Wipro to make 'digital' business a separate unit

Wipro, India's third-largest IT services company, plans to incentivise delivery managers to drive growth, managing director and CEO T K Kurien said during a meeting with analysts on Wednesday. When an analyst asked in what way delivery managers, who are responsible for delivery of projects, can drive growth, Kurien said it's easy for a delivery manager to find opportunities around him thanks to his domain knowledge as well as knowledge of many other projects.

This is part of the various initiatives to turbo-charge Wipro's core business. The focus will be on 'digital business' by identifying opportunities in Internet of Things (IoT), open source and artificial intelligence (AI). A lot of investment would go into these areas with a dedicated leadership team in place, said Kurien. He added that at some point, Wipro would carve out the digital business as a separate unit.

Explaining the rationale behind such a move, Kurien said: "The biggest thing we are betting on in the next couple of years is what we call 'digital'. We don't believe we can do it in a traditional manner because the culture in 'digital' is going to be about speed, not how much time one takes to develop something or how much it is going to cost based on the time deployed. So we are going to have a separate team and separate leadership as it will address a completely different economic buy in a completely different way."

Wipro's digital push is in line with large industry peers that are aggressively moving ahead with their business strategy in newer areas such as artificial intelligence, automation, big data and Internet of Things.

Infosys CEO and managing director Vishal Sikka, too, has laid out a new strategy putting a lot of emphasis on these areas and on 'design thinking'.

Similarly, India's largest IT services exporter TCS has created a new vertical called 'digital software and solutions group' from which it expects $5 billion over the next five years.

"Gaining market in core business is important from a growth point of view. However, as technology is changing fast, our ability to sense the future is also going to be important," Kurien noted, adding: "While we have made two investments already from our corporate venture capital fund, all our investments are going to be in three areas - around AI, IoT and open source."

As a part of this strategy, Wipro is also looking at looking at developing intellectual property-led capability with focus on patents. In FY15, the company filed 240 patents and for FY16, it wants to double the number.

Talking about the business challenges, Kurien said: "We have done a fairly decent job in 'hunting' (getting new clients). But a lot of work needs to be done on 'farming'."

In order to incentivise the sales force to grow smaller accounts, Wipro starting from April 1 will change the incentive pay strategy from gross targets to incremental growth. In certain accounts, account managers will also have to show a minimum amount of growth to qualify for incentives.

"This year, we have moved our entire incentive pay from gross targets to incremental growth. If you are a sales guy, you will not make money till you show incremental growth. If you are a delivery guy, your variable pay is linked to how you show incremental growth. It is a big mindset change," he added.