What Wipro does so well

We hear a lot about startups. Every funding round, acquisition, IPO, merger, is some news. And in the world of startups, consulting firms have settled into a local-maxima: Productized services, which I’ve talked about at length in this newsletter. But what about enterprises? What about the most successful firms serving those enterprises? How do they function, stand out from the crowd, operate and do sales?

So, I went down the rabbit hole to find out about this world that everybody aspires to but is rarely ever talked about. And my first target is Wipro.

I don’t want to bore you with the details of how Wipro started, the company financials and stuff — there’s plenty of material available about that. My intention with this ‘case study’ is to contrast the differences I’ve found between the now-conventional wisdom of productized services and whatever methods the giant consulting firms utilize.

However, I’ll admit I couldn’t find any information about how Wipro landed their first big customer (if there indeed was such a thing) and how it expanded initial sales. I tried contacting a few ex-Wipro folks who worked there circa-1995 when Wipro made the move from being a computer manufacturer to a back-office IT provider, but to no avail — seems they’ve given up on Linkedin. My hypothesis is that, since the company had existed for half a century by that time, it wouldn’t be a stretch to assume that they merely had to reach out to their network to land the initial sales; they only had to show capability and the rest would follow.

Besides, there wasn’t much competition at that time anyway.

Without further ado, here’s what stands out for me:

Content direction

Not once do they mention any particular tech tool in any of their blogs or marketing material. It’s all very ‘industry-focused’; the only time technology is mentioned is in broad strokes like “AI” or “Cloud Computing”.

Their customers aren’t going to be technically involved in any of the projects. They are looking to make the next right technological move so that’s where their content is geared. Wipro's content is supposed to be 'Industry leading with technology', not technology leading and then applying to some industry -- something which a lot of smaller firms get wrong, including us.

Service packaging

It’s a staple in enterprise services from what I can tell but Wipro is a masterclass in packaging services. Consider their most recent AI launch: https://www.wipro.com/ai/ (You’ll have to use VPN if you’re in Pakistan)

It reads:

Wipro ai360 is helping enterprises capitalize on the true value of AI. With AI infused into every part of the ecosystem, we serve as a true orchestrator, helping enterprises soar into the future.

It feels like Wipro ai360 is a something like a product. But here’s what it actually is: https://www.wipro.com/newsroom/press-releases/2023/wipro-launches-wipro-ai360-commits-to-investing-1-billion-in-ai-over-the-next-three-years/

Basically, they integrated AI into all internal processes and tools. It’s all internal. That’s it.

And it makes sense, because if you’re that large, integrating new capabilities in-house is already a strong enough signal that you’d be capable of handling the most complex integrations.

You can see the same trend even early on, circa-2005 when Wipro successfully switched from being mere ‘coders’ to consultants. On providing digital transformation to enterprises:

Digital Maturity Assessment (DMA) framework indicating the transformation readiness of the company, Digital Service Provider (DSP) functional architecture for moving towards next-generation architecture, and a digital transformation journey across the value stream are the core essential aspects of the digital transformation model of Wipro.

An example of it here: https://www.wipro.com/content/dam/nexus/en/industries/communication-service-providers/solutions/wipro-digital-transformation-model.pdf

There’s plenty more on this but it can be summed up as: study your market well and design offerings that educate, not just sell. If your offering whitepaper doesn’t read like a ‘DIY tutorial’, you haven’t thought about your offering deeply enough.

Vertical Integration & Horizontal Expansion

Maybe this point should precede the former, since this thinking is what leads to an effective service packaging.

Wipro segments itself in “Business Verticals” that are aligned with Industry segments. Essentially, a business department is a consequence of working in a particular industry segment. You can imagine mini-agencies hyper-specializing in a particular industry like Finance, Automotive, Retail etc.

The natural consequence of aligning departments on industry verticals instead of technology is that each department can keep track of the long-term view of their respective industry which helps them upsell. More on this later.

Talent investments

Wipro has made enormous investments in the development of its workforce over the decades. And it all started with Vivek Paul joining as Vice Chairman in 1999. Vivek was working as Global Head at General Electric Medical Systems when Wipro Chairman, Azim Premji, decided to bring him on board — GEMS was a Wipro client and that’s how they knew each other. Vivek’s task was to transform Wipro from a mostly manufacturer to a software services company; effectively launch the company from $150M to $Bs.

A thought-provoking excerpt from the excellent case study by George K. Chacko:

Paul took a look at Wipro in 1999 and said: Its mindset has to change. It had to think technology, think invention, think innovation. So, he brought (late) Professor Sumantra Ghoshal from London Business School to revolutionize the way the management people were thinking-from inward-looking to outward-looking. From re-active to pro-active. From products to service.

The last line in particular stands out. The productized services roadmap argues the other way around: the zenith is products; the bottom is services. You rely on services until you can narrow down and build something valuable enough that you can truly scale. But here, in 1999, they’d been thinking the opposite.

The world has changed a lot since then, but I believe a similar opportunity still exists for the developing countries, especially bottom of the barrel ones like Pakistan. A product is a serious gamble, services is at least cash-flow positive even if you don’t manage to scale.

From the same paper:

While Talent Transformation provides the technical skills, Wipro found that many software engineer-turned-consultant lacks the human skills to persuade the customer that the Wipro solution would meet/beat his requirements. Worse still, they lack the broader perspective to empathize with the customer’s higher needs up the value chain: “People development is a strategic function at Wipro,” said Ranjan Acharya., who is one of the seven reporting directly to Chairman Premji. “[Vice Chairman] Vivek Paul spearheaded the initiative of Power Consulting which seeks to transform software engineers into consultants. At our Leadership Institute for senior managers, managers teach managers, the Chairman himself spends half a day per program of his personal time teaching in every leadership program We offer over 100,000 person-days of training a year.

And none of it has changed even in 2023, with initiatives like ai360 being primarily in-house trainings of all staff in AI.

Customer Retention

Perhaps the most important thing Wipro has mastered. In the enterprise services world, retention is key. There are only so many enterprises you can go after, and the sales cycle is protracted (6-24 months) and expensive (usually costing upwards of $million). If your primary bread and butter is enterprises, you have to maximize retention at all costs.

And that’s exactly what Wipro does. In the early days of 1980s, when they were assembling products made by companies like Cisco, Canon, HP etc., and distributing them through a dealer network, and eventually in the 90s when they shifted to services, it wasn’t a complete switch in distribution but merely an ‘upsell’.

Given their vertical integration structure, each business vertical inside Wipro ends up becoming an “educator” for its industry.

“We push the Business Verticals to seriously think of potential developments over the distant horizon,” said Anurag Behar, Vice President, Mission Quality, Innovation, Brand and Corporate Communications. “What are you doing to prepare to meet the challenge tomorrow or the day after? “At the same time, I work with [CTO] Divakaran to prod them from the solution-side. If he can one leg up on the solution to the customer’s future problem, Divakaran can develop a business plan: how long would it take; how many people; which market(s) can use the invention; how long before there will be positive cash flow?”

And that education opens up future cash flow:

A cornerstone of our Vision is to be among the top 10 IT service companies in the world. To achieve this vision, we have pursued a strategy of becoming a comprehensive solutions provider to all the IT needs of our customers… Innovation is necessary to satisfy new customer needs and create new Revenue streams…[W]here we believe that a technology will add value to our customers, we will invest-ahead of time… [The 32,000 strong Wipro team] is best at building a Wipro that wins for its stakeholders. -- Azim Premji, Chairman Wipro.

“Partnering with clients” is a cliche now; it doesn’t mean much when you say those words unless you do it like Wipro. They become one with the client literally and keep a closer eye on the industry trends than their clients; they build capabilities in the upcoming tides ahead of time and when the time is ripe, they upsell and lock-in. The next point is the key to how they manage to do it.

Client Relations

Enterprises are complex entities. A huge part of why enterprise sales take so long is because there are multiple stakeholders to win over. In SMB sales, you just have to win over the CEO or the founder; in enterprises, you have to go through the relevant department, help them champion you to procurement, finances, and whatnot.

And it doesn’t end with the sale. The fact that there are multiple stakeholders to win means that there are going to be some that are against you being there. Maybe your product or service challenges the functioning of that department; maybe you’re just a nuisance. Either way, working with enterprises eventually causes internal friction. And client relations in this market category is about managing the client’s internal frictions.

Wipro has a proven track record in managing the internal change at client organizations. It tries to swim with the customer’s own value system and facilitates a positive change or reform from within. Though engaged as consultant, it still put a great emphasis on getting the things done and ensuring the engagement does result in the desired business change. It encouraged and engaged the customers to evolve their best practices from their own services, their own people and their own culture as Dr Anurag Srivastava pointed out in his take. It was a marked departure from the general perception about consultants who were seen more as the people who will enforce a cultural change.

As Srivastava recalled: “Wipro was quick to realize that a tension develops in client firm’s business value chain, if one tries to paste an external culture onto an organization all in the name of best practices”. When change is imposed in this fashion it leads to staff resentment and stiff resistance. Wipro approach is to use consultants as facilitators who inspire the organization to refine and reform their own culture, acting as catalysts that help the organization evolve a set of best practices which they can own. Seen from this perspective, consultants work to fill the knowledge gaps in client’s intellectual space, rather than attempting to manufacture solutions from scratch.

Adopting the client firms' values as your own while you engage them is the secret ingredient behind the upsell: you can’t really spearhead the way to new frontiers if the client mistrusts you or has track record of friction with you.

Long-Term View

This one goes without saying and is a key fixture of nearly all really successful businesses but bears repeating here anyhow: Wipro is very long-term focused.

Unlike the SMB segment where the next quarter is the end-all, be-all. The world of enterprises works in years, usually decades. Wipro made the move to IT services in the early 1990s and it didn’t materialize until the early 2000s, by which point it moved to consulting which didn’t materialize until 2006-07.

Investing in the right technologies ahead of time, risking being wrong about it, or executing complex internal transformations over years-long horizons requires an appetite for the long-term and a temperament that can resist short-term temptations. Something which is very alien in the SMB world.

Conclusion

In the words of IBM Chairman, Thomas Watson: **

“For IBM to become a great company, it would have to act like a great company long before it became one”.

Since nearly every company aims to become an enterprise someday, it’s worth studying what the end goal looks like. That was my motivation for studying Wipro and I wasn’t wrong. It goes against nearly all of my intuitions that were fine-tuned in the SMB world and social media.

The biggest takeaway for me is that it takes time. A lot of time. But you don’t fill that time with nothingness; you also don’t fill it up with short-term fixtures and over-optimization for the small market segments. Just as it is very easy to go for the big fishes and end up with nothing, it’s also very easy to perpetually remain stuck with catching the small fries. There’s definitely a danger of settling into a local-maxima — how do you detect it; I don’t know for sure yet, but I will study it!

In the coming issues, I will be doing more of these case studies into large services companies — Accenture, IBM, InfoSys, CapGemini, etc. That means the frequency of my newsletter issues may fall but it’s well worth the ‘culture shock’.