THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT
NEW DELHI THESIS ON “GAP ANALYSIS AT WIPRO CUSTOMER SUPPORT DEPARTMENT”
SUBMITTED TO: PROF. SUMANTA SHARMA PROF. ALPI JAIN
UNDER THE GUIDANCE OF: MR. TANVEER SINGH
SUBMITTED BY:
TEJINDER SINGH ALUMNI ID NO.: DF79-M-0955 BATCH: FW 07-09
The Indian Institute Of Planning And Management, New Delhi
Batch: FW 07-09 2
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ACKNOWLEDGEMENT
It is not until you undertake a project like this one that you realize how massive the effort it really is, or how much you must rely upon the selfless efforts and goodwill of others. I take the privilege of offering my deepest sense of gratitude to Mr. Tanveer Singh, Regional Sales Manager, WIPRO India Limited, Gurgaon for his valuable inspiration and guidance during the thesis. He has taken keen interest and has continuously supervised this project. He has been a source of inspiration to me. He has helped me acquire some of the managerial skills, which helps one survive in the corporate world. I am highly obliged to Mr. Amrish Mahajan, Mr. Ronendro Singh, Ms. Shivangi Mishra, Ms. Vineeta, Ms Gagan, Mr. Saurabh Sen Gupta, Mr. Shankar and Mr. Ajay for their guidance, technical support and co-operation during my thesis.
Tejinder Singh
Batch: FW 07-09 3
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
TABLE OF CONTENTS
CONTENTS
1. Letter of Transmittal 2. Certificate 3. Acknowledgment 4. Executive Summary 5. Project Title & Scope 6. Phase I A) Introduction B) Position of WIPRO in PC Value Chain Model C) WIPRO Corporate Profile D) Product Line of WIPRO India E) Time Line F) WIPRO Support Business Model G) Spare Logistics Support H) WIPRO Partner Network I) Stocking Locations J) Warranty Support K) Skill Enhancement L) Major Account Program M) WIPRO Service Offerings N) Sales Funnel Process 7. Phase II A) Task Involved (i) Discussion with Decision Maker (ii) Discussion with Industry Expert 64 65 14 18 19 21 24 25 30 32 35 37 41 43 44 62
PAGE NO.
06 07 08 09 12
Batch: FW 07-09 4
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
(iii) Secondary Data Analysis B) Environmental Context of the problem (i) Past Information & Forecast (ii) Resources & Constraints (iii) Objective (iv) Buyer Behavior (v) Legal Environment (vi) Economic Environment (vii) Marketing & Technical Skills C) Problem Definition (i) Management Decision Problem (ii) Marketing Research Problem D) Approach to the Problem (i) Theoretical Foundations (ii) Research Questions & their Hypothesis E) Research Design (i) Type of Research Design (ii) Scope of the Study (iii) Target Population (iv) Primary sources of Data (v) Secondary Sources (vi) Sampling Technique (vii) Sample Size (viii) Questionnaire Design (ix) Scaling Techniques F) Data Analysis (i) Methodology (ii) Plan of Data Analysis G) Results (i) Observations
66
70 70 71 71 72 72 74 75 75 76 80 81 81 81 81 82 83 83 83 84 85 86 89
Batch: FW 07-09 5
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
(ii) Gap Areas (iii) Detailed SWOT Analysis (iv) Analytical Hierarchical Process Analysis H) Limitations & Caveats I) Conclusions & Recommendations J) Annexure (i) Questionnaire for ASPs (ii) Questionnaire for Resellers (iii) ASPs List
8.
94 98 100 108 109 115 119 121 124 156
Phase III – Marketing Plan 2009
9. References
Batch: FW 07-09 6
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
LIST OF FIGURES
FIGURE NO.
1) Fig. 1.1 2) Fig. 1.2 3) Fig. 1.3 4) Fig. 1.4 5) Fig. 1.5 6) Fig. 1.6 7) Fig. 1.7 8) Fig. 1.8 9) Fig. 1.9 10) Fig. 2.1 11) Fig. 2.2 12) Fig. 2.3 13) Fig. 2.4 14) Fig. 2.5 15) Fig. 2.6 16) Fig. 2.7 17) Fig. 2.8 18) Fig. 2.9 19) Fig. 2.10 20) Fig. 2.11 21) Fig. 2.12 22) Fig. 2.13 23) Fig. 2.14 24) Fig. 2.15 25) Fig. 2.16 26) Fig. 2.17 27) Fig. 2.18 28) Fig. 2.19 29) Fig. 3.1 30) Fig. 3.2 31) Fig. 3.3 32) Fig. 3.4
Batch: FW 07-09 7
TOPIC
PC Industry Value Added Curve Position of WIPRO in PC Value Chain Model Pan WIPRO Group WIPRO Support Model RMA Procedure WIPRO Service Offerings (Existing) Comparison of STEP Vs Standard Warranty Price Structure Sales Funnel Economic Projections for India IT Growth rate in 2005 across geographies AHP Technique Hierarchy diagram Awareness Levels for Services Popularity of WIPRO services stream Competitive Position of WIPRO vis-à-vis it’s major competitors ASP Customer Profile Base for Desktops ASP Customer Profile Base for Laptops ASP Customer Profile Base for Servers ASP Customer Profile Base for Storage ASP Customer Profile Base for Peripherals ASP Customer Profile Base for the whole product line Output of ASP Technique Pair wise Comparison Data Gradient Sensitivity Graph; Strength in Service Distributors Gradient Sensitivity Graph; Service Variety Head to Head Weighted Head Comparison Hierarchy Diagram for Best Service Hierarchy Diagram for ASP Selection Economic Projections WIPRO Services Model WIPRO Support Model Margin-Return Matrix
Alumni ID No.: DF79-M-0955
PAGE NO.
15 18 20 25 31 44 45 58 62 73 73 87 89 90 90 91 91 92 92 92 93 101 101 102 103 104 105 106 127 137 140 152
The Indian Institute Of Planning And Management, New Delhi
33) Fig. 3.5
Competitor Matrix
153
LIST OF TABLES
TABLE NO.
1) Table 1.1 2) Table 1.2 3) Table 1.3 4) Table 1.4 5) Table 1.5 6) Table 1.6
TOPIC
Warranty Pay-out Matrix Definition of Desktops & Servers Warranty Matrix Training & Development Schedule Service Level in FMS – first level calls
PAGE NO.
28 29 37 41 50 50
Service Level in FMS – second level calls
Batch: FW 07-09 8
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
7) Table 2.1 8) Table 2.2 9) Table 2.3 10) Table 2.4 11) Table 2.5 12) Table 3.1 13) Table 3.2 14) Table 3.3 15) Table 3.4 16) Table 3.5
India Based IT service network Models IT Service Firms in India WIPRO service revenue figures for 2004-05 Popularity of WIPRO services Observations Growth Areas in 2009 Competitor Analysis of Services Service Revenue Figures Port-Folio Matrix SWOT Analysis table
67 68 70 89 93 130 135 141 142 144
ABSTRACT
The major work in this thesis has been done with a view of finding out gap areas of existing service revenue initiatives of WIPRO India and finally to give suggestions and strategies to address the same. The summer internship consisted of 2 months from August, 2009 till October 2009. During the course of my thesis at WIPRO India; I have gained valuable insights into the IT Services sector and more particularly how WIPRO India operates in this domain. I was given the opportunity to study their operations in detail and finally apply my newly gained knowledge in devising various strategies to increase the service revenue for WIPRO Ltd.
Batch: FW 07-09 9
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
I was given the opportunity to interact with WIPRO’s authorized service providers (ASPs) and WIPRO resellers. This was important because WIPRO has an indirect mode of operations for disbursing its IT services in India. The ASPs were the main interface of WIPRO with its customers and also prospective customers. Also the ASPs are an important source of market intelligence and valuable data on WIPRO’s major competitors can be gained from them. Based on this service model; I applied “Agency Theory” in the theoretical framework of my research to find out gap areas. Agency theory explains how to best organize relationships in which one party (the principal) determines the work, which another party (the agent) undertakes. The theory argues that under conditions of incomplete information and uncertainty, which characterize most business settings, two agency problems arise: adverse selection and moral hazard. Then in the next phase of my research I developed questionnaires; and duly got them filled from many of the ASPs in the Delhi region and also WIPRO resellers in the Delhi region.
In analyzing the results, I also made use of a mathematical modeling technique called “Analytical Hierarchical Process” (AHP). This was used to develop a model by which WIPRO service initiatives could be ranked in real time against its major competitors based on certain decision criteria. AHP was implemented on Expert Choice-11 software. Finally based on my research work and identifying the gap areas, I made a Marketing Plan for WIPRO Services for 2009. The marketing plan was based on several marketing tools like Multiple Factor portfolio matrix, SWOT Analysis and suitable strategies were formulated.
Batch: FW 07-09 10
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SYNOPSIS
DETAILS OF THE STUDENT Name: Tejinder Singh Batch: Fall Winter 2007-2009 Specialization: HR & Marketing Phone No: 9779784816 Email ID: [email protected]
Batch: FW 07-09 11
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
DESIRED AREA OF RESEARCH: MARKETING PLAN FOR CUSTOMER SUPPORT (MARKETING) TITLE OF THE THESIS Finding out the gap areas in existing initiatives of WIPRO Customer Support department and suggest marketing plans thereof. RESEARCH OBJECTIVE PRIMARY OBJECTIVE 1. Background study of the operation of WIPRO Customer Support Department. Detail study of the existing service revenue initiatives. Finding out the gap areas in existing initiatives and suggest sales & marketing plans thereof. SECONDARY OBJECTIVE 2. Study India’s service revenue market and suggest opportunities for Wipro along with detailed sales and marketing plan. 3. Sales call, lead generation and closure.
A. METHODOLOGY Step I The questionnaire is framed for Authorized Service Providers (ASPs) so as to extract data on the following parameters: ?
Visibility: - To check the visibility of WIPRO. As a service providing organization in the field of IT products & Services in India.
Batch: FW 07-09 12
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Market Demand: - To gauge the market demands for various WIPRO Service offerings. Identification of new service offerings: - To get valuable inputs from the ASPs so as to identify new areas of opportunities for WIPRO. To position its service offerings. Clarity: - To check the level of clarity of the ASPs in disbursing service offerings from WIPRO. Brand Image: - To check the brand image of WIPRO. As a service organization. Range of service offerings vis-à-vis its competitors: - To have an idea as to how WIPRO’s Service offerings fare vis-à-vis its major competitors in India. Awareness: - To gauge the overall awareness and understanding of WIPRO’s ASPs in terms of current service offerings from WIPRO. Level of formalization in Selling Services: - To have an idea as to how systematic the ASPs were when it came to selling the various service offerings from WIPRO. Achievement of Sales Target: - To check how the ASPs were achieving their sales targets if or any targets given to them from WIPRO. Or made by them.
?
?
?
?
?
?
?
Step II After the questionnaires for the ASPs and the Resellers were finalized, I would start taking appointments followed by the daily visits to the ASPs and the Resellers to obtain the valuable input regarding the various loopholes (if any) in the service revenue area to achieve maximum returns from this area. Step III
Batch: FW 07-09 13
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
After all the questionnaires would be complete, I would be left with both quantitative and qualitative data. For analyzing the quantitative data, I would use graphs and pie charts to make out important inferences. The qualitative data which I would have in terms of open ended questions would pose a unique challenge for me as to should I quantify it. To overcome this problem I would use Analytical Hierarchical Process Technique (AHP). Consequently the AHP technique would be used to come out with valuable suggestions to address the gap areas identified by the research. SCOPE OF THE STUDY
•
The study would be conducted for India, New Delhi (covering 11 Authorized Service Providers and 16 Resellers of WIPRO).
•
The Service would be from a Known brand (i.e. services from WIPRO). Time Scope Mid-April to Mid-July
•
INTRODUCTION TO THE AREA OF RESEARCH IT Services is a fast growing business in India these days. Due to the “Internet boom” and high growth of PC’s in the Indian market has driven this sector for the last decade now. Currently there are a large number of players in this sector ranging from large MNC’s like IBM, Wipro, and HP-Compaq to Indian Software & Service majors like Wipro, Infosys etc. Same is the story for the plethora of IT services currently
Batch: FW 07-09 14
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
being offered by these companies ranging from Annual Maintenance Contracts (AMC), warranty services, end to end solutions like Facility Management solutions etc. Also in today’s business environment of cut throat competition IT Services become an important differentiation tool and thus developing core competencies in the IT Sector. The major work in this thesis has been done with a view of finding out gap areas of existing service revenue initiatives of WIPRO and finally to give suggestions and strategies to address the same. During the course of my thesis at WIPRO; I have gained valuable insights into the IT Services sector and more particularly how WIPRO operates in this domain. I was given the opportunity to study their operations in detail and finally apply my newly gained knowledge in devising various strategies to increase the service revenue for WIPRO.
DETAILS OF THE EXTERNAL GUIDE Name: Tanveer Singh Designation: Regional Sales Manager
Batch: FW 07-09 15
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
PHASE I
Background study of WIPRO Customer Support Department
INTRODUCTION
UNDERSTANDING WIPRO
Wipro Infotech is the leading strategic IT partner for companies across India, the Middle East and Asia-Pacific - offering integrated IT solutions. We plan, deploy, sustain and maintain your IT lifecycle through our total outsourcing, consulting services, business solutions and professional services. Wipro Infotech helps you drive momentum in your organisation - no matter what domain you are in.
Batch: FW 07-09 16
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Backed by our strong quality processes and rich experience managing global clients across various business verticals, we align IT strategies to your business goals. Along with our best of breed technology partners, Wipro Infotech also helps you with your hardware and IT infrastructure needs. Wipro Infotech is a part of USD 5 billion Wipro Limited (NYSE:WIT) with a market capitalization of USD 24 billion. The various accreditations that we have achieved for every service we offer reflect our commitment towards quality assurance. Wipro Infotech was the first global software company to achieve Level 5 SEICMM, the world's first IT company to achieve Six Sigma, as well as the world's first company to attain Level 5 PCMM. Currently, our presence extends to 9 regional offices in India besides offices in the KSA, UAE, Taiwan, Malaysia, Singapore, Australia and other regions in Asia-Pacific and the Middle East. WIPRO is one of the pioneers in the Indian IT market, with its origins in 1976. For over quarter of a century, we have developed and implemented solutions for multiple market segments, across a range of technologies in India. We have been in the forefront in introducing new technologies and solutions.
Research & Development Wipro annually invests approximately 5% of its revenue on IT R&D, and employs more than 1,000 engineers and scientists. To encourage innovations, they have established an institutional patent application procedure and invention award system, which has resulted and continues to result in the development of many state-of-the-art leading-edge products as well as a vast range of intellectual property portfolio. To date, Wipro owns 700 patents in
Batch: FW 07-09 17
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
over 27 countries. Some of these outstanding intellectual properties include: • • Chip-Up technology, the world's first single-chip CPU upgrade Achieving maximum transfer rate in parallel port to serial channel data conversion.
•
Screw-less hinge and peripheral connections in a multimedia notebook Synchronization technology. Multi-chip co-ordination bus and heat sink designs. Technologies related to Remote Diagnostic Management System. Upgrade of Pentium processor to a multi-processing system. Bus compatibility technology and heat dissipation design. Wipro CD-ROM drives technology in anti-vibration, circuitry and fast data
• • • • • •
access. • • • • • • Multi-station video memory. Video conferencing system. PCMCIA card connector. Innovative casing designs. Wipro BIOS. DASP (disk anti shock protection) on notebook.
The first round of IT initiatives related to the 1998 restructuring covered several major areas:
•
Global Network: The decision to re-architect the company’s global
network is the example of trying to use resources better across the Wipro group, which had thus led to the number of networks being run by different
Batch: FW 07-09 18
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
business units, with little flexibility in the way network resources can be used or shared.
•
Supply Chain: The implementation of i2 logistics software on a global
basis within the APIG and Wipro Semiconductor groups had led to better planning, shorter cycle times and reduced inventory, thus a better supply chain management.
•
Customer Service: The implementation of Siebel 99 customer relation’s
software worldwide to improve customer service (i.e. to support multinational customers and travelers they integrated cross-geography customer service database).
•
E-Commerce for the PC Business: The implementation of Shop Wipro
online site, the volume of sales had been increasing regularly (US being the test market for internet sales because of its better strategies and infrastructure). Ecommerce initiatives for the PC business are being carried out under the Wipro information Products Group.
•
Extended Enterprise Initiatives: The idea of linking its information
system to those of its customers and suppliers via Electronic Data Interchange brought a great deal of success. It plans to develop links with other customers using EDI or business-to-business e-commerce applications. It is also studying whether Wipro should develop a community network with its suppliers. Figure 1.1
Batch: FW 07-09 19
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Client-Server Strategy
The organizational structure of WIPRO is based on the principle of independence and co-operation among our various Strategic Business Units (SBUs) and Regional Business Units (RBUs). It fosters quick decision-making and fast implementation, which enables us to stay responsive to fast-changing local markets. Though independent in terms of operations and decision-making, each WIPRO business unit enjoys the benefits of belonging to a mutually cooperative network of companies, which share a cohesive, overall strategic direction.
POSITION OF WIPRO IN THE PC VALUE CHAIN
COMPONENTS
WIPRO Strategic Business Units Memory BIOS Chipset Motherboard CD-ROM Power Supply Keyboard Add-On Cards Monitor
Outside Suppliers Hard Disk Drive Microprocessor
FINALPC ASSEMBLY SALE, SERVICE AND SUPPORT
Batch: FW 07-09 20
DISTRIBUTORS MARKETING
End Users WIPRO Strategic and Regional Business Dealers Units Business Alumni ID No.: DF79-M-0955 Government VARS WIPRO Regional OEM Customers Consumers Retailers Business Units (IBM, Fujitsu, Canon, etc) Distributors Education System Integrators
The Indian Institute Of Planning And Management, New Delhi
Figure 1.2
The model of support delivery is indirect which means that Support Providers impart the regular service delivery. WIPRO India provides the back end technical support and spares support. The overall accountability of support lies with WIPRO India. There are following category of support providers:
?
Authorized Service Providers (ASP’s) - For Desktops and Servers WIPRO Care Clinics (ACC’s) - For notebooks WIPRO Certified Storage Partner - For Storage
?
?
Batch: FW 07-09 21
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Repair vendors - For TFT Monitors, CRT Monitors, LCD Monitors
? Authorized Service Providers (ASP’s)
Only ASP’s are authorized to carry out installation and on site warranty support. Resellers, who do not have ASP accreditation, are not authorized to carry out installation or on-site support. The selections of ASP’s are based on various parameters with an objective of providing highest level of service to the customers. Technical and operational audits are conducted regularly for these partners. Frequent training programs are also conducted for the ASP’s. Currently, WIPRO India has 155 service partners across the country. These partners are located in 79 cities.
ASP Program: Appointment of New Partners
o Appointment is based on need.
o
Evaluation by WIPRO support manager on infrastructure, technical skills, minimum required base of WIPRO systems etc.
o On evaluation, if the partner is found OK, an initial registration fee is taken as below: 1) A Class - Rs. 15000/(Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, Pune, Ahmedabad) 2) B Class - Rs.10.000/-(All State Capital cities) 3) C & D Class - Rs.5,000/- per ID is charged.
Batch: FW 07-09 22
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
(Rest of the cities, which do not fall under the above category) Yearly renewal fee of Rs. 5,000 is charged. For every additional ID a renewal fee of Rs. 2,500 is charged. 25% of the payout will be retained for spare stocking. At the end of each quarter, 25% of the payout will be deducted for spares and the spares will be sent to ASP's. The final decision to appoint an ASP lies with the GM - Customer Support.
• ASP Audit
WIPRO India conducts regular operational & technical audits of partners (i.e. their ASP’s & ACC’s), to enhance their efficiency & to understand the bottlenecks between WIPRO and their channel providers for service by take necessary actions to bridge the gap.
Monitors Repair Vendors
WIPRO India has identified repair vendors to undertake the repair of monitors. The service partners have to directly get in touch with monitor vendor for the repair of the same after logging the Monitor Request on the APN (WIPRO Partner Network).
? WIPRO (Authorized) Care Clinics (ACC’s)
The WIPRO Care Clinic is authorized for carry in service of notebook. Highlights of WIPRO Care Clinic are as follows: • Manned by minimum of two notebook-trained personnel.
Alumni ID No.: DF79-M-0955
Batch: FW 07-09 23
The Indian Institute Of Planning And Management, New Delhi
•
Infrastructure - Space at least 500 sq. feet.
The WIPRO Care Clinic keeps WIPRO India updated with respect to all its activities by means of the following reports:
1) Daily Activity Report -This consists of the entire notebook serviced by the
ACC, giving the details of the nature of the problem and the status in addition to details of calls closed from pervious day.
2) Weekly Report - This will give details of all the activities closed during the
week with those pending with reasons. Currently, WIPRO India has 30 Care Clinics, which is spread across India. WIPRO Care Clinic being a premier relationship offered by WIPRO to a partner, a thorough analysis is being carried out prior to selecting an ACC. Prime factors are: • • Evaluation by Appointment is based on loyalty & performance. Strong technical skills related to Notebook repairs. support manager on infrastructure, technical skills, etc
Appointment is need based and on average 20 walk-in repairs are reasonable break even. On evaluation if the partner is found OK, an initial registration fee of Rs 15,000/-is charged. Yearly renewal fee of Rs 5.000/- is charged. Spare stocking is mandatory and is calculated based on the volume systems maintained and failure rate. 25% of the payout would be allocated towards this. The final decision to appoint an ASP lies with the GM – Customer Support.
Batch: FW 07-09 24
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SELECTION OF PREMIER PARTNERS
Premier partners are selected from the existing ASP based on the following criteria: •
•
Should be an active player in the IT industry as an organization. Should be owned and managed by technocrats with strong commitment towards support. Should have strong IT support track record and present for at least a decade in the region. Should have active interest in IT support business and co work on revenue initiatives. Should have adequate WIPRO trained and certified engineer to support installed base of WIPRO Systems. Should be willing to invest in spare purchase. Should be ready to increase presence, in terms of opening new offices, post resident engineers, etc in the region as and when the requirement for the same arises.
• •
•
•
•
•
• • •
Should be a process driven organization. Adherence to WIPRO Support Norms. Good Track record in WIPRO audit. Ability to provide support as per WIPRO's commitment for project orders.
WARRANTY PAYOUT
The ASPs are made payments by AIL for carrying out WIPRO services according to the payout matrix given below (Table 1.1):
For ASP:
Batch: FW 07-09 25
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The matrix payout (paid quarterly at the end of the quarter) per year would be as below: Table 1.1 Pay-out Matrix QTY at single site Annual machine <10 11 –30 31 –50 51 –100 101-250 251 – 500 501 –1000 1000-2500 >2500 400 380 350 325 300 275 260 250 240 Add for each entry level server 100 100 100 75 75 75 75 50 50 300 300 300 250 250 250 250 200 200 Add for each high end server
(i.e. number of systems) payout per
INSTALLATION CHARGES
The WIPRO transfer price for the product includes Installation charges i.e. Sales and Support partners do not get any additional amount towards installation service. A sales only partner (who is not an WIPRO ASP) gets the installation done through ASP as per the above rates by ensuring that he adds the above to his final selling price.
For ACC:
The payout for ACC is based on per call basis which is Rs.300/- per call. (Paid on a monthly basis upon receipt of bill along with call sheets).
Batch: FW 07-09 26
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SPARE LOGISTICS SUPPORT
RMA (Return Material Authorization) Procedures
RMA procedures are provided to assist WIPRO customers in receiving warranty service for their products. In the event of hardware failure, is the unlikely event that WIPRO customers experience problems within the warranty period. If a customer encounters problems with the hardware during the warranty period, then the customer can:
Batch: FW 07-09 27
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 1.
Contact WIPRO Support via WIPRO’s authorized service providers.
2. Be prepared to provide the proof of serial number and serial number that are attached to the hardware.
3.
Upon receiving above information, WIPRO Support will first confirm whether the customer has a hardware problem that is covered by warranty. If this is the case, the customer gets issued a Return Material Authorization (RMA) number and additional instructions for the warranty return.
There are three kinds of RMA's:
•
Advance RMA- During the comprehensive warranty period, WIPRO caters part in advance based on the request received from the partner. WIPRO will not cater to the part request if the system is not registered with' WIPRO. Partners have to return the defective (against advance RMA) within 7 business days, failing which WIPRO will debit the same to partner's account.
•
Normal RMA- During second & third year warranty. Partner has to return the defective parts in advance. Upon receipt of the same WIPRO will cater to the request.
•
Defective on Arrival (DOA): - Defective on arrival is the case where the product is found to be completely non - functional "at the time of first time power "on "within a period of 60 days from the date of shipment.
Batch: FW 07-09 28
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Partners have to return the defective (against advance RMA) within 7 business days, failing which WIPRO will debit the same to partner's account.
RMA Procedures
Customer reports a problem
ACE visits the customers premises and checks the problem
Any other problem If yes then solve
NO Part is defective
YES
ASP sends PPRF (Parts request & return format) on the WIPRO APN
RMA coordinator validates request and warranty
Batch: FW 07-09 29 Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ADVANCED RMA Part is sent first to the customer i.e. replacement) then defective is returned NORMAL RMA ASP has to send in the defective part first with complete RMA number
Within 1 year YES Parts/system within warranty
Beyond 1 year but within 3 years NO (Beyond 3 years) No parts support
Defective part is checked and validated
Replacement part is sent to the ASP Figure 1.5 RMA Procedure
WIPRO PARTNER NETWORK (APN)
On June 13, 2003 the WIPRO Partner Network was launched; a fully intelligent web based business tool facilitator. This enables on-line support transaction to WIPRO’s support providers thereby cutting down dramatically the response time to customers. The APN service initiative goes beyond mere e-mail communication and now provides real time call logging and status update facility to WIPRO’s support providers. This robust tool, while transparent to the end user, serves as an important monitoring tool facilitating better service levels. The APN serves as an important MIS connecting the service channel partners and WIPRO India via a web based access (on the website http://www.WIPRO.co.in). All the service channel partners have been assigned a username and password so that they can discreetly login into the WIPRO APN system via their login credentials. Thus
Batch: FW 07-09 30
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
access to the APN website is restricted to channel partners and WIPRO employees only. The salient features of APN are: Logging part request Viewing status of part transactions Warranty validation Price enquiry TES (Technical Escalation System) System registrations Download of bios, drivers etc Pay out details Support network across the country Part number enquiry
1) Price enquiry: - All service channel partners have the option for looking
up a Computer peripheral/component and then getting a price quote in WIPRO India regarding the pricing of that part. The the part number, which is a unique real time from
service channel partner can enter
id assigned to that part, and get the price quotes.
2) Warranty Validation: - The service channel partners can view the
Warranty status of a computer peripheral from WIPRO India in real time by inputting the Unique Computer serial number which can be found on the machine of the customer in the website to get the warranty status in terms of till what date is the warranty valid, when does the warranty expires i.e. on which date, what is the status of the Registration of the Machine.
3) Courier Details: - The service channel partners can find out the status of
the spare parts and components for WIPRO Computer systems, which they have requested to be shipped to them from WIPRO India in lieu of
Batch: FW 07-09 31
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
repair, and maintenance operations, which are conducted by them. For a particular service channel partner, the partner can view the courier status by entering the date of shipment. The APN then generates an excel file showing the Invoice no, invoice date, customer name, customer city, RMA number (Return Material Authorization), part number, part details, Quantity, Courier name and courier dispatch date.
4) Download of bios, drivers etc: - The service channel partners can
access to the latest WIPRO computer bios updates and software drivers of the various computers on the APN. They need to enter the WIPRO computer model number and then view all the BIOS and driver updates currently available for that particular model. This section of the APN is continually being updates as and when newer BIOS and drivers released from WIPRO.
5) TES (Technical Escalation System): - WIPRO India has an effective
TES (Technical Escalation System) in place. This enables customer hardware-software problems to be solved. The service channel partners can “escalate” particular problems faced by them in repairing computer systems. If the service channel partner is unable to resolve the computer problem then by way of the APN, the service channel partner can escalate that particular case to WIPRO Technical Escalation team, which handles hardware and software, related problems. The service channel partner can register a particular unresolved issue by giving a description about the problem being faced, entering the Computer serial number, customer name. The service channel partner can then access their registered computer problems by way of a unique Case Id number assigned to their complaint. The Technical Escalation team tries to solve the particular problem and keeps the service partner updated about the status and other issues related to the particular problem. The service channel partners can also
Batch: FW 07-09 32
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
view the status of pending cases, new cases, and closed cases for future reference.
6) Spare Parts Enquiry: - The service channel partner can get information
on the spare parts by entering spare partner category and entering the Keyword. The APN then generates the various spare parts/Items, which match the criteria selected by the service channel partner. The output is in terms of Part number, Part description, and product line. .
7) Knowledge Base: - The service channel partners can have access to the
Knowledge base on the WIPRO APN. The service channel partners to get important information on computer repair related issues; i.e. past cases and computer repair engineers’ comments on how a particular computer repair problem was resolved can use the knowledge base.
8) Forms download: - The service channel partner can download the
following forms from the WIPRO APN website. • • • • • Registration form PPRF form Claim form Order form (STEP) Order form (parts)
These forms serve as official paperwork for all the above issues between WIPRO India and the service channel partners.
9) Pay out details: - The service channel partners can access their pay out
details for a particular time period; i.e. the amount that accrues up in their account with WIPRO India. The amount is determined by the payout details (mentioned earlier in the payout matrix).
Batch: FW 07-09 33
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
STOCKING LOCATIONS
WIPRO India has stocking locations across the country; the current stocking locations are as follows: 1. 2. 4. 5. 6. 7. 8. 9. Bangalore - Singasandra Delhi Hyderabad Chennai Chandigarh Pune Trivandrum. Bhopal
3. Mumbai
10. Ahmedabad 11. Jaipur 12. Lucknow
Batch: FW 07-09 34
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
13. Cochin 14. Guwahati& 15. Kolkata
SPARES REPLACEMENT CENTERS (SRC)
In addition to the above Stocking Locations WIPRO India has also provided adequate spares stocking to certain ASP’s for its VPD products. These are called as Spare Replacement Centers (SRC). The stocking has been made at these locations based on the population of systems in each city. Whenever there is a part requirement for any VPD product, the concern Reseller can take the defective part to the nearest SRC who will replace the part over the counter after verifying the part.
TEST & REPAIR
WIPRO India has a well-equipped test & repair Center (TRC) at Bangalore. All incoming as well as outgoing parts undergo thorough testing before inward/outward movement.
DEFECTIVE ON ARRIVAL (DOA)
Any product purchased from WIPRO India, which is found to be completely nonfunctional "at the time of first time power on", within a period of 60 days from the date of shipment by WIPRO India (Pvt.) Ltd., is defined as a Defective on Arrival (excepting transit damage cases). Date of Shipment is calculated as per the Invoice of the material from Pondicherry. All items procured from AIL whether in Indian Rupees or in US$ or under Deemed Export or High Sea Sales are covered under this DOA policy. The coverage is determined based on the proof of Purchase which may need to be submitted in case AIL desires
Batch: FW 07-09 35
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The following are excluded from DOA: • • • • Defects arising due to transit damages. Issues related to software incompatibility. Incompatibility issues related with other products. Field Replaceable Units (Any item that can be changed at the customer location itself with the help of normal tools like the screwdriver etc is called a Field Replaceable Unit).
Please note the following: 1. The DOA so logged goes through the following four stages: a) Qualification b) Fulfillment c) Analysis and d) Feedback
2.
The defective item is returned to WIPRO Bangalore. Locations where WIPRO India has its Reverse Logistics Center the partner has to return the defective item to them for onward shipment to Bangalore. Location where WIPRO office is not present WIPRO recommends the return of the material using the WIPRO India's nominated freight forwarder. The amount for sending back the material is reimbursed by WIPRO.
3. It is mandatory that the item must be sent in the original packing complete with the accessories & packing buffers properly placed. Incomplete items will not be considered and the entire item cost will be invoiced to the partner.
4.
It is mandatory that all items must include the copy of the Original Invoice and the Service Call report of the WIPRO Authorized Service Provider stating the detail of the fault observed and the action carried out.
Batch: FW 07-09 36
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SPARE PART RETURN
All defective parts are to be returned to WIPRO India's Head quarters at Bangalore or at Reverse Logistics locations wherever present. Duly filled up fault tag should mandatory accompany faulty part. Partners should take care in carefully completing all the details as mentioned in Fault Tag. Noncompliance will result in delay in reconciliation of the parts sent. Partners should return the defective (against advance RMA & DOA) within 7 business days, failing which WIPRO will debit the same to partner's account.
REVERSE LOGISTICS OPERATIONS
In order to facilitate a faster TAT for spares WIPRO India has opened Reverse Logistics Centers in Mumbai & Delhi. The ASPs present in these locations have to send the defective spares to these centers only. It acts as a collection center for defective spares thereby reducing the cost of courier to the Partners. WIPRO India will increase Reverse Logistics Locations as and when required.
SPARE PURCHASE
If any customer/partner wants to purchase spares for upgrading WIPRO systems, they have to place purchase order on AIL with 100 % advance. The delivery period is 4- 6 weeks from the date of receipt of purchase order. Spare price list is circulated by WIPRO India every Quarter. The spares for Notebooks, Servers, and Desktops will be available for 3, 4 & 5 yr. respectively after the launch of product. All the spares are catered from the main warehouse at Bangalore against any purchase cases.
Batch: FW 07-09 37
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
STANDARD WARRANTY
Desktops and Servers: 1 year comprehensive (parts, labor & on-site). Next two years, parts only warranty from WIPRO India. Notebook & Tablet PC: 1-yr carry-in warranty. TFT Monitors, LCD & 17" CRT monitors: 3 years (on site at cities where our monitor repair vendors are present - currently 19 cities).
Warranty Matrix
Table 1.3 Parts Coverage (In years) 3 1 3 1 3 1 1 1 1 3 1 1 1 Labor Coverage (In On Site Carry In 1 1 1 1 1 1 1 1 1
Products
Desktops VPD
WIPRO Power Sle WIPRO Aspire WIPRO Veriton WIPRO Power S200 WIPRO Powers 100 WIPRO Power 250 series WIPRO POWER S 251 series
Notebooks Servers VPD
WIPRO TravelMate WIPRO Aspire WIPRO Altos WIPRO Altos G310
Batch: FW 07-09 38
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Peripherals
LCD Monitors 3 3 CRT Monitors 15" 2 2 CRT Monitors 17" 3 3 LCD-TVs 1 1 Projectors 2 2 LCD Monitors, CRT Monitors 15" and 17" are for stand-alone sales, else the warranty as per product warranty.
SERVICE LEVEL AGREEMENT (SLA)
Resolution time
WIPRO provides SLA of 95 % uptime for desktops and 97 % uptime for servers. These are provided at locations where WIPRO’s ASP's are present. Currently WIPRO has 79 cities where its service partners are present. SLA for notebooks is 2 business day turn around time at the ACC’s.
Response Time
At A class location, calls will be responded to within 2 hours for servers and within 4 hours for desktops. At B class cities, calls will responded to within the same business day. At C class cities calls will be responded to within the next business day. The cut off time for logging in calls would be 4 p.m. Response time will be case specific for remote and difficult locations like Srinagar, Andaman & Nicobar Islands, and Northeast states. The above SLA’s are applicable during the period of comprehensive warranty only. A class - Bangalore, Delhi, Mumbai, Chennai, Hyderabad & Kolkata. B class - All state capitals wherever WIPRO’s ASP's are present. C class - All other cities where WIPRO’s ASP's are present.
Warranty Registration
Batch: FW 07-09 39
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
To avail benefits of warranty support, customers have to register WIPRO system within 15 days of delivery. Customers can register by visiting www.WIPRO.in or sending the registration card available inside the box or sending the registration details on the excel sheet. No part requests will be entertained if the system is not registered with WIPRO India.
Scope of Support Calls
WIPRO commits to support that the scope would cover hardware and licensed software supplied by WIPRO. Any issue related to product specification during the entire customer contract period shall be fully owned by the WIPRO India (Pvt.) Ltd. and resolve to the customer's satisfaction at no cost exposure to the company.
The supplier would be responsible for any defects that may develop under normal and proper use of products, arising out of defective parts, design or workmanship in the product, at the customer sites and shall remedy the reported defects at its own cost. This warranty is valid only if WIPRO is satisfied that the defects are due to faulty materials and workmanship. Improper usage or handling will not qualify for a free replacement of the parts. Calls under the following category will be outside the scope of warranty support and would be on a chargeable basis: 1. Plastic parts & consumables, i.e., Panel, bezel, hinge, print head and knob. 2. Virus related calls 3. Software related calls other than the original OS supplied with the PC 4. Calls related to unstable power supply. 5. Physical damage/ breakage.
Batch: FW 07-09 40
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Terms and Conditions of Warranty
1.
WIPRO India is not responsible for damage to, or loss of, any programs, data or removable storage media including any consequential loss or damage. Maintenance work of any type performed on WIPRO product by an unauthorized party renders the warranty null and void. Any non-WIPRO certified product added on to the WIPRO Product would also render the warranty null and void.
2.
The software is provided on an "as is" basis and the warranty does not cover software corruption. Warranty will be rendered void by misuse, accident, modification, unsuitable operation environment, improper maintenance by unauthorized personnel, removal or alteration of equipment or part identification, serial number label, Tampering of warranty sticker, or failure caused by a product for which WIPRO is not responsible. WIPRO does not warrant uninterrupted or errorfree Operation of equipment.
3.
4.
WIPRO is not liable for any damage to, or loss of, any programs or data. If a hard disk failure occurs, WIPRO will only install the factory default software onto the replacement hard drive. WIPRO will not undertake any file or data transfer from the faulty hardware to the new replacement of swapped hardware. Customers are advised to do the backup prior to the repair.
5. Force Majeure: Warranty does not cover damages caused by Acts of God, e.g. Lightning, flood, riots, fire etc. Neither party shall be liable for nonperformance either in whole or in part of this agreement due to reasons unforeseen These reasons and shall include beyond and be its limited to control. strikes, lockouts,
nationalization, acts of God, war, and fire. In such an event, the other party will be notified immediately in writing detailing full facts of the case and both parties will undertake to arrive at mutually satisfactory solutions to overcome the difficulties arising out of these circumstances.
Batch: FW 07-09 41
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
WIPRO SERVICE OFFERINGS (EXISTING)
WIPRO SERVICES
Warranty Services
Upgrades
Facility Management Services (FMS)
Storage Solutions
Batch: FW 07-09 42
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Standard to Enhancement Packs (S.T.E.P.)
Buy Back
Networking
Implementation (Roll Out Services)
Figure 1.6
STANDARD TO ENHANCEMENT PACKS (STEP)
STEP policy is a unique way to enhance the services provided by WIPRO India in its quest for committed Total Solution. In this a customer can get extended warranty on its product for a nominal amount. STEP is available to extend standard warranty to three years comprehensive or carry in. Every system that is procured is a product purchase with a specific purpose. It is completely utility based and stands to serve for the entirety of the utility. STEP’s are primarily designed to provide the customer value for money specifically when we compute the Total Cost of Ownership WIPRO Packaged Services make it easy to choose the precise level of support customer’s need, from basic to business-critical. Purchased with the product, these services include Warranty extension/enhancement, Installation, hardware service and the software support for the operating systems. STEP
Batch: FW 07-09 43
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
• • • •
is a commitment extension from WIPRO. is the immediate basic movement towards a committed Total Solution. is extremely easy to sell and even easier to buy. is an extra revenue generation mechanism for the reseller/service Provider.
STEP would be applicable only in India. Similarly product purchased outside India will not be governed by this STEP. The STEP is not transferable from one user to another.
Benefits of STEP: > Easy to buy > Simple to implement > Investment Protection > Reliable and consistent service > Ease to obtain support > Advanced Hardware availability > Increased Uptime
A comparison of STEPS and standard warranty
Basic Warranty provides: • Protection against manufacturer defects • Parts, Labor (for 1 year) and besteffort repairs • Best effort response for replacement of defective components • No software or network operating system support • No installation services
Batch: FW 07-09 44 Alumni ID No.: DF79-M-0955
STEP Services offer: • Protection against downtime • Response time upgrades • Single source expert help • Installation support • Advance spare replacement The type and level of support that’s right for customer requirement
The Indian Institute Of Planning And Management, New Delhi
Figure 1.7
Obtaining STEP
? By selecting the product code.
?
Placing the order (for customers on the Reseller/Support Partner) for the required quantity.
? Reseller/Partner shall send prescribed STEP order forms to The Distributor with all the details like End user, System Sr.#, STEP part no. etc., along with the payment.
? ?
Distributor will send the forms to WIPRO India Ltd (AIL), Bangalore. On receiving the details, AIL WMS coordinator will update the database on web, generate the certificate and will directly dispatch it to the end-user, with a cc to e-mail of the respective Reseller/ Partner.
Typically about 10 days are required for confirmation of STEP towards the system.
Exclusions to STEP: (Terms and conditions towards STEP)
•
WIPRO India is not responsible for damage to, or loss of, any programs, data or removable storage media including any consequential loss or damage.
Batch: FW 07-09 45
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi •
Any non-WIPRO certified product added on to the WIPRO Product would also render the STEP null and void. The software is provided on an "as is" basis and the STEP does not cover software corruption.
•
•
Cracked glass panel on monitor, LCD screen, or damage caused by too much pressure exerted on the LCD, are not covered under STEP.
•
•
Battery/Battery packs and plastic parts for Notebooks are not covered by the STEP. STEP will be rendered void by misuse, accident, modification, unsuitable operation environment, improper maintenance by unauthorized personnel, removal or alteration of equipment or part identification label, tampering of STEP sticker, or failure caused by a product for which WIPRO is not responsible.
•
WIPRO does not warrant uninterrupted or error-free operation of equipment. STEP does not cover damages caused by Acts of God, e.g. Lightning, flood, riots, fire etc.
•
All third party peripherals, whether purchased as a part of a system, or bundled with it, come with the prevailing agent's Warranty, and WIPRO makes no warranty whatsoever on their behalf. Note: These STEP offerings would be applicable to only those clients who have registered their purchase with us within 15 days of receiving the STEP. In case of systems that are not registered, they would have to be accompanied compulsorily by the proof of purchase.
•
All WIPRO Options within the system purchased along with the system or later on will be governed by the warranty of the Base WIPRO System. On-site service will be limited to customer's location that is within 40km radius of an WIPRO Professional Service Partner's premises. Any customer location
•
Batch: FW 07-09 46
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
beyond the 40km radius will automatically be governed by the carry-in service.
UPGRADE
Upgrade option for any existing product is available. WIPRO offers attractive prices for the upgrade option. The following are some of the upgrade options: ? Box upgrade ? HDD ? Memory ? Monitor ? CDROM-COMBO
FACILITY MANAGEMENT SERVICES (FMS)
To manage the multi-vendor and multi location IT environment in an optimized and effective manner, and meet the increased set goals, CUSTOMER needs Facility Management Services to help them focus on their core activities and forge abiding relationships with the customers, business associates, shareholders and employees through appropriate and better technology options. WIPRO India offers a host of Faculty management Services. To satisfy their customers IT needs and requirements; certain amount of technological and infrastructure requirements are necessary for any Faculty management Services provider. WIPRO India has the following infrastructure resources.
Value Proposition WIPRO Faculty Management Services would bring to Customer
Batch: FW 07-09 47
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 1) Focus: -Permitting Customer to focus on the business issues that
surround them as opposed to running the day-to-day IT operations.
2) Agility: - Supporting the Customer’s need for both organizational and
technological agility in order to respond rapidly to changes in their own competitive marketplace.
3) Value: -Delivering solutions that enhance the productivity, availability, cost
efficiency and consistency of the Customer’s infrastructure through technical excellence and global presence.
4) Control:-Operating under clear and flexible service level agreements to
ensure that you, as a decision-maker, have a higher level of control over direction and performance through various service level agreements.
5) Results: -Focusing on delivering against both the shorter-and the longer-
term goals of Customer in order to ensure that the expected business results of IT operations are realized.
6) Single point of contact: -To have a single point of contact and
accountability for their entire IT environment.
7) Customer Satisfaction: - To achieve high level of end user satisfaction. 8) Centralized help desk: -To have a centralized Help Desk where all IT
related problems. Of all the users will be reported and resolution monitored. Note: - The services offered under WIPRO India FMS would be different from client to client and would be worked out based on the requirements of the client. Based on the strengths of WIPRO Ltd. (AIL) and our FM Program Partners, AIL has identified the services that we would be offering to clients. The services offered are: -
Batch: FW 07-09 48
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1. Help Desk Support: To provide Single point contact to all users in the respective locations for logging their calls related to IT. Based on the site requirements the Helpdesk could be on-site or off-site.
?
Scope: - To all the users of Customer.
? List of Deliverables ? ? ? Receive and log user calls from over the phone or e-mail. Analyze the call and decide on whom it should be passed-on to. Refer the problem to the competent designated person / Resident Engineer/ service provider. ? Track and follow-up the problem with the designated person / service provider to ensure SLA commitments are adhered to. ? Escalate to CUSTOMER Program/ IT Manager, if SLA commitments are not met. ? ? ? ? Do call closures on resolution of the problems. Analyze the call statistics (open/closed calls). User satisfaction Survey Consolidate call reports to provide periodic call statistics reports
Responsibilities of Customer • • To provide one Desktop with printer in LAN. To provide Table, chair, storage facility and an intercom for receiving/ making calls. 2. Server Management: - To provide a maximum up time and performance levels of all the Intel servers with Customer.
Batch: FW 07-09 49
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Scope: - To all the users and interfaces connected onto these servers (Number of servers
List of Deliverables Handling of all NT/win2K related support issues. Installations and re-installation of OS as and when required. Backup Management Performance monitoring and tuning exercise of all servers (hardware) and services (DHCP, WINS etc.) – Quarterly basis ? ? ? ? ? Alert configurations of systems to trigger events to responsible users. Checking of the spooler available sizes - monthly basis Addition, deletion, re-configurations of additional users and printers. Timely updating of service packs and hot fixes. House keeping of servers such as, disk space usage, files and folders, permissions, users login on network and email systems etc. - Monthly basis. ? ? Maintenance of IP addressing across the network. Handling of all upgrades, Hardware and OS related software as and when required. Service Levels Note: - All servers carry the highest priority level. All first level calls Table 1.5 Resolution time (in hr.) 24 12 2 Table 1.6 Escalation time (in hr.)
? ? ? ?
Type of problem Normal Critical Supercritical
All Second Level calls (Customer / Vendor) Type of problem
Batch: FW 07-09 50
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Normal Critical Supercritical Responsibilities of Customer
•
8 4 1
To provide Technical assistance to all 3rd party or in-house developed/supported applications related issues on the servers at the second level. This could also involve the vendor if required.
• • •
All validations of new software upgrades and patches have to go through the test run or through a proper guided approach. Suggesting the need for upgrades as and when required. Co-ordination with the applications team when it involves any of these servers, where the system hardware and software are needed to be justified before the process goes online.
3. Desktop Management: - To provide complete support on day-to-day related problems on hardware, Operating Software and client application software. Scope: - To all the users of Customer List of Deliverables: Day to day call handling at the helpdesk. The calls would be related to: System calls, Application calls, Users related calls and general calls. ? To handle calls related to System hardware, which could include Installations / re-installation, upgrades and to configure the same. ? To support call related applications like office, licensed software and in-house applications. To install and re-install software applications. ? To resolve recurring problems permanently by applying proper solutions, which could have to do with replacement of the hardware, or necessary training to the user groups
?
Batch: FW 07-09 51
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
To handle all first level calls related to connectivity issues of the nodes (desktops/laptops) over the network. To assist users in giving solutions towards backup, zipping and related issues. To interact with CUSTOMER / Vendor for replacement of spares and higher level of service. To co-ordinate all re-allocation and transfer of systems between office locations for fresh installations / re-installations or service replacements.
?
?
?
Service Levels: • • All first level calls Resolution time on an average is 4 Hr for all calls.
Responsibilities of Customer To provide second level supports or escalate it on to the Vendor. To provide the vendor AMC contract details to helpdesk. To suggest methods to users departments for proper and efficient use of desktop / Laptops and necessary training to be imparted on need basis. ? ? Monitoring reports and implementing proper measures. All validations of new software upgrades and patches to go through the test run or through a proper guided approach. ? To give proper documentation and training for implementing in-house software across users to the Helpdesk. ? ? ? ? Provision of space, phone and system to be provided to the helpdesk. Helpdesk personal names to be registered with security. Access to all backup media, spare parts and consumables to be provided. Access to all backup and application software’s.
? ? ?
Batch: FW 07-09 52
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
Access to all software and hardware manuals.
4. Hardware Maintenance: - To provide day to day support for IT hardware break-fix across the various offices at Customer for Servers/Desktops/Network Components/Printers / Scanners / Modems Scope: - As per the list of hardware enclosed location wise. List of Deliverables: Support includes Hardware problem diagnosis and Hardware repair. WIPRO shall provide spares and technical services on the equipment covered. Support could be telephonic or on site as required. ? To maintain all first level service calls of Servers/Desktops/Network Components/Printers / Scanners / Modems ? ? To escalate problems of higher order to CUSTOMER or the Vendor. Preventive maintenance to be carried out, which will include Disk media scans & defragmentation, Keyboard & Mouse roller cleaning, Printer servicing & cleaning. ? To configure / re-configure printers/modems/scanners across systems on need basis.
?
Batch: FW 07-09 53
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? ?
To ensure all loading of proper and updated drivers as and when required. To ensure proper escalation and follow-up with the vendor for the same to be completed with respect to the time schedules. To ensure health check done on toners given for re-filling and to ensure no second time re-filled toners to be used
?
Service Levels: • • All first level calls Downtime not to exceed 24 Hrs.
5. Anti-Virus Management: - To provide an effective control mechanism for Virus check on the network. Scope: - Applicable to all desktops/laptops and servers on the network. List of Deliverables: Implementation of the Anti-Virus tool provided by Customer. Diagnose and rectify any virus problems, which can be fixed by the anti-virus tool. ? Updating the package by downloading the updates from the vendor’s website –as per the security policy. ? To place the update with proper permissions and control in a common access area on the server after primarily testing for any probable corruption or malfunction. ? Sending mailer (and monitor read status) to the entire user list about the latest update, with the link to the procedure defined on the Intranet. ? To keep track of the latest malicious virus from the net and taking the required measures for encounter the same.
? ?
Batch: FW 07-09 54
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
Re-installation of the anti-virus packages where they have been corrupted or deleted by the users. Write scripts on the server to maximize automation of updating of anti-virus tool at the desktop/ laptop level. Triggering regular scans on a random basis across the users to check if the package has been updated.
?
?
Service Levels Update of Virus related calls will have a resolution time of 8 Hr. All server related updates to be done by the Helpdesk.
? ?
Responsibilities of Customer ? ? ? To provide License copies of the anti-virus tool to the Helpdesk. Renewal of the licenses with the respective anti-virus tool vendor. All critical rumors and announcements by other media suspecting of virus attacks to be checked and necessary precaution to be taken. ? ? ? To automate using login scripts and replicating the same across domains. Monitoring reports and implementing proper measures. All validations of new software upgrades and patches to go through the test run or through a proper guided approach. 6. Backup and Recovery Management: -To ensure that all servers and important data are protected against data losses. Scope: - To cover all File & Print and Mail servers. List of Deliverables: -
Batch: FW 07-09 55
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? ?
To define backup schedules on need basis for all servers. To perform regular backup operations on the servers as per the defined strategy of the customer. Proper labeling and housing of the media for identification and retrieval. Maintain online and off-line mechanisms of disaster recovery of media. Conduct restoration exercises at random intervals to check for availability of backed up data. Regular maintenance of the media and the backup device on monthly basis. Backup of data, programs, application software on CD-R’s on need basis. Maintain log sheets for backups. Ensure proper scheduling of backups during non-peak hours. To also backup servers at the system level as specified by Customer.
? ? ?
? ? ? ? ?
Service Levels: • • Ensure that at least 95 % of the backups are taken as per defined schedules. Ensure 100% of planned restoration exercises. Responsibilities of Customer: To communicate the planned backup strategy to the Helpdesk. Provide adequate media and necessary hardware and software resources to the Helpdesk. ? In case of failed restoration exercises, immediate concern to be taken in terms of backing up data again even if the system is in peak hours of work. ? ? ? To keep Helpdesk informed of the necessary updates to the software. To provide proper authorization to backup user related data. To keep track of the reports logs and variations of the Helpdesk activity.
? ?
Batch: FW 07-09 56
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
7. Asset Management: - To build an up to date databases of the current IT assets and Implement a system to track any changes to the same. To monitor and maintain a database of all the software license inventory & usage. Scope: - To cover every IT related asset at CUSTOMER location. List of Deliverables: To deploy Asset Management agent across the network which will furnish complete asset information as regards to hardware – software. ? ? Maintenance of IP addressing across the network To maintain all installation / re-installation details of systems and their movement within CUSTOMER. ? To record all changes in upgrades and re-configuration of machines, software Installations and de-installations. ?
?
?
To monitor software licenses. Physical stock to be checked once in 6 months for the entire organization and monthly for the spares inventory at the Helpdesk.
Service levels: Update of Asset database within 3 days of any changes or additions done. Customer Responsibility:- To provide Asset Management Tool for capturing the inventory data. 8. Vendor Management: - To co-ordinate with vendors of all IT related products for parts replacements, higher customized levels of service and delivery related issues. Scope: - For all third party items.
Batch: FW 07-09 57
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
List of Deliverables: ? To maintain a list of various vendors for related products (consumables, H/w and S/w) ? ? ? ? Logging calls with vendors. Coordinating with the vendors to get the problems resolved. Follow up on the delivery schedules with the vendors. Keeping track of the hardware and software maintenance contracts entered into the customers with the various vendors.
?
Analyzing the performance of the different vendor’s vis-à-vis their maintenance contract entered into with customer.
Service Levels: • • To ensure proper terms and conditions are met on regular basis. To check for product and service quality.
Responsibilities of Customer: • • • To monitor the products purchased for their quality. To keep track of the generated reports. To pass the bills and invoices.
9. Network Management: - To provide management and availability of the Local Area Network. Scope: - For all Desktops, Peripherals, File & Print and Mail servers. List of Deliverables: ? Detection, isolation and diagnosis o Network faults and getting them resolved.
Batch: FW 07-09 58
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
Quarterly checking of network on various aspects like physical inspection, connection, patching, active devices like hubs & switches mounting & fully operational design. Keep a check on user authorization / logins to ensure there is no illegal access to the network information & services. Configuration Management of the networking equipment such as hubs, switches etc. Deployment of Network (optional). Audit tool to gather all relevant information of network usage, performance, Intrusion Denial of Service, IP spoofing etc.
?
?
?
Responsibilities of Customer: ? ? To provide Network Monitoring Tool To provide Network Topology Map.
Service Levels: ? ? All first level calls Downtime not to exceed 4 hours
10. Mail Management: - To provide management of the mail and messaging application. Scope: - For all Desktops and Mail server. List of Deliverables: User account management- Creation, deletion and transfer of mail boxes Management of public folders and post offices Monitoring the mail traffic queue and the disk space usage for mail.
? ? ?
Batch: FW 07-09 59
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? ? ? ? ?
Internet configuration at client end. Define email policies in conjunction with customer and ensure compliance. Resolving of problems related to sending /receiving /retrieval user mails Ensuring the Mail works smoothly across locations Mail log report/Mail Uptime Report
Service levels: All first level calls Downtime not to exceed 4 hours
? ?
BUY BACK
Buy Back option is available for systems and peripherals upon mutually agreed rates and conditions. On such deals, the existing system/ peripherals should accompany the purchase order with payment.
ANNUAL MAINTENANCE CONTRACTS
Annual maintenance contract (AMC’s) is the best solution if a customer’s product is out of warranty. WIPRO annual maintenance contract is an agreement from WIPRO to the customer to support the product for one year. WIPRO provides separate price lists for the AMC’s that it offers. Annual Maintenance Contract with WIPRO India Pvt. Ltd, which comprises of:
Batch: FW 07-09 60
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? Committed response time & uptime as per the services opted by the customer
?
Quality Repairs at WIPRO Repair Centers
? Genuine & high quality spares ? Certified service professionals
?
Direct ownership of WIPRO India for meeting SLAs.(Service Level Agreements)
? Call Escalation Procedure for easy reference ? Support Plan to maximize the AIL deliverables and customer satisfaction. ? The AMC charges cover all parts & labor charges except consumables, plastic parts and non-functioning parts. Please refer to the Terms and Conditions attached. The Services would be provided by WIPRO India Pvt. Ltd. or any of the WIPRO Authorized support partners. However, WIPRO India takes the overall maintenance responsibility for problem resolution fort the equipment’s covered under this Contract.
WIPRO India Responsibilities towards AMC
?
WIPRO India will provide onsite hardware remedial maintenance and OS support (limited to troubleshooting or reloading in case of HDD replacement) during the contracted hours of coverage. Scheduled preventive maintenance shall be performed during the prime shift (9:00 am to 5:30 pm Monday- Friday) in accordance with equipment standards specified by WIPRO India. Quarterly service activity review meetings.
?
?
Exclusions towards AMC Service
Batch: FW 07-09 61
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
?
Services outside the contracted hours of coverage. Services, which in WIPRO India’s opinion are required due to improper treatment or unauthorized attempts by other than WIPRO India authorized personnel to repair maintain or modify the equipment or software. Individual hardware products that cannot in WIPRO India’s opinion be properly repaired due to excessive wear or deterioration. These products may be withdrawn from service within ninety (90) days after written notice. All costs, charges and expenses in respect of moving the equipment or any part thereof including cost, charges and expenses of dismantling, reinstallation, commissioning and transport. OS customization & performance tuning Any physical breakage and burnout. List of items mentioned below: Printer Bands, printer ribbon, Printer head, Ink cartridge & stationery. All magnetic/optical media, Laptop & UPS Batteries Read/Write heads of Tape Drives/Cartridge Drives All passive components of networking
?
?
? ? ? ? ? ? ?
SALES FUNNEL PROCESS
A sale is like any other business activity - it needs planning. To achieve a required output (annual target) you need a certain level and quality of input (prospects). The numbers at the top of the funnel must take account of your anticipated - or preferably known - conversion rates through the funnel. Complete the sales funnel planner by starting with the required sales results, and work back through the funnel adjusting the figures according to realistic expected conversion rates.
Batch: FW 07-09 62
Sales Input
Required value prospect base Average contract value New prospects required
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Conversion Ratios through the Sales Funnel Sales Output
Appointments
Proposals
Rs. Annual sales target Average Contract Value Number of new contacts
PHASE II
Batch: FW 07-09 63 Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
MARKET RESEARCH (Tools & Techniques to find out Gap areas followed by Recommendations)
TASK INVOLVED
A. DISCUSSION WITH DECISION-MAKER: - “Mr. Tanveer
Singh, Regional Sales Manager, WIPRO InfoTech Ltd.” I had an opportunity to talk to Mr. Tanveer Singh, who is my overall project guide and also a decision maker in the company in the area of services and support. Issues discussed: a.
WIPRO Ltd. clientele includes corporate buyers, Govt. sector, PSU’s, Educational institutions and individual buyers. & 70% of the customers are in
Batch: FW 07-09 64
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
the large buyers segment (comprising of corporate, Govt. sector and educational institutes) and rest 30% are Individual buyers
b.
Smaller Workforce: - As compared to the other key players in the market, WIPRO comparatively has a small work force (about 140 people) working in India.
c.
Less of Advertising: - There was a brief discussion on advertisements given in media by WIPRO to promote its products and services. Mr. Tanveer Singh said that earlier the rate of advertising was very low; but recently WIPRO India has started increasing advertisement’s and promoting special events etc.
d.
A brief introduction and discussion on the various service offerings from WIPRO India: - this included discussion on the current offerings currently being provided by WIPRO. He also mentioned specifically about the Network Storage Services which AIL provides, but over time this has not been the thrust area for AIL, and AIL does not do a lot of work in this area.
e.
Discussion about the Unorganized Sector: - discussion was conducted on whether the Unorganized Sector; particularly the Assembled PC dealers posed a challenge to WIPRO. According to him, they did not pose a significant challenge to WIPRO in India; because of the recent drop in prices of MNC brands PC (by the lowering of import duties, cost of manufacture of computer parts, increased consumption of PC’s etc.) people were going more for branded MNC PC’s.
f.
Discussion about Call Centre’s/24 hr customer support: - This issue was discussed as to why AIL currently did not have a Call Center support with 24× 7 telephone support. In answer to this query; he replied that in the start of
Batch: FW 07-09 65
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
its operations in 1999; AIL had tied up with a local call center to provide this service but the response was not so good in terms of customers actually contacting or using this support service. Subsequently this service was discontinued when it was found that no real work was being carried out by the call center staff in terms of handling customer calls. However he also agreed that now times have changed and also acknowledge the importance of having such support services in such times of increased competition.
g. Discussion about the Bottom-line (profits) of AIL: - He mentioned that the Computer Industry was a very volatile Industry with newer trends coming in at a very fast pace. Subsequently he also mentioned that the operating profits of AIL was also quite low in lieu of the above observation.
h.
Importance of Services Marketing: - He then mentioned that as the bottomline in Computer Industry were quite low, Services marketing and revenue and profit from these services have become an important revenue stream for WIPRO India. He emphasized the importance of such services and how they can serve as an important Source of Profit generation for AILS.
i.
Perception about WIPRO as a brand name in India: - There was a discussion about how WIPRO was recognized by people in India. He mentioned that initially people were not aware of WIPRO as a Computer Company; however this scenario is changing now; with people’s perceptions about WIPRO changing.
j. Credit terms: - There was a brief discussion on the credit policy of AIL. He mentioned that AIL’s credit policy was quite stringent and credit was mostly provided to Clients who had an exceptionally good track record of payments. There was a brief discussion on GOV Sector also; by way of payments as these payments quite often got delayed due to bureaucratic reasons and lot of procedures etc.
Batch: FW 07-09 66
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
B. SECONDARY DATA ANALYSIS
INDIA’S IT SERVICES INDUSTRY: A COMPARATIVE ANALYSIS In the past decade, India’s information technology services industry emerged as an important player in the global IT services market. The country’s share of this market, valued at more than $350 billion, increased from 1.5 percent in 20002001 to 1.9 percent in 2002-2003. While worldwide revenue of IT services grew less than 2 percent during this period, India’s IT services industry experienced 22 percent revenue growth—a pace comparable to the rise in Hong Kong’s electronics industry during the 1970s.
Table 2.1 Firm Network Model Subsidiary Model
India-based IT service network models. Descriptions Possible Relationship The MNC’s Indian subsidiary provides all IT services to the firm. Possible Network Oracle Examples
s Subtypes Wholly Owned Intra-firm
Batch: FW 07-09 67
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Subsidiary provider model
The MNC’s subsidiary provides IT service provider with one or non-Indian IT service provider(s).
Wholly Owned, Equity based Partnership, Contractual (long term) or project-based
Intra-firm, Joint Venture, Inter-firm
General Electric, Citibank, HP, IBM, Acer
plus IT service Indian
services along informal, more Indian or (short-term)
IT service provider model
The MNC does not have any Indian employs Indian or a combination of Indian and non-Indian IT service providers either independently or with the assistance of outsourcing firms.
Equity-based Partnership, Contractual informal, project-based (short-term)
Joint venture, Inter-firm
Pyxis (a manufacturer of automated medication and supply dispensing systems)
subsidiary and (long term) or
Batch: FW 07-09 68
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Government Support The Indian government has played a central role in establishing and promoting the IT services industry. It created software technology parks to provide the necessary office space, data and satellite communication links, and hardware and prioritized funding of the country’s telecommunications infrastructure. To facilitate exports, the Indian government provides easily obtainable licenses, rebates, duty-free imports, credits, international trade fair subsidies, and research support, and in 1995 it permanently exempted service exports from income taxes. This pattern follows the example of Taiwan’s government, which established export-processing zones in the 1960s to promote electronics production and has since provided financial assistance, training, and research and development support. The Singapore Technology at every step, including a 10-year tax holiday and factory space in an industrial park. The Korean government similarly helped Samsung and other chaebols or conglomerates become major exporters in the electronics market. Table 2.2 IT Service Firms in India
Batch: FW 07-09 69
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Although India’s IT services industry is divided among many firms, a relatively small group of them have emerged as the main players. The top five IT service companies in India have grown faster than the rest of the industry and now have 32 percent of the market share; the next 50 firms have had considerably slower growth and have only 35 percent of the market share.1 Thus, India’s IT services industry is not as consolidated as the East Asian electronics and computer hardware industries. In Taiwan, for example, the top 10 PC manufacturers control 80 percent of total production. With some differences, particularly the absence of multiple supply tiers, India’s IT services industry is undergoing a transformation similar to that of East Asia’s electronics and computer hardware industries. Currently, this industry is dependent on MNCs, partly as owners and mostly as buyers, who are outsourcing more IT service operations to remain internationally competitive. MNCs have adopted different production models, with the subsidiary plus IT service provider emerging as the dominant one.
PROBLEM DEFINITION
A. Management Decision Problem: -
“What should be done to
improve WIPRO Ltd. services for increasing its services revenue”?
B. Marketing Research Problem: -
To identify the gap areas in
existing service initiatives of WIPRO India and determine the relative strength and weaknesses of WIPRO India vis-à-vis its major competitors.
Batch: FW 07-09 70
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
APPROACH TO THE PROBLEM
A. THEORETICAL FOUNDATIONS
The basis of my project is based on the “Agency Theory”. I have subsequently applied this theory in my research and also developed research questions and subsequent hypothesis resulting out of those questions. Agency theory explains how to best organize relationships in which one party (the principal) determines the work, which another party (the agent) undertakes (Eisenhardt, 1985).
Batch: FW 07-09 71
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The theory argues that under conditions of incomplete information and uncertainty, which characterize most business settings, two agency problems arise: adverse selection and moral hazard. Adverse selection is the condition under which the principal cannot ascertain if the agent accurately represents his ability to do the work for which he is being paid. Moral hazard is the condition under which the principal cannot be sure if the agent has put forth maximal effort (Eisenhardt, 1989). The problems of adverse selection and moral hazard mean that fixed wage contracts (i.e. a fixed payout given to the Agent from the Principal for disbursing services) are not always the optimal way to organize relationships between principals and agents (Jensen and Meckling, 1976). A fixed wage might create an incentive for the agent to shirk since his compensation will be the same regardless of the quality of his work or his effort level (Eisenhardt, 1985). When agents have incentive to shirk, it is often more efficient to replace fixed wages with compensation based on residual claimancy on the profits of the firm (Alchian and Demsetz, 1972). The provision of ownership rights reduces the incentive for agents' adverse selection and moral hazard since it makes their compensation dependent on their performance (Jensen, 1983). The important tenets of Agency theory are1. Ensuring Ownership Incentives
?
?
Batch: FW 07-09 72
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The argument made above suggests that the provision of residual claimancy on the profits of the Principal provides a strong incentive for agents not to engage in moral hazard or adverse selection and so enhances the performance of the service. By turning the individuals who are the Agents into the residual claimants on the profit generated by this partnership between the Principal and the Agent; ensures that shirking is reduced. We can represent the two parties involved i.e. the Principal as the franchiser and the Agent as a franchisee. So using this terminology, we can describe the relationship between the two. If the franchised outlet is run by a passive owner who hires a manager to run the outlet, then the beneficial effects of franchising on adverse selection and moral hazard are lost. Passive ownership simply recreates the agency problems that franchising is designed to overcome. Moreover, passive ownership increases agency costs over those which exist when the owner hires outlet managers. In place of the cost of managing the agency relationship between the owner and the outlet manager, passive ownership imposes the cost of managing the agency relationship between the franchiser and the passive owner and the cost of managing the agency relationship between the passive owner and the outlet manager. Since the survival of new franchise systems depends on the franchisers' ability to economize on agency costs, those new franchise systems, which allow passive ownership, should be less likely to survive. 2. Monitoring Efficiency The performance of a franchise system (here in the context of my project at WIPRO; we can consider the ASP’s as a franchisee’s for disbursing WIPRO India’s service offerings) depends on the ability of the franchiser to ensure that
Batch: FW 07-09 73
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
all members of the system work to develop and maintain its brand name. The brand name is a signal to customers of the quality of the franchise outlet. As such, it is the major strategic asset that differentiates outlets in the franchise system from outlets in other franchise systems or independent businesses in the same industry. However, the development and maintenance of the brand name is an externality problem. Each franchisee (WIPRO’s ASP’s) has an incentive to free ride off of the efforts of other franchisees to develop and maintain the brand name. Each franchisee can internalize the entire value of the savings from shirking on quality maintenance or on advertising and promotion, but can externalize the cost of that shirking. For example, if a franchisee degrades quality, he will still be perceived as having the same quality as the rest of the franchise chain and will receive the same amount of benefit from the brand name. Given the existence of a free rider problem, the survival of a new franchise system depends on the franchisers ability to minimize the agency cost of free riding. Research has shown that information about agent behavior minimizes agent free riding. Information raises the risk of detection and therefore the likelihood that the franchisee will be terminated. Even if the information does not allow the principal to detect all free riding, it deters agents as long as the agents are risk averse. In addition, the information allows the principal to better differentiate suboptimal performance that is due to the agent's shirking from exogenous environmental shifts; and any information that improves this differentiation reduces the agent's incentive to shirk.
Batch: FW 07-09 74
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Obtaining information about franchisee behavior is a costly undertaking. Information on franchisee behavior is often gained through direct monitoring of franchisees. This activity includes verification that the franchisee is adhering to the contractual terms of the franchise agreement (Lal, 1990) through activities such as inspections of franchisee outlets by management personnel (Michael, forthcoming). Efficiencies in outlet monitoring can reduce these monitoring costs in two ways. First, by increasing the ratio of outlets to monitoring personnel, per outlet monitoring costs are reduced. The primary mechanism for verifying franchisee compliance with franchiser terms is the unannounced audit.
Since franchiser representatives can audit multiple outlets during a given work week, the cost per outlet of hiring a franchise consultant is lower if the franchiser has multiple outlets for each monitor on its payroll. Second, monitoring accuracy is improved by a high ratio of outlets per monitor. "Franchise systems with numerous units typically develop efficient routines for monitoring and measuring performance to assure profitability and uniform delivery of the franchise product or service. Such routines are enhanced by volume comparisons across units. The sheer volume of these comparisons can produce more educated routines for identifying and then managing the shirker One would expect that the more monitoring efficiency a franchiser has, the more able the firm would be to monitor franchisees and so economize on agency costs. 3. Geographic Dispersion Monitoring costs increase with the distance between the principal and the agent. The cost of monitoring franchised outlets is a function of the amount of time that monitors can spend on monitoring relative to other activities. The greater the distance between the monitor and the agent, the more travel costs must be added to the cost of monitoring. Moreover, when distances are greater, monitors
Batch: FW 07-09 75
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
must spend a greater amount of time away from agents, increasing the latter's opportunity to free ride and raising monitoring costs. For these reasons, monitoring costs are lower when agents are geographically concentrated. Therefore, one would expect that the more geographically concentrated a franchise system's expansion is, the more the firm is able to economize on agency costs. 4. Franchiser Free Riding Although much of the literature on franchising has focused on establishing franchisee incentives, franchisers must also be given incentives to motivate them to monitor franchisees against free riding. As was described above, franchisees have an incentive to degrade the brand name and, in the absence of monitoring, will do so. The franchiser prevents franchisees from doing this by auditing the quality of franchised units, and by establishing and enforcing contractual provisions for advertising, training and outlet operations. However, these monitoring activities impose a cost on the franchiser. In the absence of a countervailing benefit, the franchiser has an incentive not to follow through on this monitoring obligation. This has shown that if the franchiser was compensated entirely through these up-front franchise fees, he would have no incentive to monitor the system against agent shirking since he would receive no benefit from maintaining a high quality system. The royalty that the franchiser receives provides an incentive to monitor franchisees against shirking .To the extent that the franchiser receives ongoing royalties, he has an incentive not to default on his monitoring obligations. Defaulting on these obligations would lower the franchisers return from establishing the franchise system since an unmonitored system would have greater franchisee free riding and lower sales.
Batch: FW 07-09 76
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Potential franchisees see the size of the royalty rate in the franchise contract as a measure of the franchisers incentive to develop and uphold the brand name and the reputation of the franchise system. This reassures potential franchisees that the franchise system is organized in a way that will minimize agency problems .Therefore, one would expect that the higher the royalty rate in the franchise system, the more the firm is able to economize on agency costs. This argument leads to the fourth hypothesis:
B. RESEARCH QUESTIONS & THEIR HYPOTHESIS
1. Research Question: - Does Passive ownership of ASP’s (i.e. the owner appoints another person to run it fully) have any role to play in generating Adverse selection and moral hazard. Hypothesis: - New franchise systems which permit passive ownership of franchised outlets are less likely to survive than are other new franchise systems. 2. Research Question: - Does greater levels of monitoring of the ASP’s by WIPRO help in increasing Services revenue generation. Hypothesis:-the greater the WIPRO Ltd. monitoring efficiency, the more likely the ASP support model system is to survive and generate greater revenues.
Batch: FW 07-09 77
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
3. Research Question: - Does geographical concentration help WIPRO to better monitor and coordinate its ASP’s Hypothesis: - The more geographically concentrated the expansion of the ASP’s system, the more likely it is to survive. 4. Research Question: - Does loyalty of the ASP with WIPRO help in that ASP generating higher services revenue. Hypothesis: - The higher the royalty rate, the more likely that ASP would generate increasing profits from Services for WIPRO. 5. Research Question: - Does the lack of communication between WIPRO India services department and the ASP’s lead to adverse selection and moral hazard. Hypothesis: - Lower the level of communication higher are the levels of moral hazard and adverse selection leading to lower efficiency and lower profits of ASP’s
RESEARCH DESIGN
A. TYPE OF RESEARCH DESIGN
I have used both Exploratorary Research design and Conclusive research design in my research. In the start of the study Exploratory research was used to formulate or to define the major research problem more precisely, to identify the alternative courses of action and to develop hypothesis and isolate key variables and relationships for further examination (to use conclusive research design with Analytical Hierarchical process technique.)
Batch: FW 07-09 78
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Conclusive research was also undertaken to ascertain the main gap areas in WIPRO Service’s and to provide a solution so as to increase WIPRO’s services revenue in India and finally used to develop the Marketing and Sales plan for Ace India Ltd.
B. SCOPE OF THE STUDY
•
The study was conducted for India, New Delhi (covering 11 Authorized Service Providers and 16 Resellers of WIPRO Ltd.).
•
The Service was from a Known brand (i.e. services from WIPRO Ltd.). Time Scope Mid-August to Mid-October
•
C. TARGET POPULATION
• Indian • Authorized Service Partners ( i.e. the owners of the ASP) • WIPRO Resellers (. i.e. the owners of the Reseller firm) • All ASP’s and WIPRO resellers situated in New Delhi • Age of 18+
D. PRIMARY SOURCES OF DATA
This study was conducted at the premises of WIPRO India’s Authorized Service Providers (ASP’s) and WIPRO Resellers. The interviews were conducted with the concerned persons on the basis of structured questionnaire. Observations
Batch: FW 07-09 79
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
were made during the interview. Questions relevant to the concerned person were asked to gather up to date and accurate information.
E. SECONDARY SOURCES OF DATA
Secondary sources of data would be based on numerous sources including Journals, Magazines, Syndicated Services like IDC and articles, which were published in reputed journals and other important sources. These Secondary sources of data were accessed primary from IIPA and INDEST online access for e-books and Journals (Indian National Digital Library in Engineering Sciences & Technology http://paniit.iitd.ac.in/indest/ )
Some of the Secondary sources referred till date:-
Journals: 1. Harvard Business Review 2. Business Horizons
3.
Journal of Business Research
4. Information & Management 5. Qualitative Market Research: An International Journal 6. Journal of Retailing 7. Sloan Management Review
Syndicated Services: 1. IDC INDIA 2. NASSCOM 3. Gartner
Batch: FW 07-09 80
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Magazines: 1. Chip 2. Digit 3. Voice and Data 4. Network magazine 5. Mobility 6. 360 degree magazine 7. DQ channels 8. C.E.R.N. Resellers News
Important Landmark Researches: • Agency Theory (refer theoretical framework for the same)
Data from other Important Sources
1. Centre for Monitoring Indian Economy (CMIE) 2. Economic Times
3.
Technology Information, Forecasting & Assessment Council (TIFAC)
F. SAMPLING TECHNIQUE
The study involved finding gap areas in WIPRO India’s service offerings and in particular in the Delhi region specifically. For that I administered the questionnaire to all the WIPRO Resellers and WIPRO Authorized Service providers in the Delhi region. (The details of the above are given in the Annexure in the form of ASP list and WIPRO Resellers list in the Delhi region.)
G. SAMPLE SIZE
Batch: FW 07-09 81
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The sample size for Delhi region was: - 11 for WIPRO Auth. Service Providers 16 for WIPRO resellers (excluding those in Delhi NCR region)
H. QUESTIONNAIRE DESIGN
For the survey conducted, a detailed disguised questionnaire was prepared. Questionnaire was administered to concerned persons. The responses were recorded on the questionnaire itself. Questionnaire contained both open ended and closed ended questions. Closed ended questions were used where choices were limited and where some measure of degree was required. Multi choice questions were used where choices available were more than two. Open-ended questions were primarily asked to the respondents to have a Qualitative feel of the main issues involved and where responses can vary widely and so limit cannot be implied. I had to ensure no telescoping i.e. when the respondent assumes that just because a particular incident has happened in the recent past, they might misjudge the timing and give responses that seem to be closer to the present than the event actually happen. Questions were introduced to ensure that details are extracted for the validity of the events. Questions asked were formulated to take care of two issues a. The event so listed by the respondents is not a creation (Fake event) b. Not so much information is asked to the respondents so that the respondent feels “bombarded”
Batch: FW 07-09 82
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Some questions were specifically comparative in nature like what were the respondent’s views of Services provided by WIPRO India vis-à-vis WIPRO’s competitors. At the end of the questionnaire I attached a “sales funnel excel sheet” to be filled up by the Authorized Service Providers to get information about the current leads they are trying for WIPRO India in terms of generating revenues. Note: - sample questionnaires for ASPs and Resellers has been attached in the appendix.
I. SCALING TECHNIQUES
In the structured questionnaire that was administered to the respondents, the type of scale employed was Interval scale and Ordinal Scale. Interval Scale was used in questions to have a quantitative feel of the ranking of WIPRO Services with respect to its major competitors Ordinal Scale was used to gauge the overall popularity of the various WIPRO Services revenue streams. (i.e., to have a ranking)
Batch: FW 07-09 83
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
DATA ANALYSIS
A. METHODOLOGY
Step I
The questionnaire was framed for ASPs so as to extract data on the following Parameters: ?
Visibility: - To check the visibility of WIPRO Ltd. As a service providing organization in the field of IT products & Services in India. Market Demand: - To gauge the market demands for various WIPRO Ltd. Service offerings. Identification of new service offerings: - To get valuable inputs from the ASPs so as to identify new areas of opportunities for WIPRO Ltd. To position its service offerings. Clarity: - To check the level of clarity of the ASPs in disbursing service offerings from WIPRO Ltd. Brand Image: - To check the brand image of WIPRO Ltd. As a service organization.
?
?
?
?
Batch: FW 07-09 84
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Range of service offerings vis-à-vis its competitors: - To have an idea as to how WIPRO India Ltd’s Service offerings fare vis-à-vis its major competitors in India. Awareness: - To gauge the overall awareness and understanding of WIPRO’s ASPs in terms of current service offerings from WIPRO Ltd. Level of formalization in Selling Services: - To have an idea as to how systematic the ASPs were when it came to selling the various service offerings from WIPRO Ltd. Achievement of Sales Target: - To check how the ASPs were achieving their sales targets if or any targets given to them from WIPRO Ltd. Or made by them.
?
?
?
WIPRO Resellers offer excellent opportunity for me to get valuable information in terms of WIPRO Ltd.’s current service offerings. They have the advantage of being in direct contact with WIPRO’s Customers, especially the Small Office Home Office (SOHO) / Individual segment. The questionnaire was framed for Resellers so as to check the awareness level of Resellers w.r.t. the current service offerings from WIPRO Ltd. Also the Resellers stock products and services of WIPRO’s major competitors like HP, IBM, etc. Thus they can give valuable information in terms of how WIPRO services fare in the market vis-à-vis its competitors and where WIPRO is lacking. Finally to increase its services revenue; to know how WIPRO can use its Resellers to disburse IT services especially STEPs, AMCs and Upgrades.
Step II
Batch: FW 07-09 85
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
After the questionnaires for the ASPs and the Resellers were finalized, I started taking appointments followed by the daily visits to the ASPs and the Resellers to obtain the valuable input regarding the various loopholes (if any) in the service revenue area to achieve maximum returns from this area.
Step III
After all the questionnaires were filled up, I was left with both quantitative and qualitative data. For analyzing the quantitative data, I used graphs and pie charts to make out important inferences. The qualitative data which I had in terms of open ended questions posed a unique challenge for me as to should I quantify it. To overcome this problem I made use of Analytical Hierarchical Process Technique (AHP). Consequently the AHP technique was used to come out with valuable suggestions to address the gap areas identified by the research. A brief overview of AHP technique is given in the next section.
B. PLAN OF DATA ANALYSIS
The visit to these ASPs and the Resellers brought forward a lot of areas of concerns; fruitful suggestions, which in-turn helped me in giving a perspective on the practical front. I interacted assertively and probed every word the ASPs and Resellers had to say so as to identify the most important and significant gap areas in the service revenue field, which was followed by the best possible suggestions to overcome these gaps. For the simple analyzing of data like the rankings, awareness, etc I used graphs, pie charts, etc to interpret the data. Finally to give the best possible alternative for recognizing the best possible suggestion to increase the service revenue, I made use of Analytical Hierarchical Process (AHP), which is discussed below:
Batch: FW 07-09 86
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The analytic hierarchy process (AHP) is a comprehensive, logical and structural framework, which allows improving the understanding of complex decisions by decomposing the problem in a hierarchical structure. The incorporation of all relevant decision criteria, and their pair wise comparison allows the decision maker to determine the trade-offs among objectives. The application of the AHP approach explicitly recognizes and incorporates the knowledge and expertise of the participants in the priority setting process, by making use of their subjective judgments, a particularly important feature for decisions to be made on a poor information base. However AHP also integrates objectively measured information (e.g., yields) where this information is available.
The AHP is based on three principles: A) Decomposition of the decision problem, B) Comparative judgment of the elements, and C) Synthesis of the priorities. The first step is to structure the decision problem in a hierarchy as depicted in Figure 2.4 below. The goal of the decision, such as "Optimal Allocation of Research Resources", is at the top level of the hierarchy. The next level consists of the criteria relevant for this goal and at the bottom level are the alternatives (for example research projects) to be evaluated.
Batch: FW 07-09 87
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Figure 2.3 AHP Hierarchy Diagram The second step is the comparison of the alternatives and the criteria. They are compared in pairs with respect to each element of the next higher level. It allows expressing the comparisons in verbal terms, which are then translated in the corresponding numbers. As the last step, we synthesize the comparisons to get the priorities of the alternatives with respect to each criterion and the weights of each criterion with respect to the goal. The local priorities are then multiplied by the weights of the respective criterion. The results are summed up to get the overall priority of each alternative. To facilitate using the AHP technique, I used a software package called Expert Choice.
Application of AHP for WIPRO Ltd. support department
1. I used AHP in generating a comparative ranking of WIPRO India vis-à-vis its major competitors (IBM, Dell, HP-Compaq, WIPRO). The ranking was done by
Batch: FW 07-09 88
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
data gathered from various sources on the service offerings of WIPRO and its competitors and also the opinion of WIPRO’s ASP; who ranked WIPRO Services in comparison to its competitors mentioned above. Based on that; A goal, Decision Criteria and alternatives were compiled in the Expert choice software and output generated. 2. AHP technique was used to give WIPRO India as a decision making tool for appointing new ASP’s. Thus WIPRO India can utilize this technique to make decisions for appointing or not appointing ASP’s which ultimately help WIPRO Ltd. to increase its services revenue. Note: - The hierarchy diagram for this scenario is shown in the “Results” section. 3. AHP technique was used to give WIPRO India as a comparison making tool to accessing the overall level of performance of their ASP’s. Thus by using AHP; they can assign a ranking to their ASP’s based on various performance criterion which can be used in the AHP technique. Note: - The hierarchy diagram for this scenario is shown in the “Results” section.
RESULTS
A. OBSERVATIONS
A) The ASPs in a Delhi region of WIPRO Ltd. that we interviewed regarding
my project, only 30% ASP’s were exclusive service providers for WIPRO Ltd. and the rest were Support partners for WIPRO’s competitors like HPCompaq, IBM etc.
Batch: FW 07-09 89
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi B) The Bar Graph given below summarizes the awareness level of the ASPs
for the various service offerings by WIPRO Ltd.
Awareness Of Acer Services
9 8 7 6 5 4 3 2 1 0
C pg ra de s ST EP Bu yb ac In k st al la t io n Tr ai ni ng N et w or ki ng St or ag e R ol lO ut U S FM AM
Figure 2.4 From the bar graph (Fig. 2.5), we can see that Annual Maintenance Contract (AMC) and Installation Services have the maximum awareness levels of the ASPs. Important services like Networking and Facility Management Services (FMS) can be the important source of service revenue for WIPRO Ltd. C) The cumulative score obtained after tabulating the responses of the ASPs for the popularity of the various service offerings and the subsequent revenue generated from those streams is given below in table 2.4: Table 2.4 Popularity of WIPRO Services Roll FMS 34 AMC 78 Upgrades STEP 55 42 Buyback 16 Installation 70 Training 27 Networking Storage Out 37 18 15
Batch: FW 07-09 90
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The percentage wise criteria for the above is given in the pie-chart below, which clearly states that AMC with 19% is among the top, followed by Installation with 18% and so on.
Figure 2.5 Popularity of WIPRO Services Thus we see that AMC is regarded as the most valuable source of service revenue generation by the ASPs followed by Installation, Upgrades, STEP, Networking, FMS, Training, Storage, Buyback and Roll Out Services (Implementation).
D) The competitive position of WIPRO and its competitor’s w.r.t. service
revenue initiatives in terms of percentage is given below.
Batch: FW 07-09 91
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
9% 7%
7% 28%
Acer IBM HP HCL Wipro
26%
23%
PCS
Figure 2.6 Competitive Position of WIPRO In terms of its service revenue initiatives, the ASPs have the perception that WIPRO India Ltd. has adequate variety of services to augment / generate revenue from its services. An important point to note here is that most of the ASPs of WIPRO were also service partners for IBM. As from the pie chart, we can see that WIPRO has got the highest percentage (28%), whereas HP (26%) and IBM (23%). However this result should be taken with the caution as error could creep in due to the biased answers of the ASPs, as not everyone had knowledge of each of the competitor, resulting into response error.
E) The customer profile for the ASPs for different product lines from WIPRO
Ltd. are as follows:
Batch: FW 07-09 92
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
A P C so e Poile B s F r D s t p S 's u t m r r f a e o e ko s
6 %
1% 3
G v rn e t o e mn 3% 2 Eu a n d c tio C rp ra o o te BO e c m P /T le o 2% 3 I d id a n iv u l
2% 6
Figure 2.7
A P C s m r P file B s F r S 's u to e ro ae o N te o k o b os
1% 8 1% 2
2% 3
G ve m n o rn e t E u tio d ca n C rp ra o o te B O e co P /T le m Id ul n ivid a
2% 4
2% 3
Figure 2.8
Batch: FW 07-09 93
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
A P C s m r P file B s F r S rv rs S 's u to e ro ae o e e
6 % 1% 8
1% 2 4% 0
G ve m n o rn e t E u tio d ca n C rp ra o o te B O e co P /T le m 2% 4 Id ul n ivid a
Figure 2.9
A P C s m P file B e F r S rag S 's u to er ro as o to e
0 % 3% 3
G ve m n o rn e t E u tio d ca n C rp ra o o te B O e co P /T le m In ivid a d ul
0 %
6% 7
Figure 2.10
Batch: FW 07-09 94
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
A P C s m P file B e F r S 's u to er ro as o P erip e h rals
1% 7
G ve m n o rn e t 3% 2 E u tio d ca n C rp ra o o te B O e co P /T le m
1% 7 1% 7 1% 7
Id ul n ivid a
Figure 2.11
F) The customer profile for the ASPs for the whole product lines from WIPRO
Ltd. are as follows: Figure 2.12
AS P s C u s to m e r P r o file B a s e F o r T h e W h o le P r o d u c t L in e
14% 8% 33% G o ve rn m e n t E d u c a tio n C o rp o ra te 23% 22% B P O /T e le c o m In d ivid u a l
G) Observations regarding the Field Report on WIPRO service revenue
streams:
Batch: FW 07-09 95
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Table 2.5 Observations Factors Visibility Market Demand Identification of new service offerings Clarity Brand Image Range of service offerings vis-à-vis its competitors Awareness Level of formalization in Selling Services Achievement of Sales Target Availability of services • • • • • High • • • • • Averag e Low
The visibility of the revenue streams was found to be high, i.e., all channel partners had heard of one or more of the stream at some point of time. The most positive signals for WIPRO Ltd. come from the range of offerings it provides with the customer and the extensively growing demand for services and support. Thus WIPRO has potential to cater to the largely deprived service industry with the plethora of offerings. Due to the low level of understanding / awareness, the channel partners are ignorant of new service offerings such as FMS, Roll out services, etc and thus in-turn had problems
Batch: FW 07-09 96
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
pushing the right kind of stream to the customer resulting in dismal revenue figures. But if we consider w.r.t. the range of service offerings, it’s a positive sign looking at the growing demand for services and support.
B. GAP AREAS
Based on the observations, tabulated data and important qualitative data which I obtained through discussions with the respective ASPs and the Resellers; I have identified the following gap areas:
A) Authorized Service Providers (ASPs)
1) As the figure of 30% for exclusive service providers for WIPRO Ltd. is
quite low, the interest level of the other service providers had been divided with other competitors as well, i.e. they are not fully focused towards WIPRO. This essentially means that the ASPs are lacking in loyalty to WIPRO.
2) The awareness levels of WIPRO’s ASPs regarding the plethora of
services currently being offered by WIPRO Ltd. are extremely limited. Moreover the ASPs wanted more information regarding the services, they were unaware off. This clearly shows that there was a major communication gap between WIPRO and its ASPs regarding the WIPRO’s service offerings. 3) AMC, Installation and Upgrades were the main sources of revenue generation for the services. Other lucrative and upcoming areas like STEPS (due to the boom in laptop sales, desktops, etc in India currently) were not being capitalized properly. Subsequently new emerging areas like wireless networking that is going to be the future trends in India are still not being capitalized.
Batch: FW 07-09 97
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 4) Most of the ASPs were not systematic in selling the various service
offerings to the customers. This shows that they were not aggressively pushing the service offerings to the end customers, so as to generate revenue. This could possibly mean that they don’t have clear knowledge and understanding of the service offerings currently being provided by WIPRO Ltd. except for some few popular services like AMC and Installation. This shows that their preparedness for selling the services was quite low.
5) There is greater thrust on selling of WIPRO products but the same push
strategy is not being employed in the case of services, i.e. with good segmentation, effort to work on service offerings is not present like in sales. Also they lacked important selling tools like “STEP sales kit”, pamphlets, etc.
6) None of the ASP’s I interviewed was assigned any revenue targets in
services from WIPRO Ltd. This caused a lack of motivation in the ASP’s. Also most of the ASPs said that there was a lack of drive or initiative by WIPRO Ltd. itself to help them increase their service revenue.
7) From the consolidated customer profile base of WIPRO’s ASP’s; we
can see that the Individual segment is the least. There has been an explosive growth of computer usage and purchase in the last decade in India. Individuals / SOHO (small office home office) segment is the fastest growing segment in the country today. It is but natural that with increase in consumption of IT products in India by Individuals/ SOHO segment there is bound to be an increase in installed base and an increase in demand for IT services from manufacturers. Clearly WIPRO is not capitalizing on this front. More steps needed to be taken in this area.
8) In terms of initiatives taken up independently by the ASPs to augment and
increase services revenue; nothing concrete is taking place. There is no standard or set procedure they follow in this regard. Most of them are
Batch: FW 07-09 98
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
dependant upon WIPRO Ltd. to come to them and motivate them in this regard; i.e. there is a complete lack of thrust or initiative from there side; barring one or two Premier support partners, i.e. WIPRO has taken sincere initiatives but information has not percolated down.
9) Low brand image of WIPRO: - Almost all the ASP’s were service
providers of major WIPRO competitors like IBM, HP-Compaq etc. They considered WIPRO’s competitors as a more valuable business partner rather than WIPRO. Also the certificates of IBM, HP, etc were proudly displayed in their offices, and WIPRO certificates were largely missing barring one or two ASP’s. Also WIPRO should try and project itself as a service organization.
10) Almost all the ASP’s said that WIPRO India should have dedicated 24*7
customer support in the form of Call Centers etc. The justification given was that most computer problems don’t come in the time frame of 9 to 6, which makes the customers suffer.
11) ASP’s said that there was no coordination between WIPRO’s ASPs
within a region. According to them such kind of working relationship was necessary.
12) Price lists were also another area of heated debate with the some of the
ASP’s. They mentioned that there was a lack of clarity on the Price lists. Also the price lists available to them often arrived late or did not arrive at all. This they said caused confusion and loss of productivity in them. They were confused between the price lists of STEP and other service offerings.
13) Storage was an area which some of the ASP’s were interested in; but
also consequently mentioned that WIPRO Ltd. support to them in this area was rather limited. Thus WIPRO should cash on this lucrative area heavily.
Batch: FW 07-09 99
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
14) Logistics were also a major cause of concern for the ASP’s which was
causing a lot of customer dissatisfaction. According to the ASP’s; there was a long transit time for spare parts to arrive to them from WIPRO Ltd. This caused a lot of inconvenience to them in front of the end customers.
15) Some ASP’s mentioned that they were very much interested to pitch in for
WIPRO Ltd. service offerings to their end customers; but were not receiving adequate support from WIPRO Ltd. in terms of prospective customers information, sales funnel etc. 16)There was strong resentment in the payout matrix albeit the margins given to the ASP’s. They wanted it to be increased.
17) Another gap area came very recently when WIPRO in order to gain
visibility in the market opened four malls at a stretch in Delhi region but the availability of product ranges cannot be seen at those centers.
B) Resellers / Dealers
1) In-spite of having the maximum contact with the SOHO / Individual segment, neither the Resellers nor WIPRO has taken any initiative to make this segment as one of their major customer base. 2) Almost all of the resellers have no knowledge of some or any of the service offerings. Some of them even didn’t know of theirs existence.
3) There was a major communication gap between the support department
and the resellers and this communication was restricted to sales people only.
Batch: FW 07-09 100
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
4) Price list was another major gap area as it reached the dealer either very late or not at all and thus they have to stick to their own sources only. Also they don’t have knowledge about the price list of different service offerings separately.
5) Margin for the resellers was less as compared to its competitors. Most of
the dealers were of the view that they were not going to spend their precious time on selling WIPRO services which have such low operating margins for them. 6) The customers of dealers are facing lot of problems w.r.t. the after sales service, especially the warranty service which in turn is taking the relationship of dealer and its customers towards the negative side. 7) There is a need for updation of the dealers’ w.r.t. the latest developments especially the technical or any other area (service offerings) so as to make the customer aware of it on time.
8) There is an immediate need for WIPRO to publicise itself (products &
services) and having provision of pamphlets, brochures, etc especially in the SOHO segment which has a large number of customer base ready for WIPRO to encash upon. 9) Non-availability of tie-ups with ASPs and Dealers is also need to be looked upon, especially when almost all of the ASPs are located in South Delhi only. 10)Vendors advertise schemes for products and services in newspapers without informing the retailers / resellers, who provide products and services at the price quoted to them of the stock they already hold. The customers ask for those rates, which are quoted in the newspapers and hence feel cheated.
Batch: FW 07-09 101
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 11) The non availability of regular services (especially due to low
awareness level) is making the dealers to give their own warranty to its customers, which is making the service revenue of WIPRO to reduce.
C. ANALYTICAL HIERARCHICAL PROCESS ANALYSIS
I have applied AHP in three scenarios for WIPRO; as discussed earlier in the Data Analysis section of this report.
Scenario 1: - I used AHP in generating a comparative ranking of WIPRO India
vis-à-vis its major competitors (IBM, Dell, HP-Compaq, WIPRO). The ranking was done by data gathered from various sources on the service offerings of WIPRO and its competitors and also the opinion of WIPRO’s ASP; who ranked WIPRO Services in comparison to its competitors mentioned above. Based on that; A goal, Decision Criteria and alternatives were compiled in the Expert choice software and output generated. The various AHP parameters are as follows: 1. Goal: - To evaluate the best service provider (amongst WIPRO, IBM, HPCompaq, WIPRO, Dell) 2. Decision Criteria: - I made use of five decision criteria. They were: a. Service innovation- it refers to the level of innovation a service provider has in his services; i.e. those services which are exclusive to the provider. b. Service variety- it refers to the range of service offerings
Batch: FW 07-09 102
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
c. Website Support - Support features that support provider’s website have to offer the customers; in terms of usability features, knowledge base, ease of use etc. d. Strength in Service distributors - it refers to the service providers strength in having a wide coverage of service providing sites for access by their customers. e. Customer focus- it pertains to the level of customer focus the service provider has; in terms of customer centered support policies, clarity in service offerings etc. 3. Alternatives: - WIPRO + its four major competitors of WIPRO. 1. WIPRO 2. IBM 3. HP-Compaq 4. WIPRO 5. Dell Note: - For conducting AHP analysis, I made use of Expert Choice-11 software. The software had a unique feature wherein I was able to make pair-wise comparison between the alternatives and decision criteria. Also to check logical inconsistency in the data entry operation; there were suitable safeguards to prevent this from happening. The prescribed limit of inconsistency in the software should be not exceed 0.10 Pair wise comparisons were made by data collected from various sources like websites, talking to Industry experts, doing competitive analysis, talking to ASP’s, computer resellers etc. Finally priority ranking was given to the five Decision criteria using the judgment of an expert.
Batch: FW 07-09 103
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Synthesis with respect to: Goal: Best Service Overall Inconsistency = .09
WIPRO IBM Dell WIPRO HP-Compaq .190 .495 .085
.127
.102
Figure 2.13: Output of the AHP technique applied to scenario 1 From figure 2.13 which is the generated output from the AHP model; we can see that IBM has the best ratings in comparisons to others and WIPRO gets ranked third with a score of 0.127 Note: - the overall inconsistency of the model is .09 which is well within the limit of 0.10
Batch: FW 07-09 104
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Figure 2.14 Figure 2.14 shows the pair wise comparison data in Expert Choice-11 for 5 criteria.
Figure 2.15 Gradient sensitivity graph; Strength in service distributors From Figure 2.15; which is a basically a Gradient sensitivity graph (generated from Expert Choice-11 software) for “Strength in service distributors” decision criterion. We can see that at 0.18 weightage; IBM is ranked the highest followed by HP-Compaq, then WIPRO & Dell tied at third position and finally WIPRO at the last position i.e. fifth.
Batch: FW 07-09 105
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
By the gradient sensitivity graph in figure 2.15; if WIPRO wants to improve its competitive position in Strength in Service distributors it can increase its strength in making new service distributors and if gets to the 0.5 weightage point in the above graph would be successful in beating Dell and if further increases it to 0.85 would come in at number 3 from the last position beating Dell, HPCompaq.
Figure 2.16 Gradient sensitivity graph; Service Variety From figure 2.16; which is a Gradient sensitivity graph (generated from Expert Choice-11 software) for “ Service Variety” decision criterion we can see that if
Batch: FW 07-09 106
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
WIPRO is presently at number three along with Dell, IBM and HP-Compaq being at the top. If WIPRO tries to increase its Service Variety as shown in figure 2.16; it falls to last place form its overall good position of second to fifth amongst its major competitors. Thus one possible explanation could be that increasing Service variety might have an impact on Customer focus; i.e. that of decreasing focus on delivering to end-user.
Batch: FW 07-09 107
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
WIPR
Weighted head to head between WIPRO and IBM
Figure 2.17 A head to head weighted head comparison comparing WIPRO with IBM Figure 2.17 shows a weighted head to head comparison between WIPRO and IBM. IBM is the best service provider; and from the above figure shows where does WIPRO stand vis-à-vis IBM. The entire five Decision criterion are shown and the scores of IBM are shown; along with the overall score.
Batch: FW 07-09 108
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Figure 2.18 Hierarchy diagram for Best Service Figure 2.19 depicts the hierarchy diagram for Scenario 1 (described earlier).
Batch: FW 07-09 109
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
We can see the overall goal; the five decision criterions and finally the five alternatives namely WIPRO, Dell, IBM, HP-Compaq, WIPRO.
Scenario 2:-. AHP technique was used to give WIPRO India as a decision
making tool for appointing new ASP’s. Thus WIPRO India can utilize this technique to make decisions for appointing or not appointing ASP’s, which ultimately help WIPRO Ltd. to increase its services revenue.
Figure 2.19 The hierarchy diagram for ASP selection In this case, the important parameters of AHP technique would be: Goal: - The Goal is to choose the ASP from a list of prospective ASP’s who have applied to become accredited with WIPRO as their support partners.
Batch: FW 07-09 110
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Decision Criterion: - a. Support Engineers- This criterion is further split into 2nd level which focuses on the education level of the engineers; i.e. are they MCA, MCSE, MCP, CNE or ACE ( WIPRO Certified Engineer). b. Internet Access Resources- it is also further broken down into what type of internet connectivity does the prospective ASP have; i.e. leased line or dialup. c. Technical resources available to engineers- it is further broken down into the software collection they have, type of centralized drivers and library for technical reference. d. Experience level- It pertains to the experience level the prospect has in the computer industry in terms of years etc. e. Internal training within the Organization- to check out what are the training level of its employees in the organization, how frequently do they update their domain knowledge etc. f. Location- location can play an important decision criteria in selecting an ASP. Some applicants could be strategically located in areas having high prospects, good connectivity etc. g. Financial Position- it pertains to the financial history of the applicant, does he have a good credit ratings; is he a creditor to another party, what is his debt taking capacity etc. Alternatives: In this case it would be the applicants or prospective ASP
who want to be affiliated with WIPRO. This model can be used to evaluate the applicants based on the judgment of the decision makers; i.e. like which factor should be given higher rankings etc and finally making pair wise comparisons to achieve at the best alternative.
Batch: FW 07-09 111
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Subsequently Sensitivity Analysis can be done to check out various scenarios that may result by changing the weight age of the decision criterions.
Scenario 3. AHP technique can be used by WIPRO India as a comparisonmaking tool to accessing the overall level of performance of their ASP’s. Thus by using AHP; they can assign a ranking to their ASP’s based on various performance criterion which can be used in the AHP technique. The goal would be to evaluate the Best ASP With decision criterion like Sales in the last quarter, ASP initiative in selling services, useful feedback from ASP, customer satisfaction etc. Alternatives could be the various existing WIPRO ASPs in a given geographical area. Thus comparisons could also be made area wise like North sector, East, West etc. The result generated would give WIPRO a ranking of the ASP’s; which would be a helpful tool for WIPRO to formulate strategies and plans in coordinating with its ASPs in the future.
LIMITATIONS & CAVEATS
Batch: FW 07-09 112
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Every project or study has its own limitations, which are limited by factors like time, money, availability etc. These are some of the limitations I encountered during the course of summer training. 1. I had to study the perception about service levels of the dealers in the Delhi region only. WIPRO India has ASPs and resellers all across India. Till date WIPRO has 187 ASPs across India. 2. The sample size of 11 ASPs may not give a true picture about the entire population. 3. Some of the respondents filling up the questionnaire were prone to error which could possibly arise due to bias in answering. 4. The duration of the project was for two months (August-October) 5. Some of the ASPs and resellers were apprehensive in giving answers to sensitive questions like their sales figures in the last quarter etc. 6. New Delhi being a large area; also the ASPs and resellers were located throughout Delhi. This made traveling a difficult task in the Delhi heat. 7. The availability of data was a problem sometimes. Initially I had to struggle to obtain data on WIPRO Services but after due clearance from my Guide; the data was made available to me.
CONCLUSIONS & RECOMMENDATIONS
Batch: FW 07-09 113
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
To summarize, IT services is an important source of revenue for IT companies today. The same holds for WIPRO also. The current service offerings by WIPRO are competitive enough, but still not reaching to its full potential. WIPRO as a brand is increasingly getting popular in India. The business model of WIPRO to disburse its services is indirect. Due to this WIPRO’s service revenue in some ways is contingent upon its ASPs, ACC and its other channel partners. Major initiatives need to be taken by WIPRO in bridging the communication gap with its ASPs. Motivating them, giving them sales targets, promoting WIPRO as a premier service organization and greater promotion of services are the need of the hour. The AHP models suggested to WIPRO for appointing new ASPs can be used to do partnership with those partners who would be sincere in their efforts to provide WIPRO services to its customers and to increase service revenues. Maintaining Customer loyalty is a critical factor influencing long-term profitability. With strong market growth and good customer loyalty one can reap significant rewards. Prospects and even past customers are suspicious dealing with unknown enterprises even if they have superior offerings. An enterprises success depends, to a great extent, on the impact that sales and advertising make on its image. Focusing efforts in these areas of marketing can improve chances of success. Based on the gap areas, which I identified, I would like to give following recommendations to WIPRO Ltd. to improvise upon the gap areas obtained and apply some new strategy(s) suggested:
A) For Authorized Service Providers (ASPs)
Batch: FW 07-09 114
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1) As WIPRO is on the higher side at its range of product offerings to the computer users and thus with a growing demand for services and support, has the potential to cater to the largely deprived service industry with its plethora of offerings and thus it should not loosen this opportunity to capture the service industry and position itself as the best service organization. 2) With desktops and notebooks unit sales soaring the charts especially during the last 6 months or so, the Customer Service and Support industry is indispensable and thus WIPRO should cash on it heavily. 3) Incentives for the ASP should be made achievable and flexible enough and should not be only limited to a 100% achievement of the target. 4) The awareness of the brand, and positioning of WIPRO extensively as a best service Organization should be extensively done through the use of media or print. 5) There should an aggressive push given to the WIPRO service, especially with attractive features like 24*7 support, on-line technical support, etc. 6) Due to the cut-throat competition, pricing should be made more competitive not only in product offerings, but also service offerings as well. Another possibility in this area could be to have different service packs for different customers, i.e. by segregating into premium customers, medium customers and low customers and providing them with the service offerings as low price packs, average price packs and high price packs, respectively. Also the high price service packs could be introduced with some extensive discounts or by joining them with other offers from time to
Batch: FW 07-09 115
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
time in order to lure the end-customers and thus making it economical for them. 7) There should be full clarity among all the ASPs for the different service offerings followed by motivation given to them so that they make an aggressive effort to push the service offerings in order to generate the service revenue. 8) WIPRO should hold regular meetings of all the ASPs together every month so as to have a good communication between each of them and thus discussing and removing all the loopholes if any during that period. In addition to this regular trainings should also be provided to the ASPs so as to acquaint them with the latest service revenue initiatives. 9) There should be regular policy of giving the revenue targets to all the ASPs (can be quarterly or so) which should be according to their strength and the installed base and thus it should be followed by the regular audit done by the WIPRO Support Department to find out the possible areas of non-achievement of the allotted targets and thus reasons for them and finally work on those areas. 10) WIPRO should come out with innovative service offerings such as: • Customer should be made to choose their own combination of resolution payment. • Attraction offers, i.e. purchase of one service offering (like AMC) would give 20% discount on the other service offering (like STEP).
•
time,
duration,
etc
and
accordingly
making
Different combo-packs i.e. purchase of a product along with AMC would give free upgrade in the 2nd year or 1 year extra technical support, etc.
Batch: FW 07-09 116
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi •
Giving incentive points to customers whenever they go for WIPRO services (for eg., if a customer goes for upgradation of his computer and upgrades his RAM from WIPRO, he would get certain points which when accrued up to a particular level could be redeemed by the customer for a suitable incentive given by WIPRO.)
11)There should be a joint effort by various departments like sales and support team should work together on the prospective leads available both the departments especially a lot of relaxation in it would also give a sense of satisfaction feel satisfied with regard to which would give
terms of work load and thus
level to the customers also as they would
buying a product and having proper support for that. 12)Instead of having a fixed payout matrix for the ASPs, there should be a variable pay-out matrix scheme, wherein the pay-out would be dependent upon service revenue generated by the ASPs, i.e., higher the service the service revenue, higher the pay-out. 13) WIPRO should have a concept as Premium Partner, i.e., one ASP should take care of AMC, STEP and FMS exclusively due to its large customer base in the name of government and corporate sector, which can have a large number of order at a single point of time for the above three services with addition as infrastructure management as well. 14) WIPRO should have a policy of motivating it partners in respect of achieving the vouchers, etc. 15) WIPRO should keep a demo version of all its premium product ranges along with whole information of all its service offerings in various forms like pamphlets, magazines, etc in everywhere where WIPRO is present. target / incentives like free trip to Malaysia for two, gift
Batch: FW 07-09 117
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
16) WIPRO should give the rights to the ASPs to add those customers also, to whom the respective ASP have not supplied the systems, but who are interested in various service offerings like AMC, etc. For this purpose WIPRO should direct those customer base to the ASPs incase WIPRO comes across any or the right to entertain the unsatisfied customer as well. 17) WIPRO should also have the facility of toll free number and online support which would give lot more acceptance by the customers overall. 18) WIPRO should come up with a scheme to provide the existing customers with a weekly or monthly subscription of newsletter containing information about the service offerings (latest ones as well). 19) Recertification: - This can be another area where WIPRO can increase its services revenue. The recertification plan consists of targeting those end users of WIPRO Products whose machines are now out of the warranty period. An WIPRO Certified engineer can visit the premises of the customer and “recertify” the machine by physically verifying the contents of the system, and ensuring that all warranty rules have been followed. This can be done for a Fee, which in-turn would result in revenue generation. 20) Product Redeployment: - This plan focuses on the ‘buyback” technique. The plan is to buyback the older existing hardware at the customers premises; replacing it with Newer hardware from WIPRO. (This would also ensure increased revenue for WIPRO Products). Subsequently retrofitting and upgrading the older machines and finally redeploying them to customers who have their specific needs being fulfilled by these machines
Batch: FW 07-09 118
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
for a fee. The process could be carried out in the same organization or at different levels too. 21) Customer training: - Customers who purchase WIPRO Products and Services can be given specific training into using his/her new WIPRO hardware. The training can be positioned as a Value added benefits given to the end user specifically in the Individual / SOHO segment. The ASP’s could be authorized to conduct the training at their premises for a fee. This would ensure greater customer contact and satisfaction. 22) Online Back up service: - With the explosive growth of Internet and Web based services like E-mail (E-mail service providers typically now provide large size mailboxes of the tune of 1 GB size; e.g. rediffmail.com). WIPRO India could capitalize on this lucrative segment with Storage solution services. Presently WIPRO is not much in the Storage Services segment. 23) Analytical Hierarchical Process: - This technique can be used by WIPRO to aid its decision making capabilities by basing them on sound scientific and mathematical tools and techniques. Strategic decisions like appointing new service partners, their location, etc can be facilitated by using this technique. Sound decision making in-turn would help in increasing the service revenue.
B) For Resellers / Dealers
1) The SOHO / Individual segment is one of the biggest segment among all. WIPRO should take serious initiative to capture this segment as this has a large installed base and a big opportunity for providing various and different service offerings. 2) Major steps to educate and train the resellers should be taken so that they can make their customers aware of various service offerings and the benefits from them.
Batch: FW 07-09 119
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
3) There should be regular meetings together with resellers, sales and support people, so as to reduce or remove the communication gap which is a big cause of concern. 4) The provision of providing the price list and margin should be checked upon and improvise upon the loopholes in-order to be effective. 5) The problem of after sales support should be checked upon thoroughly and thus improvises upon the loopholes if any.
6) The dealer should have tie-up with the ASPs so that they can satisfy their
WIPRO customers better than looking for some other sources. This would make the relationship of customer and dealers / WIPRO stronger as fast and better procedure of rectifying their problems would be a good sign. This will actually increase the service revenue as it will make dealers to stop their own set up base and engineers.
7) There is lot in buyback service available as the dealers may be the
right person who can make the awareness level of different customers towards WIPRO and its products and services.
8) WIPRO doesn’t have a standard credit policy. It is expected by the
distributors to be provided credit by the company. 9) There should a provision of technical bulletin in form of CDs and books to the dealers so as keep the awareness level towards the maximum point. C) There should be regular use of strategy models such as Analytical Hierarchical Process, Margin-Return Model and the Competitor’s Analysis Model (as explained in Marketing Plan 2009 in phase III of the report), which would thus help WIPRO to take correct steps and initiatives in-order to capture the major part of service revenue market.
Batch: FW 07-09 120
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ANNEXURE
Batch: FW 07-09 121
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ASP / CHANNEL BASED WIPRO SERVICES QUESTIONNAIRE Name: Organization: Category: ASP / PSP / ACC Address: Phone: Email id:
1) Are you working exclusively for WIPRO Ltd.?
Yes If
No No, then which all partners are you working for?
___________________________
2) Are you aware of service revenue initiatives of WIPRO Ltd.?
Yes
No
3) Which of the following WIPRO service revenue streams are you aware of? Facility Management Services (FMS) Annual Maintenance Contract (AMC) Upgrades STEP Buyback services 4) According to the success, rank the following revenue streams: (1 for most popular and 10 for least popular) Facility Management Services (FMS) _____ Installation Annual Maintenance Contract (AMC) _____ Training Upgrades _____ Networking _____ _____ _____ Installation Training Networking Storage Solutions Implementation / Roll out
Batch: FW 07-09 122
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
STEP _____ Implementation / Roll out services _____
_____ Buyback
Storage Solutions _____
5) What procedure do you follow while selling the above-mentioned services? FMS _______________________________________________________ ________________________________________________ ________ AMC _______________________________________________________ ________________________________________________ ________ Upgrades _______________________________________________________ ________________________________________________ ________ STEP _______________________________________________________ ________________________________________________ ________ Implementation ___________________________________________________________________ __ _______________________________________________________________
-
-
-
-
Installation _______________________________________________________ ________________________________________________________ Training _______________________________________________________
-
-
Batch: FW 07-09 123
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
________________________________________________________ Networking _______________________________________________________ ________________________________________________________ Storage ________________________________________________________ ________________________________________________________ Buyback ________________________________________________________ ________________________________________________________ 6) Do you have the dedicated staff, exclusively for generating WIPRO service revenue? Yes designations? ______________________________________________________________ ________ ______________________________________________________________ ________ 7) What are the top 10 expectations and support required from WIPRO Ltd. w.r.t. the service revenue? ______________________________________________________________ _______ No If yes, then what is the strength of the staff and what are their names and -
Batch: FW 07-09 124
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
8) WIPRO’s revenue initiatives for its service offerings; as compared to its competition. Please mark the following from 1 to 6 against the place of opinion you have and elaborate giving reasons. (1 for least and 6 for the highest) Acer ____ IBM ___ HP ___ WIPRO ____ WIPRO ______ Dell ____
______________________________________________________________ _______ 9) What is your installation base you are currently handling (give breakup in terms of servers, desktops, laptops etc.)? ______________________________________________________________ _______ 10) Does WIPRO Ltd. allocate a service revenue target to your organization? Yes No If yes, how is this revenue target figure decided upon? _____________________________________________________________ ________
10) What are the reasons behind the achievement / non-achievement of
allocated target for the last quarter?
Stream STEP FMS
Target Achieveme nt
Reasons
Batch: FW 07-09 125
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
AMC Buyback Upgrade Installation Storage Solutions Networking Roll out services 12) What is the customer profile that is currently supported by your organization? Type Desktops Notebooks Servers Storage Peripheral s 13) Which are the top 5 measures / initiatives taken up (by ASP) in-order to maximize service revenue for WIPRO India Pvt. Ltd.? _____________________________________________________________ _______ Governme nt Educationa l Corporat e BPO / Telecom Individual
14) What steps do you take to ensure adequate satisfaction levels of your major clients? _____________________________________________________________ _______ 15) How can you maximize the above mentioned steps / efforts to generate the service revenue? _____________________________________________________________ ________
Batch: FW 07-09 126
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
16) As a service-oriented organization, which are the other areas where you can position WIPRO vis-à-vis its service offerings? _____________________________________________________________ ________ 17) Where do you see yourself / WIPRO / the association between the two in the 2 years from now? _____________________________________________________________ _______
WIPRO RESELLERS QUESTIONNAIRE
Name: ______________________________________________________________ Company: ___________________________________________________________ Address: ____________________________________________________________ ____________________________________________________________ Phone: ______________________________________________________________ Email id: ____________________________________________________________
1)
What WIPRO products are you currently selling? Desktops Notebooks Servers Storage
Others_______________
2)
How much sales of the below mentioned WIPRO Products do you have in
a month? Product Type Desktops Quantity Sales Revenue (in Rs.)
Batch: FW 07-09 127
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Notebooks Servers Storage Others 3) How would you categorize your primary customer base? Government SOHO / Home Segment Educational Corporate
BPO / Telecom
4)
Which are your major customers for WIPRO products?
Customer Name
Type of Product
Quantit y
Amount (in Rs.)
5)
What “Service Offerings” currently being provided by WIPRO Ltd. are you
aware of? Facility Management Services (FMS) Annual Maintenance Contract (AMC) Upgrades STEP Buyback services Installation Training Networking Storage Solutions Implementation / Roll out
6)
What WIPRO services are you offering to your customers? Also give the
sales break up of the same.
Batch: FW 07-09 128
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1. ________________________ 2. ________________________ 3. ________________________ 4. ________________________ 5. ________________________
_____________________________ _____________________________ _____________________________ _____________________________ _____________________________
7)
What are the current leads / prospective customers you are currently
handling and for what WIPRO services? ______________________________________________________________ ______________________________________________________________
8)
Mention your expectations from WIPRO in choosing these leads?
______________________________________________________________ ______________________________________________________________
PHASE III
Batch: FW 07-09 129 Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
MARKETING PLAN 2009
MARKETING PLAN 2009
The planning framework for our marketing plan has four phases which in-turn breaks down into ten major steps: • • • • Strategic Context Situation Review Marketing Strategy Formulation Resource Allocation and Monitoring
Batch: FW 07-09 130
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1. STRATEGIC CONTEXT Mission
WIPRO believes in fresh ideas and has consistently applied it to technology. Fresh means more than new. It means the best. This forms the essence of WIPRO's mission: “To provide fresh technology to be enjoyed by everyone, everywhere”. This fact is vindicated by WIPRO’s motto “Applying Thought”. Its management strategy is embodied by a number of corporate statements, like "Driving Business Transformation", which represents its strategy to leverage on both global and local resources to provide world-class products with strong local customer support. Thus in short, the strategic focus of the WIPRO Ltd. is: -
• • •
Adding value to the target market segments Constantly providing innovative technologies Provide complete customer satisfaction to the user
Corporate Objectives
WIPRO's corporate objectives for 2009 is to continue breaking the barriers between people and technology by delivering innovative products and services to their customers.. In 2001 WIPRO formalized its new PC direction and announced Mega-Micro e-Services — a new-generation e-business model designed to 'eenable' customers to be more competitive in the knowledge-based economy. In
Batch: FW 07-09 131
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
2002, the WIPRO Value Labs were established, dedicated to researching and integrating innovative technologies. As a result of efforts at the Value Labs, WIPRO introduced the Applying Thought platform in 2003 — an integration of IT hardware, software and services designed to create value for customers by providing them with easy-to-use, dependable end-to-end solutions. WIPRO’s commitment to creating innovative, customer-centric IT products and services that are developed on the basis of what users truly need and want, providing them with "human-touch" digital tools that maximize convenience and enhance life. WIPRO Product Value Lab WIPRO recognizes the importance of the channel to building market share, and bringing value-added products and services to customers in a timely fashion. Carrying multiple brands is essential to a profitable channel business; as WIPRO has shifted roles from manufacturer to service provider, we have broadened our business scope and brand offering. Close cooperation with our channel affiliates allows WIPRO to understand and reach customers across all sectors — from enterprises to home users — with maximum effectiveness.
?
Investment Management Business: - WIPRO's investment management business group generates significant financial returns by utilizing venture capital to invest in high-potential businesses that focus on information and communication technology (ICT), components, software, and IC design. WIPRO also divests from investment portfolios, as dictated by market conditions. Earnings are used to fortify WIPRO's core businesses, or to buy back stock in order to enhance the company's return on equity.
Batch: FW 07-09 132
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
The Pan WIPRO Group: - The pan WIPRO Group has more than 60,000 employees and generated revenues of US$15.6 billion in 2008. Venture Capital Business: - WIPRO Technology Ventures (ATV) makes all high-tech, venture capital investment decisions for the WIPRO Group. ATV builds partnerships with entrepreneurs and helps start-ups create value by combining their energy and vision with extensive WIPRO Group contacts and capital resources. Focusing on the U.S. and Asia Pacific regions, ATV invests in companies that develop early-stage, innovative software- or hardwarebased intellectual property, as well as technology that enable fresh applications leveraging the Internet platform.
?
2. SITUATION REVIEW Marketing Audit
A. Environmental Analysis (Indian context)
Economic: - The economic projection for India till 2050 is given below. India’s GNP i.e. the purchasing power has been steadily been increasing over the years from a modest US $1600 in 1995 to a US$ 2000 in 2005 and projected to have
Batch: FW 07-09 133
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
explosive growth to US$ 15,000 in the year 2050. Under the optimistic high growth projection, India's economy in 2050 would be about the twice the size of the current U.S. economy. The region's prosperity or average annual income (as measured by per capita GNP), even in the best case is unlikely to exceed $12,000 per person (with high economic growth and low population growth). In the worst case, incomes 50 years hence might be only $2,000 per person. These figures indicate that India is on the road to becoming a developed Country. It is but obvious that a direct consequence of this fact would be an increase in demand for IT products like desktops, Laptops. It products quintessentially are linked to IT Services and vice-versa. Thus a direct inference to this linkage would also mean that the demand for IT Services is also going to increase in the future in India.
Figure 3.1 Source: - United Nations Statistics Division (http://unstats.un.org/unsd/default.htm)
?
Social Environment: -Roughly 70% of the Indian diaspora lives in the hinterland albeit in towns and villages, and the rest 30% in Cities and other
Batch: FW 07-09 134
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
urban dwellings. There has been an upwards swing in the social environment in India, with steady growth in the development of people. Political Environment: - India has a parliamentary form of government based on universal adult franchise. The executive authority is responsible to the elected representatives of the people in Parliament for all its decisions and actions. Sovereignty rests ultimately with the people. Note: - Most of the major manufacturers of IT products (WIPRO, IBM, etc) have manufacturing plants located in Pondicherry; which is a union territory providing specific incentives like tax breaks etc. Technology: - The vision of IT policy is to use IT as a tool for raising the living standards of the common man and enriching their lives. Though, urban India has a high internet density, the government also wants PC and Internet penetration in the rural India. In information technology (IT), India has built up valuable brand equity in the global markets. In IT-enabled services (ITES), India has emerged as the most preferred destination for business process outsourcing (BPO), a key driver of growth for the software industry and the services sector. India's most prized resource in today's knowledge economy is its readily available technical work force. India has the second largest English-speaking scientific professionals in the world, second only to the U.S. According the data from ministry of communication and information technology, the ITES-BPO industry has grown by about 54 per cent with export earnings of US$ 3.6 billion during 2003-04. Output of the Indian electronics and IT industry is estimated to have grown by 18.2 per cent to Rs. 1,14,650 crores in 2003-04.
?
?
Batch: FW 07-09 135
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Regulatory: - The Indian IT Industry is governed by certain set of rules and regulations by some top apex bodies in the country. Some of the important ones are
? Ministry of Information Technology: - Came out with the IT Act, 2001
on 17th May, 2000 ? Telecom Regulatory Authority of India (T.R.A.I) is the apex body, which frames for Telecom related, issues in India. ? The Communications Commission of India (CCI) seeks to establish an open licensing policy and ensure a level playing field for all operators and to promote equitable, non-discriminatory interconnection across various networks, Government controls: - The evaluation of government control in India, which is no better than fair, considers factors such as the availability of subsidies, imposition of safety and operational regulations, licensing requirements, restricted access to materials and price controls. Global: - Post 1994, India has initiated large-scale globalization and liberalization by opening up to world markets to the world. This has been a paradigm shift in India and its subsequent outlook to the world. Post 1994; Multi national companies have come to India; brining along with them newer technology, jobs and capital. Currently India is also the member of World trade Organization (W.T.O.) and has become a global player in terms of trade. Lately India is known as the “Asian tiger” along with China.
?
?
B. Market Analysis
Batch: FW 07-09 136
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Growth & Size of IT services market: - Released in April 2005, Gartner Dataquest's forecast for the size and scope of the worldwide IT services market 2003-2009, is a healthy one, expected to grow from US$665.9 billion in 2000 to US$1.3 Trillion in 2005 - a compound annual growth rate (CAGR) of 15.6 percent. The growth of IT Services is expected to grow at an impressive rate. The Western European IT services market is forecast to grow from US$172.8 billion in 2000 to US$326.0 billion in 2005 - a CAGR of 13.5 percent It is forecast to constitute 25.1 percent of the worldwide IT services market in 2009. The Asia-Pacific IT services market is forecast to grow from US$37.7 billion in 2000 to US$124.8 billion in 2005 - a CAGR of 27.0 percent. AsiaPacific will account for 6.3 percent of the worldwide IT services market in 2009. The North American IT services market is forecast to grow from US$345.0 billion in 2005 to US$712.1 billion in 2009 - a CAGR of 15.6 percent. North American constitutes almost 52% of the worldwide IT services market in 2009, with the U.S. accounting for the majority of this share. Market Segments: - The segments, which enjoyed explosive growth in the last five years, should expect healthy, albeit more modest, gains by 2009.
?
The main customer segments in the IT Services market in India are: 1. Government Sector 2. Public Sector Units (P.S.U.) 3. Corporate
Batch: FW 07-09 137
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
4. Telecom / BPO 5. Educational 6. Individual / SOHO Development and integration was the largest segment in 2008, at US$169.4 billion. It is forecast to grow to US$368.9 billion in 2005 - a CAGR of 16.8 percent. Business process management services is forecast to be the largest and fastest-growing segment, growing from US$148.2 billion in 2000 to US$345.5 billion in 2009 - a CAGR of 18.4 percent. IT management services was the fourth-largest segment in 2005. It is forecast to grow from US$95.3 billion in 2000 to US$214.9 billion in 2009 - a CAGR of 17.7 percent.
The Hardware maintenance and support services are the slowest-growing segment. It is forecast to grow from US$105.4 billion in 2000 to US$136.5 billion in 2009 - a CAGR of 5.3 percent. Gartner Dataquest believes the accelerators that will most influence the worldwide IT services market include continuing constraints on IT labor supply; outsourcing of non core activities; growth of customer relationship management solution implementation; growth of wireless/mobile infrastructure and application services, and increases in sales to other service providers and hosting. Table 3.1 Growth Areas in 2009
Batch: FW 07-09 138
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Source: - IDC report, 2004
?
Buyer Behavior: -It is a central component of the environmental context. As discussed earlier in a discussion with the Decision maker; major sales and operations of WIPRO products and services are for large segment buyers (Govt., PSU’s, Corporate, BPO etc.). The buyer behavior here in Marjory Industrial Buying with purchase of IT products and services via tendering process, high level committees etc. In segments like Government; price sensitivity is not an issue, other customers may or might be price sensitive. As IT products and services are prone to change, IT being a volatile sector; purchases of IT Products and services are updated regularly at customer’s premises. The buying behavior for IT services is quite complex and is characterized by important issues i.e. “IT services are intangible in nature”. Especially in India where unlike the developed countries; customers are not willing to pay for
Batch: FW 07-09 139
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Services; they expect that IT service they would receive as for free of no charge when they purchase an IT product(s). Intangibility increases the perceived riskiness of services purchase. While Corporate have purchase committees for buying IT products and services; Government have formal Organizations like DGHS, NIXIE, NIC, etc, which have various empanelment for buying products and services. The following factors have a bearing on the customers as to how they perceive risk while going for IT Services:
? The level of tangible evidence: - As services are intangible in nature;
customers want some tangible proof; that they have received the promised service. This tangible proof can be Invoices, delivery challans, etc.
? Buyer's level of involvement in the service: - Is the service, a high
contact or a low contact service.
? The novelty of the purchase to the buyer: - It describes how the service
is different from other service offerings; i.e. how it is unique, innovative and finally useful to the buyer.
? The purchaser's individual risk threshold: - It means whether the buyer
is risk averse or a risk taker. For IT services; it depends largely on the customer profile. Corporate, government buyers have different level of risk threshold than individual home users.
? Situational factors: - It depends on the local situation the buyer might be
facing like money availability, time etc.
Batch: FW 07-09 140
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ? Legal safeguards available to consumers: - It pertains to the legal
paperwork, which accompanies service offerings. This framework could be Service level agreements (SLA’s), insurance etc. Customers Needs: - The customers are divided into various categories. I. Individual home users ? Highly price sensitive ? Want to spend RS 15000-30000 / on an average / machine ? Expect a one year warranty on the computer ? Expect the distributors to evolve a uniform pricing when selling products & services to resellers and distributors ? Warranty must be defined and also the period that it covers. ? Buyers assume that warranty covers everything even the spare parts, they expect to get a replacement. II. Corporate ? Quality of service offerings ? Reliability of service ? Good communication in lieu of service offerings ? Are not price sensitive ? Want end to end solutions ? Response time to service issues considered critical III. Government ? Are not price sensitive ? Long purchasing procedure for buying services ? Expect better service at low cost
?
Batch: FW 07-09 141
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? Payment to service provider is usually slow.
C. Competitive Analysis
The Current Major Players in IT services in India 1. Hewlett Packard India Ltd & Compaq. HP group is in India, for most of its people are hidden away in the services exports groups. HP has an assembling facility in Bangalore with a capacity to assemble 20,000 PCs a month. It has a retail presence in 60 cities through 135 stores. About 12,000, or 8%, of HP, Inc, employees sit in India. At March-end, over 5,000 of those were at Digital Global Soft, over 3,500 in two back office groups, 2,000 at HP-ISO, and the rest at HP India. India recently became HP's third nation after China and Japan, in the newly defined Asia-Pacific-Japan (APJ) region, where the country head is a managing director. HP India had four business groups-enterprise systems (ESG), personal systems (PSG), HP services (HPS), and imaging and printing (IPG). This changed in May 2004. ESG became CSG, the Customer Solutions Group, HP's only customerfacing group for enterprise, public sector and SMB. CSG represents all the business groups of HP, with integrated sales, marketing and business development. Sales staff from PSG and HPS has moved into CSG. (Traditional reseller channels remain with PSG, and consumer/retail, with IPG.) 2. IBM India
Batch: FW 07-09 142
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
IBM has been present in India since 1992. Since inception, IBM in India has expanded its operations considerably with regional headquarters in Bangalore and offices in 14 cities including regional offices in New Delhi, Mumbai, Kolkata and Chennai. Today, the company has established itself as one of the leaders in the Indian Information Technology (IT) Industry. IBM offers end-to-end solutions to the customers from hardware to software, services and consulting. IBM has the e-business capabilities, products, services and partner network to help large and small enterprises plan, build and implement the e-business infrastructure. Linux support has further enhanced IBM's e-business infrastructure enabler capability. The company also offers finance and leasing facilities to customers. IBM has “IBM Solution Partnership Centre”, Bangalore: (One among 10 facilities worldwide) Independent Software Vendors are encouraged to port their solutions on IBM platforms at this centre and develop Web based applications for Indian customers. Also it has “Global e-business Software Centre”, Gurgaon: This state-of-the-art center combines IBM's global experience and technology expertise to deliver ebusiness solutions for Indian organizations and also the government through the e-Governance Centre. Manufacturing Facility, Pondicherry: Set up in 1999, the plant currently manufactures commercial desktops, low and mid-range servers. Local manufacturing has helped in reaching products to customers faster, besides giving the flexibility to configure the systems to specific customer requirements
3. Dell India
Batch: FW 07-09 143
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Dell Computer Corp. has set up a wholly owned subsidiary in the southern city of Bangalore to begin direct sales and support operations in India. It has set up the subsidiary in India by November and to direct sales and support operations in major cities in India. The company is yet to start its manufacturing unit in India; currently its products are manufactured outside India; from Singapore. Through its subsidiary Dell offers its full range of Optiplex desktops, Latitude notebooks, PowerEdge servers, Precision workstations and PowerVault storage products. Dell has a service partnership with Tata Infotech through which Dell will offer business services and operate spare parts depots in six out of Infotech's 11 centers across the country. The company also has an agreement with Infosys for technological support.
Table 3.2
Competitor Analysis of Services of WIPRO vis-à-vis its major competitors
Service attribute Upgrades Warranties Warranty Extension s Financing & Leasing No Yes Yes IBM global Yes Lease Financing & No WIPRO India Yes Yes Yes Dell India Yes Yes Yes IBM India Yes Yes No HP-Compaq India Yes Yes Yes WIPRO Yes Yes Yes
Batch: FW 07-09 144
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
AMC Buy Back
Yes Yes
No No
Financing No No
Yes No Yes (HP Asset No Recovery Services) Yes
FMS (facility mgt. service) Installatio
Yes
Yes Dell Professio nal Services via Yes Indirect
Yes
Yes
Yes
Yes Direct(on purchase)
Yes Indirect
Yes via Direct
n Services ASP’s Mode of Indirect Service disbursem ent 24× 7 Tel. No Support Data Storage Services Tech. Training ITW Knowledg e base Other Unique Service Offerings Yes Yes No Yes via ASP’s
site parts ASP’s + Indirect No Yes
Yes Yes
Yes
No
Yes (Storage on No Demand)
Yes Yes
Yes Yes Yes Re- IBM Global Dell Services, business on demand, IBM
Yes Yes
Yes No No Per Event Security & Services HP
Dell on, cover
HP
certificati
Support Consulting, Hardware Support Exchange Service, Hardware
Complete e-
Offsite HP
Batch: FW 07-09 145
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
business consulting , Electronic Service Agents
Support Pick-Up
Offsite &
Return Services
E. MULTIPLE FACTOR PORTFOLIO MATRIX
The Multiple Factor Portfolio Matrix approach enables the managers to consider their appropriate objectives and strategies for the business in accordance with its potential. Below the table 3.1 shows the matrix to come out with different strategies to be implemented: Table 3.4 Factor Portfolio Matrix Weight Rating ( 1-5) 5 4 6 Value 1.25 0.8 1.5
Market Attractiveness
Overall Market Size 0.25 Annual market growth 0.20 rate Competitive intensity 0.25
Batch: FW 07-09 146
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Technological requirements Inflationary vulnerability Environmental impact Total
0.15 0.05 0.10 1.00
3 1 2
0.45 0.05 0.2 4.25
Factor Market share Service quality Brand reputation Network Promotional effectiveness Operations capacity Operations efficiency Staff availability Managerial personnel Total
Weigh t 0.15 0.10 0.15 0.05 0.15 0.05 0.10 0.10 0.15 1.00
Rating Value ( 1-5) 2 3 1 4 1 2.5 1.9 1.2 1.7 0.3 0.3 0.15 0.2 0.15 0.125 0.19 0.2 0.255 1.87
Competitive Position Of WIPRO
From the Multiple factor Matrix; we get the cumulative scores of both market attractiveness and Competitive position of WIPRO. •
•
Market Attractiveness of IT Services sector comes out to be= 4.25 Competitive positioning of WIPRO Services comes out to be=1.87
Batch: FW 07-09 147
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Based on the above scores we see that the market attractiveness for IT Services sector comes out to be high and the Competitive positioning of WIPRO Services is low. Note: - The ranking in the above matrices have been arrived at by taking important inputs from Analytical Hierarchical process technique (AHP), qualitative data obtained from ASPs, through syndicated data providers (IDC, NASSCOM), websites and finally doing Competitor Analysis. The results of the AHP technique, competitor analysis etc can be referred in the earlier sections of this report. Thus with a high market attractiveness and low competitive positioning the best strategies to follow for WIPRO in IT Services are the following (found after comparing the scores of market attractiveness and competitive position from the Multiple factor portfolio matrix):1.
Specialize around limited strengths: - With such a strategy, WIPRO can specialize in its current service offerings. It can target newer markets for its existing services. The Individual/ SOHO segment is a lucrative area where WIPRO can garner high services revenue, as till date Service revenue from this segment is quite low.
2.
Seek ways to overcome weaknesses: - WIPRO can seek introspection and do some type of trouble shooting to address its current weak areas. One area where WIPRO is weak is in Logistics and a substantial communications gap with its ASPs. This would ensure long-term benefits in way of higher ASP loyalty and motivation and thus resulting into higher sales revenue from Services.
3.
Withdraw if indications of sustainable growth are lacking: - Finally if a particular service offering is not generating the desired revenue levels; WIPRO can think of withdrawing the offering from the market. It would be
Batch: FW 07-09 148
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
a waste of resources and valuable time and money on WIPRO’s part to continue going for such services. For e.g. If a particular service warrants keeping a large number of service engineers on standby and hold up valuable resources like spare parts etc and the service is not generating revenue as per expectations; then it would be wiser to discontinue such services.
KEY ASSUMPTIONS
The purpose of the key assumptions is to identify, those factors that will be critical to the success of the marketing strategy. The marketing plan is contingent upon the following key assumptions: 1. Interest Rates: - The interest rates prevailing might change in the future, albeit, the short or long term interest rates. It is largely dependent upon the monitory policy followed by the government. 2. Inflation Rate: - inflation rate shows the overall; health of the economy. In a developing country like ours, it is one of the major critical factors. If inflation goes up, cost of commodities and products would increase. 3. Status of the Economy: - The economy could be in slowing down or could be in recession. 4. Anticipated demand levels: - It could be possible that the demand for IT products & services could change in the future. For e.g.; if the economy slows down the demand for IT products & services may go down.
Batch: FW 07-09 149
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
5. Regulatory Changes: - This factor is contingent upon he regulatory bodies amending or coming up with newer legislations which might have a bearing on IT services.
3. MARKETING STRATEGY FORMULATION Marketing Objectives & Strategies
The ultimate aim of fabricating this marketing plan was to give a guide to WIPRO’s marketing department and to provide them with ready reference material on various scenarios and strategies to response to those scenarios. The aim is to increase revenue from services, which has become an integral part of IT companies to augment and increase their overall revenue. This marketing plan can be used in two areas: •
Current users: - here the marketing strategy has two key tasks, the retention of existing customers, and obtaining additional business from existing customers.
•
New users: - for new users, the marketing strategy is concerned with both increasing trial of the services offered, and then obtaining repeat usage of the services, after the initial trial, on an on-going basis.
Batch: FW 07-09 150
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The only way WIPRO can hope to differentiate well is to define the vision of the company to be an information technology ally to our clients. We will not be able to compete in any effective way with the chains using boxes or products as appliances. We need to offer a real alliance. The benefits WIPRO sell includes many intangible benefits; confidence on higher prices just because we offers services; the market has shown that it will not support that concept. We have to also sell the service and charge for it separately. The marketing strategy is the means by which marketing objectives can be achieved. The marketing strategy is the core of the main strategy. Basically it requires concentrating on the following points: • • • • • • • Need to emphasize on service & support. Need to have a relationship business. Need to understand business needs and to improve brand visibility. Need to have no communication gap with the channel partners, thereby creating a mutually beneficial strategy. Need to have a focused service sales team. Need to educate staff on service programs, including different ways of motivation. Need to conduct different research programs in-order to find out the loopholes within the organization using different tools, etc based on differentiating services w.r.t. segments, combinations, resolution times, etc. • • Need to use different Automatic notification tools like Automatic mailers, new offers, discounts, etc for customers nearing the enquiry. Need to work in an organization keeping in mind that “everything that comes or goes is everyone’s responsibility”.
Batch: FW 07-09 151
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
An evaluation of WIPRO Ltd. based on the data collected from partners, distributors, the net (web-sites), the discussions with different industry experts and the insights provided by my colleagues. Thus hereby, the use of following strategies would definitely help WIPRO to increase its customer base and service revenue. The analysis evaluates the potential for WIPRO India Ltd to implement any of three generic strategies: cost leadership, differentiation or focus. Within those it then considers more specific strategies such as pricing, promotion and distribution strategies. A COST LEADERSHIP STRATEGY is based on the enterprise's ability to control their operating costs so well that they are able to price their products or services very competitively and still generate high profit margins, thus having a significant competitive edge. A DIFFERENTIATION STRATEGY involves the offering of a product or service that is clearly unique when compared to alternatives. Uniqueness can take many forms such as brand image, technology, functionality, customer service, dealer networks and many others. It is likely that differentiation will involve a combination of two or more of these forms. A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more 'intense' form of either the cost leadership or differentiation strategy. It is designed to address a "focused" segment of the marketplace, product or service form or cost management process and is usually employed when it isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation. It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition profit margins can be very high.
Batch: FW 07-09 152
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The implementation mode Neither of the other generic strategies is considered to have a good potential for implementation, however, the analysis finds it necessary for WIPRO to consider A FOCUS STRATEGY. The analysis has shown that the pursuit of a differentiation focus strategy would be inappropriate while the pursuit of a cost leadership focus strategy would be worth considering. To determine just what WIPRO should "focus" on, WIPRO must look at a variety of factors. WIPRO might decide to concentrate on a certain market segment that WIPRO Ltd. is well suited to serve. A good example of this is the automobile industry. General Motors evaluated the market and decided that one segment was looking for "luxury, quality and prestige" in their automobile, so they developed and offered a new product, the Cadillac. This decision was market driven and GM's approach was to provide a product with enough differentiation to make it attractive to the targeted market segment. To determine whether the marketplace in the industry offers a focus opportunity, WIPRO must have well defined market segments. WIPRO should spend more time analyzing the market to determine characteristics that can differentiate market segments. Within market segments WIPRO may be able to focus by industry or by organization size if there are particular talents within WIPRO India Ltd that would facilitate that kind of focus. An alternative to starting with the market and isolating a segment is to focus on a "specialized" form of service that is well suited to WIPRO’s execution capabilities.
Batch: FW 07-09 153
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
If WIPRO can isolate aspects of its service form that it is able to improve on, some segment of the market may find these improvements of value, which could be the basis for its focus strategy. Or, if WIPRO could define any innovative/attractive service that WIPRO could produce for substantially less than the industry averages and differentiated from the competitors, WIPRO could probably focus on a market segment that considered the service quite acceptable. This would be a cost focus strategy. Through a buyer characteristics analysis after the recent survey done and interviews with different industry experts, it has been noted that many of WIPRO’s prospects have a bias towards an alternative to WIPRO service offerings. While this makes sales more difficult using a conventional marketing strategy, there may be a way to turn this bias in WIPRO’s favor if WIPRO can isolate needs or attitudes that allow it to define a focus strategy. With a cost leadership strategy, development/design is one of many functions that require cost controls. In a cost focus strategy it may be that a very effective development/designing process can be the major factor in a successful strategy. Other areas which might be considered include: seasonal sales, market profitability, geographic location, available resources, criticality of need, convenience of purchase, motive for purchase and degree of risk. WIPRO could probably have to be even more effective because, with either a differentiation focus or a cost focus strategy you are actually combining two strategies. Thus, WIPRO through this opportunity of using focus strategy should encash upon selling different and attractive service to the SOHO / Individual segment, where as per today’s market scenario, there is vast installed base and capturing this segment would give a major lead in the service revenue segment.
Batch: FW 07-09 154
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
PRICING STRATEGY WIPRO needs to effectively compete against the idea that businesses should buy computers as plug-in appliances that don’t need ongoing service, support and training. It is observed over a period of time that WIPRO’s target markets think about price but would buy based on quality service if the offering were properly presented. They think about the price because that’s all they ever see. WIPRO have very good indications that many would rather pay 10-20% more for a relationship with a long-term vendor providing back-up and quality service and support; they end up in the box-pusher channels because they aren’t aware of the alternatives. Also the industry currently depend upon the newspaper advertising as their main way to reach new buyers, but as WIPRO change strategies, however, there is a need to change the way we promote ourselves. WIPRO must charge appropriately for the high-end, high-quality service and support it offer. WIPRO’s revenue structure has to match our cost structure, so the revenue must balance the salaries we pay to assure good service and support WIPRO charge. WIPRO cannot build the service and support revenue into the price of products. The market can’t bear the higher prices and the buyer feels ill used when they see the same product priced lower at the chains. Despite the logic behind this, the market doesn’t support this concept. Therefore, WIPRO must make sure that it deliver and charge for the service and support. Installation, service, training, network support, etc must be readily available and priced to sell as it delivers revenue.
Batch: FW 07-09 155
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
There are different pricing strategies available which help in setting prices for different services: A Skimming Strategy If a service has enough differentiation to justify a high price and you desire quick cash and have minimal desires for significant market penetration and control, then WIPRO should set its prices very high.
A Market Penetration Strategy If near term income is not so critical and rapid market penetration for eventual market control is desired, then WIPRO should set its prices for the services very low. A Comparable Pricing Strategy If WIPRO is not the market leader in its industry, then the leaders will have created a ‘price expectation’ in the minds of the marketplace. In this case WIPRO can price comparably to your competitors, in-order to survive in the competitive scenario. The entry mode The probability of the successful entry into the defined market is evaluated by considering a variety of factors. These include the overall management capabilities, the strength and viability of the service development team, the adequacy of its execution, the methods available for service distribution, the marketing and sales organization's strengths and current activities, WIPRO
Batch: FW 07-09 156
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
experience versus that of its competitors plus its ability to differentiate its service from those of the competition, the problems WIPRO may encounter in your efforts to penetrate the market, the potential difficulties you may encounter due to insufficient infrastructure and the availability of adequate operating capital. WIPRO potential to achieve significant market penetration has been evaluated as negative. Given a successful entry into the market, WIPRO must then evaluate the potential for generating and maintaining profits over an extended period. This requires constructing barriers that might prevent competitors from entering the market, whether competitors are likely to retaliate when WIPRO’s services are introduced, how vigorously the competition will compete with it and with each other in the marketplace, the probability that WIPRO’s services will encounter competitive services or alternative solutions in the marketplace, the strength of the prospect in the buying negotiation process, WIPRO’s ability to execute the service at a reasonable price and WIPRO’s ability to sustain a competitive advantage. However, to create an illusion of the competitive pricing, WIPRO should come out with innovative service offerings such as: • •
•
Customer should be made to choose their own combination of resolution time, duration, etc and accordingly making payment. Attraction offers, i.e. purchase of one service offering (like AMC) would give 20% discount on the other service offering (like STEP). Different combo-packs i.e. purchase of a product along with AMC would give free upgrade in the 2nd year or 1 year extra technical support, etc.
•
Giving incentive points to customers whenever they go for WIPRO services (for eg., if a customer goes for upgradation of his computer and upgrades his RAM from WIPRO, he would get certain points
Batch: FW 07-09 157
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
which when accrued up to a particular level could be redeemed by the customer for a suitable incentive given by WIPRO.)
Thus, there is a need to sell the company, not the product. WIPRO needs to project itself as a service organization omitted to providing prompt and efficient services to its customers. WIPRO has to sell its service and support. The hardware is like the razor, and after sales support and service are like razor blades. Thus, WIPRO needs to serve its customers with what they really need. Hence WIPRO should set the ambitious sales forecast and in-turn expects sales and gross margins to increase. As an extra initiative, WIPRO can also apply the given below models to further plan its strategies for Service offerings. The models are explained below: 1. MARGIN-RETURN MODEL A quick analysis as to what strategy must be adopted once the services come into the market.
IMPROVE SERVICE OR Unsatisfactory MARGIN
RETRENCH / RESTRUCTURE
Target Profit Margin
Batch: FW 07-09 158
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
MARKET ENTRENCH OR EXPAND Satisfactory
IMPROVE VOLUME OR STRUCTURE
Satisfactory
Unsatisfactory
Target Return
Figure 3.4 Margin-Return Matrix This model can be used in-order to find out where a particular WIPRO service offering lies in the present market place. It clearly explains whether the respective service offering is providing satisfactory target return or not and whether the target margin achieved is upto the expectations or not. Based on this comparison, suitable strategies, which are given in the margin return matrix, should be used in-order to achieve the right strategy to be implemented upon. 2. COMPETITOR ANALYSIS
Differentiate, improve Better image
Promote and sell harder
Batch: FW 07-09 159
Their Reputation
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Dangerous Competitors
No Problem
Worse
Value of their Offering
Figure 3.5 Competitor Matrix This model should be used in-order to find out what strategy should WIPRO apply keeping in light the current service offerings of its major competitors. Similarly to the Margin-Return model, this model suggests possible strategies for WIPRO to pursue. For e.g.; using the above model, if the competitor reputation is better than WIPRO and also its value of service offering is better, then WIPRO should come out with some innovative, differentiated and attractive strategy so as to achieve better revenue margins from its competitor. COMPETITIVE EDGE WIPRO’s competitive edge is positioning as strategic ally with its clients, who are clients more than customers. By building a business model based on long term standing relationships with satisfied clients, WIPRO can simultaneously build
Batch: FW 07-09 160
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
defenses against competition. The longer the relationship stands, the more WIPRO can help its clients in understanding what WIPRO offers them and why they need it. FUTURE SERVICES For any organization, it is must to remain on the top of the new technologies, because this is the only way of earning bread & butter. Thus in-order to survive in the market, one should always comes out with some innovative strategy and that too should be the first one to innovate. Taking today’s scenario, there is a need for lot of opportunities to look for like: • Networking: - it is one of the most upcoming and lucrative area especially wireless networking in India. For networking, there is a need to provide better knowledge of cross platform technologies. Main target areas; educational institutions, third party networking parties’ tie-up, etc. • Storage Solutions: - The need of storage needs for enterprises in India is on the rising scale. Main target areas; large corporations, etc.
•
Data Security options: - Another area where WIPRO can capitalize heavily is the data security services. Today data has become more valuable than hardware, so it makes sense to protect data from viruses, Trojans, internet worms, etc.
•
Online-Back up service: - With the explosive growth of Internet and Web based services like E-mail (E-mail service providers typically now provide large size mailboxes of the tune of 1 GB size; e.g. rediffmail.com). WIPRO India could capitalize on this lucrative segment with Storage solution services. Presently WIPRO is not much in the Storage Services segment.
Batch: FW 07-09 161
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Estimate Expected Results
The purpose of examining the expected results from the marketing strategies is to ensure that marketing strategies will actually deliver the desired marketing objectives. Once the strategies have been determined and decisions made about the marketing mix to be developed in each marketing segment, the financial implications of the strategies need to be evaluated. Estimating expected results involves the detailed review of sales revenues, cost of sales, marketing costs, operating expenses and overhead expenses. The financial analysis should show that the strategy will produce anticipated results. If it does not, the marketing strategies m\need to be examined further to see how they can be redeveloped to achieve the desired results.
Identify Alternate Mixes
Based on the above marketing plan given above, suitable service mixes can be formulated which takes care of the 6 P’s i.e., Product, Price, People, Processes, Place and Promotion and thus determining the strategies for achieving the marketing objectives.
4. RESOURCE ALLOCATION AND MONITORING
The last step is to have continuous feedback by monitoring the alternate service mixes. This would ensure that whatever plans and strategies have been formulated and are going in the right direction and if not corrective or preventive measures can be taken.
Batch: FW 07-09 162
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
REFERENCES
I Books referred
1. Marketing Management by Philip Kotler, Eleventh edition 2. The essence of Services Marketing by Adrian Payne 3. Marketing Research; an applied Orientation by Naresh Malhotra 4. Data Analysis and decision making by Albright, Winston and Zappe
II. Journals referred
1. Harvard business review 2. Sloan Management review 3. Journal of consumer behavior
Batch: FW 07-09 163
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
III. Websites referred
1. 2. 3. 4. 5. 6.
Dataquest (India) http://www.dqindia.com/ WIPRO India Website http://www.WIPRO.co.in/ NASSCOM http://www.nasscom.org/ IDC India http://www.idcindia.com/ Knowledgestorm Website http://www.knowledgestorm.com/ Google Search http://www.google.co.in/
IV. Software used:Expert Choice ver.11 (trial version downloaded from http://www.expertchoice.com/)
Batch: FW 07-09 164
Alumni ID No.: DF79-M-0955
doc_725477163.doc
NEW DELHI THESIS ON “GAP ANALYSIS AT WIPRO CUSTOMER SUPPORT DEPARTMENT”
SUBMITTED TO: PROF. SUMANTA SHARMA PROF. ALPI JAIN
UNDER THE GUIDANCE OF: MR. TANVEER SINGH
SUBMITTED BY:
TEJINDER SINGH ALUMNI ID NO.: DF79-M-0955 BATCH: FW 07-09
The Indian Institute Of Planning And Management, New Delhi
Batch: FW 07-09 2
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ACKNOWLEDGEMENT
It is not until you undertake a project like this one that you realize how massive the effort it really is, or how much you must rely upon the selfless efforts and goodwill of others. I take the privilege of offering my deepest sense of gratitude to Mr. Tanveer Singh, Regional Sales Manager, WIPRO India Limited, Gurgaon for his valuable inspiration and guidance during the thesis. He has taken keen interest and has continuously supervised this project. He has been a source of inspiration to me. He has helped me acquire some of the managerial skills, which helps one survive in the corporate world. I am highly obliged to Mr. Amrish Mahajan, Mr. Ronendro Singh, Ms. Shivangi Mishra, Ms. Vineeta, Ms Gagan, Mr. Saurabh Sen Gupta, Mr. Shankar and Mr. Ajay for their guidance, technical support and co-operation during my thesis.
Tejinder Singh
Batch: FW 07-09 3
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
TABLE OF CONTENTS
CONTENTS
1. Letter of Transmittal 2. Certificate 3. Acknowledgment 4. Executive Summary 5. Project Title & Scope 6. Phase I A) Introduction B) Position of WIPRO in PC Value Chain Model C) WIPRO Corporate Profile D) Product Line of WIPRO India E) Time Line F) WIPRO Support Business Model G) Spare Logistics Support H) WIPRO Partner Network I) Stocking Locations J) Warranty Support K) Skill Enhancement L) Major Account Program M) WIPRO Service Offerings N) Sales Funnel Process 7. Phase II A) Task Involved (i) Discussion with Decision Maker (ii) Discussion with Industry Expert 64 65 14 18 19 21 24 25 30 32 35 37 41 43 44 62
PAGE NO.
06 07 08 09 12
Batch: FW 07-09 4
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
(iii) Secondary Data Analysis B) Environmental Context of the problem (i) Past Information & Forecast (ii) Resources & Constraints (iii) Objective (iv) Buyer Behavior (v) Legal Environment (vi) Economic Environment (vii) Marketing & Technical Skills C) Problem Definition (i) Management Decision Problem (ii) Marketing Research Problem D) Approach to the Problem (i) Theoretical Foundations (ii) Research Questions & their Hypothesis E) Research Design (i) Type of Research Design (ii) Scope of the Study (iii) Target Population (iv) Primary sources of Data (v) Secondary Sources (vi) Sampling Technique (vii) Sample Size (viii) Questionnaire Design (ix) Scaling Techniques F) Data Analysis (i) Methodology (ii) Plan of Data Analysis G) Results (i) Observations
66
70 70 71 71 72 72 74 75 75 76 80 81 81 81 81 82 83 83 83 84 85 86 89
Batch: FW 07-09 5
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
(ii) Gap Areas (iii) Detailed SWOT Analysis (iv) Analytical Hierarchical Process Analysis H) Limitations & Caveats I) Conclusions & Recommendations J) Annexure (i) Questionnaire for ASPs (ii) Questionnaire for Resellers (iii) ASPs List
8.
94 98 100 108 109 115 119 121 124 156
Phase III – Marketing Plan 2009
9. References
Batch: FW 07-09 6
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
LIST OF FIGURES
FIGURE NO.
1) Fig. 1.1 2) Fig. 1.2 3) Fig. 1.3 4) Fig. 1.4 5) Fig. 1.5 6) Fig. 1.6 7) Fig. 1.7 8) Fig. 1.8 9) Fig. 1.9 10) Fig. 2.1 11) Fig. 2.2 12) Fig. 2.3 13) Fig. 2.4 14) Fig. 2.5 15) Fig. 2.6 16) Fig. 2.7 17) Fig. 2.8 18) Fig. 2.9 19) Fig. 2.10 20) Fig. 2.11 21) Fig. 2.12 22) Fig. 2.13 23) Fig. 2.14 24) Fig. 2.15 25) Fig. 2.16 26) Fig. 2.17 27) Fig. 2.18 28) Fig. 2.19 29) Fig. 3.1 30) Fig. 3.2 31) Fig. 3.3 32) Fig. 3.4
Batch: FW 07-09 7
TOPIC
PC Industry Value Added Curve Position of WIPRO in PC Value Chain Model Pan WIPRO Group WIPRO Support Model RMA Procedure WIPRO Service Offerings (Existing) Comparison of STEP Vs Standard Warranty Price Structure Sales Funnel Economic Projections for India IT Growth rate in 2005 across geographies AHP Technique Hierarchy diagram Awareness Levels for Services Popularity of WIPRO services stream Competitive Position of WIPRO vis-à-vis it’s major competitors ASP Customer Profile Base for Desktops ASP Customer Profile Base for Laptops ASP Customer Profile Base for Servers ASP Customer Profile Base for Storage ASP Customer Profile Base for Peripherals ASP Customer Profile Base for the whole product line Output of ASP Technique Pair wise Comparison Data Gradient Sensitivity Graph; Strength in Service Distributors Gradient Sensitivity Graph; Service Variety Head to Head Weighted Head Comparison Hierarchy Diagram for Best Service Hierarchy Diagram for ASP Selection Economic Projections WIPRO Services Model WIPRO Support Model Margin-Return Matrix
Alumni ID No.: DF79-M-0955
PAGE NO.
15 18 20 25 31 44 45 58 62 73 73 87 89 90 90 91 91 92 92 92 93 101 101 102 103 104 105 106 127 137 140 152
The Indian Institute Of Planning And Management, New Delhi
33) Fig. 3.5
Competitor Matrix
153
LIST OF TABLES
TABLE NO.
1) Table 1.1 2) Table 1.2 3) Table 1.3 4) Table 1.4 5) Table 1.5 6) Table 1.6
TOPIC
Warranty Pay-out Matrix Definition of Desktops & Servers Warranty Matrix Training & Development Schedule Service Level in FMS – first level calls
PAGE NO.
28 29 37 41 50 50
Service Level in FMS – second level calls
Batch: FW 07-09 8
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
7) Table 2.1 8) Table 2.2 9) Table 2.3 10) Table 2.4 11) Table 2.5 12) Table 3.1 13) Table 3.2 14) Table 3.3 15) Table 3.4 16) Table 3.5
India Based IT service network Models IT Service Firms in India WIPRO service revenue figures for 2004-05 Popularity of WIPRO services Observations Growth Areas in 2009 Competitor Analysis of Services Service Revenue Figures Port-Folio Matrix SWOT Analysis table
67 68 70 89 93 130 135 141 142 144
ABSTRACT
The major work in this thesis has been done with a view of finding out gap areas of existing service revenue initiatives of WIPRO India and finally to give suggestions and strategies to address the same. The summer internship consisted of 2 months from August, 2009 till October 2009. During the course of my thesis at WIPRO India; I have gained valuable insights into the IT Services sector and more particularly how WIPRO India operates in this domain. I was given the opportunity to study their operations in detail and finally apply my newly gained knowledge in devising various strategies to increase the service revenue for WIPRO Ltd.
Batch: FW 07-09 9
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
I was given the opportunity to interact with WIPRO’s authorized service providers (ASPs) and WIPRO resellers. This was important because WIPRO has an indirect mode of operations for disbursing its IT services in India. The ASPs were the main interface of WIPRO with its customers and also prospective customers. Also the ASPs are an important source of market intelligence and valuable data on WIPRO’s major competitors can be gained from them. Based on this service model; I applied “Agency Theory” in the theoretical framework of my research to find out gap areas. Agency theory explains how to best organize relationships in which one party (the principal) determines the work, which another party (the agent) undertakes. The theory argues that under conditions of incomplete information and uncertainty, which characterize most business settings, two agency problems arise: adverse selection and moral hazard. Then in the next phase of my research I developed questionnaires; and duly got them filled from many of the ASPs in the Delhi region and also WIPRO resellers in the Delhi region.
In analyzing the results, I also made use of a mathematical modeling technique called “Analytical Hierarchical Process” (AHP). This was used to develop a model by which WIPRO service initiatives could be ranked in real time against its major competitors based on certain decision criteria. AHP was implemented on Expert Choice-11 software. Finally based on my research work and identifying the gap areas, I made a Marketing Plan for WIPRO Services for 2009. The marketing plan was based on several marketing tools like Multiple Factor portfolio matrix, SWOT Analysis and suitable strategies were formulated.
Batch: FW 07-09 10
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SYNOPSIS
DETAILS OF THE STUDENT Name: Tejinder Singh Batch: Fall Winter 2007-2009 Specialization: HR & Marketing Phone No: 9779784816 Email ID: [email protected]
Batch: FW 07-09 11
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
DESIRED AREA OF RESEARCH: MARKETING PLAN FOR CUSTOMER SUPPORT (MARKETING) TITLE OF THE THESIS Finding out the gap areas in existing initiatives of WIPRO Customer Support department and suggest marketing plans thereof. RESEARCH OBJECTIVE PRIMARY OBJECTIVE 1. Background study of the operation of WIPRO Customer Support Department. Detail study of the existing service revenue initiatives. Finding out the gap areas in existing initiatives and suggest sales & marketing plans thereof. SECONDARY OBJECTIVE 2. Study India’s service revenue market and suggest opportunities for Wipro along with detailed sales and marketing plan. 3. Sales call, lead generation and closure.
A. METHODOLOGY Step I The questionnaire is framed for Authorized Service Providers (ASPs) so as to extract data on the following parameters: ?
Visibility: - To check the visibility of WIPRO. As a service providing organization in the field of IT products & Services in India.
Batch: FW 07-09 12
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Market Demand: - To gauge the market demands for various WIPRO Service offerings. Identification of new service offerings: - To get valuable inputs from the ASPs so as to identify new areas of opportunities for WIPRO. To position its service offerings. Clarity: - To check the level of clarity of the ASPs in disbursing service offerings from WIPRO. Brand Image: - To check the brand image of WIPRO. As a service organization. Range of service offerings vis-à-vis its competitors: - To have an idea as to how WIPRO’s Service offerings fare vis-à-vis its major competitors in India. Awareness: - To gauge the overall awareness and understanding of WIPRO’s ASPs in terms of current service offerings from WIPRO. Level of formalization in Selling Services: - To have an idea as to how systematic the ASPs were when it came to selling the various service offerings from WIPRO. Achievement of Sales Target: - To check how the ASPs were achieving their sales targets if or any targets given to them from WIPRO. Or made by them.
?
?
?
?
?
?
?
Step II After the questionnaires for the ASPs and the Resellers were finalized, I would start taking appointments followed by the daily visits to the ASPs and the Resellers to obtain the valuable input regarding the various loopholes (if any) in the service revenue area to achieve maximum returns from this area. Step III
Batch: FW 07-09 13
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
After all the questionnaires would be complete, I would be left with both quantitative and qualitative data. For analyzing the quantitative data, I would use graphs and pie charts to make out important inferences. The qualitative data which I would have in terms of open ended questions would pose a unique challenge for me as to should I quantify it. To overcome this problem I would use Analytical Hierarchical Process Technique (AHP). Consequently the AHP technique would be used to come out with valuable suggestions to address the gap areas identified by the research. SCOPE OF THE STUDY
•
The study would be conducted for India, New Delhi (covering 11 Authorized Service Providers and 16 Resellers of WIPRO).
•
The Service would be from a Known brand (i.e. services from WIPRO). Time Scope Mid-April to Mid-July
•
INTRODUCTION TO THE AREA OF RESEARCH IT Services is a fast growing business in India these days. Due to the “Internet boom” and high growth of PC’s in the Indian market has driven this sector for the last decade now. Currently there are a large number of players in this sector ranging from large MNC’s like IBM, Wipro, and HP-Compaq to Indian Software & Service majors like Wipro, Infosys etc. Same is the story for the plethora of IT services currently
Batch: FW 07-09 14
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
being offered by these companies ranging from Annual Maintenance Contracts (AMC), warranty services, end to end solutions like Facility Management solutions etc. Also in today’s business environment of cut throat competition IT Services become an important differentiation tool and thus developing core competencies in the IT Sector. The major work in this thesis has been done with a view of finding out gap areas of existing service revenue initiatives of WIPRO and finally to give suggestions and strategies to address the same. During the course of my thesis at WIPRO; I have gained valuable insights into the IT Services sector and more particularly how WIPRO operates in this domain. I was given the opportunity to study their operations in detail and finally apply my newly gained knowledge in devising various strategies to increase the service revenue for WIPRO.
DETAILS OF THE EXTERNAL GUIDE Name: Tanveer Singh Designation: Regional Sales Manager
Batch: FW 07-09 15
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
PHASE I
Background study of WIPRO Customer Support Department
INTRODUCTION
UNDERSTANDING WIPRO
Wipro Infotech is the leading strategic IT partner for companies across India, the Middle East and Asia-Pacific - offering integrated IT solutions. We plan, deploy, sustain and maintain your IT lifecycle through our total outsourcing, consulting services, business solutions and professional services. Wipro Infotech helps you drive momentum in your organisation - no matter what domain you are in.
Batch: FW 07-09 16
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Backed by our strong quality processes and rich experience managing global clients across various business verticals, we align IT strategies to your business goals. Along with our best of breed technology partners, Wipro Infotech also helps you with your hardware and IT infrastructure needs. Wipro Infotech is a part of USD 5 billion Wipro Limited (NYSE:WIT) with a market capitalization of USD 24 billion. The various accreditations that we have achieved for every service we offer reflect our commitment towards quality assurance. Wipro Infotech was the first global software company to achieve Level 5 SEICMM, the world's first IT company to achieve Six Sigma, as well as the world's first company to attain Level 5 PCMM. Currently, our presence extends to 9 regional offices in India besides offices in the KSA, UAE, Taiwan, Malaysia, Singapore, Australia and other regions in Asia-Pacific and the Middle East. WIPRO is one of the pioneers in the Indian IT market, with its origins in 1976. For over quarter of a century, we have developed and implemented solutions for multiple market segments, across a range of technologies in India. We have been in the forefront in introducing new technologies and solutions.
Research & Development Wipro annually invests approximately 5% of its revenue on IT R&D, and employs more than 1,000 engineers and scientists. To encourage innovations, they have established an institutional patent application procedure and invention award system, which has resulted and continues to result in the development of many state-of-the-art leading-edge products as well as a vast range of intellectual property portfolio. To date, Wipro owns 700 patents in
Batch: FW 07-09 17
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
over 27 countries. Some of these outstanding intellectual properties include: • • Chip-Up technology, the world's first single-chip CPU upgrade Achieving maximum transfer rate in parallel port to serial channel data conversion.
•
Screw-less hinge and peripheral connections in a multimedia notebook Synchronization technology. Multi-chip co-ordination bus and heat sink designs. Technologies related to Remote Diagnostic Management System. Upgrade of Pentium processor to a multi-processing system. Bus compatibility technology and heat dissipation design. Wipro CD-ROM drives technology in anti-vibration, circuitry and fast data
• • • • • •
access. • • • • • • Multi-station video memory. Video conferencing system. PCMCIA card connector. Innovative casing designs. Wipro BIOS. DASP (disk anti shock protection) on notebook.
The first round of IT initiatives related to the 1998 restructuring covered several major areas:
•
Global Network: The decision to re-architect the company’s global
network is the example of trying to use resources better across the Wipro group, which had thus led to the number of networks being run by different
Batch: FW 07-09 18
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
business units, with little flexibility in the way network resources can be used or shared.
•
Supply Chain: The implementation of i2 logistics software on a global
basis within the APIG and Wipro Semiconductor groups had led to better planning, shorter cycle times and reduced inventory, thus a better supply chain management.
•
Customer Service: The implementation of Siebel 99 customer relation’s
software worldwide to improve customer service (i.e. to support multinational customers and travelers they integrated cross-geography customer service database).
•
E-Commerce for the PC Business: The implementation of Shop Wipro
online site, the volume of sales had been increasing regularly (US being the test market for internet sales because of its better strategies and infrastructure). Ecommerce initiatives for the PC business are being carried out under the Wipro information Products Group.
•
Extended Enterprise Initiatives: The idea of linking its information
system to those of its customers and suppliers via Electronic Data Interchange brought a great deal of success. It plans to develop links with other customers using EDI or business-to-business e-commerce applications. It is also studying whether Wipro should develop a community network with its suppliers. Figure 1.1
Batch: FW 07-09 19
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Client-Server Strategy
The organizational structure of WIPRO is based on the principle of independence and co-operation among our various Strategic Business Units (SBUs) and Regional Business Units (RBUs). It fosters quick decision-making and fast implementation, which enables us to stay responsive to fast-changing local markets. Though independent in terms of operations and decision-making, each WIPRO business unit enjoys the benefits of belonging to a mutually cooperative network of companies, which share a cohesive, overall strategic direction.
POSITION OF WIPRO IN THE PC VALUE CHAIN
COMPONENTS
WIPRO Strategic Business Units Memory BIOS Chipset Motherboard CD-ROM Power Supply Keyboard Add-On Cards Monitor
Outside Suppliers Hard Disk Drive Microprocessor
FINALPC ASSEMBLY SALE, SERVICE AND SUPPORT
Batch: FW 07-09 20
DISTRIBUTORS MARKETING
End Users WIPRO Strategic and Regional Business Dealers Units Business Alumni ID No.: DF79-M-0955 Government VARS WIPRO Regional OEM Customers Consumers Retailers Business Units (IBM, Fujitsu, Canon, etc) Distributors Education System Integrators
The Indian Institute Of Planning And Management, New Delhi
Figure 1.2
The model of support delivery is indirect which means that Support Providers impart the regular service delivery. WIPRO India provides the back end technical support and spares support. The overall accountability of support lies with WIPRO India. There are following category of support providers:
?
Authorized Service Providers (ASP’s) - For Desktops and Servers WIPRO Care Clinics (ACC’s) - For notebooks WIPRO Certified Storage Partner - For Storage
?
?
Batch: FW 07-09 21
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Repair vendors - For TFT Monitors, CRT Monitors, LCD Monitors
? Authorized Service Providers (ASP’s)
Only ASP’s are authorized to carry out installation and on site warranty support. Resellers, who do not have ASP accreditation, are not authorized to carry out installation or on-site support. The selections of ASP’s are based on various parameters with an objective of providing highest level of service to the customers. Technical and operational audits are conducted regularly for these partners. Frequent training programs are also conducted for the ASP’s. Currently, WIPRO India has 155 service partners across the country. These partners are located in 79 cities.
ASP Program: Appointment of New Partners
o Appointment is based on need.
o
Evaluation by WIPRO support manager on infrastructure, technical skills, minimum required base of WIPRO systems etc.
o On evaluation, if the partner is found OK, an initial registration fee is taken as below: 1) A Class - Rs. 15000/(Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, Pune, Ahmedabad) 2) B Class - Rs.10.000/-(All State Capital cities) 3) C & D Class - Rs.5,000/- per ID is charged.
Batch: FW 07-09 22
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
(Rest of the cities, which do not fall under the above category) Yearly renewal fee of Rs. 5,000 is charged. For every additional ID a renewal fee of Rs. 2,500 is charged. 25% of the payout will be retained for spare stocking. At the end of each quarter, 25% of the payout will be deducted for spares and the spares will be sent to ASP's. The final decision to appoint an ASP lies with the GM - Customer Support.
• ASP Audit
WIPRO India conducts regular operational & technical audits of partners (i.e. their ASP’s & ACC’s), to enhance their efficiency & to understand the bottlenecks between WIPRO and their channel providers for service by take necessary actions to bridge the gap.
Monitors Repair Vendors
WIPRO India has identified repair vendors to undertake the repair of monitors. The service partners have to directly get in touch with monitor vendor for the repair of the same after logging the Monitor Request on the APN (WIPRO Partner Network).
? WIPRO (Authorized) Care Clinics (ACC’s)
The WIPRO Care Clinic is authorized for carry in service of notebook. Highlights of WIPRO Care Clinic are as follows: • Manned by minimum of two notebook-trained personnel.
Alumni ID No.: DF79-M-0955
Batch: FW 07-09 23
The Indian Institute Of Planning And Management, New Delhi
•
Infrastructure - Space at least 500 sq. feet.
The WIPRO Care Clinic keeps WIPRO India updated with respect to all its activities by means of the following reports:
1) Daily Activity Report -This consists of the entire notebook serviced by the
ACC, giving the details of the nature of the problem and the status in addition to details of calls closed from pervious day.
2) Weekly Report - This will give details of all the activities closed during the
week with those pending with reasons. Currently, WIPRO India has 30 Care Clinics, which is spread across India. WIPRO Care Clinic being a premier relationship offered by WIPRO to a partner, a thorough analysis is being carried out prior to selecting an ACC. Prime factors are: • • Evaluation by Appointment is based on loyalty & performance. Strong technical skills related to Notebook repairs. support manager on infrastructure, technical skills, etc
Appointment is need based and on average 20 walk-in repairs are reasonable break even. On evaluation if the partner is found OK, an initial registration fee of Rs 15,000/-is charged. Yearly renewal fee of Rs 5.000/- is charged. Spare stocking is mandatory and is calculated based on the volume systems maintained and failure rate. 25% of the payout would be allocated towards this. The final decision to appoint an ASP lies with the GM – Customer Support.
Batch: FW 07-09 24
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SELECTION OF PREMIER PARTNERS
Premier partners are selected from the existing ASP based on the following criteria: •
•
Should be an active player in the IT industry as an organization. Should be owned and managed by technocrats with strong commitment towards support. Should have strong IT support track record and present for at least a decade in the region. Should have active interest in IT support business and co work on revenue initiatives. Should have adequate WIPRO trained and certified engineer to support installed base of WIPRO Systems. Should be willing to invest in spare purchase. Should be ready to increase presence, in terms of opening new offices, post resident engineers, etc in the region as and when the requirement for the same arises.
• •
•
•
•
•
• • •
Should be a process driven organization. Adherence to WIPRO Support Norms. Good Track record in WIPRO audit. Ability to provide support as per WIPRO's commitment for project orders.
WARRANTY PAYOUT
The ASPs are made payments by AIL for carrying out WIPRO services according to the payout matrix given below (Table 1.1):
For ASP:
Batch: FW 07-09 25
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The matrix payout (paid quarterly at the end of the quarter) per year would be as below: Table 1.1 Pay-out Matrix QTY at single site Annual machine <10 11 –30 31 –50 51 –100 101-250 251 – 500 501 –1000 1000-2500 >2500 400 380 350 325 300 275 260 250 240 Add for each entry level server 100 100 100 75 75 75 75 50 50 300 300 300 250 250 250 250 200 200 Add for each high end server
(i.e. number of systems) payout per
INSTALLATION CHARGES
The WIPRO transfer price for the product includes Installation charges i.e. Sales and Support partners do not get any additional amount towards installation service. A sales only partner (who is not an WIPRO ASP) gets the installation done through ASP as per the above rates by ensuring that he adds the above to his final selling price.
For ACC:
The payout for ACC is based on per call basis which is Rs.300/- per call. (Paid on a monthly basis upon receipt of bill along with call sheets).
Batch: FW 07-09 26
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SPARE LOGISTICS SUPPORT
RMA (Return Material Authorization) Procedures
RMA procedures are provided to assist WIPRO customers in receiving warranty service for their products. In the event of hardware failure, is the unlikely event that WIPRO customers experience problems within the warranty period. If a customer encounters problems with the hardware during the warranty period, then the customer can:
Batch: FW 07-09 27
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 1.
Contact WIPRO Support via WIPRO’s authorized service providers.
2. Be prepared to provide the proof of serial number and serial number that are attached to the hardware.
3.
Upon receiving above information, WIPRO Support will first confirm whether the customer has a hardware problem that is covered by warranty. If this is the case, the customer gets issued a Return Material Authorization (RMA) number and additional instructions for the warranty return.
There are three kinds of RMA's:
•
Advance RMA- During the comprehensive warranty period, WIPRO caters part in advance based on the request received from the partner. WIPRO will not cater to the part request if the system is not registered with' WIPRO. Partners have to return the defective (against advance RMA) within 7 business days, failing which WIPRO will debit the same to partner's account.
•
Normal RMA- During second & third year warranty. Partner has to return the defective parts in advance. Upon receipt of the same WIPRO will cater to the request.
•
Defective on Arrival (DOA): - Defective on arrival is the case where the product is found to be completely non - functional "at the time of first time power "on "within a period of 60 days from the date of shipment.
Batch: FW 07-09 28
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Partners have to return the defective (against advance RMA) within 7 business days, failing which WIPRO will debit the same to partner's account.
RMA Procedures
Customer reports a problem
ACE visits the customers premises and checks the problem
Any other problem If yes then solve
NO Part is defective
YES
ASP sends PPRF (Parts request & return format) on the WIPRO APN
RMA coordinator validates request and warranty
Batch: FW 07-09 29 Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ADVANCED RMA Part is sent first to the customer i.e. replacement) then defective is returned NORMAL RMA ASP has to send in the defective part first with complete RMA number
Within 1 year YES Parts/system within warranty
Beyond 1 year but within 3 years NO (Beyond 3 years) No parts support
Defective part is checked and validated
Replacement part is sent to the ASP Figure 1.5 RMA Procedure
WIPRO PARTNER NETWORK (APN)
On June 13, 2003 the WIPRO Partner Network was launched; a fully intelligent web based business tool facilitator. This enables on-line support transaction to WIPRO’s support providers thereby cutting down dramatically the response time to customers. The APN service initiative goes beyond mere e-mail communication and now provides real time call logging and status update facility to WIPRO’s support providers. This robust tool, while transparent to the end user, serves as an important monitoring tool facilitating better service levels. The APN serves as an important MIS connecting the service channel partners and WIPRO India via a web based access (on the website http://www.WIPRO.co.in). All the service channel partners have been assigned a username and password so that they can discreetly login into the WIPRO APN system via their login credentials. Thus
Batch: FW 07-09 30
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
access to the APN website is restricted to channel partners and WIPRO employees only. The salient features of APN are: Logging part request Viewing status of part transactions Warranty validation Price enquiry TES (Technical Escalation System) System registrations Download of bios, drivers etc Pay out details Support network across the country Part number enquiry
1) Price enquiry: - All service channel partners have the option for looking
up a Computer peripheral/component and then getting a price quote in WIPRO India regarding the pricing of that part. The the part number, which is a unique real time from
service channel partner can enter
id assigned to that part, and get the price quotes.
2) Warranty Validation: - The service channel partners can view the
Warranty status of a computer peripheral from WIPRO India in real time by inputting the Unique Computer serial number which can be found on the machine of the customer in the website to get the warranty status in terms of till what date is the warranty valid, when does the warranty expires i.e. on which date, what is the status of the Registration of the Machine.
3) Courier Details: - The service channel partners can find out the status of
the spare parts and components for WIPRO Computer systems, which they have requested to be shipped to them from WIPRO India in lieu of
Batch: FW 07-09 31
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
repair, and maintenance operations, which are conducted by them. For a particular service channel partner, the partner can view the courier status by entering the date of shipment. The APN then generates an excel file showing the Invoice no, invoice date, customer name, customer city, RMA number (Return Material Authorization), part number, part details, Quantity, Courier name and courier dispatch date.
4) Download of bios, drivers etc: - The service channel partners can
access to the latest WIPRO computer bios updates and software drivers of the various computers on the APN. They need to enter the WIPRO computer model number and then view all the BIOS and driver updates currently available for that particular model. This section of the APN is continually being updates as and when newer BIOS and drivers released from WIPRO.
5) TES (Technical Escalation System): - WIPRO India has an effective
TES (Technical Escalation System) in place. This enables customer hardware-software problems to be solved. The service channel partners can “escalate” particular problems faced by them in repairing computer systems. If the service channel partner is unable to resolve the computer problem then by way of the APN, the service channel partner can escalate that particular case to WIPRO Technical Escalation team, which handles hardware and software, related problems. The service channel partner can register a particular unresolved issue by giving a description about the problem being faced, entering the Computer serial number, customer name. The service channel partner can then access their registered computer problems by way of a unique Case Id number assigned to their complaint. The Technical Escalation team tries to solve the particular problem and keeps the service partner updated about the status and other issues related to the particular problem. The service channel partners can also
Batch: FW 07-09 32
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
view the status of pending cases, new cases, and closed cases for future reference.
6) Spare Parts Enquiry: - The service channel partner can get information
on the spare parts by entering spare partner category and entering the Keyword. The APN then generates the various spare parts/Items, which match the criteria selected by the service channel partner. The output is in terms of Part number, Part description, and product line. .
7) Knowledge Base: - The service channel partners can have access to the
Knowledge base on the WIPRO APN. The service channel partners to get important information on computer repair related issues; i.e. past cases and computer repair engineers’ comments on how a particular computer repair problem was resolved can use the knowledge base.
8) Forms download: - The service channel partner can download the
following forms from the WIPRO APN website. • • • • • Registration form PPRF form Claim form Order form (STEP) Order form (parts)
These forms serve as official paperwork for all the above issues between WIPRO India and the service channel partners.
9) Pay out details: - The service channel partners can access their pay out
details for a particular time period; i.e. the amount that accrues up in their account with WIPRO India. The amount is determined by the payout details (mentioned earlier in the payout matrix).
Batch: FW 07-09 33
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
STOCKING LOCATIONS
WIPRO India has stocking locations across the country; the current stocking locations are as follows: 1. 2. 4. 5. 6. 7. 8. 9. Bangalore - Singasandra Delhi Hyderabad Chennai Chandigarh Pune Trivandrum. Bhopal
3. Mumbai
10. Ahmedabad 11. Jaipur 12. Lucknow
Batch: FW 07-09 34
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
13. Cochin 14. Guwahati& 15. Kolkata
SPARES REPLACEMENT CENTERS (SRC)
In addition to the above Stocking Locations WIPRO India has also provided adequate spares stocking to certain ASP’s for its VPD products. These are called as Spare Replacement Centers (SRC). The stocking has been made at these locations based on the population of systems in each city. Whenever there is a part requirement for any VPD product, the concern Reseller can take the defective part to the nearest SRC who will replace the part over the counter after verifying the part.
TEST & REPAIR
WIPRO India has a well-equipped test & repair Center (TRC) at Bangalore. All incoming as well as outgoing parts undergo thorough testing before inward/outward movement.
DEFECTIVE ON ARRIVAL (DOA)
Any product purchased from WIPRO India, which is found to be completely nonfunctional "at the time of first time power on", within a period of 60 days from the date of shipment by WIPRO India (Pvt.) Ltd., is defined as a Defective on Arrival (excepting transit damage cases). Date of Shipment is calculated as per the Invoice of the material from Pondicherry. All items procured from AIL whether in Indian Rupees or in US$ or under Deemed Export or High Sea Sales are covered under this DOA policy. The coverage is determined based on the proof of Purchase which may need to be submitted in case AIL desires
Batch: FW 07-09 35
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The following are excluded from DOA: • • • • Defects arising due to transit damages. Issues related to software incompatibility. Incompatibility issues related with other products. Field Replaceable Units (Any item that can be changed at the customer location itself with the help of normal tools like the screwdriver etc is called a Field Replaceable Unit).
Please note the following: 1. The DOA so logged goes through the following four stages: a) Qualification b) Fulfillment c) Analysis and d) Feedback
2.
The defective item is returned to WIPRO Bangalore. Locations where WIPRO India has its Reverse Logistics Center the partner has to return the defective item to them for onward shipment to Bangalore. Location where WIPRO office is not present WIPRO recommends the return of the material using the WIPRO India's nominated freight forwarder. The amount for sending back the material is reimbursed by WIPRO.
3. It is mandatory that the item must be sent in the original packing complete with the accessories & packing buffers properly placed. Incomplete items will not be considered and the entire item cost will be invoiced to the partner.
4.
It is mandatory that all items must include the copy of the Original Invoice and the Service Call report of the WIPRO Authorized Service Provider stating the detail of the fault observed and the action carried out.
Batch: FW 07-09 36
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
SPARE PART RETURN
All defective parts are to be returned to WIPRO India's Head quarters at Bangalore or at Reverse Logistics locations wherever present. Duly filled up fault tag should mandatory accompany faulty part. Partners should take care in carefully completing all the details as mentioned in Fault Tag. Noncompliance will result in delay in reconciliation of the parts sent. Partners should return the defective (against advance RMA & DOA) within 7 business days, failing which WIPRO will debit the same to partner's account.
REVERSE LOGISTICS OPERATIONS
In order to facilitate a faster TAT for spares WIPRO India has opened Reverse Logistics Centers in Mumbai & Delhi. The ASPs present in these locations have to send the defective spares to these centers only. It acts as a collection center for defective spares thereby reducing the cost of courier to the Partners. WIPRO India will increase Reverse Logistics Locations as and when required.
SPARE PURCHASE
If any customer/partner wants to purchase spares for upgrading WIPRO systems, they have to place purchase order on AIL with 100 % advance. The delivery period is 4- 6 weeks from the date of receipt of purchase order. Spare price list is circulated by WIPRO India every Quarter. The spares for Notebooks, Servers, and Desktops will be available for 3, 4 & 5 yr. respectively after the launch of product. All the spares are catered from the main warehouse at Bangalore against any purchase cases.
Batch: FW 07-09 37
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
STANDARD WARRANTY
Desktops and Servers: 1 year comprehensive (parts, labor & on-site). Next two years, parts only warranty from WIPRO India. Notebook & Tablet PC: 1-yr carry-in warranty. TFT Monitors, LCD & 17" CRT monitors: 3 years (on site at cities where our monitor repair vendors are present - currently 19 cities).
Warranty Matrix
Table 1.3 Parts Coverage (In years) 3 1 3 1 3 1 1 1 1 3 1 1 1 Labor Coverage (In On Site Carry In 1 1 1 1 1 1 1 1 1
Products
Desktops VPD
WIPRO Power Sle WIPRO Aspire WIPRO Veriton WIPRO Power S200 WIPRO Powers 100 WIPRO Power 250 series WIPRO POWER S 251 series
Notebooks Servers VPD
WIPRO TravelMate WIPRO Aspire WIPRO Altos WIPRO Altos G310
Batch: FW 07-09 38
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Peripherals
LCD Monitors 3 3 CRT Monitors 15" 2 2 CRT Monitors 17" 3 3 LCD-TVs 1 1 Projectors 2 2 LCD Monitors, CRT Monitors 15" and 17" are for stand-alone sales, else the warranty as per product warranty.
SERVICE LEVEL AGREEMENT (SLA)
Resolution time
WIPRO provides SLA of 95 % uptime for desktops and 97 % uptime for servers. These are provided at locations where WIPRO’s ASP's are present. Currently WIPRO has 79 cities where its service partners are present. SLA for notebooks is 2 business day turn around time at the ACC’s.
Response Time
At A class location, calls will be responded to within 2 hours for servers and within 4 hours for desktops. At B class cities, calls will responded to within the same business day. At C class cities calls will be responded to within the next business day. The cut off time for logging in calls would be 4 p.m. Response time will be case specific for remote and difficult locations like Srinagar, Andaman & Nicobar Islands, and Northeast states. The above SLA’s are applicable during the period of comprehensive warranty only. A class - Bangalore, Delhi, Mumbai, Chennai, Hyderabad & Kolkata. B class - All state capitals wherever WIPRO’s ASP's are present. C class - All other cities where WIPRO’s ASP's are present.
Warranty Registration
Batch: FW 07-09 39
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
To avail benefits of warranty support, customers have to register WIPRO system within 15 days of delivery. Customers can register by visiting www.WIPRO.in or sending the registration card available inside the box or sending the registration details on the excel sheet. No part requests will be entertained if the system is not registered with WIPRO India.
Scope of Support Calls
WIPRO commits to support that the scope would cover hardware and licensed software supplied by WIPRO. Any issue related to product specification during the entire customer contract period shall be fully owned by the WIPRO India (Pvt.) Ltd. and resolve to the customer's satisfaction at no cost exposure to the company.
The supplier would be responsible for any defects that may develop under normal and proper use of products, arising out of defective parts, design or workmanship in the product, at the customer sites and shall remedy the reported defects at its own cost. This warranty is valid only if WIPRO is satisfied that the defects are due to faulty materials and workmanship. Improper usage or handling will not qualify for a free replacement of the parts. Calls under the following category will be outside the scope of warranty support and would be on a chargeable basis: 1. Plastic parts & consumables, i.e., Panel, bezel, hinge, print head and knob. 2. Virus related calls 3. Software related calls other than the original OS supplied with the PC 4. Calls related to unstable power supply. 5. Physical damage/ breakage.
Batch: FW 07-09 40
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Terms and Conditions of Warranty
1.
WIPRO India is not responsible for damage to, or loss of, any programs, data or removable storage media including any consequential loss or damage. Maintenance work of any type performed on WIPRO product by an unauthorized party renders the warranty null and void. Any non-WIPRO certified product added on to the WIPRO Product would also render the warranty null and void.
2.
The software is provided on an "as is" basis and the warranty does not cover software corruption. Warranty will be rendered void by misuse, accident, modification, unsuitable operation environment, improper maintenance by unauthorized personnel, removal or alteration of equipment or part identification, serial number label, Tampering of warranty sticker, or failure caused by a product for which WIPRO is not responsible. WIPRO does not warrant uninterrupted or errorfree Operation of equipment.
3.
4.
WIPRO is not liable for any damage to, or loss of, any programs or data. If a hard disk failure occurs, WIPRO will only install the factory default software onto the replacement hard drive. WIPRO will not undertake any file or data transfer from the faulty hardware to the new replacement of swapped hardware. Customers are advised to do the backup prior to the repair.
5. Force Majeure: Warranty does not cover damages caused by Acts of God, e.g. Lightning, flood, riots, fire etc. Neither party shall be liable for nonperformance either in whole or in part of this agreement due to reasons unforeseen These reasons and shall include beyond and be its limited to control. strikes, lockouts,
nationalization, acts of God, war, and fire. In such an event, the other party will be notified immediately in writing detailing full facts of the case and both parties will undertake to arrive at mutually satisfactory solutions to overcome the difficulties arising out of these circumstances.
Batch: FW 07-09 41
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
WIPRO SERVICE OFFERINGS (EXISTING)
WIPRO SERVICES
Warranty Services
Upgrades
Facility Management Services (FMS)
Storage Solutions
Batch: FW 07-09 42
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Standard to Enhancement Packs (S.T.E.P.)
Buy Back
Networking
Implementation (Roll Out Services)
Figure 1.6
STANDARD TO ENHANCEMENT PACKS (STEP)
STEP policy is a unique way to enhance the services provided by WIPRO India in its quest for committed Total Solution. In this a customer can get extended warranty on its product for a nominal amount. STEP is available to extend standard warranty to three years comprehensive or carry in. Every system that is procured is a product purchase with a specific purpose. It is completely utility based and stands to serve for the entirety of the utility. STEP’s are primarily designed to provide the customer value for money specifically when we compute the Total Cost of Ownership WIPRO Packaged Services make it easy to choose the precise level of support customer’s need, from basic to business-critical. Purchased with the product, these services include Warranty extension/enhancement, Installation, hardware service and the software support for the operating systems. STEP
Batch: FW 07-09 43
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
• • • •
is a commitment extension from WIPRO. is the immediate basic movement towards a committed Total Solution. is extremely easy to sell and even easier to buy. is an extra revenue generation mechanism for the reseller/service Provider.
STEP would be applicable only in India. Similarly product purchased outside India will not be governed by this STEP. The STEP is not transferable from one user to another.
Benefits of STEP: > Easy to buy > Simple to implement > Investment Protection > Reliable and consistent service > Ease to obtain support > Advanced Hardware availability > Increased Uptime
A comparison of STEPS and standard warranty
Basic Warranty provides: • Protection against manufacturer defects • Parts, Labor (for 1 year) and besteffort repairs • Best effort response for replacement of defective components • No software or network operating system support • No installation services
Batch: FW 07-09 44 Alumni ID No.: DF79-M-0955
STEP Services offer: • Protection against downtime • Response time upgrades • Single source expert help • Installation support • Advance spare replacement The type and level of support that’s right for customer requirement
The Indian Institute Of Planning And Management, New Delhi
Figure 1.7
Obtaining STEP
? By selecting the product code.
?
Placing the order (for customers on the Reseller/Support Partner) for the required quantity.
? Reseller/Partner shall send prescribed STEP order forms to The Distributor with all the details like End user, System Sr.#, STEP part no. etc., along with the payment.
? ?
Distributor will send the forms to WIPRO India Ltd (AIL), Bangalore. On receiving the details, AIL WMS coordinator will update the database on web, generate the certificate and will directly dispatch it to the end-user, with a cc to e-mail of the respective Reseller/ Partner.
Typically about 10 days are required for confirmation of STEP towards the system.
Exclusions to STEP: (Terms and conditions towards STEP)
•
WIPRO India is not responsible for damage to, or loss of, any programs, data or removable storage media including any consequential loss or damage.
Batch: FW 07-09 45
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi •
Any non-WIPRO certified product added on to the WIPRO Product would also render the STEP null and void. The software is provided on an "as is" basis and the STEP does not cover software corruption.
•
•
Cracked glass panel on monitor, LCD screen, or damage caused by too much pressure exerted on the LCD, are not covered under STEP.
•
•
Battery/Battery packs and plastic parts for Notebooks are not covered by the STEP. STEP will be rendered void by misuse, accident, modification, unsuitable operation environment, improper maintenance by unauthorized personnel, removal or alteration of equipment or part identification label, tampering of STEP sticker, or failure caused by a product for which WIPRO is not responsible.
•
WIPRO does not warrant uninterrupted or error-free operation of equipment. STEP does not cover damages caused by Acts of God, e.g. Lightning, flood, riots, fire etc.
•
All third party peripherals, whether purchased as a part of a system, or bundled with it, come with the prevailing agent's Warranty, and WIPRO makes no warranty whatsoever on their behalf. Note: These STEP offerings would be applicable to only those clients who have registered their purchase with us within 15 days of receiving the STEP. In case of systems that are not registered, they would have to be accompanied compulsorily by the proof of purchase.
•
All WIPRO Options within the system purchased along with the system or later on will be governed by the warranty of the Base WIPRO System. On-site service will be limited to customer's location that is within 40km radius of an WIPRO Professional Service Partner's premises. Any customer location
•
Batch: FW 07-09 46
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
beyond the 40km radius will automatically be governed by the carry-in service.
UPGRADE
Upgrade option for any existing product is available. WIPRO offers attractive prices for the upgrade option. The following are some of the upgrade options: ? Box upgrade ? HDD ? Memory ? Monitor ? CDROM-COMBO
FACILITY MANAGEMENT SERVICES (FMS)
To manage the multi-vendor and multi location IT environment in an optimized and effective manner, and meet the increased set goals, CUSTOMER needs Facility Management Services to help them focus on their core activities and forge abiding relationships with the customers, business associates, shareholders and employees through appropriate and better technology options. WIPRO India offers a host of Faculty management Services. To satisfy their customers IT needs and requirements; certain amount of technological and infrastructure requirements are necessary for any Faculty management Services provider. WIPRO India has the following infrastructure resources.
Value Proposition WIPRO Faculty Management Services would bring to Customer
Batch: FW 07-09 47
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 1) Focus: -Permitting Customer to focus on the business issues that
surround them as opposed to running the day-to-day IT operations.
2) Agility: - Supporting the Customer’s need for both organizational and
technological agility in order to respond rapidly to changes in their own competitive marketplace.
3) Value: -Delivering solutions that enhance the productivity, availability, cost
efficiency and consistency of the Customer’s infrastructure through technical excellence and global presence.
4) Control:-Operating under clear and flexible service level agreements to
ensure that you, as a decision-maker, have a higher level of control over direction and performance through various service level agreements.
5) Results: -Focusing on delivering against both the shorter-and the longer-
term goals of Customer in order to ensure that the expected business results of IT operations are realized.
6) Single point of contact: -To have a single point of contact and
accountability for their entire IT environment.
7) Customer Satisfaction: - To achieve high level of end user satisfaction. 8) Centralized help desk: -To have a centralized Help Desk where all IT
related problems. Of all the users will be reported and resolution monitored. Note: - The services offered under WIPRO India FMS would be different from client to client and would be worked out based on the requirements of the client. Based on the strengths of WIPRO Ltd. (AIL) and our FM Program Partners, AIL has identified the services that we would be offering to clients. The services offered are: -
Batch: FW 07-09 48
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1. Help Desk Support: To provide Single point contact to all users in the respective locations for logging their calls related to IT. Based on the site requirements the Helpdesk could be on-site or off-site.
?
Scope: - To all the users of Customer.
? List of Deliverables ? ? ? Receive and log user calls from over the phone or e-mail. Analyze the call and decide on whom it should be passed-on to. Refer the problem to the competent designated person / Resident Engineer/ service provider. ? Track and follow-up the problem with the designated person / service provider to ensure SLA commitments are adhered to. ? Escalate to CUSTOMER Program/ IT Manager, if SLA commitments are not met. ? ? ? ? Do call closures on resolution of the problems. Analyze the call statistics (open/closed calls). User satisfaction Survey Consolidate call reports to provide periodic call statistics reports
Responsibilities of Customer • • To provide one Desktop with printer in LAN. To provide Table, chair, storage facility and an intercom for receiving/ making calls. 2. Server Management: - To provide a maximum up time and performance levels of all the Intel servers with Customer.
Batch: FW 07-09 49
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Scope: - To all the users and interfaces connected onto these servers (Number of servers
List of Deliverables Handling of all NT/win2K related support issues. Installations and re-installation of OS as and when required. Backup Management Performance monitoring and tuning exercise of all servers (hardware) and services (DHCP, WINS etc.) – Quarterly basis ? ? ? ? ? Alert configurations of systems to trigger events to responsible users. Checking of the spooler available sizes - monthly basis Addition, deletion, re-configurations of additional users and printers. Timely updating of service packs and hot fixes. House keeping of servers such as, disk space usage, files and folders, permissions, users login on network and email systems etc. - Monthly basis. ? ? Maintenance of IP addressing across the network. Handling of all upgrades, Hardware and OS related software as and when required. Service Levels Note: - All servers carry the highest priority level. All first level calls Table 1.5 Resolution time (in hr.) 24 12 2 Table 1.6 Escalation time (in hr.)? ? ? ?
Type of problem Normal Critical Supercritical
All Second Level calls (Customer / Vendor) Type of problem
Batch: FW 07-09 50
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Normal Critical Supercritical Responsibilities of Customer
•
8 4 1
To provide Technical assistance to all 3rd party or in-house developed/supported applications related issues on the servers at the second level. This could also involve the vendor if required.
• • •
All validations of new software upgrades and patches have to go through the test run or through a proper guided approach. Suggesting the need for upgrades as and when required. Co-ordination with the applications team when it involves any of these servers, where the system hardware and software are needed to be justified before the process goes online.
3. Desktop Management: - To provide complete support on day-to-day related problems on hardware, Operating Software and client application software. Scope: - To all the users of Customer List of Deliverables: Day to day call handling at the helpdesk. The calls would be related to: System calls, Application calls, Users related calls and general calls. ? To handle calls related to System hardware, which could include Installations / re-installation, upgrades and to configure the same. ? To support call related applications like office, licensed software and in-house applications. To install and re-install software applications. ? To resolve recurring problems permanently by applying proper solutions, which could have to do with replacement of the hardware, or necessary training to the user groups
?
Batch: FW 07-09 51
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
To handle all first level calls related to connectivity issues of the nodes (desktops/laptops) over the network. To assist users in giving solutions towards backup, zipping and related issues. To interact with CUSTOMER / Vendor for replacement of spares and higher level of service. To co-ordinate all re-allocation and transfer of systems between office locations for fresh installations / re-installations or service replacements.
?
?
?
Service Levels: • • All first level calls Resolution time on an average is 4 Hr for all calls.
Responsibilities of Customer To provide second level supports or escalate it on to the Vendor. To provide the vendor AMC contract details to helpdesk. To suggest methods to users departments for proper and efficient use of desktop / Laptops and necessary training to be imparted on need basis. ? ? Monitoring reports and implementing proper measures. All validations of new software upgrades and patches to go through the test run or through a proper guided approach. ? To give proper documentation and training for implementing in-house software across users to the Helpdesk. ? ? ? ? Provision of space, phone and system to be provided to the helpdesk. Helpdesk personal names to be registered with security. Access to all backup media, spare parts and consumables to be provided. Access to all backup and application software’s.
? ? ?
Batch: FW 07-09 52
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
Access to all software and hardware manuals.
4. Hardware Maintenance: - To provide day to day support for IT hardware break-fix across the various offices at Customer for Servers/Desktops/Network Components/Printers / Scanners / Modems Scope: - As per the list of hardware enclosed location wise. List of Deliverables: Support includes Hardware problem diagnosis and Hardware repair. WIPRO shall provide spares and technical services on the equipment covered. Support could be telephonic or on site as required. ? To maintain all first level service calls of Servers/Desktops/Network Components/Printers / Scanners / Modems ? ? To escalate problems of higher order to CUSTOMER or the Vendor. Preventive maintenance to be carried out, which will include Disk media scans & defragmentation, Keyboard & Mouse roller cleaning, Printer servicing & cleaning. ? To configure / re-configure printers/modems/scanners across systems on need basis.
?
Batch: FW 07-09 53
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? ?
To ensure all loading of proper and updated drivers as and when required. To ensure proper escalation and follow-up with the vendor for the same to be completed with respect to the time schedules. To ensure health check done on toners given for re-filling and to ensure no second time re-filled toners to be used
?
Service Levels: • • All first level calls Downtime not to exceed 24 Hrs.
5. Anti-Virus Management: - To provide an effective control mechanism for Virus check on the network. Scope: - Applicable to all desktops/laptops and servers on the network. List of Deliverables: Implementation of the Anti-Virus tool provided by Customer. Diagnose and rectify any virus problems, which can be fixed by the anti-virus tool. ? Updating the package by downloading the updates from the vendor’s website –as per the security policy. ? To place the update with proper permissions and control in a common access area on the server after primarily testing for any probable corruption or malfunction. ? Sending mailer (and monitor read status) to the entire user list about the latest update, with the link to the procedure defined on the Intranet. ? To keep track of the latest malicious virus from the net and taking the required measures for encounter the same.
? ?
Batch: FW 07-09 54
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
Re-installation of the anti-virus packages where they have been corrupted or deleted by the users. Write scripts on the server to maximize automation of updating of anti-virus tool at the desktop/ laptop level. Triggering regular scans on a random basis across the users to check if the package has been updated.
?
?
Service Levels Update of Virus related calls will have a resolution time of 8 Hr. All server related updates to be done by the Helpdesk.
? ?
Responsibilities of Customer ? ? ? To provide License copies of the anti-virus tool to the Helpdesk. Renewal of the licenses with the respective anti-virus tool vendor. All critical rumors and announcements by other media suspecting of virus attacks to be checked and necessary precaution to be taken. ? ? ? To automate using login scripts and replicating the same across domains. Monitoring reports and implementing proper measures. All validations of new software upgrades and patches to go through the test run or through a proper guided approach. 6. Backup and Recovery Management: -To ensure that all servers and important data are protected against data losses. Scope: - To cover all File & Print and Mail servers. List of Deliverables: -
Batch: FW 07-09 55
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? ?
To define backup schedules on need basis for all servers. To perform regular backup operations on the servers as per the defined strategy of the customer. Proper labeling and housing of the media for identification and retrieval. Maintain online and off-line mechanisms of disaster recovery of media. Conduct restoration exercises at random intervals to check for availability of backed up data. Regular maintenance of the media and the backup device on monthly basis. Backup of data, programs, application software on CD-R’s on need basis. Maintain log sheets for backups. Ensure proper scheduling of backups during non-peak hours. To also backup servers at the system level as specified by Customer.
? ? ?
? ? ? ? ?
Service Levels: • • Ensure that at least 95 % of the backups are taken as per defined schedules. Ensure 100% of planned restoration exercises. Responsibilities of Customer: To communicate the planned backup strategy to the Helpdesk. Provide adequate media and necessary hardware and software resources to the Helpdesk. ? In case of failed restoration exercises, immediate concern to be taken in terms of backing up data again even if the system is in peak hours of work. ? ? ? To keep Helpdesk informed of the necessary updates to the software. To provide proper authorization to backup user related data. To keep track of the reports logs and variations of the Helpdesk activity.
? ?
Batch: FW 07-09 56
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
7. Asset Management: - To build an up to date databases of the current IT assets and Implement a system to track any changes to the same. To monitor and maintain a database of all the software license inventory & usage. Scope: - To cover every IT related asset at CUSTOMER location. List of Deliverables: To deploy Asset Management agent across the network which will furnish complete asset information as regards to hardware – software. ? ? Maintenance of IP addressing across the network To maintain all installation / re-installation details of systems and their movement within CUSTOMER. ? To record all changes in upgrades and re-configuration of machines, software Installations and de-installations. ?
?
?
To monitor software licenses. Physical stock to be checked once in 6 months for the entire organization and monthly for the spares inventory at the Helpdesk.
Service levels: Update of Asset database within 3 days of any changes or additions done. Customer Responsibility:- To provide Asset Management Tool for capturing the inventory data. 8. Vendor Management: - To co-ordinate with vendors of all IT related products for parts replacements, higher customized levels of service and delivery related issues. Scope: - For all third party items.
Batch: FW 07-09 57
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
List of Deliverables: ? To maintain a list of various vendors for related products (consumables, H/w and S/w) ? ? ? ? Logging calls with vendors. Coordinating with the vendors to get the problems resolved. Follow up on the delivery schedules with the vendors. Keeping track of the hardware and software maintenance contracts entered into the customers with the various vendors.
?
Analyzing the performance of the different vendor’s vis-à-vis their maintenance contract entered into with customer.
Service Levels: • • To ensure proper terms and conditions are met on regular basis. To check for product and service quality.
Responsibilities of Customer: • • • To monitor the products purchased for their quality. To keep track of the generated reports. To pass the bills and invoices.
9. Network Management: - To provide management and availability of the Local Area Network. Scope: - For all Desktops, Peripherals, File & Print and Mail servers. List of Deliverables: ? Detection, isolation and diagnosis o Network faults and getting them resolved.
Batch: FW 07-09 58
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
Quarterly checking of network on various aspects like physical inspection, connection, patching, active devices like hubs & switches mounting & fully operational design. Keep a check on user authorization / logins to ensure there is no illegal access to the network information & services. Configuration Management of the networking equipment such as hubs, switches etc. Deployment of Network (optional). Audit tool to gather all relevant information of network usage, performance, Intrusion Denial of Service, IP spoofing etc.
?
?
?
Responsibilities of Customer: ? ? To provide Network Monitoring Tool To provide Network Topology Map.
Service Levels: ? ? All first level calls Downtime not to exceed 4 hours
10. Mail Management: - To provide management of the mail and messaging application. Scope: - For all Desktops and Mail server. List of Deliverables: User account management- Creation, deletion and transfer of mail boxes Management of public folders and post offices Monitoring the mail traffic queue and the disk space usage for mail.
? ? ?
Batch: FW 07-09 59
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? ? ? ? ?
Internet configuration at client end. Define email policies in conjunction with customer and ensure compliance. Resolving of problems related to sending /receiving /retrieval user mails Ensuring the Mail works smoothly across locations Mail log report/Mail Uptime Report
Service levels: All first level calls Downtime not to exceed 4 hours
? ?
BUY BACK
Buy Back option is available for systems and peripherals upon mutually agreed rates and conditions. On such deals, the existing system/ peripherals should accompany the purchase order with payment.
ANNUAL MAINTENANCE CONTRACTS
Annual maintenance contract (AMC’s) is the best solution if a customer’s product is out of warranty. WIPRO annual maintenance contract is an agreement from WIPRO to the customer to support the product for one year. WIPRO provides separate price lists for the AMC’s that it offers. Annual Maintenance Contract with WIPRO India Pvt. Ltd, which comprises of:
Batch: FW 07-09 60
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? Committed response time & uptime as per the services opted by the customer
?
Quality Repairs at WIPRO Repair Centers
? Genuine & high quality spares ? Certified service professionals
?
Direct ownership of WIPRO India for meeting SLAs.(Service Level Agreements)
? Call Escalation Procedure for easy reference ? Support Plan to maximize the AIL deliverables and customer satisfaction. ? The AMC charges cover all parts & labor charges except consumables, plastic parts and non-functioning parts. Please refer to the Terms and Conditions attached. The Services would be provided by WIPRO India Pvt. Ltd. or any of the WIPRO Authorized support partners. However, WIPRO India takes the overall maintenance responsibility for problem resolution fort the equipment’s covered under this Contract.
WIPRO India Responsibilities towards AMC
?
WIPRO India will provide onsite hardware remedial maintenance and OS support (limited to troubleshooting or reloading in case of HDD replacement) during the contracted hours of coverage. Scheduled preventive maintenance shall be performed during the prime shift (9:00 am to 5:30 pm Monday- Friday) in accordance with equipment standards specified by WIPRO India. Quarterly service activity review meetings.
?
?
Exclusions towards AMC Service
Batch: FW 07-09 61
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
?
?
Services outside the contracted hours of coverage. Services, which in WIPRO India’s opinion are required due to improper treatment or unauthorized attempts by other than WIPRO India authorized personnel to repair maintain or modify the equipment or software. Individual hardware products that cannot in WIPRO India’s opinion be properly repaired due to excessive wear or deterioration. These products may be withdrawn from service within ninety (90) days after written notice. All costs, charges and expenses in respect of moving the equipment or any part thereof including cost, charges and expenses of dismantling, reinstallation, commissioning and transport. OS customization & performance tuning Any physical breakage and burnout. List of items mentioned below: Printer Bands, printer ribbon, Printer head, Ink cartridge & stationery. All magnetic/optical media, Laptop & UPS Batteries Read/Write heads of Tape Drives/Cartridge Drives All passive components of networking
?
?
? ? ? ? ? ? ?
SALES FUNNEL PROCESS
A sale is like any other business activity - it needs planning. To achieve a required output (annual target) you need a certain level and quality of input (prospects). The numbers at the top of the funnel must take account of your anticipated - or preferably known - conversion rates through the funnel. Complete the sales funnel planner by starting with the required sales results, and work back through the funnel adjusting the figures according to realistic expected conversion rates.
Batch: FW 07-09 62
Sales Input
Required value prospect base Average contract value New prospects required
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Conversion Ratios through the Sales Funnel Sales Output
Appointments
Proposals
Rs. Annual sales target Average Contract Value Number of new contacts
PHASE II
Batch: FW 07-09 63 Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
MARKET RESEARCH (Tools & Techniques to find out Gap areas followed by Recommendations)
TASK INVOLVED
A. DISCUSSION WITH DECISION-MAKER: - “Mr. Tanveer
Singh, Regional Sales Manager, WIPRO InfoTech Ltd.” I had an opportunity to talk to Mr. Tanveer Singh, who is my overall project guide and also a decision maker in the company in the area of services and support. Issues discussed: a.
WIPRO Ltd. clientele includes corporate buyers, Govt. sector, PSU’s, Educational institutions and individual buyers. & 70% of the customers are in
Batch: FW 07-09 64
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
the large buyers segment (comprising of corporate, Govt. sector and educational institutes) and rest 30% are Individual buyers
b.
Smaller Workforce: - As compared to the other key players in the market, WIPRO comparatively has a small work force (about 140 people) working in India.
c.
Less of Advertising: - There was a brief discussion on advertisements given in media by WIPRO to promote its products and services. Mr. Tanveer Singh said that earlier the rate of advertising was very low; but recently WIPRO India has started increasing advertisement’s and promoting special events etc.
d.
A brief introduction and discussion on the various service offerings from WIPRO India: - this included discussion on the current offerings currently being provided by WIPRO. He also mentioned specifically about the Network Storage Services which AIL provides, but over time this has not been the thrust area for AIL, and AIL does not do a lot of work in this area.
e.
Discussion about the Unorganized Sector: - discussion was conducted on whether the Unorganized Sector; particularly the Assembled PC dealers posed a challenge to WIPRO. According to him, they did not pose a significant challenge to WIPRO in India; because of the recent drop in prices of MNC brands PC (by the lowering of import duties, cost of manufacture of computer parts, increased consumption of PC’s etc.) people were going more for branded MNC PC’s.
f.
Discussion about Call Centre’s/24 hr customer support: - This issue was discussed as to why AIL currently did not have a Call Center support with 24× 7 telephone support. In answer to this query; he replied that in the start of
Batch: FW 07-09 65
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
its operations in 1999; AIL had tied up with a local call center to provide this service but the response was not so good in terms of customers actually contacting or using this support service. Subsequently this service was discontinued when it was found that no real work was being carried out by the call center staff in terms of handling customer calls. However he also agreed that now times have changed and also acknowledge the importance of having such support services in such times of increased competition.
g. Discussion about the Bottom-line (profits) of AIL: - He mentioned that the Computer Industry was a very volatile Industry with newer trends coming in at a very fast pace. Subsequently he also mentioned that the operating profits of AIL was also quite low in lieu of the above observation.
h.
Importance of Services Marketing: - He then mentioned that as the bottomline in Computer Industry were quite low, Services marketing and revenue and profit from these services have become an important revenue stream for WIPRO India. He emphasized the importance of such services and how they can serve as an important Source of Profit generation for AILS.
i.
Perception about WIPRO as a brand name in India: - There was a discussion about how WIPRO was recognized by people in India. He mentioned that initially people were not aware of WIPRO as a Computer Company; however this scenario is changing now; with people’s perceptions about WIPRO changing.
j. Credit terms: - There was a brief discussion on the credit policy of AIL. He mentioned that AIL’s credit policy was quite stringent and credit was mostly provided to Clients who had an exceptionally good track record of payments. There was a brief discussion on GOV Sector also; by way of payments as these payments quite often got delayed due to bureaucratic reasons and lot of procedures etc.
Batch: FW 07-09 66
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
B. SECONDARY DATA ANALYSIS
INDIA’S IT SERVICES INDUSTRY: A COMPARATIVE ANALYSIS In the past decade, India’s information technology services industry emerged as an important player in the global IT services market. The country’s share of this market, valued at more than $350 billion, increased from 1.5 percent in 20002001 to 1.9 percent in 2002-2003. While worldwide revenue of IT services grew less than 2 percent during this period, India’s IT services industry experienced 22 percent revenue growth—a pace comparable to the rise in Hong Kong’s electronics industry during the 1970s.
Table 2.1 Firm Network Model Subsidiary Model
India-based IT service network models. Descriptions Possible Relationship The MNC’s Indian subsidiary provides all IT services to the firm. Possible Network Oracle Examples
s Subtypes Wholly Owned Intra-firm
Batch: FW 07-09 67
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Subsidiary provider model
The MNC’s subsidiary provides IT service provider with one or non-Indian IT service provider(s).
Wholly Owned, Equity based Partnership, Contractual (long term) or project-based
Intra-firm, Joint Venture, Inter-firm
General Electric, Citibank, HP, IBM, Acer
plus IT service Indian
services along informal, more Indian or (short-term)
IT service provider model
The MNC does not have any Indian employs Indian or a combination of Indian and non-Indian IT service providers either independently or with the assistance of outsourcing firms.
Equity-based Partnership, Contractual informal, project-based (short-term)
Joint venture, Inter-firm
Pyxis (a manufacturer of automated medication and supply dispensing systems)
subsidiary and (long term) or
Batch: FW 07-09 68
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Government Support The Indian government has played a central role in establishing and promoting the IT services industry. It created software technology parks to provide the necessary office space, data and satellite communication links, and hardware and prioritized funding of the country’s telecommunications infrastructure. To facilitate exports, the Indian government provides easily obtainable licenses, rebates, duty-free imports, credits, international trade fair subsidies, and research support, and in 1995 it permanently exempted service exports from income taxes. This pattern follows the example of Taiwan’s government, which established export-processing zones in the 1960s to promote electronics production and has since provided financial assistance, training, and research and development support. The Singapore Technology at every step, including a 10-year tax holiday and factory space in an industrial park. The Korean government similarly helped Samsung and other chaebols or conglomerates become major exporters in the electronics market. Table 2.2 IT Service Firms in India
Batch: FW 07-09 69
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Although India’s IT services industry is divided among many firms, a relatively small group of them have emerged as the main players. The top five IT service companies in India have grown faster than the rest of the industry and now have 32 percent of the market share; the next 50 firms have had considerably slower growth and have only 35 percent of the market share.1 Thus, India’s IT services industry is not as consolidated as the East Asian electronics and computer hardware industries. In Taiwan, for example, the top 10 PC manufacturers control 80 percent of total production. With some differences, particularly the absence of multiple supply tiers, India’s IT services industry is undergoing a transformation similar to that of East Asia’s electronics and computer hardware industries. Currently, this industry is dependent on MNCs, partly as owners and mostly as buyers, who are outsourcing more IT service operations to remain internationally competitive. MNCs have adopted different production models, with the subsidiary plus IT service provider emerging as the dominant one.
PROBLEM DEFINITION
A. Management Decision Problem: -
“What should be done to
improve WIPRO Ltd. services for increasing its services revenue”?
B. Marketing Research Problem: -
To identify the gap areas in
existing service initiatives of WIPRO India and determine the relative strength and weaknesses of WIPRO India vis-à-vis its major competitors.
Batch: FW 07-09 70
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
APPROACH TO THE PROBLEM
A. THEORETICAL FOUNDATIONS
The basis of my project is based on the “Agency Theory”. I have subsequently applied this theory in my research and also developed research questions and subsequent hypothesis resulting out of those questions. Agency theory explains how to best organize relationships in which one party (the principal) determines the work, which another party (the agent) undertakes (Eisenhardt, 1985).
Batch: FW 07-09 71
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The theory argues that under conditions of incomplete information and uncertainty, which characterize most business settings, two agency problems arise: adverse selection and moral hazard. Adverse selection is the condition under which the principal cannot ascertain if the agent accurately represents his ability to do the work for which he is being paid. Moral hazard is the condition under which the principal cannot be sure if the agent has put forth maximal effort (Eisenhardt, 1989). The problems of adverse selection and moral hazard mean that fixed wage contracts (i.e. a fixed payout given to the Agent from the Principal for disbursing services) are not always the optimal way to organize relationships between principals and agents (Jensen and Meckling, 1976). A fixed wage might create an incentive for the agent to shirk since his compensation will be the same regardless of the quality of his work or his effort level (Eisenhardt, 1985). When agents have incentive to shirk, it is often more efficient to replace fixed wages with compensation based on residual claimancy on the profits of the firm (Alchian and Demsetz, 1972). The provision of ownership rights reduces the incentive for agents' adverse selection and moral hazard since it makes their compensation dependent on their performance (Jensen, 1983). The important tenets of Agency theory are1. Ensuring Ownership Incentives
?
?
Batch: FW 07-09 72
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The argument made above suggests that the provision of residual claimancy on the profits of the Principal provides a strong incentive for agents not to engage in moral hazard or adverse selection and so enhances the performance of the service. By turning the individuals who are the Agents into the residual claimants on the profit generated by this partnership between the Principal and the Agent; ensures that shirking is reduced. We can represent the two parties involved i.e. the Principal as the franchiser and the Agent as a franchisee. So using this terminology, we can describe the relationship between the two. If the franchised outlet is run by a passive owner who hires a manager to run the outlet, then the beneficial effects of franchising on adverse selection and moral hazard are lost. Passive ownership simply recreates the agency problems that franchising is designed to overcome. Moreover, passive ownership increases agency costs over those which exist when the owner hires outlet managers. In place of the cost of managing the agency relationship between the owner and the outlet manager, passive ownership imposes the cost of managing the agency relationship between the franchiser and the passive owner and the cost of managing the agency relationship between the passive owner and the outlet manager. Since the survival of new franchise systems depends on the franchisers' ability to economize on agency costs, those new franchise systems, which allow passive ownership, should be less likely to survive. 2. Monitoring Efficiency The performance of a franchise system (here in the context of my project at WIPRO; we can consider the ASP’s as a franchisee’s for disbursing WIPRO India’s service offerings) depends on the ability of the franchiser to ensure that
Batch: FW 07-09 73
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
all members of the system work to develop and maintain its brand name. The brand name is a signal to customers of the quality of the franchise outlet. As such, it is the major strategic asset that differentiates outlets in the franchise system from outlets in other franchise systems or independent businesses in the same industry. However, the development and maintenance of the brand name is an externality problem. Each franchisee (WIPRO’s ASP’s) has an incentive to free ride off of the efforts of other franchisees to develop and maintain the brand name. Each franchisee can internalize the entire value of the savings from shirking on quality maintenance or on advertising and promotion, but can externalize the cost of that shirking. For example, if a franchisee degrades quality, he will still be perceived as having the same quality as the rest of the franchise chain and will receive the same amount of benefit from the brand name. Given the existence of a free rider problem, the survival of a new franchise system depends on the franchisers ability to minimize the agency cost of free riding. Research has shown that information about agent behavior minimizes agent free riding. Information raises the risk of detection and therefore the likelihood that the franchisee will be terminated. Even if the information does not allow the principal to detect all free riding, it deters agents as long as the agents are risk averse. In addition, the information allows the principal to better differentiate suboptimal performance that is due to the agent's shirking from exogenous environmental shifts; and any information that improves this differentiation reduces the agent's incentive to shirk.
Batch: FW 07-09 74
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Obtaining information about franchisee behavior is a costly undertaking. Information on franchisee behavior is often gained through direct monitoring of franchisees. This activity includes verification that the franchisee is adhering to the contractual terms of the franchise agreement (Lal, 1990) through activities such as inspections of franchisee outlets by management personnel (Michael, forthcoming). Efficiencies in outlet monitoring can reduce these monitoring costs in two ways. First, by increasing the ratio of outlets to monitoring personnel, per outlet monitoring costs are reduced. The primary mechanism for verifying franchisee compliance with franchiser terms is the unannounced audit.
Since franchiser representatives can audit multiple outlets during a given work week, the cost per outlet of hiring a franchise consultant is lower if the franchiser has multiple outlets for each monitor on its payroll. Second, monitoring accuracy is improved by a high ratio of outlets per monitor. "Franchise systems with numerous units typically develop efficient routines for monitoring and measuring performance to assure profitability and uniform delivery of the franchise product or service. Such routines are enhanced by volume comparisons across units. The sheer volume of these comparisons can produce more educated routines for identifying and then managing the shirker One would expect that the more monitoring efficiency a franchiser has, the more able the firm would be to monitor franchisees and so economize on agency costs. 3. Geographic Dispersion Monitoring costs increase with the distance between the principal and the agent. The cost of monitoring franchised outlets is a function of the amount of time that monitors can spend on monitoring relative to other activities. The greater the distance between the monitor and the agent, the more travel costs must be added to the cost of monitoring. Moreover, when distances are greater, monitors
Batch: FW 07-09 75
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
must spend a greater amount of time away from agents, increasing the latter's opportunity to free ride and raising monitoring costs. For these reasons, monitoring costs are lower when agents are geographically concentrated. Therefore, one would expect that the more geographically concentrated a franchise system's expansion is, the more the firm is able to economize on agency costs. 4. Franchiser Free Riding Although much of the literature on franchising has focused on establishing franchisee incentives, franchisers must also be given incentives to motivate them to monitor franchisees against free riding. As was described above, franchisees have an incentive to degrade the brand name and, in the absence of monitoring, will do so. The franchiser prevents franchisees from doing this by auditing the quality of franchised units, and by establishing and enforcing contractual provisions for advertising, training and outlet operations. However, these monitoring activities impose a cost on the franchiser. In the absence of a countervailing benefit, the franchiser has an incentive not to follow through on this monitoring obligation. This has shown that if the franchiser was compensated entirely through these up-front franchise fees, he would have no incentive to monitor the system against agent shirking since he would receive no benefit from maintaining a high quality system. The royalty that the franchiser receives provides an incentive to monitor franchisees against shirking .To the extent that the franchiser receives ongoing royalties, he has an incentive not to default on his monitoring obligations. Defaulting on these obligations would lower the franchisers return from establishing the franchise system since an unmonitored system would have greater franchisee free riding and lower sales.
Batch: FW 07-09 76
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Potential franchisees see the size of the royalty rate in the franchise contract as a measure of the franchisers incentive to develop and uphold the brand name and the reputation of the franchise system. This reassures potential franchisees that the franchise system is organized in a way that will minimize agency problems .Therefore, one would expect that the higher the royalty rate in the franchise system, the more the firm is able to economize on agency costs. This argument leads to the fourth hypothesis:
B. RESEARCH QUESTIONS & THEIR HYPOTHESIS
1. Research Question: - Does Passive ownership of ASP’s (i.e. the owner appoints another person to run it fully) have any role to play in generating Adverse selection and moral hazard. Hypothesis: - New franchise systems which permit passive ownership of franchised outlets are less likely to survive than are other new franchise systems. 2. Research Question: - Does greater levels of monitoring of the ASP’s by WIPRO help in increasing Services revenue generation. Hypothesis:-the greater the WIPRO Ltd. monitoring efficiency, the more likely the ASP support model system is to survive and generate greater revenues.
Batch: FW 07-09 77
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
3. Research Question: - Does geographical concentration help WIPRO to better monitor and coordinate its ASP’s Hypothesis: - The more geographically concentrated the expansion of the ASP’s system, the more likely it is to survive. 4. Research Question: - Does loyalty of the ASP with WIPRO help in that ASP generating higher services revenue. Hypothesis: - The higher the royalty rate, the more likely that ASP would generate increasing profits from Services for WIPRO. 5. Research Question: - Does the lack of communication between WIPRO India services department and the ASP’s lead to adverse selection and moral hazard. Hypothesis: - Lower the level of communication higher are the levels of moral hazard and adverse selection leading to lower efficiency and lower profits of ASP’s
RESEARCH DESIGN
A. TYPE OF RESEARCH DESIGN
I have used both Exploratorary Research design and Conclusive research design in my research. In the start of the study Exploratory research was used to formulate or to define the major research problem more precisely, to identify the alternative courses of action and to develop hypothesis and isolate key variables and relationships for further examination (to use conclusive research design with Analytical Hierarchical process technique.)
Batch: FW 07-09 78
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Conclusive research was also undertaken to ascertain the main gap areas in WIPRO Service’s and to provide a solution so as to increase WIPRO’s services revenue in India and finally used to develop the Marketing and Sales plan for Ace India Ltd.
B. SCOPE OF THE STUDY
•
The study was conducted for India, New Delhi (covering 11 Authorized Service Providers and 16 Resellers of WIPRO Ltd.).
•
The Service was from a Known brand (i.e. services from WIPRO Ltd.). Time Scope Mid-August to Mid-October
•
C. TARGET POPULATION
• Indian • Authorized Service Partners ( i.e. the owners of the ASP) • WIPRO Resellers (. i.e. the owners of the Reseller firm) • All ASP’s and WIPRO resellers situated in New Delhi • Age of 18+
D. PRIMARY SOURCES OF DATA
This study was conducted at the premises of WIPRO India’s Authorized Service Providers (ASP’s) and WIPRO Resellers. The interviews were conducted with the concerned persons on the basis of structured questionnaire. Observations
Batch: FW 07-09 79
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
were made during the interview. Questions relevant to the concerned person were asked to gather up to date and accurate information.
E. SECONDARY SOURCES OF DATA
Secondary sources of data would be based on numerous sources including Journals, Magazines, Syndicated Services like IDC and articles, which were published in reputed journals and other important sources. These Secondary sources of data were accessed primary from IIPA and INDEST online access for e-books and Journals (Indian National Digital Library in Engineering Sciences & Technology http://paniit.iitd.ac.in/indest/ )
Some of the Secondary sources referred till date:-
Journals: 1. Harvard Business Review 2. Business Horizons
3.
Journal of Business Research
4. Information & Management 5. Qualitative Market Research: An International Journal 6. Journal of Retailing 7. Sloan Management Review
Syndicated Services: 1. IDC INDIA 2. NASSCOM 3. Gartner
Batch: FW 07-09 80
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Magazines: 1. Chip 2. Digit 3. Voice and Data 4. Network magazine 5. Mobility 6. 360 degree magazine 7. DQ channels 8. C.E.R.N. Resellers News
Important Landmark Researches: • Agency Theory (refer theoretical framework for the same)
Data from other Important Sources
1. Centre for Monitoring Indian Economy (CMIE) 2. Economic Times
3.
Technology Information, Forecasting & Assessment Council (TIFAC)
F. SAMPLING TECHNIQUE
The study involved finding gap areas in WIPRO India’s service offerings and in particular in the Delhi region specifically. For that I administered the questionnaire to all the WIPRO Resellers and WIPRO Authorized Service providers in the Delhi region. (The details of the above are given in the Annexure in the form of ASP list and WIPRO Resellers list in the Delhi region.)
G. SAMPLE SIZE
Batch: FW 07-09 81
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The sample size for Delhi region was: - 11 for WIPRO Auth. Service Providers 16 for WIPRO resellers (excluding those in Delhi NCR region)
H. QUESTIONNAIRE DESIGN
For the survey conducted, a detailed disguised questionnaire was prepared. Questionnaire was administered to concerned persons. The responses were recorded on the questionnaire itself. Questionnaire contained both open ended and closed ended questions. Closed ended questions were used where choices were limited and where some measure of degree was required. Multi choice questions were used where choices available were more than two. Open-ended questions were primarily asked to the respondents to have a Qualitative feel of the main issues involved and where responses can vary widely and so limit cannot be implied. I had to ensure no telescoping i.e. when the respondent assumes that just because a particular incident has happened in the recent past, they might misjudge the timing and give responses that seem to be closer to the present than the event actually happen. Questions were introduced to ensure that details are extracted for the validity of the events. Questions asked were formulated to take care of two issues a. The event so listed by the respondents is not a creation (Fake event) b. Not so much information is asked to the respondents so that the respondent feels “bombarded”
Batch: FW 07-09 82
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Some questions were specifically comparative in nature like what were the respondent’s views of Services provided by WIPRO India vis-à-vis WIPRO’s competitors. At the end of the questionnaire I attached a “sales funnel excel sheet” to be filled up by the Authorized Service Providers to get information about the current leads they are trying for WIPRO India in terms of generating revenues. Note: - sample questionnaires for ASPs and Resellers has been attached in the appendix.
I. SCALING TECHNIQUES
In the structured questionnaire that was administered to the respondents, the type of scale employed was Interval scale and Ordinal Scale. Interval Scale was used in questions to have a quantitative feel of the ranking of WIPRO Services with respect to its major competitors Ordinal Scale was used to gauge the overall popularity of the various WIPRO Services revenue streams. (i.e., to have a ranking)
Batch: FW 07-09 83
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
DATA ANALYSIS
A. METHODOLOGY
Step I
The questionnaire was framed for ASPs so as to extract data on the following Parameters: ?
Visibility: - To check the visibility of WIPRO Ltd. As a service providing organization in the field of IT products & Services in India. Market Demand: - To gauge the market demands for various WIPRO Ltd. Service offerings. Identification of new service offerings: - To get valuable inputs from the ASPs so as to identify new areas of opportunities for WIPRO Ltd. To position its service offerings. Clarity: - To check the level of clarity of the ASPs in disbursing service offerings from WIPRO Ltd. Brand Image: - To check the brand image of WIPRO Ltd. As a service organization.
?
?
?
?
Batch: FW 07-09 84
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Range of service offerings vis-à-vis its competitors: - To have an idea as to how WIPRO India Ltd’s Service offerings fare vis-à-vis its major competitors in India. Awareness: - To gauge the overall awareness and understanding of WIPRO’s ASPs in terms of current service offerings from WIPRO Ltd. Level of formalization in Selling Services: - To have an idea as to how systematic the ASPs were when it came to selling the various service offerings from WIPRO Ltd. Achievement of Sales Target: - To check how the ASPs were achieving their sales targets if or any targets given to them from WIPRO Ltd. Or made by them.
?
?
?
WIPRO Resellers offer excellent opportunity for me to get valuable information in terms of WIPRO Ltd.’s current service offerings. They have the advantage of being in direct contact with WIPRO’s Customers, especially the Small Office Home Office (SOHO) / Individual segment. The questionnaire was framed for Resellers so as to check the awareness level of Resellers w.r.t. the current service offerings from WIPRO Ltd. Also the Resellers stock products and services of WIPRO’s major competitors like HP, IBM, etc. Thus they can give valuable information in terms of how WIPRO services fare in the market vis-à-vis its competitors and where WIPRO is lacking. Finally to increase its services revenue; to know how WIPRO can use its Resellers to disburse IT services especially STEPs, AMCs and Upgrades.
Step II
Batch: FW 07-09 85
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
After the questionnaires for the ASPs and the Resellers were finalized, I started taking appointments followed by the daily visits to the ASPs and the Resellers to obtain the valuable input regarding the various loopholes (if any) in the service revenue area to achieve maximum returns from this area.
Step III
After all the questionnaires were filled up, I was left with both quantitative and qualitative data. For analyzing the quantitative data, I used graphs and pie charts to make out important inferences. The qualitative data which I had in terms of open ended questions posed a unique challenge for me as to should I quantify it. To overcome this problem I made use of Analytical Hierarchical Process Technique (AHP). Consequently the AHP technique was used to come out with valuable suggestions to address the gap areas identified by the research. A brief overview of AHP technique is given in the next section.
B. PLAN OF DATA ANALYSIS
The visit to these ASPs and the Resellers brought forward a lot of areas of concerns; fruitful suggestions, which in-turn helped me in giving a perspective on the practical front. I interacted assertively and probed every word the ASPs and Resellers had to say so as to identify the most important and significant gap areas in the service revenue field, which was followed by the best possible suggestions to overcome these gaps. For the simple analyzing of data like the rankings, awareness, etc I used graphs, pie charts, etc to interpret the data. Finally to give the best possible alternative for recognizing the best possible suggestion to increase the service revenue, I made use of Analytical Hierarchical Process (AHP), which is discussed below:
Batch: FW 07-09 86
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The analytic hierarchy process (AHP) is a comprehensive, logical and structural framework, which allows improving the understanding of complex decisions by decomposing the problem in a hierarchical structure. The incorporation of all relevant decision criteria, and their pair wise comparison allows the decision maker to determine the trade-offs among objectives. The application of the AHP approach explicitly recognizes and incorporates the knowledge and expertise of the participants in the priority setting process, by making use of their subjective judgments, a particularly important feature for decisions to be made on a poor information base. However AHP also integrates objectively measured information (e.g., yields) where this information is available.
The AHP is based on three principles: A) Decomposition of the decision problem, B) Comparative judgment of the elements, and C) Synthesis of the priorities. The first step is to structure the decision problem in a hierarchy as depicted in Figure 2.4 below. The goal of the decision, such as "Optimal Allocation of Research Resources", is at the top level of the hierarchy. The next level consists of the criteria relevant for this goal and at the bottom level are the alternatives (for example research projects) to be evaluated.
Batch: FW 07-09 87
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Figure 2.3 AHP Hierarchy Diagram The second step is the comparison of the alternatives and the criteria. They are compared in pairs with respect to each element of the next higher level. It allows expressing the comparisons in verbal terms, which are then translated in the corresponding numbers. As the last step, we synthesize the comparisons to get the priorities of the alternatives with respect to each criterion and the weights of each criterion with respect to the goal. The local priorities are then multiplied by the weights of the respective criterion. The results are summed up to get the overall priority of each alternative. To facilitate using the AHP technique, I used a software package called Expert Choice.
Application of AHP for WIPRO Ltd. support department
1. I used AHP in generating a comparative ranking of WIPRO India vis-à-vis its major competitors (IBM, Dell, HP-Compaq, WIPRO). The ranking was done by
Batch: FW 07-09 88
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
data gathered from various sources on the service offerings of WIPRO and its competitors and also the opinion of WIPRO’s ASP; who ranked WIPRO Services in comparison to its competitors mentioned above. Based on that; A goal, Decision Criteria and alternatives were compiled in the Expert choice software and output generated. 2. AHP technique was used to give WIPRO India as a decision making tool for appointing new ASP’s. Thus WIPRO India can utilize this technique to make decisions for appointing or not appointing ASP’s which ultimately help WIPRO Ltd. to increase its services revenue. Note: - The hierarchy diagram for this scenario is shown in the “Results” section. 3. AHP technique was used to give WIPRO India as a comparison making tool to accessing the overall level of performance of their ASP’s. Thus by using AHP; they can assign a ranking to their ASP’s based on various performance criterion which can be used in the AHP technique. Note: - The hierarchy diagram for this scenario is shown in the “Results” section.
RESULTS
A. OBSERVATIONS
A) The ASPs in a Delhi region of WIPRO Ltd. that we interviewed regarding
my project, only 30% ASP’s were exclusive service providers for WIPRO Ltd. and the rest were Support partners for WIPRO’s competitors like HPCompaq, IBM etc.
Batch: FW 07-09 89
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi B) The Bar Graph given below summarizes the awareness level of the ASPs
for the various service offerings by WIPRO Ltd.
Awareness Of Acer Services
9 8 7 6 5 4 3 2 1 0
C pg ra de s ST EP Bu yb ac In k st al la t io n Tr ai ni ng N et w or ki ng St or ag e R ol lO ut U S FM AM
Figure 2.4 From the bar graph (Fig. 2.5), we can see that Annual Maintenance Contract (AMC) and Installation Services have the maximum awareness levels of the ASPs. Important services like Networking and Facility Management Services (FMS) can be the important source of service revenue for WIPRO Ltd. C) The cumulative score obtained after tabulating the responses of the ASPs for the popularity of the various service offerings and the subsequent revenue generated from those streams is given below in table 2.4: Table 2.4 Popularity of WIPRO Services Roll FMS 34 AMC 78 Upgrades STEP 55 42 Buyback 16 Installation 70 Training 27 Networking Storage Out 37 18 15
Batch: FW 07-09 90
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The percentage wise criteria for the above is given in the pie-chart below, which clearly states that AMC with 19% is among the top, followed by Installation with 18% and so on.
Figure 2.5 Popularity of WIPRO Services Thus we see that AMC is regarded as the most valuable source of service revenue generation by the ASPs followed by Installation, Upgrades, STEP, Networking, FMS, Training, Storage, Buyback and Roll Out Services (Implementation).
D) The competitive position of WIPRO and its competitor’s w.r.t. service
revenue initiatives in terms of percentage is given below.
Batch: FW 07-09 91
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
9% 7%
7% 28%
Acer IBM HP HCL Wipro
26%
23%
PCS
Figure 2.6 Competitive Position of WIPRO In terms of its service revenue initiatives, the ASPs have the perception that WIPRO India Ltd. has adequate variety of services to augment / generate revenue from its services. An important point to note here is that most of the ASPs of WIPRO were also service partners for IBM. As from the pie chart, we can see that WIPRO has got the highest percentage (28%), whereas HP (26%) and IBM (23%). However this result should be taken with the caution as error could creep in due to the biased answers of the ASPs, as not everyone had knowledge of each of the competitor, resulting into response error.
E) The customer profile for the ASPs for different product lines from WIPRO
Ltd. are as follows:
Batch: FW 07-09 92
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
A P C so e Poile B s F r D s t p S 's u t m r r f a e o e ko s
6 %
1% 3
G v rn e t o e mn 3% 2 Eu a n d c tio C rp ra o o te BO e c m P /T le o 2% 3 I d id a n iv u l
2% 6
Figure 2.7
A P C s m r P file B s F r S 's u to e ro ae o N te o k o b os
1% 8 1% 2
2% 3
G ve m n o rn e t E u tio d ca n C rp ra o o te B O e co P /T le m Id ul n ivid a
2% 4
2% 3
Figure 2.8
Batch: FW 07-09 93
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
A P C s m r P file B s F r S rv rs S 's u to e ro ae o e e
6 % 1% 8
1% 2 4% 0
G ve m n o rn e t E u tio d ca n C rp ra o o te B O e co P /T le m 2% 4 Id ul n ivid a
Figure 2.9
A P C s m P file B e F r S rag S 's u to er ro as o to e
0 % 3% 3
G ve m n o rn e t E u tio d ca n C rp ra o o te B O e co P /T le m In ivid a d ul
0 %
6% 7
Figure 2.10
Batch: FW 07-09 94
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
A P C s m P file B e F r S 's u to er ro as o P erip e h rals
1% 7
G ve m n o rn e t 3% 2 E u tio d ca n C rp ra o o te B O e co P /T le m
1% 7 1% 7 1% 7
Id ul n ivid a
Figure 2.11
F) The customer profile for the ASPs for the whole product lines from WIPRO
Ltd. are as follows: Figure 2.12
AS P s C u s to m e r P r o file B a s e F o r T h e W h o le P r o d u c t L in e
14% 8% 33% G o ve rn m e n t E d u c a tio n C o rp o ra te 23% 22% B P O /T e le c o m In d ivid u a l
G) Observations regarding the Field Report on WIPRO service revenue
streams:
Batch: FW 07-09 95
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Table 2.5 Observations Factors Visibility Market Demand Identification of new service offerings Clarity Brand Image Range of service offerings vis-à-vis its competitors Awareness Level of formalization in Selling Services Achievement of Sales Target Availability of services • • • • • High • • • • • Averag e Low
The visibility of the revenue streams was found to be high, i.e., all channel partners had heard of one or more of the stream at some point of time. The most positive signals for WIPRO Ltd. come from the range of offerings it provides with the customer and the extensively growing demand for services and support. Thus WIPRO has potential to cater to the largely deprived service industry with the plethora of offerings. Due to the low level of understanding / awareness, the channel partners are ignorant of new service offerings such as FMS, Roll out services, etc and thus in-turn had problems
Batch: FW 07-09 96
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
pushing the right kind of stream to the customer resulting in dismal revenue figures. But if we consider w.r.t. the range of service offerings, it’s a positive sign looking at the growing demand for services and support.
B. GAP AREAS
Based on the observations, tabulated data and important qualitative data which I obtained through discussions with the respective ASPs and the Resellers; I have identified the following gap areas:
A) Authorized Service Providers (ASPs)
1) As the figure of 30% for exclusive service providers for WIPRO Ltd. is
quite low, the interest level of the other service providers had been divided with other competitors as well, i.e. they are not fully focused towards WIPRO. This essentially means that the ASPs are lacking in loyalty to WIPRO.
2) The awareness levels of WIPRO’s ASPs regarding the plethora of
services currently being offered by WIPRO Ltd. are extremely limited. Moreover the ASPs wanted more information regarding the services, they were unaware off. This clearly shows that there was a major communication gap between WIPRO and its ASPs regarding the WIPRO’s service offerings. 3) AMC, Installation and Upgrades were the main sources of revenue generation for the services. Other lucrative and upcoming areas like STEPS (due to the boom in laptop sales, desktops, etc in India currently) were not being capitalized properly. Subsequently new emerging areas like wireless networking that is going to be the future trends in India are still not being capitalized.
Batch: FW 07-09 97
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 4) Most of the ASPs were not systematic in selling the various service
offerings to the customers. This shows that they were not aggressively pushing the service offerings to the end customers, so as to generate revenue. This could possibly mean that they don’t have clear knowledge and understanding of the service offerings currently being provided by WIPRO Ltd. except for some few popular services like AMC and Installation. This shows that their preparedness for selling the services was quite low.
5) There is greater thrust on selling of WIPRO products but the same push
strategy is not being employed in the case of services, i.e. with good segmentation, effort to work on service offerings is not present like in sales. Also they lacked important selling tools like “STEP sales kit”, pamphlets, etc.
6) None of the ASP’s I interviewed was assigned any revenue targets in
services from WIPRO Ltd. This caused a lack of motivation in the ASP’s. Also most of the ASPs said that there was a lack of drive or initiative by WIPRO Ltd. itself to help them increase their service revenue.
7) From the consolidated customer profile base of WIPRO’s ASP’s; we
can see that the Individual segment is the least. There has been an explosive growth of computer usage and purchase in the last decade in India. Individuals / SOHO (small office home office) segment is the fastest growing segment in the country today. It is but natural that with increase in consumption of IT products in India by Individuals/ SOHO segment there is bound to be an increase in installed base and an increase in demand for IT services from manufacturers. Clearly WIPRO is not capitalizing on this front. More steps needed to be taken in this area.
8) In terms of initiatives taken up independently by the ASPs to augment and
increase services revenue; nothing concrete is taking place. There is no standard or set procedure they follow in this regard. Most of them are
Batch: FW 07-09 98
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
dependant upon WIPRO Ltd. to come to them and motivate them in this regard; i.e. there is a complete lack of thrust or initiative from there side; barring one or two Premier support partners, i.e. WIPRO has taken sincere initiatives but information has not percolated down.
9) Low brand image of WIPRO: - Almost all the ASP’s were service
providers of major WIPRO competitors like IBM, HP-Compaq etc. They considered WIPRO’s competitors as a more valuable business partner rather than WIPRO. Also the certificates of IBM, HP, etc were proudly displayed in their offices, and WIPRO certificates were largely missing barring one or two ASP’s. Also WIPRO should try and project itself as a service organization.
10) Almost all the ASP’s said that WIPRO India should have dedicated 24*7
customer support in the form of Call Centers etc. The justification given was that most computer problems don’t come in the time frame of 9 to 6, which makes the customers suffer.
11) ASP’s said that there was no coordination between WIPRO’s ASPs
within a region. According to them such kind of working relationship was necessary.
12) Price lists were also another area of heated debate with the some of the
ASP’s. They mentioned that there was a lack of clarity on the Price lists. Also the price lists available to them often arrived late or did not arrive at all. This they said caused confusion and loss of productivity in them. They were confused between the price lists of STEP and other service offerings.
13) Storage was an area which some of the ASP’s were interested in; but
also consequently mentioned that WIPRO Ltd. support to them in this area was rather limited. Thus WIPRO should cash on this lucrative area heavily.
Batch: FW 07-09 99
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
14) Logistics were also a major cause of concern for the ASP’s which was
causing a lot of customer dissatisfaction. According to the ASP’s; there was a long transit time for spare parts to arrive to them from WIPRO Ltd. This caused a lot of inconvenience to them in front of the end customers.
15) Some ASP’s mentioned that they were very much interested to pitch in for
WIPRO Ltd. service offerings to their end customers; but were not receiving adequate support from WIPRO Ltd. in terms of prospective customers information, sales funnel etc. 16)There was strong resentment in the payout matrix albeit the margins given to the ASP’s. They wanted it to be increased.
17) Another gap area came very recently when WIPRO in order to gain
visibility in the market opened four malls at a stretch in Delhi region but the availability of product ranges cannot be seen at those centers.
B) Resellers / Dealers
1) In-spite of having the maximum contact with the SOHO / Individual segment, neither the Resellers nor WIPRO has taken any initiative to make this segment as one of their major customer base. 2) Almost all of the resellers have no knowledge of some or any of the service offerings. Some of them even didn’t know of theirs existence.
3) There was a major communication gap between the support department
and the resellers and this communication was restricted to sales people only.
Batch: FW 07-09 100
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
4) Price list was another major gap area as it reached the dealer either very late or not at all and thus they have to stick to their own sources only. Also they don’t have knowledge about the price list of different service offerings separately.
5) Margin for the resellers was less as compared to its competitors. Most of
the dealers were of the view that they were not going to spend their precious time on selling WIPRO services which have such low operating margins for them. 6) The customers of dealers are facing lot of problems w.r.t. the after sales service, especially the warranty service which in turn is taking the relationship of dealer and its customers towards the negative side. 7) There is a need for updation of the dealers’ w.r.t. the latest developments especially the technical or any other area (service offerings) so as to make the customer aware of it on time.
8) There is an immediate need for WIPRO to publicise itself (products &
services) and having provision of pamphlets, brochures, etc especially in the SOHO segment which has a large number of customer base ready for WIPRO to encash upon. 9) Non-availability of tie-ups with ASPs and Dealers is also need to be looked upon, especially when almost all of the ASPs are located in South Delhi only. 10)Vendors advertise schemes for products and services in newspapers without informing the retailers / resellers, who provide products and services at the price quoted to them of the stock they already hold. The customers ask for those rates, which are quoted in the newspapers and hence feel cheated.
Batch: FW 07-09 101
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi 11) The non availability of regular services (especially due to low
awareness level) is making the dealers to give their own warranty to its customers, which is making the service revenue of WIPRO to reduce.
C. ANALYTICAL HIERARCHICAL PROCESS ANALYSIS
I have applied AHP in three scenarios for WIPRO; as discussed earlier in the Data Analysis section of this report.
Scenario 1: - I used AHP in generating a comparative ranking of WIPRO India
vis-à-vis its major competitors (IBM, Dell, HP-Compaq, WIPRO). The ranking was done by data gathered from various sources on the service offerings of WIPRO and its competitors and also the opinion of WIPRO’s ASP; who ranked WIPRO Services in comparison to its competitors mentioned above. Based on that; A goal, Decision Criteria and alternatives were compiled in the Expert choice software and output generated. The various AHP parameters are as follows: 1. Goal: - To evaluate the best service provider (amongst WIPRO, IBM, HPCompaq, WIPRO, Dell) 2. Decision Criteria: - I made use of five decision criteria. They were: a. Service innovation- it refers to the level of innovation a service provider has in his services; i.e. those services which are exclusive to the provider. b. Service variety- it refers to the range of service offerings
Batch: FW 07-09 102
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
c. Website Support - Support features that support provider’s website have to offer the customers; in terms of usability features, knowledge base, ease of use etc. d. Strength in Service distributors - it refers to the service providers strength in having a wide coverage of service providing sites for access by their customers. e. Customer focus- it pertains to the level of customer focus the service provider has; in terms of customer centered support policies, clarity in service offerings etc. 3. Alternatives: - WIPRO + its four major competitors of WIPRO. 1. WIPRO 2. IBM 3. HP-Compaq 4. WIPRO 5. Dell Note: - For conducting AHP analysis, I made use of Expert Choice-11 software. The software had a unique feature wherein I was able to make pair-wise comparison between the alternatives and decision criteria. Also to check logical inconsistency in the data entry operation; there were suitable safeguards to prevent this from happening. The prescribed limit of inconsistency in the software should be not exceed 0.10 Pair wise comparisons were made by data collected from various sources like websites, talking to Industry experts, doing competitive analysis, talking to ASP’s, computer resellers etc. Finally priority ranking was given to the five Decision criteria using the judgment of an expert.
Batch: FW 07-09 103
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Synthesis with respect to: Goal: Best Service Overall Inconsistency = .09
WIPRO IBM Dell WIPRO HP-Compaq .190 .495 .085
.127
.102
Figure 2.13: Output of the AHP technique applied to scenario 1 From figure 2.13 which is the generated output from the AHP model; we can see that IBM has the best ratings in comparisons to others and WIPRO gets ranked third with a score of 0.127 Note: - the overall inconsistency of the model is .09 which is well within the limit of 0.10
Batch: FW 07-09 104
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Figure 2.14 Figure 2.14 shows the pair wise comparison data in Expert Choice-11 for 5 criteria.
Figure 2.15 Gradient sensitivity graph; Strength in service distributors From Figure 2.15; which is a basically a Gradient sensitivity graph (generated from Expert Choice-11 software) for “Strength in service distributors” decision criterion. We can see that at 0.18 weightage; IBM is ranked the highest followed by HP-Compaq, then WIPRO & Dell tied at third position and finally WIPRO at the last position i.e. fifth.
Batch: FW 07-09 105
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
By the gradient sensitivity graph in figure 2.15; if WIPRO wants to improve its competitive position in Strength in Service distributors it can increase its strength in making new service distributors and if gets to the 0.5 weightage point in the above graph would be successful in beating Dell and if further increases it to 0.85 would come in at number 3 from the last position beating Dell, HPCompaq.
Figure 2.16 Gradient sensitivity graph; Service Variety From figure 2.16; which is a Gradient sensitivity graph (generated from Expert Choice-11 software) for “ Service Variety” decision criterion we can see that if
Batch: FW 07-09 106
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
WIPRO is presently at number three along with Dell, IBM and HP-Compaq being at the top. If WIPRO tries to increase its Service Variety as shown in figure 2.16; it falls to last place form its overall good position of second to fifth amongst its major competitors. Thus one possible explanation could be that increasing Service variety might have an impact on Customer focus; i.e. that of decreasing focus on delivering to end-user.
Batch: FW 07-09 107
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
WIPR
Weighted head to head between WIPRO and IBM
Figure 2.17 A head to head weighted head comparison comparing WIPRO with IBM Figure 2.17 shows a weighted head to head comparison between WIPRO and IBM. IBM is the best service provider; and from the above figure shows where does WIPRO stand vis-à-vis IBM. The entire five Decision criterion are shown and the scores of IBM are shown; along with the overall score.
Batch: FW 07-09 108
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Figure 2.18 Hierarchy diagram for Best Service Figure 2.19 depicts the hierarchy diagram for Scenario 1 (described earlier).
Batch: FW 07-09 109
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
We can see the overall goal; the five decision criterions and finally the five alternatives namely WIPRO, Dell, IBM, HP-Compaq, WIPRO.
Scenario 2:-. AHP technique was used to give WIPRO India as a decision
making tool for appointing new ASP’s. Thus WIPRO India can utilize this technique to make decisions for appointing or not appointing ASP’s, which ultimately help WIPRO Ltd. to increase its services revenue.
Figure 2.19 The hierarchy diagram for ASP selection In this case, the important parameters of AHP technique would be: Goal: - The Goal is to choose the ASP from a list of prospective ASP’s who have applied to become accredited with WIPRO as their support partners.
Batch: FW 07-09 110
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Decision Criterion: - a. Support Engineers- This criterion is further split into 2nd level which focuses on the education level of the engineers; i.e. are they MCA, MCSE, MCP, CNE or ACE ( WIPRO Certified Engineer). b. Internet Access Resources- it is also further broken down into what type of internet connectivity does the prospective ASP have; i.e. leased line or dialup. c. Technical resources available to engineers- it is further broken down into the software collection they have, type of centralized drivers and library for technical reference. d. Experience level- It pertains to the experience level the prospect has in the computer industry in terms of years etc. e. Internal training within the Organization- to check out what are the training level of its employees in the organization, how frequently do they update their domain knowledge etc. f. Location- location can play an important decision criteria in selecting an ASP. Some applicants could be strategically located in areas having high prospects, good connectivity etc. g. Financial Position- it pertains to the financial history of the applicant, does he have a good credit ratings; is he a creditor to another party, what is his debt taking capacity etc. Alternatives: In this case it would be the applicants or prospective ASP
who want to be affiliated with WIPRO. This model can be used to evaluate the applicants based on the judgment of the decision makers; i.e. like which factor should be given higher rankings etc and finally making pair wise comparisons to achieve at the best alternative.
Batch: FW 07-09 111
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Subsequently Sensitivity Analysis can be done to check out various scenarios that may result by changing the weight age of the decision criterions.
Scenario 3. AHP technique can be used by WIPRO India as a comparisonmaking tool to accessing the overall level of performance of their ASP’s. Thus by using AHP; they can assign a ranking to their ASP’s based on various performance criterion which can be used in the AHP technique. The goal would be to evaluate the Best ASP With decision criterion like Sales in the last quarter, ASP initiative in selling services, useful feedback from ASP, customer satisfaction etc. Alternatives could be the various existing WIPRO ASPs in a given geographical area. Thus comparisons could also be made area wise like North sector, East, West etc. The result generated would give WIPRO a ranking of the ASP’s; which would be a helpful tool for WIPRO to formulate strategies and plans in coordinating with its ASPs in the future.
LIMITATIONS & CAVEATS
Batch: FW 07-09 112
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Every project or study has its own limitations, which are limited by factors like time, money, availability etc. These are some of the limitations I encountered during the course of summer training. 1. I had to study the perception about service levels of the dealers in the Delhi region only. WIPRO India has ASPs and resellers all across India. Till date WIPRO has 187 ASPs across India. 2. The sample size of 11 ASPs may not give a true picture about the entire population. 3. Some of the respondents filling up the questionnaire were prone to error which could possibly arise due to bias in answering. 4. The duration of the project was for two months (August-October) 5. Some of the ASPs and resellers were apprehensive in giving answers to sensitive questions like their sales figures in the last quarter etc. 6. New Delhi being a large area; also the ASPs and resellers were located throughout Delhi. This made traveling a difficult task in the Delhi heat. 7. The availability of data was a problem sometimes. Initially I had to struggle to obtain data on WIPRO Services but after due clearance from my Guide; the data was made available to me.
CONCLUSIONS & RECOMMENDATIONS
Batch: FW 07-09 113
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
To summarize, IT services is an important source of revenue for IT companies today. The same holds for WIPRO also. The current service offerings by WIPRO are competitive enough, but still not reaching to its full potential. WIPRO as a brand is increasingly getting popular in India. The business model of WIPRO to disburse its services is indirect. Due to this WIPRO’s service revenue in some ways is contingent upon its ASPs, ACC and its other channel partners. Major initiatives need to be taken by WIPRO in bridging the communication gap with its ASPs. Motivating them, giving them sales targets, promoting WIPRO as a premier service organization and greater promotion of services are the need of the hour. The AHP models suggested to WIPRO for appointing new ASPs can be used to do partnership with those partners who would be sincere in their efforts to provide WIPRO services to its customers and to increase service revenues. Maintaining Customer loyalty is a critical factor influencing long-term profitability. With strong market growth and good customer loyalty one can reap significant rewards. Prospects and even past customers are suspicious dealing with unknown enterprises even if they have superior offerings. An enterprises success depends, to a great extent, on the impact that sales and advertising make on its image. Focusing efforts in these areas of marketing can improve chances of success. Based on the gap areas, which I identified, I would like to give following recommendations to WIPRO Ltd. to improvise upon the gap areas obtained and apply some new strategy(s) suggested:
A) For Authorized Service Providers (ASPs)
Batch: FW 07-09 114
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1) As WIPRO is on the higher side at its range of product offerings to the computer users and thus with a growing demand for services and support, has the potential to cater to the largely deprived service industry with its plethora of offerings and thus it should not loosen this opportunity to capture the service industry and position itself as the best service organization. 2) With desktops and notebooks unit sales soaring the charts especially during the last 6 months or so, the Customer Service and Support industry is indispensable and thus WIPRO should cash on it heavily. 3) Incentives for the ASP should be made achievable and flexible enough and should not be only limited to a 100% achievement of the target. 4) The awareness of the brand, and positioning of WIPRO extensively as a best service Organization should be extensively done through the use of media or print. 5) There should an aggressive push given to the WIPRO service, especially with attractive features like 24*7 support, on-line technical support, etc. 6) Due to the cut-throat competition, pricing should be made more competitive not only in product offerings, but also service offerings as well. Another possibility in this area could be to have different service packs for different customers, i.e. by segregating into premium customers, medium customers and low customers and providing them with the service offerings as low price packs, average price packs and high price packs, respectively. Also the high price service packs could be introduced with some extensive discounts or by joining them with other offers from time to
Batch: FW 07-09 115
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
time in order to lure the end-customers and thus making it economical for them. 7) There should be full clarity among all the ASPs for the different service offerings followed by motivation given to them so that they make an aggressive effort to push the service offerings in order to generate the service revenue. 8) WIPRO should hold regular meetings of all the ASPs together every month so as to have a good communication between each of them and thus discussing and removing all the loopholes if any during that period. In addition to this regular trainings should also be provided to the ASPs so as to acquaint them with the latest service revenue initiatives. 9) There should be regular policy of giving the revenue targets to all the ASPs (can be quarterly or so) which should be according to their strength and the installed base and thus it should be followed by the regular audit done by the WIPRO Support Department to find out the possible areas of non-achievement of the allotted targets and thus reasons for them and finally work on those areas. 10) WIPRO should come out with innovative service offerings such as: • Customer should be made to choose their own combination of resolution payment. • Attraction offers, i.e. purchase of one service offering (like AMC) would give 20% discount on the other service offering (like STEP).
•
time,
duration,
etc
and
accordingly
making
Different combo-packs i.e. purchase of a product along with AMC would give free upgrade in the 2nd year or 1 year extra technical support, etc.
Batch: FW 07-09 116
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi •
Giving incentive points to customers whenever they go for WIPRO services (for eg., if a customer goes for upgradation of his computer and upgrades his RAM from WIPRO, he would get certain points which when accrued up to a particular level could be redeemed by the customer for a suitable incentive given by WIPRO.)
11)There should be a joint effort by various departments like sales and support team should work together on the prospective leads available both the departments especially a lot of relaxation in it would also give a sense of satisfaction feel satisfied with regard to which would give
terms of work load and thus
level to the customers also as they would
buying a product and having proper support for that. 12)Instead of having a fixed payout matrix for the ASPs, there should be a variable pay-out matrix scheme, wherein the pay-out would be dependent upon service revenue generated by the ASPs, i.e., higher the service the service revenue, higher the pay-out. 13) WIPRO should have a concept as Premium Partner, i.e., one ASP should take care of AMC, STEP and FMS exclusively due to its large customer base in the name of government and corporate sector, which can have a large number of order at a single point of time for the above three services with addition as infrastructure management as well. 14) WIPRO should have a policy of motivating it partners in respect of achieving the vouchers, etc. 15) WIPRO should keep a demo version of all its premium product ranges along with whole information of all its service offerings in various forms like pamphlets, magazines, etc in everywhere where WIPRO is present. target / incentives like free trip to Malaysia for two, gift
Batch: FW 07-09 117
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
16) WIPRO should give the rights to the ASPs to add those customers also, to whom the respective ASP have not supplied the systems, but who are interested in various service offerings like AMC, etc. For this purpose WIPRO should direct those customer base to the ASPs incase WIPRO comes across any or the right to entertain the unsatisfied customer as well. 17) WIPRO should also have the facility of toll free number and online support which would give lot more acceptance by the customers overall. 18) WIPRO should come up with a scheme to provide the existing customers with a weekly or monthly subscription of newsletter containing information about the service offerings (latest ones as well). 19) Recertification: - This can be another area where WIPRO can increase its services revenue. The recertification plan consists of targeting those end users of WIPRO Products whose machines are now out of the warranty period. An WIPRO Certified engineer can visit the premises of the customer and “recertify” the machine by physically verifying the contents of the system, and ensuring that all warranty rules have been followed. This can be done for a Fee, which in-turn would result in revenue generation. 20) Product Redeployment: - This plan focuses on the ‘buyback” technique. The plan is to buyback the older existing hardware at the customers premises; replacing it with Newer hardware from WIPRO. (This would also ensure increased revenue for WIPRO Products). Subsequently retrofitting and upgrading the older machines and finally redeploying them to customers who have their specific needs being fulfilled by these machines
Batch: FW 07-09 118
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
for a fee. The process could be carried out in the same organization or at different levels too. 21) Customer training: - Customers who purchase WIPRO Products and Services can be given specific training into using his/her new WIPRO hardware. The training can be positioned as a Value added benefits given to the end user specifically in the Individual / SOHO segment. The ASP’s could be authorized to conduct the training at their premises for a fee. This would ensure greater customer contact and satisfaction. 22) Online Back up service: - With the explosive growth of Internet and Web based services like E-mail (E-mail service providers typically now provide large size mailboxes of the tune of 1 GB size; e.g. rediffmail.com). WIPRO India could capitalize on this lucrative segment with Storage solution services. Presently WIPRO is not much in the Storage Services segment. 23) Analytical Hierarchical Process: - This technique can be used by WIPRO to aid its decision making capabilities by basing them on sound scientific and mathematical tools and techniques. Strategic decisions like appointing new service partners, their location, etc can be facilitated by using this technique. Sound decision making in-turn would help in increasing the service revenue.
B) For Resellers / Dealers
1) The SOHO / Individual segment is one of the biggest segment among all. WIPRO should take serious initiative to capture this segment as this has a large installed base and a big opportunity for providing various and different service offerings. 2) Major steps to educate and train the resellers should be taken so that they can make their customers aware of various service offerings and the benefits from them.
Batch: FW 07-09 119
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
3) There should be regular meetings together with resellers, sales and support people, so as to reduce or remove the communication gap which is a big cause of concern. 4) The provision of providing the price list and margin should be checked upon and improvise upon the loopholes in-order to be effective. 5) The problem of after sales support should be checked upon thoroughly and thus improvises upon the loopholes if any.
6) The dealer should have tie-up with the ASPs so that they can satisfy their
WIPRO customers better than looking for some other sources. This would make the relationship of customer and dealers / WIPRO stronger as fast and better procedure of rectifying their problems would be a good sign. This will actually increase the service revenue as it will make dealers to stop their own set up base and engineers.
7) There is lot in buyback service available as the dealers may be the
right person who can make the awareness level of different customers towards WIPRO and its products and services.
8) WIPRO doesn’t have a standard credit policy. It is expected by the
distributors to be provided credit by the company. 9) There should a provision of technical bulletin in form of CDs and books to the dealers so as keep the awareness level towards the maximum point. C) There should be regular use of strategy models such as Analytical Hierarchical Process, Margin-Return Model and the Competitor’s Analysis Model (as explained in Marketing Plan 2009 in phase III of the report), which would thus help WIPRO to take correct steps and initiatives in-order to capture the major part of service revenue market.
Batch: FW 07-09 120
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ANNEXURE
Batch: FW 07-09 121
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
ASP / CHANNEL BASED WIPRO SERVICES QUESTIONNAIRE Name: Organization: Category: ASP / PSP / ACC Address: Phone: Email id:
1) Are you working exclusively for WIPRO Ltd.?
Yes If
No No, then which all partners are you working for?
___________________________
2) Are you aware of service revenue initiatives of WIPRO Ltd.?
Yes
No
3) Which of the following WIPRO service revenue streams are you aware of? Facility Management Services (FMS) Annual Maintenance Contract (AMC) Upgrades STEP Buyback services 4) According to the success, rank the following revenue streams: (1 for most popular and 10 for least popular) Facility Management Services (FMS) _____ Installation Annual Maintenance Contract (AMC) _____ Training Upgrades _____ Networking _____ _____ _____ Installation Training Networking Storage Solutions Implementation / Roll out
Batch: FW 07-09 122
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
STEP _____ Implementation / Roll out services _____
_____ Buyback
Storage Solutions _____
5) What procedure do you follow while selling the above-mentioned services? FMS _______________________________________________________ ________________________________________________ ________ AMC _______________________________________________________ ________________________________________________ ________ Upgrades _______________________________________________________ ________________________________________________ ________ STEP _______________________________________________________ ________________________________________________ ________ Implementation ___________________________________________________________________ __ _______________________________________________________________
-
-
-
-
Installation _______________________________________________________ ________________________________________________________ Training _______________________________________________________
-
-
Batch: FW 07-09 123
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
________________________________________________________ Networking _______________________________________________________ ________________________________________________________ Storage ________________________________________________________ ________________________________________________________ Buyback ________________________________________________________ ________________________________________________________ 6) Do you have the dedicated staff, exclusively for generating WIPRO service revenue? Yes designations? ______________________________________________________________ ________ ______________________________________________________________ ________ 7) What are the top 10 expectations and support required from WIPRO Ltd. w.r.t. the service revenue? ______________________________________________________________ _______ No If yes, then what is the strength of the staff and what are their names and -
Batch: FW 07-09 124
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
8) WIPRO’s revenue initiatives for its service offerings; as compared to its competition. Please mark the following from 1 to 6 against the place of opinion you have and elaborate giving reasons. (1 for least and 6 for the highest) Acer ____ IBM ___ HP ___ WIPRO ____ WIPRO ______ Dell ____
______________________________________________________________ _______ 9) What is your installation base you are currently handling (give breakup in terms of servers, desktops, laptops etc.)? ______________________________________________________________ _______ 10) Does WIPRO Ltd. allocate a service revenue target to your organization? Yes No If yes, how is this revenue target figure decided upon? _____________________________________________________________ ________
10) What are the reasons behind the achievement / non-achievement of
allocated target for the last quarter?
Stream STEP FMS
Target Achieveme nt
Reasons
Batch: FW 07-09 125
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
AMC Buyback Upgrade Installation Storage Solutions Networking Roll out services 12) What is the customer profile that is currently supported by your organization? Type Desktops Notebooks Servers Storage Peripheral s 13) Which are the top 5 measures / initiatives taken up (by ASP) in-order to maximize service revenue for WIPRO India Pvt. Ltd.? _____________________________________________________________ _______ Governme nt Educationa l Corporat e BPO / Telecom Individual
14) What steps do you take to ensure adequate satisfaction levels of your major clients? _____________________________________________________________ _______ 15) How can you maximize the above mentioned steps / efforts to generate the service revenue? _____________________________________________________________ ________
Batch: FW 07-09 126
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
16) As a service-oriented organization, which are the other areas where you can position WIPRO vis-à-vis its service offerings? _____________________________________________________________ ________ 17) Where do you see yourself / WIPRO / the association between the two in the 2 years from now? _____________________________________________________________ _______
WIPRO RESELLERS QUESTIONNAIRE
Name: ______________________________________________________________ Company: ___________________________________________________________ Address: ____________________________________________________________ ____________________________________________________________ Phone: ______________________________________________________________ Email id: ____________________________________________________________
1)
What WIPRO products are you currently selling? Desktops Notebooks Servers Storage
Others_______________
2)
How much sales of the below mentioned WIPRO Products do you have in
a month? Product Type Desktops Quantity Sales Revenue (in Rs.)
Batch: FW 07-09 127
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Notebooks Servers Storage Others 3) How would you categorize your primary customer base? Government SOHO / Home Segment Educational Corporate
BPO / Telecom
4)
Which are your major customers for WIPRO products?
Customer Name
Type of Product
Quantit y
Amount (in Rs.)
5)
What “Service Offerings” currently being provided by WIPRO Ltd. are you
aware of? Facility Management Services (FMS) Annual Maintenance Contract (AMC) Upgrades STEP Buyback services Installation Training Networking Storage Solutions Implementation / Roll out
6)
What WIPRO services are you offering to your customers? Also give the
sales break up of the same.
Batch: FW 07-09 128
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1. ________________________ 2. ________________________ 3. ________________________ 4. ________________________ 5. ________________________
_____________________________ _____________________________ _____________________________ _____________________________ _____________________________
7)
What are the current leads / prospective customers you are currently
handling and for what WIPRO services? ______________________________________________________________ ______________________________________________________________
8)
Mention your expectations from WIPRO in choosing these leads?
______________________________________________________________ ______________________________________________________________
PHASE III
Batch: FW 07-09 129 Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
MARKETING PLAN 2009
MARKETING PLAN 2009
The planning framework for our marketing plan has four phases which in-turn breaks down into ten major steps: • • • • Strategic Context Situation Review Marketing Strategy Formulation Resource Allocation and Monitoring
Batch: FW 07-09 130
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
1. STRATEGIC CONTEXT Mission
WIPRO believes in fresh ideas and has consistently applied it to technology. Fresh means more than new. It means the best. This forms the essence of WIPRO's mission: “To provide fresh technology to be enjoyed by everyone, everywhere”. This fact is vindicated by WIPRO’s motto “Applying Thought”. Its management strategy is embodied by a number of corporate statements, like "Driving Business Transformation", which represents its strategy to leverage on both global and local resources to provide world-class products with strong local customer support. Thus in short, the strategic focus of the WIPRO Ltd. is: -
• • •
Adding value to the target market segments Constantly providing innovative technologies Provide complete customer satisfaction to the user
Corporate Objectives
WIPRO's corporate objectives for 2009 is to continue breaking the barriers between people and technology by delivering innovative products and services to their customers.. In 2001 WIPRO formalized its new PC direction and announced Mega-Micro e-Services — a new-generation e-business model designed to 'eenable' customers to be more competitive in the knowledge-based economy. In
Batch: FW 07-09 131
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
2002, the WIPRO Value Labs were established, dedicated to researching and integrating innovative technologies. As a result of efforts at the Value Labs, WIPRO introduced the Applying Thought platform in 2003 — an integration of IT hardware, software and services designed to create value for customers by providing them with easy-to-use, dependable end-to-end solutions. WIPRO’s commitment to creating innovative, customer-centric IT products and services that are developed on the basis of what users truly need and want, providing them with "human-touch" digital tools that maximize convenience and enhance life. WIPRO Product Value Lab WIPRO recognizes the importance of the channel to building market share, and bringing value-added products and services to customers in a timely fashion. Carrying multiple brands is essential to a profitable channel business; as WIPRO has shifted roles from manufacturer to service provider, we have broadened our business scope and brand offering. Close cooperation with our channel affiliates allows WIPRO to understand and reach customers across all sectors — from enterprises to home users — with maximum effectiveness.
?
Investment Management Business: - WIPRO's investment management business group generates significant financial returns by utilizing venture capital to invest in high-potential businesses that focus on information and communication technology (ICT), components, software, and IC design. WIPRO also divests from investment portfolios, as dictated by market conditions. Earnings are used to fortify WIPRO's core businesses, or to buy back stock in order to enhance the company's return on equity.
Batch: FW 07-09 132
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
The Pan WIPRO Group: - The pan WIPRO Group has more than 60,000 employees and generated revenues of US$15.6 billion in 2008. Venture Capital Business: - WIPRO Technology Ventures (ATV) makes all high-tech, venture capital investment decisions for the WIPRO Group. ATV builds partnerships with entrepreneurs and helps start-ups create value by combining their energy and vision with extensive WIPRO Group contacts and capital resources. Focusing on the U.S. and Asia Pacific regions, ATV invests in companies that develop early-stage, innovative software- or hardwarebased intellectual property, as well as technology that enable fresh applications leveraging the Internet platform.
?
2. SITUATION REVIEW Marketing Audit
A. Environmental Analysis (Indian context)
Economic: - The economic projection for India till 2050 is given below. India’s GNP i.e. the purchasing power has been steadily been increasing over the years from a modest US $1600 in 1995 to a US$ 2000 in 2005 and projected to have
Batch: FW 07-09 133
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
explosive growth to US$ 15,000 in the year 2050. Under the optimistic high growth projection, India's economy in 2050 would be about the twice the size of the current U.S. economy. The region's prosperity or average annual income (as measured by per capita GNP), even in the best case is unlikely to exceed $12,000 per person (with high economic growth and low population growth). In the worst case, incomes 50 years hence might be only $2,000 per person. These figures indicate that India is on the road to becoming a developed Country. It is but obvious that a direct consequence of this fact would be an increase in demand for IT products like desktops, Laptops. It products quintessentially are linked to IT Services and vice-versa. Thus a direct inference to this linkage would also mean that the demand for IT Services is also going to increase in the future in India.
Figure 3.1 Source: - United Nations Statistics Division (http://unstats.un.org/unsd/default.htm)
?
Social Environment: -Roughly 70% of the Indian diaspora lives in the hinterland albeit in towns and villages, and the rest 30% in Cities and other
Batch: FW 07-09 134
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
urban dwellings. There has been an upwards swing in the social environment in India, with steady growth in the development of people. Political Environment: - India has a parliamentary form of government based on universal adult franchise. The executive authority is responsible to the elected representatives of the people in Parliament for all its decisions and actions. Sovereignty rests ultimately with the people. Note: - Most of the major manufacturers of IT products (WIPRO, IBM, etc) have manufacturing plants located in Pondicherry; which is a union territory providing specific incentives like tax breaks etc. Technology: - The vision of IT policy is to use IT as a tool for raising the living standards of the common man and enriching their lives. Though, urban India has a high internet density, the government also wants PC and Internet penetration in the rural India. In information technology (IT), India has built up valuable brand equity in the global markets. In IT-enabled services (ITES), India has emerged as the most preferred destination for business process outsourcing (BPO), a key driver of growth for the software industry and the services sector. India's most prized resource in today's knowledge economy is its readily available technical work force. India has the second largest English-speaking scientific professionals in the world, second only to the U.S. According the data from ministry of communication and information technology, the ITES-BPO industry has grown by about 54 per cent with export earnings of US$ 3.6 billion during 2003-04. Output of the Indian electronics and IT industry is estimated to have grown by 18.2 per cent to Rs. 1,14,650 crores in 2003-04.
?
?
Batch: FW 07-09 135
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Regulatory: - The Indian IT Industry is governed by certain set of rules and regulations by some top apex bodies in the country. Some of the important ones are
? Ministry of Information Technology: - Came out with the IT Act, 2001
on 17th May, 2000 ? Telecom Regulatory Authority of India (T.R.A.I) is the apex body, which frames for Telecom related, issues in India. ? The Communications Commission of India (CCI) seeks to establish an open licensing policy and ensure a level playing field for all operators and to promote equitable, non-discriminatory interconnection across various networks, Government controls: - The evaluation of government control in India, which is no better than fair, considers factors such as the availability of subsidies, imposition of safety and operational regulations, licensing requirements, restricted access to materials and price controls. Global: - Post 1994, India has initiated large-scale globalization and liberalization by opening up to world markets to the world. This has been a paradigm shift in India and its subsequent outlook to the world. Post 1994; Multi national companies have come to India; brining along with them newer technology, jobs and capital. Currently India is also the member of World trade Organization (W.T.O.) and has become a global player in terms of trade. Lately India is known as the “Asian tiger” along with China.
?
?
B. Market Analysis
Batch: FW 07-09 136
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ?
Growth & Size of IT services market: - Released in April 2005, Gartner Dataquest's forecast for the size and scope of the worldwide IT services market 2003-2009, is a healthy one, expected to grow from US$665.9 billion in 2000 to US$1.3 Trillion in 2005 - a compound annual growth rate (CAGR) of 15.6 percent. The growth of IT Services is expected to grow at an impressive rate. The Western European IT services market is forecast to grow from US$172.8 billion in 2000 to US$326.0 billion in 2005 - a CAGR of 13.5 percent It is forecast to constitute 25.1 percent of the worldwide IT services market in 2009. The Asia-Pacific IT services market is forecast to grow from US$37.7 billion in 2000 to US$124.8 billion in 2005 - a CAGR of 27.0 percent. AsiaPacific will account for 6.3 percent of the worldwide IT services market in 2009. The North American IT services market is forecast to grow from US$345.0 billion in 2005 to US$712.1 billion in 2009 - a CAGR of 15.6 percent. North American constitutes almost 52% of the worldwide IT services market in 2009, with the U.S. accounting for the majority of this share. Market Segments: - The segments, which enjoyed explosive growth in the last five years, should expect healthy, albeit more modest, gains by 2009.
?
The main customer segments in the IT Services market in India are: 1. Government Sector 2. Public Sector Units (P.S.U.) 3. Corporate
Batch: FW 07-09 137
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
4. Telecom / BPO 5. Educational 6. Individual / SOHO Development and integration was the largest segment in 2008, at US$169.4 billion. It is forecast to grow to US$368.9 billion in 2005 - a CAGR of 16.8 percent. Business process management services is forecast to be the largest and fastest-growing segment, growing from US$148.2 billion in 2000 to US$345.5 billion in 2009 - a CAGR of 18.4 percent. IT management services was the fourth-largest segment in 2005. It is forecast to grow from US$95.3 billion in 2000 to US$214.9 billion in 2009 - a CAGR of 17.7 percent.
The Hardware maintenance and support services are the slowest-growing segment. It is forecast to grow from US$105.4 billion in 2000 to US$136.5 billion in 2009 - a CAGR of 5.3 percent. Gartner Dataquest believes the accelerators that will most influence the worldwide IT services market include continuing constraints on IT labor supply; outsourcing of non core activities; growth of customer relationship management solution implementation; growth of wireless/mobile infrastructure and application services, and increases in sales to other service providers and hosting. Table 3.1 Growth Areas in 2009
Batch: FW 07-09 138
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Source: - IDC report, 2004
?
Buyer Behavior: -It is a central component of the environmental context. As discussed earlier in a discussion with the Decision maker; major sales and operations of WIPRO products and services are for large segment buyers (Govt., PSU’s, Corporate, BPO etc.). The buyer behavior here in Marjory Industrial Buying with purchase of IT products and services via tendering process, high level committees etc. In segments like Government; price sensitivity is not an issue, other customers may or might be price sensitive. As IT products and services are prone to change, IT being a volatile sector; purchases of IT Products and services are updated regularly at customer’s premises. The buying behavior for IT services is quite complex and is characterized by important issues i.e. “IT services are intangible in nature”. Especially in India where unlike the developed countries; customers are not willing to pay for
Batch: FW 07-09 139
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Services; they expect that IT service they would receive as for free of no charge when they purchase an IT product(s). Intangibility increases the perceived riskiness of services purchase. While Corporate have purchase committees for buying IT products and services; Government have formal Organizations like DGHS, NIXIE, NIC, etc, which have various empanelment for buying products and services. The following factors have a bearing on the customers as to how they perceive risk while going for IT Services:
? The level of tangible evidence: - As services are intangible in nature;
customers want some tangible proof; that they have received the promised service. This tangible proof can be Invoices, delivery challans, etc.
? Buyer's level of involvement in the service: - Is the service, a high
contact or a low contact service.
? The novelty of the purchase to the buyer: - It describes how the service
is different from other service offerings; i.e. how it is unique, innovative and finally useful to the buyer.
? The purchaser's individual risk threshold: - It means whether the buyer
is risk averse or a risk taker. For IT services; it depends largely on the customer profile. Corporate, government buyers have different level of risk threshold than individual home users.
? Situational factors: - It depends on the local situation the buyer might be
facing like money availability, time etc.
Batch: FW 07-09 140
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi ? Legal safeguards available to consumers: - It pertains to the legal
paperwork, which accompanies service offerings. This framework could be Service level agreements (SLA’s), insurance etc. Customers Needs: - The customers are divided into various categories. I. Individual home users ? Highly price sensitive ? Want to spend RS 15000-30000 / on an average / machine ? Expect a one year warranty on the computer ? Expect the distributors to evolve a uniform pricing when selling products & services to resellers and distributors ? Warranty must be defined and also the period that it covers. ? Buyers assume that warranty covers everything even the spare parts, they expect to get a replacement. II. Corporate ? Quality of service offerings ? Reliability of service ? Good communication in lieu of service offerings ? Are not price sensitive ? Want end to end solutions ? Response time to service issues considered critical III. Government ? Are not price sensitive ? Long purchasing procedure for buying services ? Expect better service at low cost
?
Batch: FW 07-09 141
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
? Payment to service provider is usually slow.
C. Competitive Analysis
The Current Major Players in IT services in India 1. Hewlett Packard India Ltd & Compaq. HP group is in India, for most of its people are hidden away in the services exports groups. HP has an assembling facility in Bangalore with a capacity to assemble 20,000 PCs a month. It has a retail presence in 60 cities through 135 stores. About 12,000, or 8%, of HP, Inc, employees sit in India. At March-end, over 5,000 of those were at Digital Global Soft, over 3,500 in two back office groups, 2,000 at HP-ISO, and the rest at HP India. India recently became HP's third nation after China and Japan, in the newly defined Asia-Pacific-Japan (APJ) region, where the country head is a managing director. HP India had four business groups-enterprise systems (ESG), personal systems (PSG), HP services (HPS), and imaging and printing (IPG). This changed in May 2004. ESG became CSG, the Customer Solutions Group, HP's only customerfacing group for enterprise, public sector and SMB. CSG represents all the business groups of HP, with integrated sales, marketing and business development. Sales staff from PSG and HPS has moved into CSG. (Traditional reseller channels remain with PSG, and consumer/retail, with IPG.) 2. IBM India
Batch: FW 07-09 142
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
IBM has been present in India since 1992. Since inception, IBM in India has expanded its operations considerably with regional headquarters in Bangalore and offices in 14 cities including regional offices in New Delhi, Mumbai, Kolkata and Chennai. Today, the company has established itself as one of the leaders in the Indian Information Technology (IT) Industry. IBM offers end-to-end solutions to the customers from hardware to software, services and consulting. IBM has the e-business capabilities, products, services and partner network to help large and small enterprises plan, build and implement the e-business infrastructure. Linux support has further enhanced IBM's e-business infrastructure enabler capability. The company also offers finance and leasing facilities to customers. IBM has “IBM Solution Partnership Centre”, Bangalore: (One among 10 facilities worldwide) Independent Software Vendors are encouraged to port their solutions on IBM platforms at this centre and develop Web based applications for Indian customers. Also it has “Global e-business Software Centre”, Gurgaon: This state-of-the-art center combines IBM's global experience and technology expertise to deliver ebusiness solutions for Indian organizations and also the government through the e-Governance Centre. Manufacturing Facility, Pondicherry: Set up in 1999, the plant currently manufactures commercial desktops, low and mid-range servers. Local manufacturing has helped in reaching products to customers faster, besides giving the flexibility to configure the systems to specific customer requirements
3. Dell India
Batch: FW 07-09 143
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Dell Computer Corp. has set up a wholly owned subsidiary in the southern city of Bangalore to begin direct sales and support operations in India. It has set up the subsidiary in India by November and to direct sales and support operations in major cities in India. The company is yet to start its manufacturing unit in India; currently its products are manufactured outside India; from Singapore. Through its subsidiary Dell offers its full range of Optiplex desktops, Latitude notebooks, PowerEdge servers, Precision workstations and PowerVault storage products. Dell has a service partnership with Tata Infotech through which Dell will offer business services and operate spare parts depots in six out of Infotech's 11 centers across the country. The company also has an agreement with Infosys for technological support.
Table 3.2
Competitor Analysis of Services of WIPRO vis-à-vis its major competitors
Service attribute Upgrades Warranties Warranty Extension s Financing & Leasing No Yes Yes IBM global Yes Lease Financing & No WIPRO India Yes Yes Yes Dell India Yes Yes Yes IBM India Yes Yes No HP-Compaq India Yes Yes Yes WIPRO Yes Yes Yes
Batch: FW 07-09 144
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
AMC Buy Back
Yes Yes
No No
Financing No No
Yes No Yes (HP Asset No Recovery Services) Yes
FMS (facility mgt. service) Installatio
Yes
Yes Dell Professio nal Services via Yes Indirect
Yes
Yes
Yes
Yes Direct(on purchase)
Yes Indirect
Yes via Direct
n Services ASP’s Mode of Indirect Service disbursem ent 24× 7 Tel. No Support Data Storage Services Tech. Training ITW Knowledg e base Other Unique Service Offerings Yes Yes No Yes via ASP’s
site parts ASP’s + Indirect No Yes
Yes Yes
Yes
No
Yes (Storage on No Demand)
Yes Yes
Yes Yes Yes Re- IBM Global Dell Services, business on demand, IBM
Yes Yes
Yes No No Per Event Security & Services HP
Dell on, cover
HP
certificati
Support Consulting, Hardware Support Exchange Service, Hardware
Complete e-
Offsite HP
Batch: FW 07-09 145
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
business consulting , Electronic Service Agents
Support Pick-Up
Offsite &
Return Services
E. MULTIPLE FACTOR PORTFOLIO MATRIX
The Multiple Factor Portfolio Matrix approach enables the managers to consider their appropriate objectives and strategies for the business in accordance with its potential. Below the table 3.1 shows the matrix to come out with different strategies to be implemented: Table 3.4 Factor Portfolio Matrix Weight Rating ( 1-5) 5 4 6 Value 1.25 0.8 1.5
Market Attractiveness
Overall Market Size 0.25 Annual market growth 0.20 rate Competitive intensity 0.25
Batch: FW 07-09 146
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Technological requirements Inflationary vulnerability Environmental impact Total
0.15 0.05 0.10 1.00
3 1 2
0.45 0.05 0.2 4.25
Factor Market share Service quality Brand reputation Network Promotional effectiveness Operations capacity Operations efficiency Staff availability Managerial personnel Total
Weigh t 0.15 0.10 0.15 0.05 0.15 0.05 0.10 0.10 0.15 1.00
Rating Value ( 1-5) 2 3 1 4 1 2.5 1.9 1.2 1.7 0.3 0.3 0.15 0.2 0.15 0.125 0.19 0.2 0.255 1.87
Competitive Position Of WIPRO
From the Multiple factor Matrix; we get the cumulative scores of both market attractiveness and Competitive position of WIPRO. •
•
Market Attractiveness of IT Services sector comes out to be= 4.25 Competitive positioning of WIPRO Services comes out to be=1.87
Batch: FW 07-09 147
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Based on the above scores we see that the market attractiveness for IT Services sector comes out to be high and the Competitive positioning of WIPRO Services is low. Note: - The ranking in the above matrices have been arrived at by taking important inputs from Analytical Hierarchical process technique (AHP), qualitative data obtained from ASPs, through syndicated data providers (IDC, NASSCOM), websites and finally doing Competitor Analysis. The results of the AHP technique, competitor analysis etc can be referred in the earlier sections of this report. Thus with a high market attractiveness and low competitive positioning the best strategies to follow for WIPRO in IT Services are the following (found after comparing the scores of market attractiveness and competitive position from the Multiple factor portfolio matrix):1.
Specialize around limited strengths: - With such a strategy, WIPRO can specialize in its current service offerings. It can target newer markets for its existing services. The Individual/ SOHO segment is a lucrative area where WIPRO can garner high services revenue, as till date Service revenue from this segment is quite low.
2.
Seek ways to overcome weaknesses: - WIPRO can seek introspection and do some type of trouble shooting to address its current weak areas. One area where WIPRO is weak is in Logistics and a substantial communications gap with its ASPs. This would ensure long-term benefits in way of higher ASP loyalty and motivation and thus resulting into higher sales revenue from Services.
3.
Withdraw if indications of sustainable growth are lacking: - Finally if a particular service offering is not generating the desired revenue levels; WIPRO can think of withdrawing the offering from the market. It would be
Batch: FW 07-09 148
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
a waste of resources and valuable time and money on WIPRO’s part to continue going for such services. For e.g. If a particular service warrants keeping a large number of service engineers on standby and hold up valuable resources like spare parts etc and the service is not generating revenue as per expectations; then it would be wiser to discontinue such services.
KEY ASSUMPTIONS
The purpose of the key assumptions is to identify, those factors that will be critical to the success of the marketing strategy. The marketing plan is contingent upon the following key assumptions: 1. Interest Rates: - The interest rates prevailing might change in the future, albeit, the short or long term interest rates. It is largely dependent upon the monitory policy followed by the government. 2. Inflation Rate: - inflation rate shows the overall; health of the economy. In a developing country like ours, it is one of the major critical factors. If inflation goes up, cost of commodities and products would increase. 3. Status of the Economy: - The economy could be in slowing down or could be in recession. 4. Anticipated demand levels: - It could be possible that the demand for IT products & services could change in the future. For e.g.; if the economy slows down the demand for IT products & services may go down.
Batch: FW 07-09 149
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
5. Regulatory Changes: - This factor is contingent upon he regulatory bodies amending or coming up with newer legislations which might have a bearing on IT services.
3. MARKETING STRATEGY FORMULATION Marketing Objectives & Strategies
The ultimate aim of fabricating this marketing plan was to give a guide to WIPRO’s marketing department and to provide them with ready reference material on various scenarios and strategies to response to those scenarios. The aim is to increase revenue from services, which has become an integral part of IT companies to augment and increase their overall revenue. This marketing plan can be used in two areas: •
Current users: - here the marketing strategy has two key tasks, the retention of existing customers, and obtaining additional business from existing customers.
•
New users: - for new users, the marketing strategy is concerned with both increasing trial of the services offered, and then obtaining repeat usage of the services, after the initial trial, on an on-going basis.
Batch: FW 07-09 150
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The only way WIPRO can hope to differentiate well is to define the vision of the company to be an information technology ally to our clients. We will not be able to compete in any effective way with the chains using boxes or products as appliances. We need to offer a real alliance. The benefits WIPRO sell includes many intangible benefits; confidence on higher prices just because we offers services; the market has shown that it will not support that concept. We have to also sell the service and charge for it separately. The marketing strategy is the means by which marketing objectives can be achieved. The marketing strategy is the core of the main strategy. Basically it requires concentrating on the following points: • • • • • • • Need to emphasize on service & support. Need to have a relationship business. Need to understand business needs and to improve brand visibility. Need to have no communication gap with the channel partners, thereby creating a mutually beneficial strategy. Need to have a focused service sales team. Need to educate staff on service programs, including different ways of motivation. Need to conduct different research programs in-order to find out the loopholes within the organization using different tools, etc based on differentiating services w.r.t. segments, combinations, resolution times, etc. • • Need to use different Automatic notification tools like Automatic mailers, new offers, discounts, etc for customers nearing the enquiry. Need to work in an organization keeping in mind that “everything that comes or goes is everyone’s responsibility”.
Batch: FW 07-09 151
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
An evaluation of WIPRO Ltd. based on the data collected from partners, distributors, the net (web-sites), the discussions with different industry experts and the insights provided by my colleagues. Thus hereby, the use of following strategies would definitely help WIPRO to increase its customer base and service revenue. The analysis evaluates the potential for WIPRO India Ltd to implement any of three generic strategies: cost leadership, differentiation or focus. Within those it then considers more specific strategies such as pricing, promotion and distribution strategies. A COST LEADERSHIP STRATEGY is based on the enterprise's ability to control their operating costs so well that they are able to price their products or services very competitively and still generate high profit margins, thus having a significant competitive edge. A DIFFERENTIATION STRATEGY involves the offering of a product or service that is clearly unique when compared to alternatives. Uniqueness can take many forms such as brand image, technology, functionality, customer service, dealer networks and many others. It is likely that differentiation will involve a combination of two or more of these forms. A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more 'intense' form of either the cost leadership or differentiation strategy. It is designed to address a "focused" segment of the marketplace, product or service form or cost management process and is usually employed when it isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation. It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition profit margins can be very high.
Batch: FW 07-09 152
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
The implementation mode Neither of the other generic strategies is considered to have a good potential for implementation, however, the analysis finds it necessary for WIPRO to consider A FOCUS STRATEGY. The analysis has shown that the pursuit of a differentiation focus strategy would be inappropriate while the pursuit of a cost leadership focus strategy would be worth considering. To determine just what WIPRO should "focus" on, WIPRO must look at a variety of factors. WIPRO might decide to concentrate on a certain market segment that WIPRO Ltd. is well suited to serve. A good example of this is the automobile industry. General Motors evaluated the market and decided that one segment was looking for "luxury, quality and prestige" in their automobile, so they developed and offered a new product, the Cadillac. This decision was market driven and GM's approach was to provide a product with enough differentiation to make it attractive to the targeted market segment. To determine whether the marketplace in the industry offers a focus opportunity, WIPRO must have well defined market segments. WIPRO should spend more time analyzing the market to determine characteristics that can differentiate market segments. Within market segments WIPRO may be able to focus by industry or by organization size if there are particular talents within WIPRO India Ltd that would facilitate that kind of focus. An alternative to starting with the market and isolating a segment is to focus on a "specialized" form of service that is well suited to WIPRO’s execution capabilities.
Batch: FW 07-09 153
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
If WIPRO can isolate aspects of its service form that it is able to improve on, some segment of the market may find these improvements of value, which could be the basis for its focus strategy. Or, if WIPRO could define any innovative/attractive service that WIPRO could produce for substantially less than the industry averages and differentiated from the competitors, WIPRO could probably focus on a market segment that considered the service quite acceptable. This would be a cost focus strategy. Through a buyer characteristics analysis after the recent survey done and interviews with different industry experts, it has been noted that many of WIPRO’s prospects have a bias towards an alternative to WIPRO service offerings. While this makes sales more difficult using a conventional marketing strategy, there may be a way to turn this bias in WIPRO’s favor if WIPRO can isolate needs or attitudes that allow it to define a focus strategy. With a cost leadership strategy, development/design is one of many functions that require cost controls. In a cost focus strategy it may be that a very effective development/designing process can be the major factor in a successful strategy. Other areas which might be considered include: seasonal sales, market profitability, geographic location, available resources, criticality of need, convenience of purchase, motive for purchase and degree of risk. WIPRO could probably have to be even more effective because, with either a differentiation focus or a cost focus strategy you are actually combining two strategies. Thus, WIPRO through this opportunity of using focus strategy should encash upon selling different and attractive service to the SOHO / Individual segment, where as per today’s market scenario, there is vast installed base and capturing this segment would give a major lead in the service revenue segment.
Batch: FW 07-09 154
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
PRICING STRATEGY WIPRO needs to effectively compete against the idea that businesses should buy computers as plug-in appliances that don’t need ongoing service, support and training. It is observed over a period of time that WIPRO’s target markets think about price but would buy based on quality service if the offering were properly presented. They think about the price because that’s all they ever see. WIPRO have very good indications that many would rather pay 10-20% more for a relationship with a long-term vendor providing back-up and quality service and support; they end up in the box-pusher channels because they aren’t aware of the alternatives. Also the industry currently depend upon the newspaper advertising as their main way to reach new buyers, but as WIPRO change strategies, however, there is a need to change the way we promote ourselves. WIPRO must charge appropriately for the high-end, high-quality service and support it offer. WIPRO’s revenue structure has to match our cost structure, so the revenue must balance the salaries we pay to assure good service and support WIPRO charge. WIPRO cannot build the service and support revenue into the price of products. The market can’t bear the higher prices and the buyer feels ill used when they see the same product priced lower at the chains. Despite the logic behind this, the market doesn’t support this concept. Therefore, WIPRO must make sure that it deliver and charge for the service and support. Installation, service, training, network support, etc must be readily available and priced to sell as it delivers revenue.
Batch: FW 07-09 155
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
There are different pricing strategies available which help in setting prices for different services: A Skimming Strategy If a service has enough differentiation to justify a high price and you desire quick cash and have minimal desires for significant market penetration and control, then WIPRO should set its prices very high.
A Market Penetration Strategy If near term income is not so critical and rapid market penetration for eventual market control is desired, then WIPRO should set its prices for the services very low. A Comparable Pricing Strategy If WIPRO is not the market leader in its industry, then the leaders will have created a ‘price expectation’ in the minds of the marketplace. In this case WIPRO can price comparably to your competitors, in-order to survive in the competitive scenario. The entry mode The probability of the successful entry into the defined market is evaluated by considering a variety of factors. These include the overall management capabilities, the strength and viability of the service development team, the adequacy of its execution, the methods available for service distribution, the marketing and sales organization's strengths and current activities, WIPRO
Batch: FW 07-09 156
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
experience versus that of its competitors plus its ability to differentiate its service from those of the competition, the problems WIPRO may encounter in your efforts to penetrate the market, the potential difficulties you may encounter due to insufficient infrastructure and the availability of adequate operating capital. WIPRO potential to achieve significant market penetration has been evaluated as negative. Given a successful entry into the market, WIPRO must then evaluate the potential for generating and maintaining profits over an extended period. This requires constructing barriers that might prevent competitors from entering the market, whether competitors are likely to retaliate when WIPRO’s services are introduced, how vigorously the competition will compete with it and with each other in the marketplace, the probability that WIPRO’s services will encounter competitive services or alternative solutions in the marketplace, the strength of the prospect in the buying negotiation process, WIPRO’s ability to execute the service at a reasonable price and WIPRO’s ability to sustain a competitive advantage. However, to create an illusion of the competitive pricing, WIPRO should come out with innovative service offerings such as: • •
•
Customer should be made to choose their own combination of resolution time, duration, etc and accordingly making payment. Attraction offers, i.e. purchase of one service offering (like AMC) would give 20% discount on the other service offering (like STEP). Different combo-packs i.e. purchase of a product along with AMC would give free upgrade in the 2nd year or 1 year extra technical support, etc.
•
Giving incentive points to customers whenever they go for WIPRO services (for eg., if a customer goes for upgradation of his computer and upgrades his RAM from WIPRO, he would get certain points
Batch: FW 07-09 157
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
which when accrued up to a particular level could be redeemed by the customer for a suitable incentive given by WIPRO.)
Thus, there is a need to sell the company, not the product. WIPRO needs to project itself as a service organization omitted to providing prompt and efficient services to its customers. WIPRO has to sell its service and support. The hardware is like the razor, and after sales support and service are like razor blades. Thus, WIPRO needs to serve its customers with what they really need. Hence WIPRO should set the ambitious sales forecast and in-turn expects sales and gross margins to increase. As an extra initiative, WIPRO can also apply the given below models to further plan its strategies for Service offerings. The models are explained below: 1. MARGIN-RETURN MODEL A quick analysis as to what strategy must be adopted once the services come into the market.
IMPROVE SERVICE OR Unsatisfactory MARGIN
RETRENCH / RESTRUCTURE
Target Profit Margin
Batch: FW 07-09 158
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
MARKET ENTRENCH OR EXPAND Satisfactory
IMPROVE VOLUME OR STRUCTURE
Satisfactory
Unsatisfactory
Target Return
Figure 3.4 Margin-Return Matrix This model can be used in-order to find out where a particular WIPRO service offering lies in the present market place. It clearly explains whether the respective service offering is providing satisfactory target return or not and whether the target margin achieved is upto the expectations or not. Based on this comparison, suitable strategies, which are given in the margin return matrix, should be used in-order to achieve the right strategy to be implemented upon. 2. COMPETITOR ANALYSIS
Differentiate, improve Better image
Promote and sell harder
Batch: FW 07-09 159
Their Reputation
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Dangerous Competitors
No Problem
Worse
Value of their Offering
Figure 3.5 Competitor Matrix This model should be used in-order to find out what strategy should WIPRO apply keeping in light the current service offerings of its major competitors. Similarly to the Margin-Return model, this model suggests possible strategies for WIPRO to pursue. For e.g.; using the above model, if the competitor reputation is better than WIPRO and also its value of service offering is better, then WIPRO should come out with some innovative, differentiated and attractive strategy so as to achieve better revenue margins from its competitor. COMPETITIVE EDGE WIPRO’s competitive edge is positioning as strategic ally with its clients, who are clients more than customers. By building a business model based on long term standing relationships with satisfied clients, WIPRO can simultaneously build
Batch: FW 07-09 160
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
defenses against competition. The longer the relationship stands, the more WIPRO can help its clients in understanding what WIPRO offers them and why they need it. FUTURE SERVICES For any organization, it is must to remain on the top of the new technologies, because this is the only way of earning bread & butter. Thus in-order to survive in the market, one should always comes out with some innovative strategy and that too should be the first one to innovate. Taking today’s scenario, there is a need for lot of opportunities to look for like: • Networking: - it is one of the most upcoming and lucrative area especially wireless networking in India. For networking, there is a need to provide better knowledge of cross platform technologies. Main target areas; educational institutions, third party networking parties’ tie-up, etc. • Storage Solutions: - The need of storage needs for enterprises in India is on the rising scale. Main target areas; large corporations, etc.
•
Data Security options: - Another area where WIPRO can capitalize heavily is the data security services. Today data has become more valuable than hardware, so it makes sense to protect data from viruses, Trojans, internet worms, etc.
•
Online-Back up service: - With the explosive growth of Internet and Web based services like E-mail (E-mail service providers typically now provide large size mailboxes of the tune of 1 GB size; e.g. rediffmail.com). WIPRO India could capitalize on this lucrative segment with Storage solution services. Presently WIPRO is not much in the Storage Services segment.
Batch: FW 07-09 161
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
Estimate Expected Results
The purpose of examining the expected results from the marketing strategies is to ensure that marketing strategies will actually deliver the desired marketing objectives. Once the strategies have been determined and decisions made about the marketing mix to be developed in each marketing segment, the financial implications of the strategies need to be evaluated. Estimating expected results involves the detailed review of sales revenues, cost of sales, marketing costs, operating expenses and overhead expenses. The financial analysis should show that the strategy will produce anticipated results. If it does not, the marketing strategies m\need to be examined further to see how they can be redeveloped to achieve the desired results.
Identify Alternate Mixes
Based on the above marketing plan given above, suitable service mixes can be formulated which takes care of the 6 P’s i.e., Product, Price, People, Processes, Place and Promotion and thus determining the strategies for achieving the marketing objectives.
4. RESOURCE ALLOCATION AND MONITORING
The last step is to have continuous feedback by monitoring the alternate service mixes. This would ensure that whatever plans and strategies have been formulated and are going in the right direction and if not corrective or preventive measures can be taken.
Batch: FW 07-09 162
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
REFERENCES
I Books referred
1. Marketing Management by Philip Kotler, Eleventh edition 2. The essence of Services Marketing by Adrian Payne 3. Marketing Research; an applied Orientation by Naresh Malhotra 4. Data Analysis and decision making by Albright, Winston and Zappe
II. Journals referred
1. Harvard business review 2. Sloan Management review 3. Journal of consumer behavior
Batch: FW 07-09 163
Alumni ID No.: DF79-M-0955
The Indian Institute Of Planning And Management, New Delhi
III. Websites referred
1. 2. 3. 4. 5. 6.
Dataquest (India) http://www.dqindia.com/ WIPRO India Website http://www.WIPRO.co.in/ NASSCOM http://www.nasscom.org/ IDC India http://www.idcindia.com/ Knowledgestorm Website http://www.knowledgestorm.com/ Google Search http://www.google.co.in/
IV. Software used:Expert Choice ver.11 (trial version downloaded from http://www.expertchoice.com/)
Batch: FW 07-09 164
Alumni ID No.: DF79-M-0955
doc_725477163.doc