Dataquest: Executive Vice Chairman of Cognizant India Discusses the State of Outsourcing

“With secular shifts in the economy, business and technology enterprises are re-examining how they operate, moving from merely incremental levels of performance efficiency to building new digital business capabilities,” says R. Chandrasekaran. “The only way for businesses to adapt in this new era is to simultaneously improve efficiency and scale with existing systems, while driving business innovation through newer SMAC (social, mobile, analytics, cloud) and sensor technologies.” Excerpts:

“Well beyond cost-containment and efficiency, the C-Suite agenda today involves addressing the dual mandate of driving efficiency while focusing on innovation from one global platform.

While non-linearity is important, it will not happen overnight. The trend is growing. Clients are increasingly looking to engage with a service provider who can demonstrate value. Many are evincing growing interest in pricing models that go beyond input-based pricing so as to align price with what is really important to the core business. Client interest in outcome-based sourcing models is based on having real evidence that the service provider can deliver the services and value…Newer delivery models like platform-based, business outcome-driven, and IP-leveraged solutions are also driving this trend.

We introduced the three horizon model a few years ago to manage reinvestment in our services portfolio. Horizon 3 is a class of emerging offerings in three areas—new markets, new delivery models, and new technologies—what we call the Emerging Business Accelerators (EBA). A critical goal of new delivery models, which form a key focus area of EBA, is to break the linearity between revenue growth and headcount growth, or, in other words, to drive non-linear revenues. We are doing this with solutions that address the changing dynamics in our clients’ industries.

To that end, our portfolio of Cognizant BusinessCloud Solutions enables clients to quickly deploy a range of on-demand business and IT solutions without the larger capital outlays and longer implementation timelines that are sometimes associated with traditional on-premise solutions. The portfolio includes offerings that leverage two models: Software-as-a-Service delivery model (SaaS) and Business Process-as-a-Service (BPaaS). We continue to invest aggressively to strengthen our capabilities in this area, as underscored by some of our recent acquisitions.”

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