brand, and, of course, the financial outcomes. We are a listed company, and we go to the board together every quarter. In addition, we end up meeting either informally or formally at least once a month with the chairman.

We divided up other matters — those related to business units, services, and functions — so that each of us can focus on specific operational issues and client relationships. I am responsible for media, telecom, and finance. Suresh looks after utilities, energy, retail, manufacturing, health, and government businesses. He also runs business process outsourcing, testing, and infrastructure management, while I run the consulting and R&D businesses across all industry units.

It helps a lot to have two of us available to talk to line-of-business heads or to the CEOs of our clients. For example, I interact with telecom CEOs or CFOs, and Suresh talks to his counterparts in healthcare. Because we end up interfacing more continuously with the same set of clients, we have richer conversations with them, we know the issues in their industries better, and we are more aware of what our competitors are doing.

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