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Is Thierry Delaporte the Right Choice As Wipro CEO?

Wipro has named former Capgemini executive Thierry Delaporte as its new Chief Executive Officer and Managing Director, effective July 6th 2020. Delaporte’s appointment is seen as a historic move in Indian IT as he is probably the first non-Indian to head a homegrown IT services major. From that perspective his appointment reflects on the entire IT services sector in the country.

Delaporte replaces Abidali Z. Neemuchwala who resigned on January 31 citing “family commitments” and will relinquish his position on 1 June. Delaporte will be based in Paris and will report to chairman Rishad Premji, who will oversee the day-to-day operations until July 5, as per a company statement.

Read more: Wipro CEO and MD Abidali Z Neemuchwala steps down

Rishad took over as Chairman of Wipro from his father Azim Premji last July and is looking to steer Wipro from a decade-long streak of below-par growth that has lagged peers. Analysts believe, though Delaporte was a surprising choice, it was nonetheless well thought out considering Delaporte’s trove of experience in steering company success.

However, Delaporte joins at a time when Wipro is already underperforming peers. The Covid-19 pandemic has added to the uncertainties. Thierry Delaporte will have to face challenges at multiple levels, cultural and structural as he takes charge as the CEO on July 6, 2020.

Read more: Coronavirus Brings India’s IT Industry to a Standstill

Needless to mention, growth remained a key challenge for Wipro. “In March, as the Covid-19 crisis rapidly deteriorated in key geographies such as Europe, UK, and the US, we saw a cascading impact on our business,” Neemuchwala said at the company’s quarterly report statement.

The Bengaluru-headquartered firm is already seeing instances of budget reductions, cuts in discretionary spend, requests for temporary discounts, pricing pressure, and restructuring of existing spends. “Sectors like retail, hospitality, airlines, energy—especially oil and gas—and auto segment in the manufacturing business are experiencing a more immediate and deeper impact,” he said.

Phil Fersht, CEO and chief analyst, HFS Research, commented in his blog, “Who would have thought… Wipro went for Delaporte,” that the choice could not have been more perfect especially at a time when Wipro is chasing growth.

Albeit Rishad Premji wanted to drive a higher growth trajectory, it did not happen. The company has been growing at 2-3% in the last couple of years, way behind its peers Infosys, TCS and HCL Tech. In FY19, HCL Tech overtook Wipro to become the third-largest IT service company in India.

As Fersht believes, “The Wipro board was clearly determined to bring in an outsider to make some changes to the company leadership team, organizational structure, and culture. The search was extensive, lasting several months, and the pandemic clearly slowed down the whole process. Moving for Delaporte, a dyed-in-the-wool Capgemini man with a strong operations and finance background shows Wipro is keen on playing it safe as the industry goes into a long cycle of volatility as we (eventually) emerge from the Covid crisis and deepening recession.”

At this juncture, to drive growth, he believes, Delaporte has to ring in changes at the organizational level. And this could be an obvious reason to bring a global executive on the Wipro’s openness to accept outside talent.

Until recently, Delaporte was the chief operating officer of Capgemini and a member of its group executive board. During his 25-year career with Capgemini, he held several leadership roles, including that of CEO of the global financial services strategic business unit, and head of all global service lines. He also oversaw Capgemini’s India operations, and led the group’s transformation agenda, conceptualizing and driving strategic programs across various business units.

Interestingly, Wipro’s rival Infosys had also roped in a former Capgemini executive, Salil Parekh to head the company as its CEO.

Analysts also believe Delaporte will be expected to deliver, among others, on the ambitious target of turning Wipro into a $15-billion company with operating margins of 23% by 2020. While the road ahead is rough, it seems that he is more than ready to take on the numerous challenges.

Chirajeet Sengupta, Partner, Everest Group told moneycontrol.com that though most IT firms are globalised in culture, given the nature of the industry and Wipro, there is a gravitational pull towards India. However common strengths between Capgemini and Wipro will help. Both companies are strong in engineering, manufacturing, energy and utilities and SAP and Oracle.

But Sengupta noted that the challenge would be how does one retain the core of an organization and build on that and extend it further. “Thierry, who is respected and well-known in business leadership, has a lot of market influence. With his pedigree and knowledge, he will be able to drive the changes.”

Meanwhile, Deepak M Satwalekar has joined as Wipro’s Board from July 1, for a five-year period, subject to the approval of the shareholders.

He will serve as an Independent Director on the board and will bring a wealth of experience to Wipro having spent over four decades in the financial services industry and as an advisor and Board member of companies from diverse industries, the company said in a statement.

Satwalekar has been the Managing Director of HDFC Ltd and subsequently the Managing Director and CEO of HDFC Standard Life Insurance Co. Ltd. Satwalekar is a recipient of the Distinguished Alumnus Award from the Indian Institute of Technology (IIT), Bombay and currently the Chairman, Board of Governors of the Indian Institute of Management, Indore, the statement said.

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Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at sohini.bagchi@trivone.com