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The Muse

April 05, 2006

Premji on Wipro's Future

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.

Some excerpts:

"...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.

17 Comments:

  • Interesting one... one fact is that.. wipro has its development based on seasoned experience... they were one of the pioneers in the IT industry in India, willing to "change" with the needs... this is why wipro is, what it is today...

    By Blogger prosaicblabber, at 9:44 PM  

  • well! damm , i am also subscribed to the K@W , but somehow i missed this issue. interesting article here. now i realise y turnkey is important.. never realised its importance when my dad insisted.. can u tell me which issue u got this?

    first time here.. clean one u got! kudos! .

    i poped here via many blogs, i will really appreciate if u cld leave a word in my blogspot, sorry if i am asking too much!

    By Blogger raz, at 12:06 PM  

  • Hi Ram:

    Nice post. I have always worried about how India is just a back office. We keep saying that India rising etc, but till we do our own research and development, we will all be still dependent on some super power for our jobs. I am glad that thought is given into such issues and how more resource and time is being spent on creating innovations. I hope soon India emerges from being a back office to a nation of knowledge and resources.

    By Blogger Sattvic, at 8:07 PM  

  • Nice interview. And most industries are switching gears from service to product development and this interview reassures it.

    I have always been asking myself what are the products India have produced that have reached global levels. Can we name atleast 5?

    By Blogger NaiKutti, at 8:48 PM  

  • sorry for the aside comment here: Just saw your side-bar! Liked the categorization of links! Just thought would let you know :-)...

    By Blogger NaiKutti, at 8:49 PM  

  • Raz - Thanks and glad you dropped by - make your visits more frequent!. Appa enna sonnalum ketkanum! ;)

    BTW, from a fast run through of your blog I get the impression you are running a business. If I am correct, keep me/us posted on how you're overcoming your day-day business challenges. We can all learn from you!

    Yes Sattvic - it is indeed heartening to see the winds of change starting to blow. I hope it builds into a full fledged storm. As regards the emergence of India, its absolutely fascinating to me how the change is occuring before our very eyes! How lucky we are!

    Hey Karthik - interesting question you bring up. Let me dig up some info, and see if I can come up with some purely Indian products that have contributed something worthwhile to the world. And glad you liked the site categorization - positive reinforcement always makes me feel good ;)

    By Blogger Ram, at 9:21 PM  

  • Hi,
    Tht was a very informative and interesting post. I really thot both ram's are one and the same and hence didnt visit ur page...

    By Blogger Ponnarasi Kothandaraman, at 4:55 AM  

  • Hi Ponnarasi, thanks - glad you liked the post! And very glad you stopped by.

    Ram

    By Blogger Ram, at 2:11 PM  

  • Very true. It is the way to go and grow. Great interview.

    And the fact about Premji going back after 30 years to present his dissertation and getting a degree shows the character of the man.

    BTW, nice blog.

    By Blogger Alexis Leon, at 9:01 PM  

  • Hi Alexis...yes, I was impressed by Premji as well. All to often we read only about his wealth, it is refreshing to learn about the character of the person too.

    Glad you liked the blog...appreciated it.

    Ram

    By Blogger Ram, at 11:08 PM  

  • management principles never fail to amaze me..it gives you such a good take on life itself.

    thanks for stopping by.

    By Blogger Mind Curry, at 2:07 AM  

  • wow!so mr.premji is more different than the person I perceived him to be.
    far out!nice take on stuff..will come back for more on this
    hope you enjoyin the weekend
    adioss:)

    By Blogger Maya Cassis, at 5:41 AM  

  • Well said Mind Curry, I'm fascinated by those issues too. Thanks.

    I'm chilling out Maya - at home sleeping or reading...what more can one ask for :)
    Thanks - catch you later.

    Ram

    By Blogger Ram, at 11:49 AM  

  • That was a nice post Ram. I've always liked Premji!A man of few words , he knows what to say & when.The more you get to know him the more you end up respecting him.I enjoyed the interview! Thanx!

    Agree with Karthik,liked the categorization of links in your side bar.

    Rashmi.

    By Blogger RandomThoughts, at 12:35 AM  

  • hey !

    thanx for stopping by ...

    i know Wipro has a good DSP Codec team .. but the VLSI group is still in the nascent stage.

    There work base might be good , but many of my friends there are a disgruntled lot ...

    By Blogger ~*. D E E P A .* ~, at 9:50 PM  

  • ur split-up of links is very precise and nice

    By Blogger ~*. D E E P A .* ~, at 9:51 PM  

  • Hi Rashmi - thanks. And glad you liked the design.

    Hey Deepa - thanks for dropping in - I know some people in the DSP team, and have heard good things about it...disgruntled? that's a very easy way to put it ;). Thanks!

    By Blogger Ram, at 11:21 PM  

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