Wipro's structural overhaul could boost performance in line with peers

There will be a newly-created role of Chief Growth Officer, who, Delaporte said, “will play a key role in driving large deals and strengthening relationships with hyper-growth partners, besides overseeing marketing, advisor/analyst relationships, sales excellence and sales enablement.”

Industry experts have lauded the move by the new CEO.

“I think any new CEO will want to shake up as what is seen as a lethargic corporate structure that is performing below its par and much lower than the competition, and many CXO level employees who contributed to this dismal performance may have been changed,” said Shriram Subramanian, founder of proxy advisory firm InGovern.

“These organisation changes should hopefully energise Wipro and enhance its performance at least in line with the competition,” he added.

Meanwhile, Peter Bendor-Samuel, CEO at Everest Group said. "Thierry, is dramatically simplify the Wipro organization, removing layers of management and moving the decision making closer to the Geographies and customers. This reorganization is clearly intended to speed decision making and increase accountability at Wipro. I believe that it will enable Wipro to grow faster in each of its Geo’s and likely will have the biggest impact in Europe. I think it also indicates that Wipro with be focusing its attention and resources on the large markets in North America, and Europe and deemphasizing its bets in smaller markets."

He added, "Like wise it appears to be making some strategic choices to focus on Industries where it is already strong and which hold significant promise for further growth, and move away from a model where it chases every opportunity in every industry with the same vigor. It appears that one of the major drivers of this reorganization is to improve accountability while focusing the considerable resources of Wipro into fewer industries and countries."

While Wipro saw a robust September quarter that beat estimates on most counts, its sequential growth, in constant currency terms, of 2 percent was well below what the top three IT companies posted.

TCS saw a 4.8 percent sequential sequential growth in September quarter in constant currency terms. HCL saw sequential growth of 4.5 percent , while Infosys saw a 4 percent jump.

Wipro has been lagging its peers for the last few years, and Delaporte is looking to close the gap.

The new CEO had told CNBC-TV18 during the earnings call after he joined the company that he would look to ‘challenge the status quo’ and would work towards creating a leaner, simpler organisational structure.

Wipro's growth has been largely dependent on the US market, Delaporte said in his letter to employees, adding that the new operating model will help drive growth in non-US markets.

The four Strategic Market Units he identified are Americas 1, Americas 2, Europe and Asia Pacific Middle East Africa (APMEA). While Americas 1 and Americas 2 are organised by sectors, Europe and APMEA are structured by countries.

Americas 1 will include the following sectors - Healthcare & Medical Devices, Consumer Goods & Lifesciences, Retail, Transportation & Services, Comm, Media & Info services, Tech Products & Platforms and LATAM. Americas 2 will include Banking, Citibank, Securities, IB & Insurance, Manufacturing, Hi-tech, Energy & Utilities and Canada. Europe will consist of the following 6 countries/regions – UK and Ireland, Switzerland, Germany, Benelux, Nordics and Southern Europe. APMEA will include 6 countries/regions as well - ANZ, India, Middle East, South East Asia, Japan and Africa. The SMUs in Europe and APMEA will be responsible for all industry sectors in these regions.

The two Global Business Lines: iDEAS (Integrated Digital, Engineering & Application Services) will include the following Service Lines - Domain and Consulting, Applications & Data, Engineering and R&D and Wipro Digital; the second GBL iCORE (Cloud Infrastructure, Digital Operations, Risk & Enterprise Cyber Security Services) will include CIS, DOP and CRS Service Lines.