Cognizant has re-invented itself so many times that it has become an expert change artist. Now attempting to reposition itself once again as a complete business solutions provider in the same league as the global consulting firms, its change management skills will be an asset, says Akila Satheesh

Can a 10 year old software services firm operating out of India aspire to become a global technology based business solutions provider in the same league as the world’s big five consulting firms, when even companies such as Infosys and TCS dare not abandon low end services for high end consulting? This is not a question that perplexes the men who run Cognizant, (earlier Cognizant Technology Solu-tions) if only because they are convinced they can do it. Ask any of them and they’ll say it’s just a matter of time. Such overwhelming confidence is probably natural for a company that has grown at a blazing 95 percent every year for 9 years in a row, and which has metamorphosed several times during that period without slowing down.

Says Lakshmi Narayan, president & COO, Cognizant, “Some years ago, we operated mainly in the area of providing technology solutions, but we have transformed radically over the last 3-4 years, and today we derive over 30 percent of our revenue from delivering business solutions, most of which involve high end Web-based technologies. All this has been done while growth rates have remained consistently high, and that in my view is a remarkable achievement.”

Narayan is not exactly beating his own drum a trifle too loudly. Both Forbes and Fortune International, which rank amongst the world’s largest circulation business magazines, voted Cognizant amongst the best small sized tech firms in the world, and even NASSCOM ranks the company among the Top 10 Indian software exporters today. Says Robertson Stephens, a US based financial analyst tracking Cognizant, “Cognizant was one of the few players focused on Y2K re-mediation to successfully and smoothly make the transition during 1999 to the next demand wave in e-business solutions. In today’s environment, where new application development has slowed dramatically, the company continues to successfully manoeuvre to exploit new opportunities.”

Exploiting new opportunities means, first and foremost, developing new technology capabilities. That’s a game that the company’s head of R&D and chief consultant Dr Apparao revels in. He tracks emerging technologies and develops ways of exploiting such new technologies for business gain. Apart from on-going research in e-business related technologies, Cognizant’s R&D is currently working on telecom and mobile technologies, automatic speech recognition, P2P technologies and fraud management. Apparao however admits that developing new technology is the easy part. “Translating that to business gains means retraining an entire organisation and that’s no easy job. Says he “We have many in-house training programmes but we also encouraged people to get training from external training and certifying bodies”. Alliances with technology partners such as BEA Systems, Berkeley Enterprise, Cyber-source, Epicentric, IBM, Oracle, Loudcloud, iPlanet, Microsoft, NEON, Nokia, Siebel etc CSC, Viant and PeopleSoft also helped to bridge the technology skills gap. “Such partnerships are also a major source of client leads for us”, says R Ramkumar, corporate & marketing comm-unications manager.

Incorporated in 1994 as a joint venture between Dun & Bradstreet (76 percent), and Satyam Computers (24 percent), the company was initially called Dun & Bradstreet Satyam Systems (DBSS). In 1996, Dun & Bradstreet spun off several of its subsidiaries including Erisco, IMS International, Nielsen Media Research, Pilot Software, Strategic Technologies and DBSS, to form a new company called Cognizant Corporation. In 1997, Cognizant bought out Satyam’s 24 percent stake for $3.4 million, making the Indian subsidiary wholly owned by the Cognizant group. That’s when DBSS was renamed Cognizant Technology Solutions (CTS). In June 1998, CTS completed its initial public offering. In the same month, Cognizant Corporation split again, with Erisco and certain other entities being merged with IMS International to form IMS Health. Following this restructuring, IMS Health owns approximately 61 percent of CTS.

	ALL THE HAPPY CLIENTS
	Verticals	Customers
	Financial Services & Insurance	First Data Corporation, iNautix (technology arm of CSFB), The Pacific Stock Exchange, MetLife, Royal and Sun Alliance, CCC Information ervices, Providian Bank
	Healthcare	IMS Health, Sierra Health, Lifeguard, Regence Group
	Retail	Ace Hardware, Brinker International, RadioShack, US Cold Storage
	Information- defined Services Others	Dun & Bradstreet, Nielsen Media Research, AC Nielsen Hewitt Associates, Northwest Airlines

A subsequent listing on Cognizant on Nasdaq infused money needed for rapid growth and today, CTS is repositioning once more with a modified name: just Cognizant, representing its quest for a business solutions identity as opposed to a mere technology solutions one.

“We discovered quite early on in the game that customer focus was what differentiated the also rans from the successful firms. So we built our operations with a strong customer focus. That’s how we discovered that what the customer really wanted was a complete solution, not just bits of technology. We decided we wanted to become a complete solutions provider, and we built the business expertise in several verticals and the execution capability to be in this space over a period of time. Our vision is to now move higher up on the value chain and get into consulting”, adds Narayan.

Customer Centricity is undoubtedly a buzzword in Cognizant, and there is little awkwardness when top managers of the firm admit that their approach is a direct copy of what the big five global consulting firms do. Narayan pushed the vision for strong customer orientation, and people down the line translated it into a workable strategy. This comprised mostly of splitting the operations clearly along vertical industry practises, again very similar to what the big five consulting firms do. Top-notch industry specialists from pedigreed business and technology schools were brought in to beef up domain expertise, but it was not just left to the experts to concoct solutions from the ivory tower, so to say. Close interaction between customer and expert was mandatory, and formal feedback mechanisms ensured that it was the customer’s need that was being met, not the experts. An annual customer meet event also helped cement ties with customers. This strategy has produced results: today 80 percent of Cognizant’s new business comes from existing customers.

Says Kim Ross, CIO, Nielsen Media Research, a Cognizant client: “Their focus on the customer is so good that we now treat Cognizant as an extension of our own IT department, and 90 percent of our outsourcing work is farmed out to them”.

Verticalisation has worked too: Cognizant decided to specialise in the verticals of financial services, information services and healthcare, and now derives around 20 percent of revenues from each of these verticals, with the remainder coming from other industries. Seen from another classification, revenue it posted in the last fiscal, 51 percent of its Rs 704 crore revenue in 2000-01 came from applications management, 43 percent from applications development and the remaining 6 percent from re-engineering.

Cognizant has also consciously maintained offshore-centricity as a differentiator. The company has been offshore centric right from its inception as it operates only in the project mode and not in the professional services/staff augmentation mode. CTS presently has a unique identity of working as a ‘focused offshore development company’ with all its 11 offshore centres operating from India, unlike many others who resort to the distributed offshore model and spread out in different geographies. “The strategy was to go to places where there were not many players, and establish brand equity in those markets. Hence, Pune and Calcutta, in addition to our Chennai centres,” explains R Chandra-sekaran, senior vice president, Cognizant. CTS is now the top software exporter in Chennai and Calcutta and one among the top in Pune.

Being offshore centric meant foregoing many business opportunities, such as ERP implementation which was a big opportunity area in the 90s. Fortunately, the ERP market has matured and many early ERP installations are now being redeveloped, which lends it self to of-shore development.

In an industry which is plagued with high attrition levels, Cognizant has maintained an attrition rate of 8 percent during the last fiscal with its strong HR practices. The fact that it is ranked among the Top 3 employers in the software industry by IDC with a higher ranking in several key parameters such as employee satisfaction index, job satisfaction and career development, compensation and benefits, stands testimony to its recruitment methodologies.

Having completed the transition from a technology to a business solutions company, the focus and challenge ahead is to take a holistic approach to business problem solving and serving the customers’ requirements end to end, states Chandrasekaran.

Cognizant’s is shaping itself to emerge as a global leader in the business applications arena and is pushing forth with some initiatives. Focus on verticalisation—which has already been kicked off, is a key that the company is looking at to offer value-added services.

To provide complete solutions, Cognizant has taken a three pronged approach: consolidate the domain knowledge garnered through project execution in verticals such as financial services, insurance, healthcare and retail; identify techno-business champions (project managers who have been servicing a particular vertical for years); and hire practice leaders (practitioners with sound technology base rather than pure-play business knowledge practitioners) and B-school graduates for business analyst roles. Cognizant has close to 90 B-school personnel and practitioners in its healthcare and insurance domains. It plans to recruit practitioners for other verticals based on the success of its plans in healthcare.

With the Big 5 trying to focus on the lower end market and IT enabled services companies trying to move up the chain, Cognizant sees potential competition from both directions in the years to come. It is gearing itself to face the challenge by moving up the value chain through verticalisation and moving down the value chain and taking up total responsibility. The company plans to make this happen through either small acquisitions or partnerships that it is constantly on the look out for.

One good example of ‘moving up the value chain’ is what Cognizant is doing for a customer—Drivelogic, who is setting up the first comprehensive, end-to-end Internet collaborative interchange focused on providing large-scale efficiencies to automotive collision supply chain. The Cognizant solution links key participants in the industry, including insurers, collision repairers, appraisers, salvage yards and parts suppliers in an integrated network. By streamlining collaboration among industry players, and providing ‘just in time’ predictive information at critical points in the accident management supply chain, DriveLogic’s Internet and wireless solutions reduces the amount of time needed to get the driver back in his or her car after an accident. These new efficiencies cut cycle time by half, resulting in significant improvement in DriveLogic’s customers’ satisfaction and retention.

During the last year, the company has been on a rapid expansion and growth phase. It increased its customer base by 50 percent and added several blue chip customers such as Ace Hardware, RadioShack, Hewitt Associates and Blue Cross in the last year. As part of its expansion phase, Cognizant opened sales and marketing offices in Atlanta, Cincinnati, Dallas, Los Angeles and Minneapolis and opened its tenth development centre in Bangalore. It commenced construction of its own Techno-complex in Pune (over 115000 sq ft) and purchased land for construction of Techno-complexes in Chennai (over 400000 sq ft) and Calcutta (over 100000 sq ft). The total investment for construction of these facilities over the next three years would be Rs 150 crore. The company achieved yet another milestone when it became the first e-services integrator to be assessed at SEI-CMM Level 5 across all development centres spanning locations in India last year.

In the long run, Cognizant is positioning itself as a consultant to meet the requirements of all businesses. Deb Mukherjee, the company’s recently inducted CTO, who spearheads this initiative says, “I want Cognizant to be as good as the Big Five in many areas. The attempt is to make it do everything they can do, and some at a lower cost, thereby making Cognizant a company which clients would prefer working with.”