As Wipro is preparing itself to take a plunge into the digital area, the company is pursuing an active acquisition strategy in this area to supplement what it is trying to build organically.
The Bengaluru-based company which has launched an independent business unit called 'Wipro Digital' is looking at acquiring company in areas like 'design competency' and 'process utility' to expand its bouquet of services in the digital space. The company is especially looking at geographies like North America and Europe, as the company things, there are companies located in the region who have reached some level of maturity in the digital space, Rajan Kohli, senior VP who will be heading 'Wipro Digital' told Business Standard.
"We will certainly be looking very closely at acquisitions in this particular space. We will also work very closely seriously with the corporate venture capital fund that Wipro has because lots of the investments will go into areas that are closely aligned with technologies that will enable digital transformation for our customers," said Kohli who was previously heading the banking and financial services business at Wipro which is part of the BFSI vertical.
Even though there is no upper limit regarding the quantum of investments Wipro would make in these acquisitions,
Kohli said the prime criteria would be to look for assets which can create an impact in upstream as well as downstream. "In digital space, acquisitions can't be of typically of the size of acquisitions in the IT services space. But as Wipro has always been of the belief that for any acquisition to have substantial impact, has to be bigger than $50 million," he added.
According to Kohli, Wipro Digital would operate as an independent business within Wipro as it has to imbibe a different set of DNA in its culture in order to be able to attract the best talents from start-ups as well as the captive units of technology companies in India. The compensation structure of the business will also be quite different from the rest of the Wipro and would be "quite comparable" with that of the industry.
"For us, it's the impact on the customers, not size of the unit which matters. So the whole people policy, recruitment policy and compensation model will be very different from that of the rest of the company because we have to attract people from the start-ups, technology captives. So we are kind of trying to inculcate the start-up culture to imbibe that speed and agility within the team," Kohli said.
Wipro's decision to have a separate unit for going after opportunities in the digital space closely follows the announcement by its CEO T K Kurien in the second week of this month that Wipro is actually planning to have such a unit.
"The biggest thing we are betting on in the next couple of years is what we call 'digital'. We don't believe we can do it in a traditional manner because the culture in 'digital' is going to be about speed, not how much time one takes to develop something or how much it is going to cost based on the time deployed," Kurien had said during the company's annual analyst meet. "So we are going to have a separate team and separate leadership as it will address a completely different economic buy in a completely different way."
Last week, the company had also announced to make its 'Analytics' business as a new service line to deal with all new generation technologies such as artificial intelligence (AI), machine learning, advanced analytics and big data replacing its Advance Technologies & Solutions service line.
According to Kohli, while Wipro Digital will operate as an independent unit, it would work closely with all the business units and service lines. The unit will have its dedicated front-end sales as well as delivery team.
Initially, Wipro Digital has identified 25 key accounts from its existing list of clientele to engage with for offering digital solutions. In the next phase, Wipro Digital intends to build solutions for clients in areas where it can have high replicability. In his new role, Kohli would report directly to CEO T K Kurien.
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