The New Face of Global Competition

In the past three years, Ganesh has worked on high-level projects for Wipro all over the world. He has helped GE Medical Systems roll out a logistics application throughout Southeast Asia. He proposed a plan to consolidate and synchronize security solutions across a British client's e-business applications. For Statoil of Norway, he developed a strategy for transferring legacy system applications onto the Web.

"I want to be on the cutting edge of technology," Ganesh says. The guy is sharp. And hungry. He'll work 18 or 19 hours a day at a customer site. For that, while overseas, he may pull down $7,000 a month. When he's home in Bangalore, his pay is about one-quarter of that -- $21,000 a year. By Indian standards, it's a small fortune.

Ganesh is part of Wipro's wedge. The company is massing a small force of high-level strategists, increasingly focused on specific industries, who can compete -- with anyone -- for any given consulting project. Once Ganesh and his colleagues work their way past a CIO's door, Wipro can play its Trojan horse: offshore outsourcing solutions that dramatically lower clients' expenses.

At that point, your applications developers could find themselves up against Dilis Antony, 30, and her team of four. Antony, who holds the equivalent of a master's degree in computer science, manages a project to build a Web-based customer survey for United Technologies' Otis Elevator Co. division, part of a much broader Web strategy that Wipro is executing for Otis. Antony says that she "wants to grow with Wipro." She has her sights set on bigger management roles. Her programmers average $8,000 a year. She probably doesn't make much more.

Think hard about that. If you are a strategy consultant working for Accenture or EDS in the United States, how do you compete with Ganesh? How does your company compete when Antony's troops can execute Ganesh's solution for perhaps a quarter of the cost of your staff -- and execute just as well?

In America's information economy, we have become comfortable framing our competitive advantage in terms of knowledge and innovation. We justify charging premium prices because we have the best-trained talent delivering top-quality information solutions. That's why panic over the overseas migration of manufacturing jobs in the 1980s was short-lived: For all of the talk of a "hollow economy," we remained masters of white-collar brain work. So what happens if brain work can be done anywhere?

The Strategy: The power of "power consulting"

Well, no, it can't be done anywhere. That would understate the enormity of what Wipro is pulling off. The company has been canny enough to understand that peddling a low-cost service can't lead to sustainable growth and profitability. This is the oldest, harshest lesson of the global economy: If what you do can be done by anyone, there will always be someone willing to do it for less.

Wipro knew that long-term prosperity depended on providing services of increasingly higher value. A decade ago, like dozens of other Indian companies, it supplied technical labor on demand. Then it realized that piecework is fine, but relationships are better. So Wipro created development centers within its offices, each dedicated to a single important customer. The idea: to promote relationships that would create annuity revenue.

Today in Electronic City, Wipro hosts development centers for Hewlett-Packard, GM, and dozens of other huge global companies. Lumber company Weyerhaeuser's three centers -- one in Bangalore, one in Chennai, and one in the United States -- house more than 200 engineers. The engagement began in 1999 with two Wipro employees conducting a modest on-site analysis at Weyerhaeuser's U.S. headquarters. Now Wipro develops, maintains, and supports a broad array of Weyerhaeuser applications from Bangalore.

At the same time, Wipro has embraced quality. In six years, it has trained 7,000 employees in Six Sigma and completed 1,000 quality projects. Six years ago, Fast Company profiled a team at Lockheed-Martin that wrote nearly perfect code ("They Write the Right Stuff," Dec : Jan 1997). The team's claim to fame: It was one of only four outfits in the world to achieve Level 5 certification from the Software Engineering Institute. Wipro has Level 5 certification in three different categories. It's eye-glazing stuff, but an amazing achievement.

Such accomplishments confirmed that Wipro's developers weren't just cheap: They were cheap and very, very good. It was enough to distinguish them from every aspiring dollar-an-hour coder in Malaysia, Russia, and South Africa. But it wasn't enough to allow them to take on the big American firms. To do that, Wipro had to become more like them. "The company has had to let go of the Indian brand and create a global company while maintaining the cost advantage associated with being Indian," says Stephen Lane, research director for IT services at Aberdeen Group.