Forbes India: Principal Correspondent Blogs About Cognizant’s Rapid Growth

According to NS Ramnath, reinvestment alone doesn’t explain Cognizant’s headway. “For that, we have to look at the engines of growth. Cognizant has three of them running. One, getting into new areas, and putting the full force of organization behind it. Two, using acquisitions in key spaces to achieve scale or to access customers faster. And three, being clear in the fact that it’s a market-share game.”

“Cognizant has been constantly adding more businesses to its portfolio – in terms of new industry verticals, in terms of new solutions and new markets, and has been pulling all punches to scale them up fast,” adds Ramnath. “When Cognizant decides to scale up a new segment, it puts the entire force of the organization behind it. It recruits the best talent from outside – offering more money, and more than money, an opportunity build a business and a lot of freedom to do that.”

He adds, “Often, when a new market opportunity came up, Cognizant did not spend too much time thinking about whether it’s adjacent to an area it was already strong in. Areas like consulting or remote infrastructure management were several boxes away from the core areas of Cognizant. It simply asked: Will it give us the growth?” He highlights that the company CEO, Francisco D’Souza’s “focus is on growth and returns, and not so much on whether one has the talent to build it. That can always be hired.”

Ramnath writes, “Cognizant came late to the party, and so, it had to tell a more compelling story to the investors to get their attention. The story it told was: “We will have lower, but stable, margins but we will grow faster than the industry”. In other words, we will keep increasing our market share, come what may. We will eat into others’ pie. Cognizant more or less stuck to that line.”

“Cognizant had more elbow room to get the market share, and it used it well,” Ramnath notes. “In short, Cognizant was firing on all cylinders – on the basic robustness of the market, increasingly bold acquisitions, and ability to grab market share.”

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