Wipro looks to buy assets in N America, Europe to grow Digital business

As Wipro prepares to plunge into the ‘digital’ area, the company is pursuing an active acquisition strategy in this segment to supplement what it is trying to build organically.

The Bengaluru-based multinational, the country's third largest information technology (IT) services company, has launched an independent business unit called Wipro Digital. It is looking at acquiring companies in areas such as 'design competency' and 'process utility' to expand its bouquet of services in the digital space.

The company is especially looking at North America and Europe, as there are companies in these regions which have reached some maturity in the digital segment, Rajan Kohli, senior vice-president, who will be heading Wipro Digital, told the Business Standard. He previously headed the banking and financial services business.

“We will certainly be looking very closely at acquisitions in this particular space…We will also work very closely with the corporate venture capital fund that Wipro has, as lots of the investments will go into areas that are closely aligned with technologies that will enable digital transformation for our customers,” said Kohli.

Kohli said the prime criteria would be assets which could create an impact in the upstream and downstream areas. “In the digital space, acquisitions can’t be of typically the size of acquisitions in the IT services space. But Wipro has always been of the belief that for any acquisition to have substantial impact, it has to be bigger than $50 million,” he added.

He said Wipro Digital would operate as an independent business within Wipro, as it has to imbibe a different DNA in its culture to be able to attract the best talent from start-ups and captive units of technology companies in India.

“For us, it’s the impact on customers which matters, not size of the unit. So, the whole people policy, recruitment policy and compensation model will be very different from that of the rest of the company because we have to attract people from start-ups, technology captives. We are trying to inculcate the start-up culture to imbibe that speed and agility within the team.”

Wipro’s decision to have a separate unit for opportunities in the digital space closely follows the announcement by T K Kurien, its chief executive, in the second week of this month that Wipro was planning such a unit. Kohli, in his new role, would report directly to Kurien.

“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,” Kurien had said during the company’s annual analysts' meet.

“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.”

Last week, the company had also announced it would be making its ‘Analytics’ business a new service line, to deal with all new-generation technologies such as artificial intelligence, machine learning, advanced analytics and big data, replacing its Advance Technologies & Solutions service line.

Kohli said Wipro Digital will operate as an independent unit but also work closely with all the business units and service lines. The unit will have dedicated front-end sales and delivery teams.

Initially, Wipro Digital has identified 25 key accounts from the existing clientele to engage with for offering digital solutions. In the next phase, it intends to build solutions for clients in areas where it can have high replicability. In his new role, Kohli would report directly to CEO T K Kurien.