Recently there are reports that Cognizant Technology Solutions Corp. (CTSH) is spending big time in US and Europe to grab the market share from its immediate rival Infosys in the global BPM industry. The annual financial report of the company shows that the company is spending 22% of its revenue to deploy more people in their client sites in US and Europe as a measure to win more business.
While the leading IT service providers including Cognizant and Tata Consultancy Services are looking at all the possible ways to increase their revenues, Infosys is trying to maintain its position as industry bearer. For the first time in its history, Infosys’ revenue fell down than their US rival, Cognizant.
Cognizant is a leading service provider of IT, consulting and business process management services headquartered in New Jersey. There are considered to be the leaders in providing IT infrastructure services, BPM services and cloud services that suits the customer requirements. They offer their service across varied industry verticals including BFSI, communication, consumer goods, healthcare, media and entertainment, manufacturing, retail and technology.
The Cognizant operating model
According to the quarterly financial reports of the company, its US share has jumped to 18% while the share of Infosys share was limited to 6.9%. This is a clear indication that the market is responding positively to Cognizant’s new strategy of investing aggressively in sales force to close more deals.
As per the opinions of analysts, now companies that hire the service providers to manage their highly sophisticated business process expect their providers to act as consultants rather than just service provider. They want their consultants to advise them on how to best utilize their budget and offer customized services to them. Cognizant was smart enough to realize the need of the customers before the major players in the field did.
As a result Cognizant started hiring what is known as high-end labor force having experience in relationship management, consulting and industry and deployed them on the customer site to address their concerns. The end result was reflected in their quarterly financial reports. The tested and proven model fetched them 21% more revenue when compared to the revenue of $1.8 billion a year earlier and for the first time they surpassed the sales revenue of Infosys.
According to Forrester r Research, Inc, the new model of spending by Cognizant gave that extra competitive advantage for them to mine new BPM deals. Cognizant on an average allocate 30 % more workers to the client site than their immediate rival which gave them an edge over the competitors. The inside news is that Cognizant with their new strategy won more business from clients such as Philips Electronics and is aggressively hunting for new deals.