Khozem Merchant has been writing some very interesting articles about the outsourcing of jobs to India. Yesterday he had a lenghty interview with Wipro President Vivek Paul. BusinessWeek recently named Vivek Paul one of its "Best Managers of the Year."
Among the interesting passages:
Mr Paul argues his big US rivals' expensive Indian development centres "offer India to customers as a line-extension" that does not fundamentally alter the economics of their business. Instead, they should be refining their "global delivery models". Indian companies have done so by taking advantage of their large pool of skilled labour, as well as the time differences with their customers (Indian day-time is US night-time) to extend the working day and offer high productivity. "In terms of the global delivery model, I'd say our international competitors are where we were three years ago," he says.
In another three years, Mr. Paul wants to fill the holes in Wipro that have emerged from a growth strategy that has focused on research and development services for say, telecommunications equipment manufacturers - which shrank with the technology downturn - rather than for banks, traditional big spenders on IT.
In the past 18 months, Wipro has made four acquisitions totalling about $150m, although some nasty surprises turned up after it acquired NerveWire, a US company that serves the securities industry. Other integration issues arose over culture, thanks to Wipro's image as an austere word-place that lacks an equity culture and pays modestly.
Mr. Paul was an employee of GE at one point. Merchant reveals what it took to lure Paul away:
It was from GE Medical Systems that Mr Paul's boss, Azim Premji, the white-haired billionaire owner of 84 per cent of Wipro, hired Mr Paul five years ago with an improbably scintillating invitation: "Do you want to make $2m a year with GE or history with Wipro?"