IT services major Cognizant's robust numbers for the second quarter of 2015, with 6% sequential growth, topped with the decision to revise upwards...
IT services major Cognizant’s robust numbers for the second quarter of 2015, with 6% sequential growth, topped with the decision to revise upwards its revenue guidance numbers for a second time in a row this year, has made the industry sit up and take notice. The various investments made by Cognizant seem to pay rich dividends. The company is now focused on delivering similar success in the fast growing digital segment, said R Chandrasekaran, executive vice-chairman, Cognizant India, in an interview with FE’s PP Thimmaya. Excerpts:
What factors drove the robust Q2 performance by Cognizant?
Cognizant has focused on the dual mandate of clients which is driving operational efficiency of running their business and also helping them in the transformation by leveraging digital platforms. On both sides we have made our investments and continue to win disproportionate share of the marketplace. We bring the best in class solutions, be it in areas like automation or artificial intelligence. We have always invested in building deep industry capability and drive thought leadership in many of the areas.
There seems to be some secular growth across geographies…
It has been pretty robust across geographies. In North America, we grew 5.8% sequentially and in continental Europe we saw 7.3% growth. We see a lot of growth in India and Australia. Given the investments we have made and our capabilities, there is an expectation that the North American market (largest for Cognizant) is likely to sustain the momentum going forward for some more time.
The healthcare vertical, grew by just 2.2% sequentially. Comment.
We are probably the leaders in the segment because of our client base and broadbase capabilities. It remained a little soft mainly because of the environment in terms of mergers & acquisitions and the challenges within US healthcare exchanges. Overall, the US healthcare market is under a lot of pressure to bring in efficiencies. Now we expect some more consolidation in the market but once all this over, it will open up opportunities. In the long term, we are optimistic about this segment.
What has been Cognizant’s digital strategy?
Today when one talks about digital technology transformation, we have to combine with design skills, business understanding and strategy, ability to handle large volumes of data, internet of things and connected devices. It is the combination of all these which is driving the transformation. We have an elaborate framework for this, which involves idea generation, collaborating with our clients and lastly putting them down on implementation mode.
Cognizant is on the forefront of that digital transformation. Now it is becoming mainstream and we cannot think of any client who is not interested in going digital.
Is Cognizant collaborating with technology start-ups?
We are scouting the market for start-ups. However, within Cognizant we want to have our own eco-system to encourage our own associates if they have any bright ideas.
We have an emerging business accelerator programme and set aside certain venture funding to invest in these ideas. This will help our associates set up their own venture within Cognizant. This entire programme is under the direct supervision of our CEO. We have already brought in about 4-5 ideas to the marketplace.
Added to this is talent management, where we bring in specialised skills from outside.
Further, we have a massive programme internally to reskill our associates. This will not only help our business but further career opportunities for associates.