Digital business, which is multiple billions, continues to grow in double digits: Cognizant CEO
Cognizant has witnessed a slew of changes in terms of its strategy, spearheaded by Brian Humphries who took charge as CEO on 1 April, 2019. Mr. Humphries talks about the company’s strategy and hiring plans. Edited excerpts:
2019 was a mixed bag for Cognizant with a lot of changes in terms of strategy. How do you see 2020 shaping up?
[The year] 2019 was the year of change for Cognizant, with a new CEO coming in. The new CEO who had inherited the company which might have been little distracted in the last few years. So, it was an important year of analysis and I tried to rally the organisation together behind the promise of returning to growth, a promise of once again being a bellwether in the IT services industry.
Through a transformation office, we have assessed where we stood at various levels in terms of our culture, our delivery organisation, commercial teams etc. We now have our so-called fit-for-growth strategy in order to scale Cognizant from $17 billion to $30 billion in the coming years. For three quarters in a row, we beat Wall Street’s expectations. [The] other good news is that there is a growing level of employee confidence, as evidenced by the fact in Q4, voluntary attrition was at its lowest level in two years. I am very optimistic that all the hard work from last year will serve us well in 2020.
What has been your major strategy shift?
We have refined our previous strategy, which allows us to expose ourselves to faster growth categories. Categories include international markets. By international markets I mean everything other than North America. Today, they represent just 24% of our business and we have a huge opportunity given that we are under penetrated in those countries.
The second part of the strategy is focusing on digital, in which we have selected four key battle grounds — data and analytics, cloud, digital engineering and Internet of Things (IoT). This business, for us today, is already multiple billions in size and larger in operations already. It continues to grow in double digits. We are also leveraging our strong balance sheet to strengthen our strategic execution.
For instance, in the last month, we have acquired two sales force platinum partners with a view to facilitating the execution of our planned strategy.
Do you think the double digit revenue growth rate is a thing of the past?
I hope not. We have a big ambition to return Cognizant to being great again. I think the momentum has been building. And there is a feeling inside of Cognizant, it is coming back and we are on the way once again here to beat and scare the competition. All this starts with client-centricity.
That has been one of the many things I have been preaching and practising ever since I joined Cognizant. As a new CEO, you want to set values and behaviours. One of things I wanted to re-integrate at the executive level is client centricity. It is going all around the world, seeing clients every day, every week and making sure we talk about new face of Cognizant and its new and refined strategy. We are planning to reinvest about $300 million back into revenue growth. One of the great things about our industry is it is huge and market is about $1.3 trillion, growing at about 5%. So, it is a huge growth market. And, there are pockets like digital where the growth is above 10%, which keeps us going.
Your lay-off announcement last year had created a lot of panic. What will be your hiring strategy?
There have not been [any] mass lay-offs and they were just rumours. We are planning to increase our headcount in India. We are adding 23,000 freshers this year starting June, when compared to the 17,000 we added last year. So, you are seeing our commitment to India on an the ongoing basis.
Once in a while, you have to reshape your pyramid because you became little bit heavy in the middle or the top. We will always do that. I don’t wake up and think about headcount reduction, I wake up to think about growth. Currently we are here to make sure that our employees are working for a winning company and drive higher growth rate. Given our focus on digital business, we have gone on record to say we need 25000 skilled people to meet the growth we anticipate in the business. Me and our Indian Head Ramkumar Ramamoorthy have spent a great deal of time working with Universities in India on the required skill sets. The 25000 requirement would be met through combination of freshers hiring and training them, reskilling of existing employees and also through laterals.
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