Wipro plans product engineering services centre in Beijing

Work with EU, US customers in China can extend to local companies

Wipro Technologies, the global IT services business of Bangalore-headquartered Wipro Limited, is poised to increase its presence in China, beyond Shanghai, to boost its engineering R&D services.

Initially the move is to keep pace with customers increasing their business in China, but in time Wipro Technologies could forge alliances with manufacturing firms of Chinese origin, a senior Wipro Technologies executive told Business Standard here on Tuesday.

"We have established a small team in Beijing, in product engineering," Ramesh Emani, head of R&D services at Wipro said. "As you know, it is Beijing, and not Shanghai, that is the engineering hub of China and we felt the need to have a presence there," Emani said.

Emani, president of Wipro's product engineering solutions, declined to elaborate on investments in the centre, or plans to increasing staff there.

"We like to build something first, and then tell you about it," he quipped. But that this centre will be a key source of business in China for the company was evident: "We have just hired a Chinese head of engineering, and the centre is working with four engineering customers from Europe and America who are expanding in China," he said.

China's large domestic market and strong manufacturing base combined to attract investment from western firms, Navi Radjou, a vice president of research at analyst firm Forrester said.

The Indian attraction was its large talent pool that could be harnessed to do sophisticated engineering design. Wipro had demonstrated the very possibility, Radjou said, in a video conference from Cambridge, Massachusetts.

Last year, Wipro Technologies earned 28 per cent of revenues from product engineering services. Another 8 per cent came from product engineering related work done in service lines of testing and infrastructure management, Jessie Paul, chief marketing officer of the business said.

Radjou, and two of his colleagues are championing a concept called innovation networks. These networks will be built through, "increasing linkages" between firms in the US, and those in India and China, which were fast becoming "export bases for innovative products," he said.

US firms were moving into a phase where co-location of R&D with either the consumer or the manufacturing was no longer necessary. Instead, they were "driving greater integration of R&D across the US, China and India." This was also the beginning of the next phase of offshoring, in which US firms will "source not simply low cost talent, but invention services (in India) and transformation services (in China)," he said.