Originally published by HFS Research
Today’s “digital” business models are centered on driving revenues and customer impact using interactive tools and associated analytics. The digital outcome is tied to the business model.
Applications provide the enabler to provide the digital outcome, they do not provide the outcome itself.
Since the early 90s, slick new enterprise applications were the flagship of (what we call today) digital transformation. In the past, the focus was very much to buy the new app first then hope it would drive impact to the business, provided is was implemented effectively. However, much has changed since then; most notably, customer journeys are now a vital part of a broader digital design process. This has shifted the value from IT services firms from simply installing apps to designing the customer experiences that the app can enable.
For this to make sense to most IT leaders, we must see a significant change in the traditional association with applications as a quick digital fix. To do this, we examine how traditional IT services giant Wipro is leading engagements with the boutique digital design firm Designit it acquired in 2015.
In recent years, Wipro dusted off the war chest and went shopping, bringing in digital and design capabilities with the acquisitions of Appirio, Cooper, and Designit. At a recent analyst briefing, we engaged with Wipro Digital executives and clients to understand the value these acquisitions have added to the firm. We also learned more about what Wipro Digital is—and what it isn’t.
Digital isn’t just application development, and IT leaders are often ill-equipped to recognize this
In the past, there has been a tendency to see transformation as an IT conversation—which hasn’t been helped by the technology-fueled narrative pushed by the IT services giants. This has changed significantly as these same firms look to the success of design agencies and either buy or replicate their services to take the digital transformation agenda to a higher-value threshold. To an extent, Wipro has struggled to bring pure-play design engagement stories to the market—often the case for many of the large providers—and it stands to reason that the firm would play to its strengths in the application services space (our recently published Top 10 analysis put the firm in a highly competitive position). However, if the firm is to play a full role in the digital transformation space, particularly if judged in the same terms as the more acquisitive digital giants such as Accenture, it needs to push evidence of its capabilities to current and future clients. And it seems, after two years working with its digital and design acquisitions the firm has finally found the right blend of new services that supplement and leverage its traditional strengths.
Designit leads the engagement, and it brings in the technological wizardry of Wipro
Hearing more from Wipro’s growing digital business, we’re starting to see an inflection point where the firm’s relatively independent design arm is leading engagements and leveraging the mothership’s extensive capabilities to turn a design into reality. Needless to say, there are countless acquisitions of design agencies going wrong because heavy-handed buyers force out talent as they gracelessly replace cool and quirky logos with their own. That doesn’t seem to have happened with Designit; much to Wipro’s strength, the firm’s relative independence is helping it grow an independent design business and supplement and leverage Wipro’s core offerings.
Wipro moves out of the IT suite to blend a growing consulting arm with its historical engineering strength and Designit’s creativity
A design agency plugging for an IT services major isn’t news in itself; either through partnership or acquisition, the results can often be very similar. What appears to be the glue holding these two very different businesses together is Wipro’s growing consulting heft. Senior consulting leaders at the firm are all too eager to acknowledge that the direction of travel is far from the traditional stomping grounds of the IT suite – which makes up the bulk of their customer base – as Wipro executives focuses more on blending the creative brains of Designit with the engineering brawn of Wipro to meet the changing demand for this key customer demographic.
Bottom Line: Wipro is shifting from order taker to challenger in this new territory—but for this to work it must help its clients shift their understanding of digital business models
While this all sounds like Wipro is on solid ground now, it’s often the case with talent heavy service delivery models—particularly one with niche demands such as digital design—that sustaining growth becomes a challenge in paradox to initial success. So, while the blend of growing consulting, design, and traditional IT is working for the firm now, it will need to continue building its credibility and presence in the swiftly changing market. To succeed in the space, the firm must shift from the heritage of taking orders from client CIOs to challenging them with new ways of thinking. While its leadership team is adamant that’s the direction of travel, it’s a tough journey to continue when the cultural heritage of the business remains unchanged. It must drive the conversation with its clients and ensure their perspective of digital evolves beyond traditional IT, to make use of the firms growing design footprint.
