BARCELONA, SPAIN - MAY 09: The Terminator robot is seen in the paddock following qualifying for the Spanish Formula One Grand Prix at the Circuit de Catalunya on May 9, 2009 in Barcelona, Spain. (Photo by Paul Gilham/Getty Images)
Bots are actually replacing humans at Wipro. India’s third largest IT services company, which is in the process of downsizing 10 percent of its workforce this year, kicked off Project NextGen in 2015 to improve productivity and automate processes. While the company denied plans to downsize, it said it achieved productivity worth 12,000 people over 140 customer engagements in 1,800 HOLMES bots in IT services.
Automation is, in fact, a reality now and progressively more jobs could become redundant as the pace of deployment increases.
In computer programming lingo, a bot, which is short for robot, is a program that operates as an agent for a user or another program or simulates a human activity. Wipro’s HOLMES bot uses a natural language processing (NLP)-based chat interface.
Wipro kicked off its transformative programme ‘Project NextGen’ in 2015, in consultation with McKinsey, to improve productivity of teams and automate processes. Senior managers claim teams were asked to execute the same projects with 10-15 percent less manpower, as McKinsey outlined several levers to improve productivity. Insiders claim that this was a dry run for this year’s downsizing, as teams were asked to function without 10-15 percent of the existing manpower.
The move to make do with fewer people was part of suggestions made by McKinsey to enhance productivity and help automate processes.
A very senior manager at Wipro says: “Project NextGen began very well and a few hundred senior managers were appointed as change leaders who would implement McKinsey’s recommendations. But what we did not realize was that it was a simulation of sorts to downsize later.”
From slashing coffee breaks and taking away mobile phones of employees during “Silent Hours” to real-time monitoring progress of tickets (problems raised by clients) on “White Boards” to “Huddle Meetings,” McKinsey came up with an exhaustive list of levers Wipro’s managers could use to enhance productivity of teams and cut down on waste.
But the net outcome of these initiatives was to reduce the strength of every team by 10-15 percent. Automation was supposed to be a big piece of this initiative and managers were assured that there would be no retrenchment at the end of the exercise.
In response to a questionnaire sent by Moneycontrol on gains from Project NextGen automation initiatives and consequent impact on jobs, Wipro said: “In FY17, Wipro generated productivity worth over 12,000 persons across 140+ customer engagements in over 1,800 cumulative instances of HOLMES bots in IT services, in the areas of application development, application support & maintenance and infrastructure services. Employees who are involved in such projects are then retrained and upskilled to be redeployed to handle higher value tasks.”
However, some of the change leaders that Moneycontrol spoke to said that the level of automation achieved was no more than 2-3 percent of the target, as India either lacked the requisite talent pool or that customers were not always ready for it. In many cases, privacy laws of other countries also came into play for automation.
Wipro is not looking just at automation to cut costs. It is also lowering the “Bulge Mix” –average work experience of a team. Managers have been told to lower the Bulge Mix of teams to less than 4 years. So, if a team has 40 people and the average work experience of individuals is between 0-3 years and the manager has little less than ten years, then the bulge mix will come down to less than 4 years.
Wipro, however, said: “There is no plan to change the bulge mix. We will continue to hire skilled resources at the middle and senior levels from the market.”
This also indicates that Wipro is planning to weed out more senior and experienced people who are managing the junior employees with less than 3-years experience. This is a big lever to cut costs but it also puts at risk managers with more than 10-years experience.
The existing IT services companies have so far leveraged upon the wage arbitrage that existed between the developed world and India. But the sector did little to prepare for a wave of disruptive technologies like cloud computing, which is making data centres and the support functions around it redundant.
With clients pressurizing companies to automate repetitive processes, Wipro roped in McKinsey to help it migrate from the existing model to stage where it could morph into a digital services company.