IT firms should be innovative to survive: Azim Premji

Nov 20:   As India’s top IT giants Infosys, TCS and Wipro have noticed a sharp fall in their profit in the first three quarter results compared to the same period of last year, despite profit depreciation in Indian stock market, the Wipro Chairman Azim Premji on Monday said “Despite many obstacles, the Indian IT sector is growing stronger. But should continue to innovate to overcome challenges and survive in a globally-competitive world.”

While delivering his address at the Freescale Technology Forum in Bangalore, the Wipro’s Chairman has also marked some keynotes regarding the growth of IT sector. He emphasised on innovation in product, technology, research and development, organisational structure, business model and processes.

He quoted as saying “Indian companies should follow an innovative business model and process to remain successful”. He also pointed out how deficiency of innovation could check success via giving an example, “Standard and Poors prepared a list of world’s top 500 companies in 1957. Only 79 of them were alive in 1997 since the rest failed to realise that the world is changing faster.” “Every company should have innovation as the core factor,” advised Premji.

“Innovation is not a boardroom policy or investment. At Wipro, we have institutionalised the spirit of innovation and have defined over 70 innovations in the last two years for targeting to evolve new services and products", he added.

Pointing out the importance of innovation, Premji said, “Innovation was helping Wipro in improving its revenue significantly. Today, projects based on innovation contribute 12 per cent of our revenue. In the next three years, we expect this contribution to reach 20 per cent”.

In the first three quarter results, India’s top three IT firms have jointly shared the loss of 74% of total loss in the Sensex so far in which India’s top IT firm Infosys became the witness of worst erosion in its profit by 28% loss while the top contestants TCS and Wipro sealed the second and third position respectively by dipping 26 and 24 percent correspondingly.

Rupee’s depreciation is also being a strong reason behind the erosion of IT firms’ profit as Indian gigantic companies most often get projects from the overseas and the business deal also finalise in terms of dollar exchange. On the other hand, some US heavyweights also registered dipping as per profit earning due to depreciation of dollar in the global market. The price hike in the crude oil is also being a strong barrier in the way of dollar’s depreciation, as most of the investors prefer to invest in the gold in spite of Dollars.

Wipro is India's third largest computer services provider company that develop software and manage computer networks for customers including General Electric Co, Citigroup Inc and ABN Amro Holding NV.

Forbes, a famous and reputed magazine has listed Azim Premji as India’s fifth richest person after L N Mittal (Steel Tycoon, 1 st), Mukesh Ambani (Reliance Mukesh Dhirubahi Ambani group, 2 nd ), Anil Ambani (Reliance Anil Dhirubhai Ambai group, 3 rd), K P Singh (DLF, 4 th ).

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