OCTOBER 25, 2005
DAVID M. UPTON
VIRGINIA A. FULLER
Wipro Technologies: The Factory Model
NS Bala closed his eyes and tried to imagine that familiar, repetitive “ker-chunk ker-chunk” sound that one might expect from a factory environment. Instead, however, he heard the ringing of phones, the tapping of keyboards, and an occasional buzz of conversation. Outside, birds chirped and the sun shone brightly. Though the bucolic grounds of Wipro Technologies in Bangalore, India looked more like a college campus than an industrial park, Bala pictured a factory in his mind. He pictured Wipro’s software products coming off a virtual assembly line with the same quality and efficiency he had witnessed in auto plants employing principles of lean manufacturing.
Wipro Technologies had been incredibly successful in selling its software services to companies around the world in all sectors of business. In fact, Technologies provided 76% of the $1.3 billion in total revenues that its parent, Wipro Limited, earned in 2004. Bala was Vice President of the Manufacturing Solutions vertical within the Enterprise Solutions SBU. His team of software engineers designed systems and applications addressing procurement, vendor development, and production processes for clients around the world in the manufacturing sector.
With at least 50 customers in the Manufacturing vertical, Bala’s team was continually responding to the individual needs of its clients, and Bala himself was constantly thinking about the most effective way to do this. An engineer by training, Bala had studied the principles of lean manufacturing that had been so well publicized by Toyota and others. He wondered if the principles that drove efficiency and quality in Toyota’s automotive plants could be emulated in the knowledgebased business of software development.
A Global Economy
Software services was a fast-growing industry in India in 2005, as more and more companies around the world were choosing to buy customized software systems rather than build them themselves. The opening of India’s economy in the 1990s had allowed companies in the US and Europe, as well as Japan, to discontinue activities in-house that were not cost-effective nor considered part of an organization’s core competency, and import them from elsewhere. Hundreds of thousands of qualified software engineers in India and other developing nations were carrying out software jobs at lower cost than in the client’s home country. This phenomenon brought a swell of new business to Wipro in the new millennium. The export of software and IT services had brought close to $17 ________________________________________________________________________________________________________________ Professor David M. Upton and Research Associate Virginia A. Fuller prepared this case. HBS cases are developed solely as the basis for class discussion. Certain details have been disguised. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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Wipro Technologies: The Factory Model
billion1 in revenues to India in 2004, and had ushered the words outsourcing and offshoring into the global business lexicon.
Outsourcing To outsource work meant that a company would “buy” work...
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