Nasdaq-listed IT services firm, Cognizant, which has a large employee base in India, performed well in the January-March quarter and provided a full-year guidance which is better than industry estimates
Nasdaq-listed IT services firm, Cognizant, which has a large employee base in India, performed well in the January-March quarter and provided a full-year guidance which is better than industry estimates. Debashis Chatterjee, president, global delivery, Cognizant, tells FE’s Pradeesh Chandran that the company is also looking at localisation of its talent. Excerpts:
How do you see the Q1 performance?
The year 2018 has been a solid start for us. We are one of the fastest growing professional services company given the scale we have. We have a distinctive approach towards digital; we always believe that we need to help our clients to become digital to the core. That strategy is working very well. Cognizant is heavily investing in terms of the full range of capabilities we need to have as a digital provider, whether it is the internet of things or artificial intelligence or augmented reality, blockchain or cloud. We are developing capabilities to help our clients to transform digital. In the digital economy, we are one of the leaders who have built a strong foundation. We are looking at three aspects of growth — digitise, internationalise and localise.
Can you elaborate on the internationalisation part?
The internationalisation strategy is clear. Last year, our revenue from the non-US market hit $3 billion and many of these geographies we believe by next decade will be more than a billion-dollar market for us. Internationalisation is critical for us and we have been investing a lot in it. If you look at the acquisitions done in the past, many of them were outside the US. The digital phenomenon is not restricted to one country, it is a global phenomenon. We can leverage the digital phenomenon and propel our growth across the world, not just the US.
When you say localisation and internationalisation, does it mean you will hire more local talent?
We feel that the kind of project we do is more agile and closer to the clients. That is why we have added 3,000 US citizens to the workforce in the US. We have regional development centres in more than 30 countries across 170 locations. We have been focused on getting the local talent closer to the client. That is something needed from a digital workforce standpoint.
What are the reasons for a strong growth in healthcare while peers are facing pressure in the segment?
If you talk about healthcare specifically, we are one of the players who has end-to-end solutions in the segment. For example, with the acquisition of Bolder Healthcare Solutions, we are a provider of the revenue cycle management (RCM) solutions to hospitals, physician practices, and other specialist healthcare organisations. We are supporting all the players in the ecosystem. Earlier also we had done a couple of acquisitions in the healthcare vertical to strengthen our offerings.
What were the reasons for softness in financial services vertical this quarter?
If you look at financial services we work with lots of money-centre banks. In the financial services business, the insurance part had a double-digit growth. Our insurance clients have done well and have bagged quite a few strategic deals. We are seeing strong growth mostly led by digital. Even in money-centre bank, the digital part of the portfolio we see significant growth. However, they are also under pressure in terms of cutting the cost in their legacy system or heritage.
Essentially, though there is growth in terms of the digital transformation part of the portfolio in the money-centre bank, it is not good enough to ease some of the pressures they have in terms of the legacy part of the business. We are seeing a little bit of rebound in terms of financial services (money-centre banks), but overall, our strategy of leading with digital is working well in the financial services business.
We are seeing modest improvement, as I said the growth is there. The digital part of the revenue is growing well. If you compare to the previous quarter we are seeing some improvement this quarter and hope that it will continue going forward.
Last year, your hiring came down significantly. What is the hiring strategy going forward?
We will continue to hire across all the geographies. We will hire in India as it is our largest development centre. Because as we internationalise and localise local talent hiring will happen in those geographies as it would be closer to the client.