Here's a textbook case of how to win and keep a customer: It shows how the combination of relationship building and providing service that goes beyond the call of duty pays off for Wipro. The tale starts in 2003, just a few years after Germany's TUI (for Touristik Union International) AG, the world's largest travel company, was assembled through a series of acquisitions.
Travel arranging is a low-margin business, and TUI was looking for ways to cut costs. It considered using Indian outfits for its call centers and some of its software development. It checked out several companies, including Wipro's BPO operation. TUI executives visited Wipro's call centers in India, but ultimately, they decided against outsourcing such operations. They were concerned about the logistics of serving European customers from halfway around the world.
Even more troubling for Wipro, TUI was dissatisfied with the way the negotiations had gone. Wipro seemed disorganized. Several Wipro executives got involved, and they told inconsistent stories about pricing and timing. "It felt big and hairy and risky," says Jim Mann, a Brit who is TUI's purchasing director and IT manager. "You're moving something a long way away. If it doesn't work, what the hell are you going to do?"
That was the first blow to Wipro's pride. The second came only months later when TUI passed it over and chose a small Indian software services rival, Sonata, to handle programming for its Web sites. TUI had discussed the contract with Wipro for months, but once again, it was put off by inconsistency in the way Wipro executives handled the discussions.
What came next surprised Mann. Premji asked for a meeting and flew to London, where Mann is based, to find out why Wipro had lost out and what it could do better. The two spoke for over an hour in Mann's office. "He came across as absolutely interested in what had gone wrong and what he could do to make it better," says Mann. "You hear people say things like this, and you don't believe it. But he was true to his word."
So Wipro got a third chance, and, this time, didn't blow it. TUI's multiyear technology management contract with another services company was coming to an end, and Mann picked Wipro to handle UK tech operations. Job responsibilities included manning a technical help desk and managing the company's security, servers, and networks. After six months of planning, the switchover came in November 2004.
Not only did the handoff go without a hitch, but Mann was impressed that Wipro people spent so much time learning about TUI's business and its corporate culture so they could fit in. They also brought ideas to TUI about how it could run things better. "We benefit from their intellects," says Mann.
In fact, Wipro even suggested efficiency improvements that seemed contrary to its own interests. On several occasions, it suggested installing software that would reduce the number of Wipro employees required to complete a task. It also came up with the idea of consolidating services for four London offices into one. "Our philosophy is clear. We want to bring in value," says Vivek Sharma, Wipro's senior business development manager for the TUI account. "If you bring in value, you may have a short-term [negative] impact [on your billings]. But in the long view, you'll get benefits from that."
In the end, both companies made out. TUI has harvested a steady steam of productivity improvements. For instance, the average length of a help desk call dropped from 13 minutes to 6 minutes. Meanwhile, it has gradually handed more responsibilities to Wipro, including managing some operations in Germany. To get that contract, Wipro committed to training key technical people to speak German.
In two years, Wipro's annual business with TUI went up by 60 per cent. So TUI's overall tech management costs have gone down even as Wipro's revenues have increased. In early 2006, 60 Wipro employees were working for TUI in Chennai, and 20 sat on site in the United Kingdom and Germany. But those numbers seemed likely to grow rapidly. Mann is eyeing Wipro's new operations in Bucharest, Romania. "We're in every country in Europe, and we feel quite good about handing them more work in the future," he says.
Excerpted from: Bangalore Tiger by Steve Hamm. Price: Rs 299. Reprinted by permission of Tata McGraw Hill Publishing Company Limited. Copyright 2007 by The McGraw-Hill Companies Inc. All rights reserved.
Hamm is a senior writer and a software editor at BusinessWeek. A business journalist since 1985, Hamm has chronicled India's tech industry since 1989.
