Economic Development

Wipro: From East to West to East

March 06, 2012

Global

March 06, 2012

Global
Our Editors

The Economist Intelligence Unit

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India’s IT services industry has grown rapidly over the past decade

India’s IT services industry has grown rapidly over the past decade, as its firms’ operational footprints have expanded across the entire world. Consider Wipro, one of India’s largest IT services firms with fiscal year 2010-11 (April-March) revenues of US$6.9bn. Wipro’s IT business today employs some 131,000 people in 55 countries.

Wipro’s IT business has delivery centers in ten Indian cities and in more than 20 cities outside of India. These ‘global delivery centres’ generally serve offshore as well as onsite customers. Wipro categorises a few of these centres as ‘strategic delivery centres’, based on either their importance to Wipro from a business perspective or on their strategic location in relation to a customer’s needs.

“Our choice of city to set up a ‘global delivery centre’ depends on a set of well-articulated parameters that determine its suitability,” emphasises Hariprasad Hegde, global head of operations at Wipro. To vet potential investment locations, Wipro uses a seven-point decision matrix, which broadly analyses the availability and cost of human capital, telecommunication infrastructure, the business environment, business conveniences such as hotels, quality of life, security and political stability.

“Talent availability and geographic proximity to major clients is important for global delivery centres,” says Mr Hegde. This approach is reflected in its choice of strategic global delivery centres outside India, in places such as Atlanta (USA), Bucharest (Romania), Cebu (The
Philippines), Chengdu (China), Curitiba (Brazil), and Monterrey (Mexico).

Before investing in a city, Wipro seeks to better understand, among other things, the potential socio-economic and environmental impacts of its actions. It conducts an analysis of the local economy to forecast how its business operations might generate jobs for the local workforce and contribute to creating a supply ecosystem that further enhances local resources and skills.

Wipro also considers the environmental sustainability of potential investments from a local water, bio-diversity, waste generation, energy, transportation and land use perspective. “A 25,000-person global delivery centre can have a fairly significant impact on its immediate social and ecological environment, something Wipro is extremely sensitive to,” Mr Hegde says.

Despite an expanding global presence, “Wipro’s global IT delivery and employment footprint is likely to be relatively weighted in favour of India and Asia in the mid-term as Wipro’s markets here grow and more cities in this region develop,” says Mr Hegde.

Wipro’s IT services business accounted for US$5.2bn of the conglomerate’s total US$6.9bn in revenues in the fiscal year 2010-11.

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