India’s third largest software exporter is going through a business transformation exercise and wants more time for the efforts to bear results. Wipro is working on changing its India and Middle East business models, in the backdrop of high oil price volatility in the latter, apart from tweaking its go-to-market strategies.

Wipro CFO Jatin Dalal spoke to BusinessLine on where the company stands in its transformational journey and how digital and automation is becoming integrated with a lot of deals.

Since the last few quarters, Wipro has not been beating guidance and the outlook is not bullish...

A lot of our efforts are in input phase. For example, we are seeing Holmes (Wipro’s Artificial Intelligence software) and automation efforts are seeing traction amongst our clients. For example, 30 engagements are covered by automation and about 30 per cent of them use Holmes. As Abid (CEO) mentioned, directionally our effort going forward directionally we would definitely put all the focus on operational rhythm to win back some of these investments. Our programme to train 1,000 delivery managers to service our key clients has got off to a good start and 200 of them have already been trained. Also, factor in the investments we have made in the last few quarters and the growth trajectory will pick up over time.

But the guidance (for the second quarter) does not reflect this...

These will kick in as you have seen from our acquisition of HealthPlan Services. Having said that there is global macroeconomic volatility but the opportunity for outsourcing demand has not gone down.

So, does the guidance factor in Brexit impact, weakness in energy and utilities and weak discretionary spending?

Our guidance is the reflection of what we see as a total revenue outlook for the second quarter.

Brexit's most immediate impact will be on currency volatility but in the medium term it could delay some discretionary spend.

In outsourcing, there are talks of cannibalising existing IT services. How is it playing out in Wipro?

We have to balance traditional offerings with new ones. So, we first look at overall strengths of Wipro and then it is left at the individual account levels.

So, in a bank where we have been providing traditional IT services, now we send out proactive proposals on how that business can sync with processes that aid in mobile banking.

You had mentioned in Q2 FY16 that we operate margins in the range of 21-22 per cent but it has been sliding (in June-ended quarter margins went down to 17.8 per cent). Are you cutting prices to be competitive?

In addition to three dimensions of investment — acquiring the skills for future, acquisitions and investment in people, there is also investment in specific accounts which we believe will drive higher customer satisfaction. In the immediate quarters, it may be dilutive on rates and, therefore, on margins but will keep us in good stead in terms of our wallet share gains and our growth in those accounts in a 'few' quarters from now. So, I wouldn't call this as price discount.

How much of revenues come from digital?

In Q1, 17.9 per cent of our revenues came from digital.

We are seeing some good traction with both existing clients and new customers in our key markets due to positioning it by emphasising on consultative selling.

We have started seeing a pick-up in the size of digital deals.

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