The journey to market prominence is a steep one for Wipro Ltd., according to Dallas-based Everest Group CEO, Peter Bendor-Samuel. Despite being a key player in the global tech arena, the Bengaluru-based firm finds itself lagging behind its competitors. In an interview with The Hindu, Bendor-Samuel pointed out that Wipro’s decades-long strategy of positioning itself as a low-cost provider has seen it lose pace compared to its peers, who have managed to maintain a more balanced approach, with an emphasis on creating value.
For nearly two decades, Wipro’s market position has seen a gradual decline. “Wipro has had a slowly deteriorating market position for almost 20 years,” Mr. Samuel remarked. The company’s heavy focus on low-cost services came with a significant trade-off – it was at the cost of developing the capabilities and assets that deliver true value to clients.
However, Wipro’s trajectory seemed poised for change under the leadership of its ex-CEO, Frenchman Thierry Delaporte. Though his tenure was cut short, resigning a year before his five-year contract concluded, he set in motion a transformational rebalance. Delaporte steered the company away from cost-centricity and towards value creation. “To summarise, at this time Wipro does not successfully compete in the value-added part of the market. Unfortunately, being too focused on the cost-saving part means that it is more difficult for it to grow. To their credit they are undergoing a transformation and putting significant investment into new capabilities. But, there is still a long way to go,” he elaborated.
With Delaporte’s departure, it falls upon Srinivas Pallia, who stepped into the role on April 6, to carry forth this transformation. According to Mr. Samuel, Pallia has his work cut out for him – not only must he continue elevating the firm’s value-based service offerings but also restore Wipro to robust performance levels. Facing him is the daunting challenge posed by the current unfavorable tech and tech services market.
Thankfully for the new leader, the investment community may grant him a grace period of at least a year. Optimistically, Bendor-Samuel anticipates that by then the macro environment will likely experience a positive shift. Looking ahead, Pallia’s long-term mission is clear: to continue the transformation Delaporte initiated. This includes adding fresh talent, acquiring new capabilities, and maintaining a lean organizational focus.
The road ahead for Wipro is by no means an easy one, as signified by Bendor-Samuel’s analysis. The company’s makeover requires not just a repositioning in the marketplace but also extensive market investments stretching across several years. During this period, profit margins may well rest below industry averages until such a transformation reaches completion.
As Wipro strives to redefine itself within an evolving tech landscape, the stakes are high, and the investments substantial. The company’s willingness to pivot and adapt, scaling beyond its traditional cost-focused model to emerge as a leader in the new and changed marketplace, will be pivotal to its future success. While the changeover may prove expensive and demanding, the pursuit of value over cost could very well redefine Wipro’s standing within the global tech market, forging a sustainable path for the future.
