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Focus shifts to business solutions using technology

Cognizant chief sees IT companies go in for more inclusive relationship with clients

Lakshmi Narayanan

THE CUSTOMER is king, says an old adage. Ask Lakshmi Narayanan, President and Chief Executive Officer (CEO) of Cognizant Technology Solutions (CTS), he will vouch for it. The customer has become more demanding. Not just better price, he also wants a tailor-made solution for his business problems. Well, for an IT (information technology) company, this is a challenge as well as an opportunity.

And, this may see IT firms go in for a more inclusive relationship with clients. This is evident from the way they are shifting their focus in the fast evolving environment.

In a candid discussion on a range of issues with The Hindu at his Chennai office recently, Mr. Lakshmi Narayanan said the technology was slowly getting `commoditised'. "Technology is taking a back seat and business is taking the front one," he pointed out.

Demanding customers

In this evolving scene, the CEO saw growth opportunities for anyone who aligned technology with business. "Clients want solutions to business problems using technology and not just technology solutions," he said. Cognizant had been increasing the proportion of business analysts relative to technologists in its teams and approached the customer with what needed to be done.

He said the customer had come a long way. Time was when he would ask an IT company to start with a pilot. That was no longer the case. "The customer is in a hurry. No longer he tells us what to do, but expects us to tell him what is good for his business," he said.

Mr. Lakshmi Narayanan felt that one could create a customer every day. It all depended on raw supply and management expertise, he pointed out.

The CEO was clear that Cognizant would not be present in any technology area that had been commoditised. In the remote infrastructure management field, it was conspicuous by its absence in desktop services since they had been commoditised already, he pointed out.

The company was present only in the high-end spectrum of servers, applications and the like, he added. He was convinced that the testing service — where there were some specialists — had not yet been commoditised. "Once it gets commoditised, we will look at engaging them (such testers) and focus on our core competence, namely, application services. At the moment, however, the value we deliver to our customers with such services is enormous," he added. Be it new verticals like retail and manufacturing or new services, Cognizant, he said, kept its focus on application services and maintained the discipline of conducting the business to remain topmost in the minds of customers.

Domain knowledge

Mr. Lakshmi Narayanan indicated that Cognizant was keen on getting a mind share of the customer. "So our focus is on being seen as the Number 1 in the minds of our customers. This is not, however, a factor of size," he said. All its methods, practices, solutions and people would hence be focussed "on winning the respect of our customers," he added. While it had technology-intensive capabilities to do this, it had chosen to invest significantly in business. The share of sales and general administrative expenses of the company was around 22-23 per cent, he said.

PHOTO: SHAJU JOHN

CUSTOMISING SOLUTIONS: Cognizant Technology Solutions' office building at Navalur near Chennai.

Answering a question, he said Cognizant would continue to grow above the industry average of 30-35 per cent.

For one, the number of engineers joining the IT industry was low in the U.S. and Europe in the wake of fears over getting `Bangalored.'

As a consequence, he felt that the demand for qualified engineers offshore would drive the growth. Given this, the sustainability of the growth depended on how well one performed and how quickly any new disruption emerged (like when travel agent business had gone online or when companies like e-Bay did huge volumes of business on the Net).

"We have seen the transition from mainframe to client server to web. We have handled them well. While banking and financial services have traditionally been using offshore, we are seeing growth in the pharmaceutical sector, which we picked up and are now gaining traction," he said.

To another question, he said Cognizant would look at acquisitions not from the growth angle but from the perspective of building capability.

Mr. Lakshmi Narayanan saw no consolidation in the real sense happening at the moment. The trigger for consolidation would be one major acquisition. "I don't foresee this happening in the next two-three years," he said. Should that happen, Cognizant would have to reposition itself accordingly, he added.

K. T. JAGANNATHAN

in Chennai

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