Wipro Ltd, India’s third-largest IT services company, has appointed chief operating officer Abidali Neemuchwala as CEO and member of its board.
Neemuchwala will replace TK Kurien, who has been named executive vice chairman. Both appointments are effective February 1.
IIT-Mumbai alumnus Neemuchwala has been a 23-year veteran at Wipro’s bigger rival Tata Consultancy Services. He quit as TCS BPO Services head in March last year to join Wipro and was widely seen as a successor to Kurien, whose five-year term as CEO ends in January.
“In his nine months as the group president and chief operating officer, Abid has effortlessly assimilated into the culture and ethos of Wipro,” Azim Premji, Wipro’s chairman, said in a statement. “The new structure will ensure smooth succession and will build on the solid foundation we have developed to drive superior growth and profitability.”
Premji said the company has been transforming over the past five years into a next-generation technology and consulting company. He added that Kurien, as executive vice chairman, will help Neemuchwala by leveraging his deep relationships with customers and chart out a new technology roadmap for Wipro.
Neemuchwala was widely seen as the top contender to succeed Kurien since he joined Wipro in March 2014 as group president and COO
Kurien will continue to report to Premji and will remain a member of the board until March 31, 2017.
Neemuchwala’s elevation is a departure from Wipro’s traditional approach to top-level appointment. The company typically appoints company veterans to top posts. Kurien had spent a decade with Wipro before taking over as CEO. His predecessors, Girish Paranjpe and Suresh Vaswani, spent longer in the company before becoming joint CEOs. Neemuchwala will just be a year old in Wipro when he takes over.
“An external appointment may be what is needed to shake things up internally, with regard to innovation and initiative. Perhaps Premji looks to Neemuchwala to sprinkle some of the fairy dust from TCS,” said Rachael Stormonth, senior vice president at NelsonHall, a US outsourcing advisory firm.
Not a surprise
The appointment comes at a time when the $7.6-billion Wipro has been striving to step up revenue growth that has lagged industry average for many years. Larger rival Infosys, which is also struggling with sluggish growth, has embarked on a turnaround project under Vishal Sikka, the first non-founder CEO who was roped in mid-2014.
However, Neemuchwala’s appointment as CEO isn’t surprising. He was widely seen as the top contender to succeed Kurien since he joined Wipro in March 2014 as group president and chief operating officer. “The appointment is not a huge surprise. His arrival from TCS in March as COO was perhaps more of a surprise in that he was an external appointment,” said Stormonth.
Neemuchwala is an electronics and communication engineering graduate from NIT, Raipur, and a postgraduate in industrial management from IIT Mumbai. He lives in Dallas, US, and oversees verticals such as global infrastructure services, business application services, BPO and advanced technology solutions.
Kurien, a chartered accountant by profession, joined Wipro in 2001 and succeeded Paranjpe and Vaswani in 2011 following a significant lag in revenue growth vis-à-vis TCS and Infosys. Though Kurien managed to steady the ship, streamline its workforce and control expenditure, Wipro has not yet caught up with the overall IT industry growth.
Wipro’s IT service revenue grew from $5.2 billion in 2010-11 to $7.1 billion in 2014-15, growing at a compound annual rate of 7.65 per cent. The Indian IT services industry grew from $88 billion to $146 billion at a CAGR of 13.49 per cent during the same period.
Wipro has made three acquisitions in 2015-16 – Danish firm DesignIT, Germany’s cellant AG and US-based Viteos – with total investment of around $300 million. Stormonth expects Wipro to make more mid-sized acquisitions in the near future.
Stormonth also added a note of caution. She said that Wipro has continued to trail other top IT service providers in both top-line growth and margin expansion. For the past four-and-a-half years Wipro has struggled to increase the number of client accounts with $20 million, $50 million, $75 million and $100 million revenue potential. “We would expect to see increased investment in sales and marketing, which, as a percentage of revenues, trails TCS and Cognizant, with a renewed focus on account mining,” she said.
