The Times of India: Cognizant’s CEO Says the Company is Diversifying as it Gets Bigger

“Two things have held us in good stead throughout,” says Francisco D’Souza. “We have focused on a small number of clients and serving them deeply — a small number of clients, small number of industries, concentrated in particular regions of the world — and that allows us to be truly intimate with customers.” Excerpts:

“The closer you are to customers, it allows you to sense and respond more quickly as markets change. Second is the opportunity and the room we have created for ourselves to reinvest in the business. And that is not about just the financial structure, about the lower margins compared to competition. Equally, it has created a real discipline in the company around return on investments and making capital allocation in places where we are going to see the bets giving returns.

There is a real benefit of your best people focusing on a small number of clients so that you can create client delight. We made a set of choices and that has worked for us because of our strategy of reinvestment that goes with it.

As we get bigger, we are beginning to diversify. Financial services and healthcare were our top two industries and continue to be so. But increasingly, we are focusing on products and resources, and communications, media and tech. Those are the next areas of growth for us.

The reports of the demise of our industry are somewhat exaggerated. You have a world that is becoming more technology intensive, not less technology intensive. I often hear that automation, artificial intelligence and all of these things are going to make it less important to have human talent. That doesn’t mean that there isn’t a role for people in technology. If you look at digital, it is not one thing. Some years ago I would have said digital is SMAC (social, mobile, analytics, cloud). But today, digital is so many other things too, it’s internet of things, additive manufacturing, blockchain, and so on. In each of these areas, clients have multiple choices of technology, multiple providers of technology, and so, putting all of these together for a client has become incredibly difficult. So if you are a client, you need somebody to help you make the right choices across this broad ecosystem, and then integrate it all to actually make it work.

As we shift to digital, we require a broader set of skills. In digital we are increasingly hiring data scientists, designers, those kinds of skills. Technology is changing fast and traditional models of training have to evolve. In many fields, statistics show that what you learn in the university years becomes obsolete within the first five years of your working life, and that is most acute in the STEM (science, technology, engineering, math) field. Whether it is the U.S. or India, I think the core is how we move to becoming lifelong learners.

In the Web days, a few digital natives first emerged from that and disrupted the industry. As these technologies became more mainstream, you saw convergence of digital and physical. And that’s where large amount of the value gets created. If you look at it today, we will start to see the same thing. Our digital natives are strong. Now, digital immigrants, if you will, are leveraging their physical assets and bringing that together with digital capabilities to create differentiated experiences. I think there will be a lot of winners among the digital immigrants who converge physical and digital.”

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