Wipro Infotech restructures PC business

Indranil chakraborty / Kolkata

After a year of sluggish sales, Wipro Infotech has restructured its personal computer (PC) business. The company reported a profit before interest and tax of Rs 79 crore on revenues of Rs 976 crore for the year ended March 31, 2004. Revenues were up 16 percent with the PC business accounting for roughly Rs 200 crore.

The company’s PC business now has a flat organisation structure, a new after-sales service solution using a call centre as the first layer of contact and a national distributor, Redington (India). It has dismantled the region-based sales structure, and has done away with direct service support to customers and the earlier marketing set-up of business associates backed by its own sales team.

In the last financial year, Wipro Infotech, which focuses on corporate sales, shipped around 67,000 PCs including 1000 notebooks, compared with 65,000 in 2002-03, according to marketing head, Anil Jain. The less than one percent growth of Wipro PC sales in the last year is well below the national growth figure of 22 percent as estimated by IDC (India).

Said Jain, “Last year, the general slowdown in the PC market had resulted in a flat growth in the first two quarters. With more focus on the small and medium enterprises we have been able to register good growth in the subsequent quarters of 2003-04 and the first quarter of the current financial year [2004-05].

In the first quarter, during which Wipro began the restructuring, volume sales of its PCs went up by around 25 per cent, according to Jain. The company has divided the country into three market zones—metro, non-metro and outlocation. Sales personnel from each “zone” will report to a marketing head. Jain said, “The restructuring has made the relationship between the headquarters and the local sales personnel more direct.”

“Since 50-60 per cent of PC sales are in the metros and a sizeable chunk of the rest in non-metros, creation of separate teams for metros and non-metros will give more focus to our sales effort,” he said. A PC market analyst said that Wipro Infotech is sticking to the PC business because of the topline growth that comes from it. “Otherwise, as an integration company it can provide storage, server and networking solutions and support with third-party PC sourcing,” he said.

A Wipro business associate said “Wipro Infotech is not in the volumes game and profits from selling PCs have touched rock bottom. However, the company is expected to continue to be in the PC business because it can provide end-to-end solutions to large corporates.

—The Financial Express