The sunflower in Wipro's logo is symbolic of the metamorphosis that the company has undergone in the 69 years since its inception. Established in 1945 as a cooking oil manufacturer, following a series of radical transformations, Wipro eventually became a technology conglomerate and, according to its latest figures, the firm employs more than 147,000 people worldwide and brings in more than $6.8bn in annual revenue.
Its evolution is far from complete, however, and Wipro is currently in the middle of yet another transformation, as it tries to adapt to the post-financial crisis landscape. In the years since the crisis, a growing number of foreign companies have withdrawn from India and, in 2011, Wipro began venturing our abroad more aggressively.
“We should move people into locations that are closer to the customer," TK Kurien told India-based magazine Business Today in 2012, shortly after assuming his new role as Wipro's CEO. "By sitting in India you end up [dealing with] more and more delivery issues and other back-end stuff on a day-to-day basis."
With operations in 61 countries worldwide, Wipro had a strong international presence even before Mr Kurien assumed his position as CEO. Recently, however, the company has extended the scope of operations performed in its foreign outposts.
“We utilise global best practices, resources and scale to support our strategic commitments to clients,” says Puneet Chandra, Wipro's vice-president and chief marketing officer. It might sound a little like corporate jargon, but Mr Chandra's words show that, unlike many emerging market companies, Wipro does not think about foreign expansion purely as a way to build an international network of sales offices.
Decisions as to where exactly Wipro expands are based on a seven-point decision matrix, Mr Chandra says. Wipro executives focus on factors such as availability and cost of human capital, ICT infrastructure, business environment, security, and political stability, as well as soft factors such as quality of life and access to business-oriented facilities. Wipro also takes the socio-economic and environmental impact of its investments into consideration, according to Mr Chandra. “A 10,000-person global delivery centre can have a fairly significant impact on its immediate social and ecological surroundings,” he says.
Data from greenfield investment monitor fDi Markets shows that in the past two years, the company created more than 2500 new jobs and invested in eight greenfield projects, mostly in developed markets. The US is one of the leading investment destinations for Wipro, with the country accounting for 50% of the company's revenue. Wipro has also expanded in the UK, Germany, Canada and South Africa, and in the near future it has plans to further expand into Europe.
“We have outlined a plan to create 500 jobs in Norway over the next three years, and in Germany we will create more than 1000 jobs by 2016,” says Mr Chandra.
Although the company's biggest clients operate in the West, Wipro is also planning to increase its presence in developing markets such as Latin America and Africa, says Mr Chandra. Here, Wipro's developing economy roots give it a competitive advantage. “We can retro-fit solutions created for clients in India in other similar fast-growing emerging markets,” says Mr Chandra, adding that this approach helps the company to deliver more affordable solutions, which is a key requirement in emerging markets.
As well as changing its geographic structure, Wipro is also altering the core structure of its business. In 2011, the company reduced the number of sales representatives it employed but significantly expanded its team of client-facing consultants. “By better understanding the needs of specific customers we can better leverage available technologies to deliver effective solutions and products,” says Mr Chandra.
At the end of March 2013, Wipro spun off its non-IT related operations, including consumer products and lighting solutions. At the same time, the company increased its capacity in areas such as cloud, analytics, mobility and sensors though a number of acquisitions, including the $32m purchase of Promax Applications Group, an Australian trade promotions consultancy, and the $150m purchase of the oil and gas consulting division of SAIC, a New York-based technology firm. In June 2013, the company also invested $5m in Axeda, the US-based provider of machine-to-machine connection solutions.
Wipro's latest quarterly results published in January 2014 suggest that these moves have been paying off, with the company's IT services revenue up 6.4% year on year, and customer satisfaction scores, between April and June of 2013, rising 11% year on year.
Is that enough to conclude that Wipro's problems are over? Not according to Anthony Miller, managing partner at UK IT research boutique TechMarketView. “Wipro went two full years without double-digit growth,” he says. “All major Indian IT companies lost their mojo following the crisis, and I do not expect them to grow at the pre-crisis pace, but Wipro is growing the slowest of all majors.”
Mr Miller cites frequent changes in the company's top management positions as one of the main reasons why Wipro is still under performing. Does that mean that the change at the very top of the company is in the offing too? “When a CEO goes for two years without a visible turnaround, you have got to start asking questions,” says Mr Miller. Despite implementing a new structure and a new approach to foreign expansion, it might be too early for Wipro's management to be opening the celebratory champagne.