Think Big, Think Growth, Think Sales—the three Ts that has driven Cognizant Technology Solutions to dizzying heights. What began as a small offshore software arm of Dun & Bradstreet Corporation in 1994 with less than 50 employees, has today emerged into a Rs 1000 crore global software services entity. With 5200 employees on board, Cognizant has become a major force in the Indian IT industry. However Cognizant president and COO, N Lakshmi Narayanan prefers his company to be called a global IT services provider instead of an Indian or American company. In fact this Indo-American identity of Cognizant has been a topic of discussion even in the past as analysts found themselves in a fix whether to rank Cognizant with the likes of Infosys and Wipro’s, which are purely Indian companies. However the identity crisis becomes a non-entity from a technology perspective with Cognizant servicing its global clientele mainly through its state-of-the-art offshore development centers spread across India and uses innovative development approaches.

Fact Sheet Start-up year: 1994 Development Centers: Chennai 5, Kolkata 4, Pune 1, Bangalore 1, Limerick, Ireland 1 Turnover: Rs 1,000 crore in over 8 years Market capitalization: Rs 6,000 crore 5,200-strong global workforce SEI-CMM Level 5 and PCMM Level 5, ISO 9001 certified and BS7799 Ranked by Nasscom as the No 1 MNC pure-play software services company Revenue Growth Employee Growth

The beginning
Cognizant was probably the first MNC to set shop in Chennai. In 1994, it was just an in-house IT development center for Dun & Bradstreet (D&B) and its operating units. Cognizant became an independent entity in 1996, when these operating units were spun off from D&B. "Coming out of the D&B fold was a strategic initiative that gave us ample room to broadbase ourselves into a diversified IT Services company, and seek out external customers", says Lakshmi Narayanan. However, the spin-off is the result of the consolidation and the confidence it derived from the captive D &B customer base it was servicing. As Chandra Sekaran, senior V-P remarks, "The initial quality customer base gave us the opportunity to understand the dynamics of offshore consulting. The emphasis then was more on offering quality solutions and developing the skill base rather than being concerned about sales and marketing or going after customers."

Y2K and after
While the hospitality industry was devising ways and means to lure the party mongers for the Year 2000 millennium bash, the top management team at Cognizant too were excited, but for very different reasons. The company deliberated on it at length—Whether it was to take a dip in the Y2K pool? It did, and a peek into its year 2000 revenues says it all. More than half of the revenues have come from Y2K projects. But it was not yet time to rejoice as many companies are marooned with the inevitable question ‘What next?’. But Cognizant seemed to have figured this out much in advance. "The decision to foray into Y2K was a strategic one," says Chandra Sekaran. " Many in the industry felt that getting into the Y2K business may not do much good to the company, but our approach to Y2K was different. Our idea was to understand the customer systems and the businesses they were into. The deeper we understood the customers we gained, the more leverage we derived to get into other value-added activities post Y2K", adds Chandra Sekaran.

In the IT industry perception is everything. And Cognizant’s successful Y2K sojourns made analysts call it ‘a Y2K company’. The immediate priority before the company then was to shed its Y2K technology provider perception, to position its brand as an end-to-end solutions provider and to re-skill its work force in newer and emerging technologies. " With the Y2K boom over, the top of the mind thinking was to retain the customers. We did that by retraining our employees and moving them into maintenance and development mode," says Kumar Mahadeva, chairman and CEO. The Y2K bug was a blessing in disguise for Cognizant as it served as an entry point to reach high profile customers who have stayed with the company ever since.

The e-factor
The company calls the post Y2K period as the transformational phase, since it realigned its processes towards eBusiness. Says Kumar, " Reorienting the company towards the ‘e’ service provider model has been difficult. The best way to do it was to collaborate with a company that is familiar with the terrain. Hence we teamed forces with Viant, an eBusiness major. Our association is such that, Viant plays the role of consultant and Cognizant that of an implementor. And the plan worked out well." " It is only the sustained relationships we forged with our partners that helped us in establishing our firm foot prints in the eBusiness arena," quips Kumar.

The Cognizant Business Tree

Transformation to a next generation of service portfolios had its inherent issues. Companies like Cognizant were purely into IT enabling the enterprises from a technology standpoint. But ebusiness solutions providers have to take into ambit the business issues, and hence have to deliver techno-business solutions. Here is where Cognizant took the conscious decision of aligning itself towards key vertical segments like—financial services, insurance, healthcare, manufacturing, logistics, telecom, media and information defined services.

Top Guns ALL: (from left) R Chandra Sekaran, Deb Mukherjee, Kumar Mahadeva, Lakshmi Narayanan, Francisco D’Souza and Gordon Coburn at the annual customer meet in the US

Says Francisco D’ Souza, senior V-P, " Hiring practice leaders called for huge investments, but we were conscious with the returns. The practice leaders have ushered in solid deliverables that puts us way ahead of competition." The practice leaders have also played an instrumental role in terms of customer support and retention of the client base.

Customer-centric focus
The economic downtrend sweeping across the world has brought tighter cost control measures. As a result enterprise IT spend has come down considerably. But still Cognizant was able to boast of a customer base of 105 clients of which 30 of them are from Fortune 500 companies. Says Lakshmi Narayanan, " Customer satisfaction is an obsession to us. We get high scores in the customer satisfaction surveys and this customer-centric approach has been instilled on our employees right from the induction stage." The company also organizes an annual customer confluence called—Cognizant Community in the US. The confluence brings together the entire senior management and the company’s customers in one common platform. " We have not lost a single client due to non-performance," says a beaming Chandra Sekaran.

Fourth-gen outsourcing
Software outsourcing has so far been through three generations. The first generation was the staffing mode, where the emphasis is on the onsite execution of projects. The second-generation kick-started the offshore approach. The third generation used both the onsite and the offshore model, with an equation of 30% onsite and 70% offshore. "Now we are seeing the emergence of fourth generation offshore services that brings to table a totally a new dimension to off shore consulting, says Lakshmi Narayanan.

It is probably first time that an IT service provider in India is talking about a new offshore model. Cognizant considers itself as a pioneer in driving the fourth generation outsourcing.

As Kumar Mahadeva puts it, "We have taken the lead in defining the fourth generation outsourcing. A typical outsourcer of this kind focuses not just on technology, but on delivering business results. It fosters closer client relationships. Moreover it leverages time capabilities, is not contract driven or driven by discreet projects, but by the business value of the relationship and partnership.

In the fourth generation model that Cognizant has pioneered, the executive management is headquartered in US and Europe. Senior client partners work as consultants in close proximity to the customers. The uniqueness of the model is that the partners are empowered to make strategic decisions directly with the clients. The company also believes that era of conventional outsourcing is over.

Shrikanth G in Chennai

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