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The Change of Guard at Wipro

Wipro chairman Azim Premji moved with unprecedented aggression on 21st January 2011,removing its two top officials as India's third-largest software exporter tries to stave off challenge from a fast-rising rival while closing a widening gap with market leaders TCS andInfosys.

Premji appointed TK Kurien, a company veteran, as CEO of Wipro's IT division and junked thejoint-CEO model in which the company had been led by Suresh Vaswani and Girish Paranjpe,the sidelined officials. The ouster of the joint CEOs, both company veterans who took over in2007, is an unusual occurrence in corporate India's history where exits tend to be gentle . Wiprotried to soften the blow by claiming that the joint-CEO model was at fault and that the companyneeded a single, more decisive leader, but few in the IT world bought this explanation.

The man whom Wipro’s 65-year-old chairman Azim Hasham Premji has handpicked to help

reinvigorate the company’s 30-year-old IT business has a huge burden of expectations to carry.

He takes charge as the sole CEO after Wipro flirted with the co-CEO structure with Suresh

Vaswani and Girish Paranjpe for four years before dumping it this January. Vaswani andParanjpe will handhold Kurien through the transition period until the end of March 2011, after 

which they will announce their own plans. This time, rumours did not precede the new CEO

announcement, as is usual in the case of Wipro. Hence, the naming of Kurien as a CEO came as

a surprise to many. Premji takes financial performance seriously, and his benchmark is always

the competition. He does not take into account absolute growth rates. So, those close to him were

expecting these changes any time,” says a former colleague who worked closely with the

chairman. “In any case, the joint-CEO model was supposed to have been a stop-gap

arrangement, and could not have lasted beyond this year. So this change would have come in any

case. But the comparatively poor financial performance accelerated the decision.”

Reference

http://articles.economictimes.indiatimes.com/2011-01-22/news/28429479_1_wipro-joint-ceos-joint-ceo-model-vaswani-and-paranjpe

http://www.businessworld.in/bw/2011_01_29_The_Change_Of_Guard_At_Wipro.html

IT industry big picture

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Focused strategy: In the past, IT industry has been large supply-driven. There was a lot of demand and those who were able to keep the delivery engine going were the winners. Thissystem generally emphasized ability to hire and deliver over sales, marketing and companystrategy. However, in an industry with increased competition, that is likely to change andwinners are those who have a razor-sharp focus rather than pursuing all business. HCL and

Cognizant have pursued a tight strategic focus - HCL on service lines and Cognizant on industryverticals - and this has paid off for them. 2011: Watch for more firms to tighten their strategies and get more focused. Bottom-up,consensus-driven business plans will give way to top-down decisive strategies Consultative Approach: Cognizant entering the top 3 and Patni-iGATE combo providinganother $1 billion firm will provide more viable options for clients. This is likely to lead topricing pressure on the incumbent providers. The only two routes to avoid this are (a) non-linear, more automated delivery and (b) consultative solutions 

2011: Watch for investments in non-linear platforms and greater focus on consulting. Sales & Marketing: As we move from a supply-driven phase to one that is more demand drivenin an era of consolidation, brand differentiation and brand premium matter much more. Inaddition, as the market gets tougher, there will be greater emphasis on managing the offeringsportfolio and understanding technology trends - a great opportunity for marketing to play a morestrategic role. 2011: Expect the enlightened few to start investing in a strong brand. The front-runners willbreak away for the tag of “Indian IT” and be seen as global players like IBM and Accenture Outlook:

 2011 is going to be an exciting year for the Indian IT industry. It is probably going to be a goodyear for clients as they will see more choice and hunger than in the recent past. For employeeswith high market value there will be a lot of emphasis on retention, while at the same timemargin pressures will imply lower pay-hikes for those with commodity skills. Firms like Wiprofoster an entrepreneurial spirit within the organization, and in boom years like 2011, you canexpect more of the employees to embrace it and leave to start their own ventures.

Referencehttp://www.paulwriter.com/blogs/item/243-wipro-ceo-change-whats-the-industry-big-picture