FEATURES/Boardroom | Jan 25, 2010 | 68439 views

Cognizant: Fixing It Before Itís Broke

At first look, there seemed to be no need to change the winning formula perfected by Cognizant Technology Solutions. But Francisco DíSouza decided to take a second look


ne day in January 2009, Francisco D’Souza flew from London to Mumbai for a visit that lasted just eight hours. He was meeting Ulf Henriksson, CEO of Invensys, a leading supplier of automation systems, to strike a research and development partnership with Cognizant Technology Solutions.

Halfway through the presentation, D’Souza felt he would lose the deal. A few yards away, Cognizant’s vice chairman, Lakshmi Narayanan, was keenly watching D’Souza, his boyish successor. “I could see what was going on in Frank’s mind,” he recalls. D’Souza, was looking at everything from Invensys’ point of view. Narayanan was convinced D’Souza would win the deal.

Francisco DíSouza, CEO, Cognizant Technology Solutions
Image: Don Emmert/ AFP for Forbes India
Francisco DíSouza, CEO, Cognizant Technology Solutions

A few months later, Invensys decided to partner with Cognizant.

The partnership was to carry out research and development for its operations management division and Invensys later extended its scope to cover its rail division. Narayanan had no doubt about what clinched the deal for Cognizant — D’Souza’s absolute empathy with the other side. “It’s a unique ability,” he says, “That‘s something I won’t be able to do.”

When a 38-year-old D’Souza took over as CEO from Narayanan in 2007, he knew he had inherited a machine that was designed to grow fast. Under Narayanan, Cognizant had evolved a simple strategy. It did not go after higher and higher operating profit as its rivals did, but capped it at a sustainable level. Any extra dollars were spent on building a strong customer facing team. It also followed a unique delivery system. Every business line was headed by two people, one to serve as the single-point contact for the customer and the other to ensure delivery. This operating model had even become a Harvard case study.

Though Cognizant had been slow to jump into some growth opportunities, this model helped it catch up fast whenever it did. “If you ask me what Cognizant missed, it missed every opportunity,” says Viju George, Vice President, Edelweiss Capital, citing enterprise resource planning, business process outsourcing and infrastructure management as examples. “But the beauty of Cognizant is they play the catch up game very well,” he says.

In sum, Narayanan had put the company on a high growth path. The new CEO had the option of simply carrying on that legacy.

But D’Souza wouldn’t accept the status quo. Before he took over, he had several long chats with Narayanan: He wanted to know how he could take the company to the next level of growth, achieve higher revenues without increasing the staff size in the same proportion.

D’Souza wasn’t satisfied with playing catch-up. He wanted the company to explore new opportunities. “Winning with a new idea is what makes him tick. If somebody says he can’t do it, that is when he gets excited,” says Narayanan.

Son of a career diplomat, D’Souza did his MBA at Carnegie Mellon and landed a job at Dun & Bradstreet, which was then setting up a captive software unit (which would later become Cognizant). He learned his trade from his predecessors, Narayanan and Kumar Mahadeva.

His mentors were quite different from each other. Mahadeva was a McKinsey-trained strategist; numbers-driven and a little aloof with people. Narayanan is a people person; the sort of manager who would throw a highly cited survey into the dust bin and listen to real people.

D’Souza has been imprinting his own stamp on Cognizant in the last three years. He has dragged the company away from its comfort zone. It would no longer be just a faithful stenographer to its customer, listen to their script with all attention, and type it all out for a low price. It would tell the customer how to improve the script and charge for it.

The organisation is changing in some profound ways. In the banking, financial services and insurance (BFSI) business segment, which brings 42 percent of revenues, D’Souza has added one layer of senior management to be able to follow the big shifts in the sector and catch opportunities early. He moved up Debashis Chatterjee, one of the two managers in charge of BFSI in the company’s time-tested two-in-a-box structure, to this new role.

As D’Souza takes Cognizant to new markets, he has also stepped up the focus on building partnerships. Earlier, the company would enter a new business opportunity by hiring people or acquiring a company in that segment. But under D’Souza, it ties up with partners, and sometimes even competitors, to get access to fresh business. This has saved marketing dollars for the company, but more importantly, given it scale in markets like Europe.

Above all, the way D’Souza is building consulting capability at Cognizant marks the biggest change happening within the organisation. His prescription for Cognizant Business Consulting (CBC) has been quite different from the traditional model pursued by Indian software companies.

And he has been doing all this in the midst of the worst economic crisis in living memwory. Think of it like changing the wheels on a car that’s going uphill. If D’Souza’s gamble pays off, then Cognizant could come out of the recession stronger; if not, it could disrupt one of the last decade’s biggest success stories in the offshore industry.

This article appeared in the Forbes India magazine issue of 05 February, 2010
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Comments (6)
Dhanush Aug 24, 2013
Really impressive... Feeling proud, having Frank as our boss.
Rajesh Rao Chillara Mar 5, 2011
I really am baffled at the media's mollycoddling of Cognizant. In fact, I feel some of this relentless praise of Cognizant could be the result of paid journalism. This is just another outsourcing company with high paid managers and poorly paid workers.
Lakshya Jan 25, 2010
Great article. So aptly put: "Cognizant is one of the last decade's biggest success stories in the offshore industry."

A couple of other areas where Francisco and Cognizant have done exceptionally well in the last few years is in aggressively growing Europe and in investing in a highly differentiating platform called Cognizant 2.0 which can change the way outsourcing is done globally. It truly reflects the "future of work" and this platform is a killer differentiator, if you will, for Cognizant.

Makes compelling reading.
Harry Gonsalves Jan 25, 2010
This is a truly ‚ÄúIndianised‚ÄĚ version of Forbes. I just read the article in print and there are several spelling and preposition mistakes. The datelines in the graphic are also incorrect. The magazine could do with better proofing. Unless, this is a way of affirming its Indianness.
Jeannette McDermott Jan 25, 2010
The article says some nice things about Cognizant and then someone from Gartner says that the leadership of the company is not comparable with another company. Can this analyst even name the top 100 in both the companies? Why would a publication carry such a sweeping, unsubstantiated statement?

It is public knowledge that Cognizant is the fastest growing company in the industry. Their numbers are for all to see. Last heard, the company had guided for revenue well upwards of 3 billion dollars and would be adding more revenue this year than TCS, Infosys and Wipro. What else does it take for a company to be in the big league? And if the magazine is not sure yet if Cognizant is indeed in the big league, as its choice of the Gartner quote implies, why has it devoted so many pages to an article about the company? It is ridiculous to see the magazine contradict itself so dimwittedly in order to appear balanced.
Deepak Jan 25, 2010
Great article.

The graph image depicting Cognizant absolute revenues in each quarter in 2008-09 seems to have an error. The last 3 sets of bar should be shown for 09 and not 08 as is shown currently.
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