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Cognizant Technology Solutions on Monday entered into a five-year, multimillion dollar engagement with the Future Group, India's largest multi-format retail group. While the $6-billion US-headquartered company has a presence in India for many years with large offshore development centres, it has been providing IT services to clients only in the last two years.
The Future Group deal for Cognizant thus marked a major breakthrough in India, which according to Mr R. Chandrasekaran, Group Chief Executive for Technology and Operations at Cognizant, is an “exciting and challenging market” to do business.
Isn't the Future Group a major breakthrough?
Yes, it was a great start. India is a large market. We have to stay invested and stay in the market for a long time to get the rewards. We are committed to India in the long run. It is very difficult to put a number in terms of investment and the returns.
How big is India as a market for IT services?
Nasscom has projected the market to be around $50 billion by 2020 [from the present $2 billion]. We need to make some serious investments if we want to be a recognised player. We are putting a strong management team and setting up goals at the business unit level to bring business from newer markets such as India. It is not just at a high level we are saying, but at an operational level too there is some traction going.
Who are your target clients?
The targets are large Indian companies and multinational corporations. We currently service several customers in India – about half of them are large Indian companies with global aspirations and the remaining are global multinational companies having operations in India.
Existing clients
A few examples are SAP Labs (set up the SAP NetWeaver Test Centre in Bangalore), mJunction services, which a joint venture between Tata Steel and SAIL (developing a scalable e-Commerce infrastructure), and Future Group (end-to-end IT Infrastructure services support for more than 1,000 Future Group stores including marquee names such as Pantaloons, Big Bazaar, Food Bazaar, Central, Home Town, and eZone across 85 towns and cities in India.
What's your strategy?
While we have invested in a dedicated leadership and sales team, our approach is a lot more consulting and domain led. Cognizant brings to India the experience of providing solutions to Global 1000 companies and thought leadership such as domain-intensive consulting skills, global best practices, large-scale program management and architecture skills, and behavioural and change management interventions with suitable adaptation to meet local needs. We will have Mumbai as the anchor centre to deliver solutions for customers in India. We will have specialised local delivery teams also located closer to customers so that there is a specific focus on delivery too. We are asking each and every vertical team to bring in domain expertise and capabilities.
Companies here are lot more forward looking today than a few years ago. There is today an urge among he companies to leverage technology to transform business. There is a sense of purpose and there is a sense of urgency. This is quite amazing.
How different is the Indian market?
The pressure the companies face here is lot more different from what we see with overseas corporations. The complexity of businesses in India provide tremendous opportunities and the new benchmarks defined here can be leveraged to make an even more profound impact in the businesses of our global customers. For example, insurance clients transact much higher volumes of claims in India at a unit cost that's perhaps the lowest globally. Once anyone cracks the code here, it could be of immense value to global customers too.
What about the type of deals?
Clients do not want us to provide just services as there is no labour arbitrage for customers in India. They want to come and take complete ownership. They do not want to come and do just one or two projects and walk out implementing the projects but they want us to own the problem, want to be accountable for the solutions we deliver and do it all in faster, better and cheaper model.
The level of engagement they expect from us is of different order. They want us commitment right from top to the bottom.
They want continuity of people who are going to be engaged. They do not want to look at a project, engaging us and move on at the end of the project. They really want you to be passionate about what you are doing and make a difference.
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