Cognizant Technology Solutions Corporation is an American multinational information technology, consulting and business process outsourcing company.

It is headquartered in Teaneck, New Jersey, United States, North America. Cognizant is included in the NASDAQ-100 and the S&P 500 indices. Originally founded as an in-house technology unit of Dun & Bradstreet in 1994, with headquarters in Chennai, India,[2] Cognizant started serving external clients in 1996. In 1997, the headquarters were moved from Chennai to Teaneck, New Jersey.[2] Cognizant's IPO was launched in 1998, after a series of corporate splits and restructures of its parent companies, the first Indian software services firm to be listed on the Nasdaq.[2] During the dot com bust, it grew by accepting the application maintenance work that the bigger players were unwilling to perform. Gradually, it ventured into application development, complex systems integration and consulting work. Cognizant saw a period of fast growth during the 2000s, becoming a Fortune 500 company in 2011.[3] In 2011, the Fortune magazine named it as the world's third most admired IT services company after Accenture and IBM.[4]

History[edit source | editbeta]

The company that is now called Cognizant has its roots in The Dun & Bradstreet Corporation, a joint venture between Dun & Bradstreet (76%) and Satyam Computers (24%).[5] Srini Raju was the CEO of this company established in 1994.[6] Kumar Mahadeva played a major role in convincing D&B to invest $2 million in the joint venture. He was born in Sri Lanka, where his father led his nation's civil service. Mahadeva traveled to England for his studies, earning a master's degree in electrical engineering from Cambridge in 1973. Originally called DBSS, the unit was established as an in-house technology unit, and focused on implementing large-scale IT projects for D&B businesses. In 1996, the company started pursuing customers beyond the D&B fold.[7] In 1996, Dun & Bradstreet (D&B) spun off several of its subsidiaries including Erisco, IMS International, Nielsen Media Research, Pilot Software, Strategic Technologies and DBSS, to form a new company called Cognizant Corporation. Three months later, in 1997, DBSS was renamed as Cognizant Technology Solutions. In July 1997, D&B bought Satyam's 24% stake in DBSS for $3.4 million.[5][8] Headquarters were moved to the United States, and in March 1998, Kumar Mahadeva was named CEO.[9] Operating as a division of the Cognizant Corporation, the company mainly focused on Y2K-related projects and web development.[10] In 1998, the parent company Cognizant Corporation was split into two companies: IMS Health and Nielsen Media Research.[11] After this restructuring, Cognizant Technology Solutions became a public subsidiary of IMS Health. In June 1998, IMS Health partially spun off the company, conducting an initial public offering of the Cognizant stock. The company raised $34 million, less than what the IMS Health underwriters had hoped for. The money was earmarked for debt payments and upgrading of the company's offices.[10]

Kumar Mahadeva decided to reduce the company's dependence on Y2K projects: by Q1 1999, 26% of company's revenues came from Y2K projects, compared with 49% in early 1998. Believing that the $16.6 billion ERP software market was saturated, Mahadeva decided to refrain from large-scale ERP implementation projects. Instead, he focused on applications management, which accounted for 37% of Cognizant's revenue in Q1 1999.[7] Cognizant's revenues in 2002 were $229 million, and the company had zero debt with $100 million in the bank.[10] During the dotcom bust, the company grew by taking on the maintenance projects that larger IT services companies did not want.[12] In 2003, IMS Health sold its entire 56% stake in Cognizant, which instituted a poison pill provision to prevent hostile takeover attempts.[10][13] Kumar Mahadeva resigned as the CEO in 2003, and was replaced by Lakshmi Narayanan.[14] Gradually, the company's services portfolio expanded across the IT services landscape and into business process outsourcing (BPO) and business consulting. Lakshmi Narayanan was succeeded by the Kenya-born Francisco D'Souza in 2006. Cognizant experienced a period of fast growth during the 2000s, as reflected by its appearance in Fortune magazine's "100 Fastest-Growing Companies" list for ten consecutive years from 2003 to 2012.[15][16]

Services[edit source | editbeta]

Cognizant provides information technology, consulting and BPO services. These include business & technology consulting, systems integration, application development & maintenance, IT infrastructure services, analytics, business intelligence, data warehousing, CRM, supply chain management, engineering & manufacturing Solutions, ERP, R&D outsourcing, and testing solutions. In 2011, the company's revenue from IT services was split roughly evenly between application development and application maintenance. Its business process outsourcing portfolio leans towards "higher-end" services i.e., work that involves domain knowledge and skills, such as legal services or healthcare claims processing rather than simple voice-based support services. In the 2012 earnings announcements, the CEO Frank D'Souza categorized the company's service offerings in three groups: Horizon 1 (application development and maintenance), Horizon 2 (BPO, IT Infrastructure Services & business consulting) and Horizon 3 ("SMAC" - Social, Mobile, Analytics and Cloud).[33] As of September 2012, the Horizon 1 services accounted for over 75% of the company's revenues, and Horizon 2 services about 20%.

Business model[edit source | editbeta]

Cognizant's original corporate headquarters in Chennai, now an offshore delivery center. Like many other IT services firms, Cognizant follows a global delivery model based on offshore software R&D and offshore outsourcing. The company has a number of offshore development centers outside the United States and near-shore centers in the U.S., Europe and South America. In its early years, Cognizant gained business from a number of American and European companies with the help of the D&B brand. The company's senior executives envisaged the firm as a provider of high-end customer services on-par with the six contemporary major system integrators (Accenture, BearingPoint, Capgemini, E&Y, Deloitte and IBM), but at lower prices.[34
Geographies[edit source | editbeta]

In addition to its global headquarters and delivery center in Teaneck, N.J., as well as the U.S. headquarters in College Station, Texas, Cognizant has nine additional U.S. delivery centers: Bentonville, Arkansas; Bridgewater, New Jersey; Chicago, Illinois; Des Moines, Iowa; Holliston, Massachusetts; Minot, North Dakota; Phoenix, Arizona; Southfield, Michigan; and Tampa, Florida.[39] The company has more than 150,000 employees globally, of which over 100,000 are in India across 10 locations with a plurality in Chennai. The other centers of the company are in Bangalore, Coimbatore, Gurgaon, Hyderabad, Kochi, Kolkata,[40] Mangalore (CoreLogic), Mumbai, and Pune. The company has local, regional, and global delivery centers in the UK, Hungary, China, The Philippines, Canada, Brazil, Argentina, and Mexico.[citation needed]
Business Units[edit source | editbeta]

Cognizant is organized into several verticals and horizontal units. The vertical units focus on specific industries such as Banking & Financial Services, Healthcare, Manufacturing and Retail. The horizontals focus on specific technologies or process areas such as Analytics, mobile computing, BPO and Testing. Both horizontal and vertical units have business consultants, who together form the organization-wide Cognizant Business Consulting (CBC) team. Cognizant is among the largest recruiters of MBAs in the industry; they are involved in business development and business analysis for IT services projects.

According to the 2011 financial statements, the major portion of Cognizant's revenues is derived from clients in the Financial Services (42.3%) and Healthcare (25.9%) industries. Other substantial revenue sources include clients from Manufacturing, Retail & Logistics (18.6%) and Communications, Information, Media & Entertainment and Technology (13.2%) industries. By geography, most of the revenue is derived from North America (77.2%) and Europe (19.2%).[41]