Recently we had a chat with the CEO of Cognizant, Francisco D’Souza, over the changing procedure of hiring in the IT industry. Let us see what he has to say.
It’s fascinating to see Cognizant growing so much faster than most other Indian IT services companies, year after year. What are you doing so differently?
Two things have held us in good stead throughout. We have focused on a small number of clients and serving them deeply. A small number of clients, small number of industries, concentrated in particular regions of the world, and that allows us to be truly intimate with customers. The closer you are to customers, it allows you to sense and respond more quickly as markets change. Second is the opportunity and the room we have created for ourselves to reinvest in the business -and that is not about just the financial structure, about the lower margins compared to competition. Equally, it has created a real discipline in the company around return on investments and making capital allocation in places where we are going to see the bets giving returns.
Do you see diversification as a disadvantage for IT services? It’s sometimes said that diversification helps to manage business cycles of industries…
That’s the trade-off you make. There is a real benefit of your best people focusing on a small number of clients so that you can create client delight. That concentration does have some effects. We have talked about the fact that for the last two years, financial services has been a slower growing part of our business and it is a large chunk of our business. In the net, when I think of the strengths, the trade-off might be worth making. Honestly, there is no right or wrong choice. We made a set of choices and that has worked for us because of our strategy of reinvestment that goes with it.
How would you respond to people who say Indian IT services will die given the changes happening in the technology world?
I would say the reports of the demise of our industry are somewhat exaggerated. You have a world that is becoming more technology intensive, not less technology intensive. I often hear that automation, artificial intelligence and all of these things are going to make it less important to have human talent. That doesn’t mean that there isn’t a role for people in technology. If you look at digital, it is not one thing. Some years ago I would have said digital is SMAC (social, mobile, analytics, cloud). But today, digital is so many other things too – it’s internet of things, it’s additive manufacturing, blockchain, and on and on. In each of these areas, clients have multiple choices of technology, multiple providers of technology, and so putting all of these together for a client have become incredibly difficult. So if you are a client, you need somebody to help you make the right choices across this broad ecosystem, and then integrate it all together to actually make it work.
How is your hiring changing? Jobs have become very important in every country, including in India…
India continues to be an important and the largest scale location that we have in the company, and the largest scale recruiting we do in the company. Having said that, as we shift to digital, we require a broader set of skills. And even if they are available in India, we may need to have those skills closer to the client because of the nature of those skills. But India continues to be by far the largest, and will remain so for the foreseeable future.
It seems that well all agree with the thought of D’Souza over the current condition of hiring.