Wipro shifts biz model, to use subcontracting to drive growth

  • Manu P Toms, Hindustan Times, Bangalore
  • Updated: Jan 19, 2015 01:36 IST

In what is a completely new business model for an Indian IT leader, Wipro is preparing for a massive overhaul of its workforce strategy under which a large quantum of work will be farmed out to smaller external companies. Other elements of this strategy are automation of a substantial chunk of work, and a top in-house layer of experts to drive cutting-edge innovation.

“The future of work will not be in large companies, it will be in SMEs and individual people with skill sets. Because knowledge no longer sits in enterprise. The ability to tap into this larger pool of talent and skill set is where our business is going to change,” Wipro CEO TK Kurien told HT.

India’s third-largest software exporter is in the process of building a network of smaller agencies “who will do work for us,” he added.

The initiative will not involve layoffs though direct employment may come down over time. “Whether we will bus thousands of employees to work every day the answer may be different. We will use the extended workforce outside, pretty much like large manufacturing corporations had done, through subcontracting. That is the way service industry is going to change,” he said.

The company has been focussing on automation recently. “Today, we do lot of activities which frankly do not necessarily has to be done by human beings and which can be done in any form or shape by machines,” he said.

Wipro hopes this would allow it to concentrate more on next generation technologies. “What we expect is overall work will move right up the pyramid and it to areas where deeper skills are required using analytics and machine learning. Fundamentally, what will happen is skills will gravitate up, which means, the average wage a person would earn will increase,” he said.

Kurian emphasised that workforce optimisation for Wipro does not equate with headcount reduction. “The total employed headcount will not change. In fact it will go up as indirect employment will increase.”

“Far bigger and far deeper intelligent pool sitting out there,” Kurian said about deploying work to third parties.

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