As the Indian economy grows, one of the key challenges will be how our companies manage to transition from the current service oriented
model towards the product or developmental
model. Basically, we don't just manage testing, maintenance and low-level development, but take the lead in innovation and the design of next generation services and products.Azim Premji
[fact: Premji quit during his final semester at Stanford to take over Wipro at age 21, sometime during the 1960's. He came back after 35 years, presented his dissertation and got his degree in the late 90's] and Ravi Aron
[Assistant Professor of Operations and Information Management at Wharton, UPenn]
are having a fascinating conversation, where Premji reveals some of the key strategic goals of Wipro and what his thoughts are on the future. His take is important and illustrative, as many of the challenges Wipro faces are equally applicable to Infosys, TCS, CTS and the others.
"...Moreover, the business we do now is evolving to models where we take turnkey responsibility for deliverables such as the design of end products -- next generation products. We don't just make subsystems for customers or work as part of a project team. We are also trying to build similar skills in some of our other businesses. We use the competencies developed in practices like technology infrastructure as well as in enterprise platform implementation to differentiate ourselves from others.
...Turnkey projects allow us to set Wipro apart because very few companies have the depth of knowledge to be able to tackle such work, whereas in projects such as billing software, we are exposed to much wider competition. Another thing that makes us unique is that we started our company designing hardware for the Indian market after imports were banned in 1980. That is how we built the competency platform which we transitioned into serving the global customer.
...You don't demolish a cash-cow business. You just simultaneously try to build the business of tomorrow, which really differentiates you.
...The mundane business is also extremely profitable. It has a tremendous annuity value, and you don't ignore businesses like that. For example, maintenance of software and hardware are tremendous annuity businesses. If you build strong efficiencies into execution, they make very good margins. It is like a yin-and-yang situation: How do you build these strong annuity businesses and at the same time build other businesses that will establish certain differentiators in the marketplace, so that your image as a partner takes on a different dimension? That is the question..."
You can directly link to the whole interview here
. This is through Knowledge@Wharton
, the Wharton school's online and free business journal.
What do you think of this interview? More to follow.