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Why Alight Solutions’ $1.5 Billion Deal Is A Big Win For Wipro

Why Alight Solutions’ $1.5 Billion Deal Is A Big Win For Wipro


The fact that Wipro stock surged by 9 percent in the last two days hints towards one of the most successful deals in years. If that wasn’t all, it also matched up to one of its archrivals TCS, who has been working with larger deals over the last few years worth over $5.6 billion in revenue. While TCS has been garnering a double-digit growth in the ongoing fiscal year, Wipro has finally managed to match up to the competition.

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In a recent development, Wipro, one of India’s leading IT service providers, has bagged a 10-year contract worth more than $1.5 billion from the US firm Alight Solutions. With this deal, Wipro’s digital strategy may finally begin to deliver the much-awaited results. This is also touted as one of the largest wins for Wipro, especially at a time when outsourcing industry is witnessing a slowdown owing to the emergence of digital services.

The $1.5 Billion Deal

Alight Solutions is an Illinois-based company and a leader in technology-enabled health, wealth, HR and finance solutions. They simplify and enhances work through the unique blend of service, technology and data. With this deal, Alight would have a 10-year engagement with Wipro to avail its comprehensive suite of solutions. It is estimated to result in a revenue of $1.5 to $1.6 billion for Wipro over the tenure.

Wipro would enable digital transformation across the solutions at Alight and also enhance the employee experience by leveraging Wipro’s industry-leading strengths in digital technologies, cognitive automation, Industry 4.0 solutions and data analytics.

Chris Michalak, CEO of Alight Solutions said that their partnership with Wipro will enhance the client experience by drawing on Wipro’s leading position in automation and innovation, while allowing Alight to invest in its health, wealth and cloud-based solutions.

Wipro officials have speculated that apart from the full suite of services, cloud enablement, company’s consulting practice and deployment of Holmes platform will also take place. The last big win by Wipro was that at $1.1 billion from Canada-based logistics and utilities firm ATCO in the year 2014.

At a time when Alight deals with more than 1,400 clients over 14 global delivery centres, the added services by Wipro would add onto its $2.4 billion revenue which it marked in the year 2016.

Why Is It A Big Win For Wipro?

This is being speculated as Wipro’s largest win to date since Abidali Z Neemuchwala took the CEO position at the company in 2016. Commenting on the acquisition he said, “This is a testimony to the capabilities we have built through our strategic investments in Wipro Digital, cloud platforms and cognitive platform Wipro HOLMES. We will leverage this expertise to digitise and modernise Alight’s core across platforms, technologies and operations.”

This multi-year contract reaffirms a steady source of revenue for the company at a time when it is aiming to achieve industry-matching numbers. It would prove to be important in scenarios where the company saw its first-quarter profits growing over 2 percent, making the current revenue standing at ₹143.07 billion as compared to the previous year.

In an earlier engagement with Alight Solutions, Wipro had announced that it would buy latter’s India operations for $117 million. With about 9,000 employees, Alight HR Services India was set up in September 2016 and has registered a revenue of ₹11.32 billion in 2017-18.

How Wipro’s Cognitive Automation Can Add Significant Value

Wipro hasn’t shied away from bringing developments around cloud platforms, data analytics or automation. In fact, Wipro Holmes is an ML and AI-powered platform that offers cognitive services to accelerate business processes through automation. Various companies in the past have made use of Holmes to discover new solutions for the unique problems they face and enable them to thrive in the future. And Alight aims to do the same.

With a key interest in improving IT and other services, it has always been keen on developing cognitive abilities required in the areas of perception, learning, reasoning, language and others.

Wipro has also been assisting clients with robotics and cognitive automation to redefine business economics as a strategic differentiator. They use a deep understanding of business to design systems backed by automation, artificial intelligence, NLP, ML, image and speech recognition using Holmes. The platform has so far delivered outstanding improvement in process efficiencies for clients across the world with its context-aware bots and predictive analytics. Holmes is not only enabling work efficiency and agility, but is extremely cost effective.

Amidst the extremely competitive environment to stay ahead of other players, this deal would definitely prove to be a major boost for both the companies in terms of revenue, improved performance and delivering better services to the end users.

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