What makes Cognizant a leader?

By N. N. Sachitanand

BANGALORE, MAY 12. At first glance, Cognizant Technology Solutions Corporation seems no different from the scores of other software houses providing e-business solutions and application management services. But it has been garnering encomiums ever since it went public in June 1998 with a Nasdaq listing. It was listed in the top 25 initial public offerings of 1998 by Red Herring magazine; named `Public company of the year' by the New Jersey Technology Council; appeared at No. 25 in Individual Investor magazine's list of 100 America's fastest growing companies and has been named the best small company in America in 1999 by Forbes magazine. The company has maintained a scorching revenue growth of over 100 per cent in the past two years and in 1999 clocked revenues of $90 million. Early this year, it announced a 1:1 stock split.

So, what is it that keeps Cognizant ahead of the pack? According to Mr. Lakshmi Narayan, President and COO, it is a combination of customer satisfaction, employee competence and a climb up the value chain. ``We have retained almost all our customers for the past six years,'' he said, ``and our earnings per employee have climbed during the same period from $28,000 a year to currently $65,000 a year. Initially we were doing low-end work such as programming changes. Today, we are developing new products for the Net and consulting in e-business strategies.'' Timely delivery and high quality of work (Cognizant has achieved SEI CMM Quality Level 4 and is now working towards Level 5) are, of course, fundamental to ensuring customer satisfaction and loyalty. But Cognizant has another characteristic that has won the hearts of its customers - transparency. To enable this openness, the company has also developed a unique tool - the Metrics Cockpit - to keep the customer constantly and openly abreast of the status of his project and thereby enhance the level of his confidence in the company.

Metrics Cockpit has gauges, similar to those in an aircraft cockpit, which can be set to indicate project-related status such as productivity, effort, defects density, targets, progress and cash flow. Data are fed in real time to these gauges. Besides presenting current status in a snapshot, Metrics Cockpit enables the viewer to drill down from a particular gauge to get the micro details. This tool can be used for analysis, early warning, indication of deviation from project parameters, project management and decision support. The tool has recently been web- enabled, so that the customer can log in and view the project status at his site. Cognizant has, incidentally, patented the Metric Cockpit and will soon be offering versions for other industries such as construction and equipment manufacture.

Not satisfied with believing that it is doing its best for the customers, Cognizant also conducts an annual customer satisfaction survey, polling 80 senior managers among its customers. Originally designed by the well known rating company A. C. Nielsen with some additional features added by Cognizant itself, the survey is in different areas such as quality, support provided, budgeting, people, customer relationship management and project management. This year the survey questionnaire will be put on the Net. Mr. Lakshmi Narayan said, ``Four years ago our overall rating from this survey was only 3.0, but we have improved to 4.0 in 1998 and 4.06 in 1999. The survey yields important clues as to where we have to beef up our customer service.''

Another area where Cognizant is outstanding is the importance given to the competence development of its employees. There is a Cognizant Academy for career development and training. The web- based Intranet is used for offering career improvement and education opportunities. A link has been established with Birla Institute of Technology and Science (BITS), Pilani, as well as some Tamil Nadu engineering colleges for permitting qualified employees to do the MS programme. A Project Management Institute provides training material and content for the company's project managers who are encouraged to get themselves certified by the institute. A Personal Development Academy has been set up to provide behavioural training. While the Hays Management Group, a leader in human relations consultancy, conducts regular surveys of the bulk of the employees, another eminent HR consultant firm, Saville and Holsworth of the U.K., conducts a five-day assessment once a year of the top 100 employees in Cognizant. They benchmark the capabilities of these seniors against global performance standards. Thanks to such excellent competence development opportunities, Cognizant has a mere 11 per cent employee turnover rate against an industry level of over 20 per cent in India.

Originally formed in 1994 as the in-house technology development centre for the Dun and Bradstreet Corporation, the New Jersey headquartered Cognizant is now a subsidiary of IMS Health, the leading provider of information solutions to the pharmaceutical and healthcare industries worldwide.

It now employs around 2,500 IT professionals, the bulk of whom are concentrated in their offshore software development centres in India - four in Chennai, three in Calcutta, and one in Pune. Cognizant also has sales and business development officers located in Chicago, San Francisco, Toronto, London and Frankfurt.

The core competencies of Cognizant include legacy and clients/server systems, web-centric applications, data warehousing and component based development. According to Mr. S. Kamalakannan, Executive, Business Development Support, Y2K related business accounted for 45 per cent of the revenues in 1998 but has now been totally replaced by e-business projects. Domainwise the break-up of the revenues now is financial services 30 per cent, information defined services 20 per cent, healthcare 15 per cent, media 15 per cent, insurance 10 per cent and the balance from software productivity tools.

``Of our 60 odd global customers,'' said Mr. Kamalakannan, ``48 are in the U.S. and 11 in Europe. There is scope for expanding into Germany but, despite what the German Government says, there are still a lot of bureaucratic hassles and delays involved, especially at the county level, in getting work permits for our employees.''

Telecom is a new area which Cognizant is planning to enter in a big way, says Mr. Naresh Nagarajan, Director of New Technologies. The company is already a member of the European Telecom Standards Institute and, within the next three months, will be setting up a Telecom Competency Centre in Bangalore staffed by around 200 persons. By the end of this year, the staff strength may touch 3,000. An Indian IPO towards the end of this year is likely.

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