Nasdaq-listed Cognizant’s better-than-expected June quarter results saw it raising its full-year expectation for turnover by 32 per cent, from the earlier 29 per cent. R Chandrasekaran, president and managing director, Global Delivery, sounds upbeat despite an uncertain macro environment and says the deal pipeline is very strong. In a telephone chat with Shivani Shinde, he talks about the business momentum in an uncertain macro environment and challenges. Edited excerpts:
Cognizant has gone ahead of Wipro and is close to overtaking Infosys. How does it feel?
The results were good and it makes us feel proud that we are being recognised by the industry as well. It is a clear testament to our policy. Whether it is to reinvest into the business or invest ahead of time even when the chips were down. It was also evident when things started coming back. Over the past six quarters, we have seen discretionary spending return. This validates customer confidence in our strategy. We did come into the industry pretty late and we have, from time to time, taken over some company. But our focus has been to grow more than peers and get better market share.
Despite an uncertain macro environment, the company has increased its guidance (full-year outlook).
We enjoy customer loyalty and some of our offerings like BPO IMS, and consulting-led services are gaining traction. We have grown eight per cent sequentially in Europe. The 32 per cent is still conservative, as we have factored in the uncertain global environment.
It’s been three years since the information technology industry and the US has been impacted by volatility. From a services delivery perspective, how have things changed?
From a client perspective, a lot has changed, which is also making us forcefully change. Customers are asking for more than just labour arbitrage. It is now about business benefits. From a delivery point, we are looking at our own skill sets and how we can leverage these across business lines and how to get synergy across service lines. Customers are asking for business benefits and they have started to measure you on the basis of these parameters. This has been the focus over six to eight months. That calls for building integrated teams. In some cases, it means we run a business for a customer.
Has this meant a rise in pricing?
The pricing is stable. On a sequential basis, we have seen a small pricing uptick of 0.5 per cent. This uptick was based on our discussions with clients last year. We will start discussing pricing with clients for 2012 towards the end of the year. We have seen pricing improve but that depends on the application and services line.
The US is seeing a lot of activisim on visas. Would such incidents increase with unemployment?
The case you are referring to is without merit. We will fight the case rigorously. But our onsite hiring has nothing to do with the visa regulations. We have always preferred to hire locals in our business markets. In Europe, we have hired local heads; in France, we have a testing unit. More, of late, given the specialisation in service lines, we have hired product and technical experts in each region. In the US alone, we have 100 fulltime recruiters who look at hiring in the US. So far, we have visited 14 undergraduate campuses and four B-schools in the US.
What are the key concerns or challenges?
Our own success puts a lot of pressure on us, because we have been able to define our own growth pattern and our own benchmark and goals. We are growing at over 30 per cent. At this size, to maintain customer loyalty is a pressure in itself. We think we have a unique work culture, entrepreneurial in nature. The challenge is, how do we bring synergies in different service lines and how do we bring a unique value proposition.
