Q. Investment in R&D or product development by Indian IT companies is quite low. Do you think that the Indian companies should raise their investment in those areas for long term growth?
A. India has traditionally been seen as being strong in IT and ITeS services and we have developed a string culture over the past four decades, where employees being billable were a critical criterion for both employees and their enterprise. This mindset needs to make way mostly for nurturing innovation. We have set up Innovation Labs to drive internal and customer focused development and for this we have allocated nearly one percentage of our key talent to focus on innovation for our future. To move to the next level in the IT value chain, Indian companies need to increase the investment levels on R&D for long term growth, as the future growth of Indian IT industry will be driven by innovation. IT companies are increasingly looking inwards and focusing on process benchmarking, enhanced utilisation of infrastructure and talent, increasing productivity and greater customer engagement. What specific initiatives have been taken by your company in this regard?

Patni has undergone a major overhaul driving to an optimal operating model incorporating all aspects of our operating infrastructure during the previous financial year. We already have an excellent technical training program as we are making further investments through a focused talent, leadership development and talent acceleration for rapid growth. We have also focused on four pillars of our growth;

Q. What kind of new trends are emerging in the Indian IT services market? Are there any new kind of verticals which are witnessing traction?

A. The insurance and healthcare space will undergo an interesting growth curve. With the global economy being in a recovery phase and the US healthcare reform would definitely provide window of opportunity for IT companies. For instance, Patni has recently inked a multi-million dollar IT Services & BPO contract with Universal American, a leading health insurance company. As part of the agreement, Patni also acquired CHCS Services, Inc., a wholly owned subsidiary of UAM which is a third party administrator (TPA). This acquisition has created a new business line for Patni as a TPA and we will now grow our global Life and Healthcare Insurance business and enhance our global delivery model. This move will significantly enhance our existing BPO capabilities to deliver end-to-end platform based solutions and TPA services to insurance provider’s back-office transactions. Patni will own the platform, the process as well as the required licenses to operate as a TPA.

Q. Is your firm considering entering the area of cloud computing? If yes, what is your high level roadmap for the same?

A. Yes, we have a very strong cloud strategy in place for different service lines – right from ADM to BPO, which is being well received by organizations looking at driving optimization and increasing efficiencies. Last year, we introduced a series of consulting and software services initiatives designed to help customers accelerate deployment to a cloud environment. The first offering, Patni’s Cloud Acceleration Program (CAP), gives independent service providers and application developers a structured, business-driven approach based on Patni’s proven process and methodologies that take the guesswork out of transitioning to cloudbased solutions. The comprehensive CAP program produces three major components: an applications architecture, an ROI analysis and an IT governance model which address two of the biggest concerns customers have about cloud implementations: ongoing control and security of their enterprise data. The program also features an ecosystem of providers that developers will be able to work with for transition. The integrated approach is run by experts from both applications and infrastructure, allowing for business benefits to be realized at a faster pace. We are also using the cloud internally and have set a deadline of June 2010 to shift all our back office functions to a cloud model.

Q. IT consulting is another upcoming vertical for Indian IT companies. How do you foresee this verticals potential in India?

A. Indian IT companies have historically provided primarily IT implementation services to their clients but the last few years have seen a gradual shift to a more consulting-based role. This not only helps them move up the value chain by providing end-to-end solutions to their clients but also gives them an opportunity to compete with global competitors. Consulting will be an extension to our domain lead phase.

Q. The domestic IT market is rapidly growing. How do you think the small and medium players cater to this market, as the big players/MNCs constitute majority share in the domestic market?

A. The domestic market for IT services is growing at a strong momentum. The global recession made most companies in the IT industry revise their business strategies and reduce dependence on the US and UK markets. The domestic market is increasingly becoming a key area of focus.

We see great potential in the Indian market, especially in sectors like verticals such as banking, financial services, insurance, Government and telecom. Increased government spending in IT such as the Unique ID Project, along with growth incentives for the industry has made the market an important one. India also requires a different structure and approach compared to overseas markets, and as the size of the market opportunity increases, India will become a key part of our future strategy. In terms of services, we are primarily targeting large SI engagements and are currently in the process of aligning with several partners as well bringing some of our global partnerships to India.

Q. Investment in R&D or product development by Indian IT companies is quite low. Do you think that the Indian companies should raise their investment in those areas for long term growth?
A. A. The future of IT industry like most others lies in innovation and R&D. Indian companies do not lead in R&D; with the exception of several home grown products within the IT industry like core banking and healthcare. At Wipro we have developed a HIS product of our own which is now available on a Cloud model. The focus on overall R&D may seem low; however this focus is poised to grow as Indian IT players address critical needs of customers. In order to protect their turf and diversify to high end services & consulting, Indian IT companies must invest in R&D. There are plenty of opportunities for innovation in process and delivery, business model and frameworks powered by IT. India with its demographics also offers us a unique market to innovate for scale and rapid roll outs which can then be taken to global markets.

Q. IT companies are increasingly looking inwards and focusing on process benchmarking, enhanced utilisation of infrastructure and talent, increasing productivity and greater customer engagement. What specific initiatives have been taken by your company in this regard?

A. Over the years, Wipro has been at the forefront of delivery model innovations. This journey started over a decade ago with the ODC model that enabled our clients to outsource their IT requirements on a large scale in a secure manner. More recently, we have been offering Managed services, that allow our clients to reduce their operational expenses by outsourcing Application and Infrastructure Management and govern the transactions through Service Level Agreements (SLAs). We realize that for the continuity of our profitable growth, the next level of innovation must not only drive up operational efficiencies significantly but also enable us to integrate our work more closely with (and to that extent drive) client business outcomes. To ensure that our services are aligned to address changing market dynamics and evolving needs of our clients, while at the same time, allowing us to deliver services most efficiently, Wipro has come up with a next generation delivery model

Flex Delivery model is a multi-tenanted delivery model comprising of a pre-defined, standardized and scalable set of services that, over time, can be delivered virtually ‘on-demand’ to meet the changing business needs of our external and internal customers

At the heart of Flex Delivery is the ability to leverage economies of scale to carry out similar type of work for multiple clients by re-organizing and sharing our work force, processes and infrastructure assets in a manner that maximizes our ability to address demand while meeting expected levels of quality. It allows for flexibility in terms of efficiently managing changes in staffing levels, infrastructure utilization, and work schedules in near real time to handle peaks and troughs in demand. We will be able to rapidly ramp up, up skill and cross-skill staff as needed without being bogged down by constraints like reporting relationships and project boundaries

Q. Shared Services, a delivery model is fast gaining popularity. What kind of services do you foresee Indian IT companies to be offering under this business model?

A. Shared Services, a well recognised term widely used across companies is mostly done as a means of consolidation of the non-core business functions to improve efficiencies. IT, being one of the cost centers, is also being done on shared model in medium to large organisations that are spread across geographies having multiple business units.

The future development of shared services concept most likely be on the further growth of this service. More processes will be incorporated into SSCs (Shared Services Centres). Indian IT companies can exploit the Global Shared Services Model; consolidate organisations’ internal service operations into mega-service centres. Indian IT companies who are strong players in the BFSI space have begun to use Shared Services to increase back office efficiencies in retail processes of banks.

Government bodies are also using Shared Services as vendors are provide government bodies with e-government portal solutions that helps provide a single point of access to public services. Another service gaining popularity is HR Shared Services which allows a company to sustain a consistent set of HR practices across an enterprise.

Q. Is your firm considering entering the area of cloud computing? If yes, what is your high level roadmap for the same?

A. Wipro’s vision is to continue its innovation through cloud computing, which accentuates our commitment to help customers address the exacting demands of today’s unpredictable environment. Wipro’s cloud computing services road map focuses on offering IT solutions to address customer requirements on a pay-per-use model, with dynamic infrastructure provisioning capabilities. These services are provided from Wipro’s Tier 3 data centres which are state-of-the-art centres with high availability IT infrastructure commissioned for cloud computing. The entire infrastructure is managed and monitored round the clock by Wipro’s remote delivery center, GSMC, which is a world class delivery center with high levels of automation. Both, the Data Centre as well as GSMC have the highest levels of relevant industry standard certifications.

Q. IT consulting is another upcoming vertical for Indian IT companies. How do you foresee this verticals’ potential in India?

A. The need for business and IT process maturity will increase as Indian IT companies start operating in global markets. While competing with the best, their cost structures need to be the best in class as well. We see this as a huge opportunity for our consulting practice. Wipro consulting services, the business and IT consulting arm of Wipro has been growing much faster than the average consulting market growth and combined with our traditional IT and BPO services, it is a huge differentiator for us in transformational engagements.

Consulting also helps in bringing additional revenue streams and provides better insight into the customers business from a strategy perspective. We see renewed interest across verticals like financial services, telecom and government to engage consultants with specific output based pricing which works well for mature services providers like us.

Q. The domestic IT market is rapidly growing. How do you think the small and medium players cater to this market, as the big players/MNCs constitute majority share in the domestic market?

A. With the enterprise segment becoming more competitive and crowded, it makes sense to venture into the small and medium business (SMB) space which offers abundant opportunities. We realize that the SMB segment is price sensitive and demonstrating return on investment to them on IT investments is a challenge. In order to address this issue, we as a company have created solutions catering exclusively to the SMB segment on the cloud computing model.