Of all the lessons thrown up by coronavirus, one of the biggest has been that traditional business continuity planning does not work well in the face of a worldwide crisis, says Jatin Dalal.
As president and CFO of Wipro, the listed Indian IT giant that operates globally, Dalal says he realised soon into the pandemic that business continuity plans always assume that the challenge to the organisation is at a particular spot.
“I always thought that if I have a problem in New York I can solve it by being in San Francisco, but the pandemic has proven all of us wrong,” Dalal, who has been CFO since 2015.
“It has proved that you could be hit in all locations at the same time so you need to have a plan B in that context. It has taught us a very different way of looking at business continuity planning,” says Dalal, who also performs the role of the group’s president.
Dalal, who joined Wipro from General Electric (GE) in 2002, says the other big learning from the coronavirus is the need to harness the collective strengths of the group to solve the complex challenges throw up by the global pandemic.
“In a crisis like this we need to come together even more than we normally do, because this requires a very different set of answers because the questions are very unique and new, and cannot be solved by an individual leader,” he tells Financial Director.
Wipro, which employs over 185,000 staff worldwide, sought to work as “one team connecting the top leadership team to individual smaller parts of the organisation,” says Dalal. The result is “we have not let go of much of our revenue, improved profitability, and cash flow has been robust,” adds Dalal, who sits on New York Stock Exchange’s listed company advisory board.
The Bangalore-based group, which was founded in 1945 (as Western India Vegetable Products Limited) and listed on NYSE in 2000, has developed offerings around consulting and business process services, that has seen its share price rise in the last two decades. Although Wipro’s stock value fell away in March, when the pandemic hit, a solid recovery has seen its market cap reach £20bn by the end of November.
Dalal’s ability to ensure the finance function can support the group through the coronavirus challenge so far and into the next stage of the pandemic is aided by his breadth of his experience across various finance roles. From running Treasury he moved to head of Financial Planning & Analysis (FP&A) for the group’s IT business.
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But it was times spent overseas, most notably in the UK as head of finance for Europe and the global finance head of its energy & utilities, healthcare and manufacturing units from 2009, that helped prepare Dalal for this year’s challenges.
His experience of the global financial crisis (GFC) that started in 2008 offered some valuable hints as to how the coronavirus pandemic should be handled. He says although there were significant differences in that the vast majority of Wipro’s staff had to work in isolation in 2020, “some of the responses were quite similar,” says Dalal.
“In both situations a global crisis took away a part of the work that we were doing overnight. So we had an issue of excess capacity to start with, in both situations.
“Despite much of the group being in isolation, Wipro’s response was to ensure continuity of services, even when we could not operate as a team on the ground or we could not be in our offices,” he says.
“Certainly the organisational response was something we learned for the first time in 2008 and in early 2009, which we were able to extrapolate for today’s situation,” says Dalal, an engineering graduate from the National Institute of Technology (NIT) in Surat who also holds a Diploma in Business Administration from Mumbai’s NMIMS business school.
Another vital component for ensuring Wipro’s finance function could support the group’s response to Covid-19 has been the global set of contacts across the group Dalal has built in recent years.
Although based in Bangalore when he was CFO of Wipro’s’s global IT business in the four years preceding his appointment as group CFO, Dalal also spent periods in the US and Japan, as well as the UK. He says this was part of a corporate culture where the senior leadership is encouraged to “spend time in a different geography, to get a local context,” he says.
“It means you are able to really see the world locally rather than just from headquarters and it gives you a very deep sense of what customers think about. That becomes very critical in times like this,” says Dalal.
Give the pandemic is being transmitted at different speeds across the world, the local context becomes very critical, says Dalal. “The response was very locally focused, in terms of how do customers keep their operations seamless and how do we support them in doing so,” he says.
Since becoming group CFO, Dalal has begun developing a finance function better able to support a more agile organisation. “We deeply encourage our people to think what are the needs of businesses of tomorrow, so we want to equip them to manage and lead in some form of change,” he says.
Alongside RPA (robotic process automation) that Wipro’s finance function had already been using for improving efficiency in areas such as accounts payable and accounts receivable, Dalal says “the AI (artificial intelligence) journey started three years ago.”
“We started to say, can we ask AI to do something not only more complex but also better than the human mind can do?” he says.
The challenge was to predict quarterly revenues to high levels of accuracy. “With this, half a CFO’s problems are solved because they can then map costs and cash flows accordingly,” says Dalal.
These considerations are vitally important in a business in which he says at any point in time there are between 4,000 and 6,000 projects in the area of complex embedded software. “These could involve problems of maintenance to very complex problems of product development, so it becomes very difficult to predict revenue accurately,” he says.
As a result, Wipro created a revenue prediction algorithm in their artificial intelligence and automation platform called HOLMES to ensure data accuracy that it is now rolling out to clients. It’s an example of the tools that corporates need to navigate the volatile pandemic environment, says Dalal.
“The analytical tools harnessed over the years have enabled companies to respond to the crisis in a more logical, more scientific manner in terms of their decision making,” he adds.
Even four years back, I don’t think we would have been able to offer this kind of information with the sharpness and smartness from leveraging data and other information,” he says.
Dalal harbours some uncertainty about near term prospects for the global IT industry. He says: “I don’t know what the real end game of this pandemic is and even when we come back, what shape and form we will come back to,” but is optimistic about the medium term for the sector.
“I feel quite good because I believe there are positive catalysts for the industry. One is that a lot of IT decisions were put on the backburner. Therefore there is a hunger to go ahead with some of those long pending IT investments that companies may not have made – especially in the cloud, digital and cyber security spaces,” he says.
Dalal believes most economies in the world will eventually see a growth in economic activity including Wipro’s home market, especially as large scale coronavirus vaccination programmes roll out. “India will actually de-grow this year, maybe anywhere between seven and eight percent in GDP but will bounce back strongly next year,” he says.
“The hope is that although some of the financial bailout packages will continue to reduce over the next few months, we are not yet seeing a scenario where economies are falling off because a rescue package was withdrawn.
“Where I think economies will bounce back is in certain sectors which are still nowhere close to their capacity utilisation, from airlines to hospitality. I think eventually those most affected will be okay by next June or July,” says Dalal, who sits on the investment committee of Wipro Ventures, the group’s $250 million start-up investment arm.
Considering the experience of the last few months, Dalal says he feels proud that Wipro didn’t have to take any tough action on job security as a result of the pandemic. “We have been able to protect jobs in most parts of the world,” he says.
Dalal says his biggest learning from the crisis period is that the group’s combined strengths could be better harnessed in less uncertain times. “On a normal course, we don’t leverage our collective smartness as well as we do in a crisis, so we should come together just as often when there is no crisis,” he says.