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| President & CEO Narayanan: Leveraging
the India advantage |
At one level
of the whole it outsourcing and offshoring thing are the multinational
biggies, IBM, EDs, Accenture, and the like that have had to turn
part or the whole of their staffing model on its head to factor
in the India thing. At another are large Indian firms such as
Infosys, TCS and Wipro that have had to complement their significant
back-end skills with commensurate front-end ones. Both involve
transformation, not the easiest thing to achieve for organisations
as large as these.
Cognizant Technology Solutions is a unique
company: it is an American company that was founded to leverage
the India advantage. And while analysts may present several other
things that account for the company's success as well as its pace
of growth (its revenues have grown at a CAGR or compounded annual
growth rate of 45.25 per cent over the past five years; its net
profit, at 56.55 per cent), it is this, its provenance, that counts
the most.
| COGNIZANT IN SHORT |
»
Revenues (calendar 2005): $885.8 million or Rs
3,986.1 crore
» Net
Profit (calendar 2005): $153.9 million or Rs 692.55 crore
» Employees
on March 31, 2006: Over 26,000
» Contribution
of top 5 customers to revenues in calendar 2005: 34 per cent
» Revenue
split (Onsite: offshore): 25:75 (The company terms it as effort
split)
» Revenue
split (US:Europe:India:Rest of the World): 86:13:0:1 |
The uniqueness has some very real benefits:
"On new accounts, Cognizant is ramping up at a pace in excess
of 60 per cent as compared to its industry peers (40 per cent),"
says Julio Quinteros, an analyst at Goldman Sachs, in a research
report he put out, upgrading Cognizant's stock. "Cognizant
is already generating revenues of $4 million (Rs 18 crore) per
client, which is about the same as its larger peers Wipro and
Infosys, and twice the annual revenue per client of Satyam,"
he adds. Not surprisingly, Cognizant has issued a guidance of
42 per cent (revenues) for 2006, "among the most aggressive
for a Top 5 it company", according to the company's President
and CEO Lakshmi Narayanan.
With small acquisitions (like the six small
ones it has done over the past five years), and by entering new
areas such as technology consulting, high-end BPO (business process
outsourcing), infrastructure management, testing, and other such
high-value service offerings, Cognizant hopes to become one of
the 10 largest it services firms in the world. When that happens,
though, it will have its provenance to thank more than anything
else.
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