With many talented, veteran company hands jockeying for the top slot, CapGemini COO Thierry Delaporte didn’t get picked to be the company’s next CEO. Instead, Aiman Ezzat got the job. It will either be the best thing to have happened to Delaporte, or the worst, depending on how the next few years go for him.
Delaporte, a self-touted sailor, apparently decided to seize this opportunity to take a six-month sabbatical; to cross a few oceans in his sailboat before deciding what his next move would be. But instead of taking that journey, he found himself being wooed and ultimately handed the reins of a vessel that, by comparison, is far more sluggish and cumbersome to operate — namely, the CEO-ship of Indian IT Services firm Wipro.
Wipro has historically been one of the big three along with Infosys and Tata Consulting Services, not just in revenue, but in acclaim as well. It has a reputation for integrity and was, till not very long ago, a legitimate member of the holy trinity in Indian IT for almost two decades along with TCS and Infosys.
During the first 15 years of India’s IT story, soaring growth was all these companies saw as they maintained, managed, and developed the IT backbone for much of the world’s companies. It was easy money and largely a labour arbitrage business.
But digital has since ripped a giant hole in that model, enough to probably cause its eventual demise in a few years’ time. The last five years or so has been a mad scramble, with Indian IT ditching the old model, retraining furiously, and getting attuned to the necessity of design thinking.
Some, like Accenture, have blazed an enviable trail for others to follow.
Indian IT, however, has been a little slow to adapt and is only now beginning to fire its cylinders. Amidst this pivotal moment of bold transformation in the industry, Wipro has failed to leave its mark on any one thing. Its previous CEO, Abid Nemucheewala, began pushing the company in the right direction towards the digital realm. The firm also made some savvy buys, such as cloud services firm Appirio and design agency DesignIT. But they too have struggled to make their mark.
One reason for this is company sprawl; numerous silos of the well-entrenched old guard have found it very difficult to eject from the rapidly commoditising, old business of infrastructure maintenance and app development.
They have found it difficult to migrate into a more sophisticated environment that mashes together disparate ways of looking at a problem for a client in a rapidly evolving terrain. To be comfortable in such an arena, a company’s various silos are required to come together as a team and throw themselves at the problem versus stitching solutions across departments.
It comes as no surprise then that Wipro is getting its lunch eaten by the next tier of firms, such as Mindtree and Mphasis. As a result, Wipro’s numbers have been middling and, in fact, borderline appalling. In its most recent financial year, the company couldn’t grow its revenues by more than a paltry 1.6%, while Infosys and TCS managed growth of 8.3% and 4.7%, respectively.
Its new rival, HCL, registered an impressive 15% growth in revenues while also ignominiously pipping Wipro to the 3rd spot to sit behind Infosys.
To appreciate the real damage, you have to look at the company’s client list, which has grown just 7% over the last six years versus Infosys’ astonishing 63% growth over the same period. Considering the mayhem at the organisation caused by the internecine battle between CEO Vishal Sikka and founder Narayana Murthy, this is nothing short of a miracle.
Clearly, something had to be done urgently to stop the hemorrhaging. It probably became apparent to both Azim Premji, founder of Wipro, and his son Rishad, who took over as chairman of the board last year, that the answer was not in India.
The ascending fortunes of rival Cognizant under new CEO Brian Humphries, and Infosys’ almost laughable debacle with erstwhile CEO Vishal Sikka only emphasised that reality. And so Delaporte, a proven leader at CapGemini who has excelled in a bruising industry marked by cut-throat competition, was anointed to lead the organisation.
For sheer experience, you couldn’t ask for someone more well-rounded than Delaporte, who has worked as an internal auditor, sat in senior positions in finance and strategy, headed operations in Latin America, before being appointed as CapGemini’s Group COO.
Since joining Wipro, Delaporte’s focus has been ripping the guts out of the company’s organisational structure and inserting a new one in its place. It was once a 26-unit mess across various geographies and service lines. That has now been slashed to six: Simplicity seems to be Delaporte’s mindset.
This new structure includes four strategic market units that fall under the newly minted role of chief growth officer, who will help drive deals and relationships with clients. It also includes two business lines: Integrated digital, engineering & application services (iDEAS) and iCORE, which includes customer information system (CIS); and Wipro digital operations and platforms (DOP) and cybersecurity and risk.
Can Delaporte pull it off? If he does, it would probably mean he has the acumen to negotiate the power centres that have been nurtured for years. It would also mean his new service delivery model has worked. Yet those are two huge asks — both of which will require flawless execution in so many components to the value chain.
To sum it up, the Delaporte-Wipro marriage seems to be a plum opportunity for two parties to prove important things. Those two things being that Wipro, in its DNA, has always been top tier — it just needed the right person to catalyse it, and that Delaporte is not just the right person to do so, but that his decision to forego a six-month sailing trip was actually worth it.