In trying to go up the value chain and at a time when IBM has acquired a part of PricewaterhouseCoopers, Indian software major Wipro has made a small but promising beginning in pure play consulting.
The consulting services of Wipro Infotech, the Asia-Pacific and Middle East arm of the IT services business of Wipro set up in 2002, has recorded a revenue of Rs 2 crore (Rs 20 million) in the first quarter of the current financial year.
Extrapolating a Gartner report of 2002 which put the Indian consulting market at $22 million and saw it growing at a CAGR of 13 per cent to reach $40 million by 2005, the consulting business of Wipro Infotech could well cross Rs 10 crore (Rs 100 million) and garner a 10 per cent share of the overall consulting pie in the current year.
Dr Anurag Srivastava, business head of consulting services, explains that this is strictly speaking not a new area for Wipro.
What was being done earlier as part of the company's overall IT services, as it is still being done within Wipro Technologies, is now being run as a separate business in Wipro Infotech so that you can both quantify the value being created and seek to grow it fast.
Aside of the fact that consulting generates more work for the main lines of business of a software services firm (adding 20-40 per cent to realisation), margins in pure play consulting are 25-30 per cent higher than in the regular IT services businesses.
"Otherwise there would be no point in getting into this," explains Dr Srivastava. The group's confidence about its future stem's from the results of a perception survey commissioned by it, which places it in the middle of the top five consulting players in the Indian market -- KPMG, IBM-PwC, Ernst and Young and Deloitte.
Customers already in the bag include Shaw Wallace for business process reengineering, HDFC Bank for process consulting and Ambit Finance for applications consulting.
The group is also looking at the core manufacturing process of a domestic steel major, designing business continuity for a leading Taiwanese semiconductor manufacturer and seeking to improve the sales force productivity of an agri-retailer in Australia through the use of Six Sigma.
For the future it is concentrating on three verticals -- manufacturing, financials and government. The group is part of a central government initiative, which is examining how existing e-governance successes can be replicated in other states. In Andhra Prasesh, it is assessing the infrastructure needed to roll out certain services.
The consulting services group has most effectively built on the existing strengths of Wipro in process and people technology like Six Sigma and PCMM (People Capability Maturity Model).
The group has around 220 consultants and domain experts and also draws upon the skills existing in other parts of Wipro.
"By focusing on people, processes and technology we try to act as change agents for our customers," says Dr Srivastava.