Wipro's Plan For Tommorow

He is the new president of Dell's software services and outsourcing business. This interview was conducted when he was with Wipro. 

Anup Varier Feb 04th 2011 A-A+

Suresh Vaswan has recently been promoted as the new president of Dell's software services and outsourcing business. This interview was conducted when he was with Wipro. 
Climbing the corporate ladder in an organization as large as Wipro is no mean task and Suresh Vaswani, Jt. CEO, IT Business, Wipro, has been patient in his rise.  In this interview, Vaswani shares a picture of what the future will look like and IT's role in it.

What technologies should corporates watch out for?

There are six themes that we believe are extremely strategic from a customer viewpoint irrespective of their industry. The first is clearly cloud computing and the second is green IT.
The third is collaboration. Most companies are becoming more global as they expand into emerging markets. To do that effectively, they need to collaborate and these technologies will become essential for companies to succeed.

Then there is social computing. All the blogs, Twitters and Facebooks of the world will become an integral part of the organizational ecosystem. That's a fact that cannot be ignored.
Mobility is extremely important. In India, mobile penetration goes deep. So, if companies want to penetrate rural or remote markets they need to think of ways of leveraging the mobile to enable business rather than setting up brick-and-mortar infrastructure and adding to costs.
Finally, predictive data analytics - rather than reactive analysis - will be very important because at the end of the day if a company can analyze more data, more productively, it will be able to pick out customer trends and benefit. That will result in a shift from a what-did-we-do-wrong paradigm to awhat-is-going-to-happen-and-what-can-be-done-about-it attitude. This will help direct investments in the right direction.

Some believe cloud computing is more hype than substance…

The cloud is here to stay. It is a serious innovation among IT business models. All organizations will adapt to it. Medium-sized organizations will move to it because it will make more business sense in the long run. Larger enterprises will have a combination of private and public clouds. In the mid-term, larger organizations will see an integration of traditional IT systems; they will implement private clouds within their organizations and use external public clouds to offer services to their users.

Isn’t green IT a product of the slowdown? Where, then, is its place tomorrow?

I would not link it to the slowdown at all. Green IT is linked to the larger challenge of ecological sustainability. I would say that it is related to an increase in awareness regarding the need for ecological sustainability, which has gone up because of the crisis that could face us if we do nothing about being sustainable in the next 10-15 years. If corporations don't become proactive about it or don't create a definite plan, in the end everybody will lose.
Green IT provides a double whammy in a manner of speaking. The two issues that can be tackled by it are: How can I make my IT infrastructure greener by using less power and driving productivity; and how can I use IT to propagate sustainability elsewhere? Both are important. And, in the long run, green IT is also cost-effective

But how does it fit in a world where companies are focused on the short-term?

I think companies are looking at both short-term and long-term goals in order to develop a sustainable business model. At the end of the day, there is a new reality today. The economy has been reset and it will move in a particular direction from here on and many of the expectations of customers, stakeholders, governments have changed. In this new reality some of the concerns that have surfaced are: Am I cost optimal and can I transform my cost structure? This is why, I feel, we need to create more demand by enhancing customer experience and such a demand with an optimal cost structure will drive sustainability.

What key lessons came out from the slowdown?

Today, organizations are becoming more risk-aware. The have started identifying risks and coming up with methodologies to mitigate them. That's something organizations would not have done five years ago. People assumed that the world was a hunky dory place and expected everything to go fine. But post the slowdown, when things started turning tough, the net learning is to be risk aware and that, in turn, would take care of the spikiness in the market. The entire process of identifying risk and solving it has speeded up.
Organizations are also looking seriously at developing a variable cost structure. If I do everything myself, I will have a bloated cost structure. If I do just what I need to do myself and I have partners to do the rest, I have a cost structure that I can scale up and down and not impact my business substantially. And my partner works in a much larger ecosystem because he is doing similar jobs for multiple people and can absorb variations.

Do you expect more Indian companies to outsource? Is your focus moving to the domestic market?

We are very focused on the domestic market. Today, about 21 percent of our business is coming from emerging markets like India and the Middle East. As a company, Wipro has always focused on our home markets because it goes without saying that if you want to be a global player then you have to be a good player in your domestic market.
A focus on the domestic market also helps us create solutions and products that we can leverage globally and allows us to further our expansion plans into more emerging markets. Emerging markets like ours are important because they necessarily are high-growth markets and generally do not have legacy systems.

You’ve moved away from dedicated offshore centers. Is that a conscious shift?

So far the trend has been that you had dedicated ODCs (offshore development centers) for customers. But that trend is shifting to a more shared-services model. The paradigm is shifting because the customer is saying: Look, this is the service I want, this is the outcome I want, these are the constraints under which we operate. You give me a service outcome rather than giving me a building full of people and networks.
This has given rise to the birth of what we now call and have branded as the 'flexdelivery' concept. So if I have to do Oracle support for a customer, I can actually do it from one of our flex delivery centers and still meet the security concerns and response time requirements of a customer. At the same time, I am able to leverage more specialized resources more effectively.

Which other emerging markets have you identified as targets?

China is a very big market which we are only now beginning to look at from a a market addresal perspective. There are markets like Latin America which are under-penetrated by service providers like us, and markets like Africa which we have started addressing last year. We have a development center in Egypt through which we deliver services to some of our middle-eastern customers. And, broadly, we do business in South Africa as part of our global thrust. Africa is certainly an interesting market though there are always country risks and you have to plan to mitigate those risks.

What’s the demand in India like? Is there a difference between verticals?

IT demand in India is very broad based. Though some sectors like telecom, defense, and BFSI are more visible in their interest in IT, the drive is widespread and the difference in adoption across verticals is not starkly different. This is because customers have clearly understood the need for IT to differentiate from the competition.

What is Wipro’s approach to M&As?

Wipro continues to invest inorganically and we have a clear idea as to where we need to make our inorganic investments. Our acquisition of Infocrossing, for instance, was on the same lines. The company has datacenters across the US which we didn't have; it has a revenue runrate in the datacenter space which we didn't have; it is in the managed datacenter space which we were not. I could have tried to build datacenters in the US but that would have taken almost as long as five to seven years. And Infocrossing was very synergistic with our company, so the acquisition made sense. We will not acquire a company just to increase revenue. That makes no sense. Value-added acquisitions that enable us to enhance our value proposition to our customers are what we look for.

What is the role of a CIO in a merger?

Nobody wants to build a high cost structure. Say one partner in an M&A is running on SAP and the other on Oracle; one has got 10 datacenters here and the other three, then at some point or the other they will have to consolidate their IT backbones. In an M&A, one of the first things that gets considered is the cost of IT and best practices. If a company has very poor IT systems, I would be very worried about acquiring it.
The CIO has a part in making those things happen and in making sure that the acquisition realizes its potential. He may or may not be involved in the business decision of the acquisition but his role is certainly important in terms of making sure that the benefits of the merger are actualized from an IT perspective.

Many joint CEO relationships have failed. Why should it work for you?

There might be examples that show it doesn't work but there are also enough that demonstrate that it works. Take how SAP recently announced a joint-CEO model. What needs to be understood is that ours is a high-growth industry and we are fairly ambitious in terms of where we want to be,which means that there is a lot of work. And I still have a lot of work to do despite having another CEO.
About making it work, we (Girish and I) have developed clarity on where we can leverage the 'power of two'. Togetherness and working independently while keeping each other informed gives us that 'power of two'. We defined it pretty early in the game and I think we have a happy equation. This helps us deliver better and that's not just empty talk as is evident from the last two years.
The model needs a lot of trust. It helps that we have been in the same company for long and are aware of each other's working styles. This also sets a collaborative tone in the organization. At the end of the day there are separate business units, service lines, and functions that need to work together and a collaborative model right at the top sets the tone for the organization.

What’s the big learning from your stint at Wipro?

The importance of integrity. More precisely, professional integrity. Not over-committing at the point of sale either to clients or internal colleagues and peers is important. It's a value that holds you in good stead from a long-term perspective. Doing something to win a deal now, which you shouldn't have ideally done, is a much larger loss. And it is better to be very clear with customers upfront.