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Wipro Chief Strategy Officer Rishad Premji said IT services companies should have a better communication with the shareholders to ensure smooth execution of growth plans.
He believes IT services companies need to have clear communications on investments for acquisitions to boost growth as the industry is passing through difficult times due to shift towards digital technology from legacy services.
“I think we really give much less credit to the investors. If you are able to communicate very clearly to the investors about the journey and path you are on, they can be patient with you. I don’t worry, we should worry less about the short-term and long-term investments,” said Premji at the Nasscom India Leadership Forum.
Premji, who is the whole time director at the board of India’s third largest IT services provider, has clearly hinted at challenging times for the IT services providers given the technology shift and macroeconomic environment.
“Change in technology is happening faster and it is becoming more and more real and if there is ever a time for the companies in the IT services industry it is now, the uncertainty around US elections, the Brexit you have shareholder activism on top of that. We are on a whole different level of complexities fundamental change is happening in the industry. There is a need for organisations to design themselves to deal with such complexities,” said Premji.
He said Wipro’s organisational flexibility helped the company close the Appirio acquisition deal in four weeks.
Wipro has been quite aggressive in acquisition to build capabilities in digital technologies among its peers like Infosys, TCS. In November last year, the company acquired Appirio for $500 million to enhance its cloud-based service offerings.
While the company makes sure that the stable and dynamic businesses co-exist with a better synchronisation, Premji says, an aggressive merger and acquisition strategy helps it make a perception even if it experiences a bumpy ride. “It requires sustained efforts.”
Wipro’s bold bets on acquisitions is helping it offset the challenges including pricing pressure. “Things we worry most is that an organisation like us see the change happening but cannot make the pivot fast enough. Certainly, there is more price competitiveness, but I still think there is a lot of runway and opportunity how you deliver with automation and how you play a differentiated story will certainly depend on the big bold bets you take,” he added.