Indian software headwinds

This is an irresistible force, and it's still growing. It's trying to move upstream, offering high-value services like consulting, integration, and infrastructure to customers. Gradually, it has more and more head-to-head competition with Accenture, EDS and IBM, and has achieved good results!

The emergence of Wipro is both encouraging and disturbing. In addition, it demonstrates the fact that a business's geographic location no longer matters. Therefore, this case has a unique logic of global competition.

Strategy: Swimming against the Current

The story of Azim H Premji, Chairman and Managing Director of Wipro Corporation, is almost legendary in India, mainly because His personal wealth is estimated to be as high as 6 billion US dollars, and he is widely regarded as the richest man in India.

In the early 1980s, after India's economic shutdown and the expulsion of foreign technology companies, Pleckey quickly established a research and development laboratory at the company and produced a PDP11 minicomputer compatible with Digital Equipment. computer. Just a few years later, with its proprietary operating system and semiconductors, Wipro has become India's largest manufacturer of personal computers, printers and scanners.

In 1990, when India reopened its doors, Pleckey admitted that Wipro could not compete with imported personal computers. But he has his own R&D lab, where India's best minds come together. So he started renting out the lab. So his engineers designed semiconductors for Texas Instruments, phones for Nokia, and switches and routers for Nortel.

He noted: "What's happening in the service industry today is really a copy of the manufacturing industry 15 years ago. The industry started with software and application development and is now moving to software-driven services such as call centers, legal services, Pharmaceutical services. Optimal cost efficiency is especially important for any production activity that can be relocated!

"Take a large legal firm as an example. The firm's staff and paralegals can be trained in India to serve partners and colleagues in the United States. Salomon Smith Barney has a large R&D facility in India. So why can't it do 60% of its reporting in India? Why does it require reporting by employees in the US? "Wipro has just signed a contract with a research hospital in the United States to provide analysis services for the latter's radiology images. In fact, radiologists in India also provide the second and third round of analysis services for the hospital.

Instead In other words, Wipro is moving upstream in consulting and other high-value services while its powerful U.S. adversary is foraging downstream. Vivek Paul, head of a small technology subsidiary of Wipro Said: "The two ends of the pendulum are racing towards the same point. There is no easy-to-follow strategy, and creating a strong global delivery model can be as difficult as renting a property in India as it is hiring an engineer. But in the end, the central point is the domain of powerful players. "

As Wipro gets closer to the center, it becomes more cautious and more robust in India. Pleki analysis believes that a truly global company should do business where it should be. That's why One of the reasons he's willing to share a limousine today with Richard S. Garnick, who has 20 years of technical sales experience, joined Wipro last year to run the company's U.S. operations. Wipro Steve Zucker, who was one of EDS' top executives in charge of US domestic sales, was also hired to drive the company's overall outsourcing business.

Wipro claims that within 2 years Inside, 3/4 of the company's employees will come from the country where the company operates: the United States, Europe, or Asia. In order to quickly gain a foothold in the relevant industry, the company will recruit local elites or acquire local companies. In addition, it may integrate research and development activities Move to places where the cost is lower than India, maybe the Philippines, maybe Vietnam. That's what a truly global business should do! Move operations closer to customers and constantly seek opportunities to arbitrage in the labor market.

Cost: Better People and Cheaper

Any professional who does hundreds of consulting on technology strategy every year has heard of Ganesh Narasimhaiya. Nish is a friendly 30-year-old. He loves cricket, bowling, and R&B music. He lives in Bangalore with his parents. He has a bachelor's degree in electronics and communications and is able to code in COBOL and Java.

For the past 3 years, Ganesh has worked on high-end projects worldwide for Wipro. He has helped GE Medical Systems design logistics applications covering the entire Southeast Asia region; Advised on integration and synergy for security solutions for clients' e-commerce applications. In addition, he devised strategies for bringing legacy system applications to the Internet for Norway's Statoil.

"I want to stand in the technology cutting edge,” said Ganesh. He is quick-witted and hungry to work. He works 18-19 hours a day on a client’s job site. Overseas, he receives $7,000 a month, while in Bangalore, he The annual salary is only $21,000.

Ganesh is just one member of Wipro's army. The company brings together a group of high-level strategists who focus their research on specific industries, so that they can Competing against competitors in consulting projects. Once Ganesh and his colleagues can successfully pass the hurdle of the client's CIO, then Wipro will throw its trump card: offshoring that can drastically reduce client expenses package solution.

Dilis Antony is a familiar name to app developers around the world. At 30, she leads a team of 4 members. Anthony holds the equivalent of a Masters in Computer Science and is currently in charge of building a web-based customer survey system for Otis Elevator, a unit of United Technologies, a project developed by Wipro for Otis. An integral part of the developed cyber strategy. Anthony said she wanted to "grow with Wipro." She has long set her sights on a higher management role. The average annual salary of her programmers is $8,000, and her own income is about the same. Think carefully. If you were a strategy consultant, what would you compete with Ganesh? How does your company respond when Anthony implements Ganesh's low-cost solution, and it works well?

Training: Thinking differently

In 1999, Wipro hired Vivek Paul to lead a small technology subsidiary of its own. Vivek was born in India, but became famous in the United States. A graduate of the business school at Massachusetts University in Amherst, he rose to prominence within the GE Healthcare Systems business group. In addition, he was involved in the negotiation process with Wipro to establish GE's first IT outsourcing joint venture in India.

Paul based Wipro Technologies in Santa Clara, California, not India. He saw "a great opportunity to become a member of a company that wants to operate globally," but he also saw his lack of dynamic employees. "The entire Indian nation is deeply rooted in execution," he said. Indian workers are expected to respect authority from the moment they are educated. Indian workers usually do a pretty good job of what they are told has to be done, but what they lack is not knowing what to tell the client what to do.

Ranjan Acharya, Wipro's Vice President Human Resource Development explains: "A pharmacist cannot add value to a prescription, he can only impress his patients with his services. . So how does a good pharmacist grow into a good physician?"

Wipro needs more physicians. Of course, it can recruit externally. In fact, the company had to do the same. In order to compete with those powerful companies, Wipro must provide industry-specific expertise. If you want to effectively solve the technical problems of a commercial bank, then you should understand how the bank's business works. So Wipro managed to "poach" Ramesh Subramanian. Remish, a former McKinsey & Company consultant with many years of experience, has focused on serving clients in the financial services sector. Wipro also founded Aswatha Amarnath, a specialist in energy financing focused on building high-level relationships with major U.S. utilities.

But such a massive hiring hasn't changed the habit of thinking like a pharmacist among the company's 15,000 engineers and managers. In response to this situation, Acarya implemented a large-scale training strategy called Power Consulting. Calling such a training initiative "William" would most likely be a joke at other companies -- especially since some of the training is so basic that it would be humiliating for the average person to receive it. For example, for engineers preparing to meet with clients, they must learn how to dress for formal lunches and how to properly use silverware.

But at Wipro, employees see this training as a competitive tool. As Acharya puts it, they learned to "understand the context of the relationship" and think in terms of customer issues. Engineers break into small groups and practice asking tough questions about the client's company, business, and employees. "Our employees are used to talking from the company's point of view," says Acharya, "so they have to learn to shift to talking and thinking from the customer's point of view."

Wipro educates employees that the situation must be analyzed , the scale and scope of the problem encountered must be defined. Employees learned to pre-statement, that is, talking to everyone ahead of time to prevent embarrassing situations. In addition, the company has well-trained employees in negotiating and closing deals. For each newly recruited engineer -- Wipro hired 2,200 engineers in six months last year -- the company schedules consulting sessions during its 45-day orientation.

How did all this turn out? food chain! By making educational engineers think like consultants and make them experts in their clients' industries, they build a workforce that continues to move the business forward. Wipro expects strategy consulting to eventually account for 10 percent of the company's technology revenue. The consulting work currently underway at General Motors and Nationalwide Insurance will help improve customer relationships and generate steady outsourcing revenue for the company.

Wipro hopes to win more high-end contracts like Storage Technology, which agreed to outsource the design and manufacture of this year's line of tape storage devices. In 2004, Wipro's employees will fully replace the storage technology company's employees in Minneapolis, USA, and will be responsible for all of the company's research and development activities. In addition, in September this year, Wipro will take over all R&D activities of Ericsson. In addition to taking the corresponding financial risks, the 120-person team sent by Wipro will manage the entire R&D process.

Next comes the challenge for Wipro. With the global economic downturn and everyone looking to cut costs, new business will follow. For Wipro, "Weinig Consulting" is about turning an opportunity into a turning point, changing from simply offering products to building high-quality partnerships, and making what is sold irreproducible.

Think again, how will you compete with Wipro?

Original text excerpted with permission from Keith H. Hammonds, The New Face of Global Competition, Fast Company, February 2003, copyright registered 2003 by Los Angeles Times Syndicate. Translated by Li Jian.