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Cognizant Technology Solutions Corporation History
Cognizant Technology Solutions Corporation is a Teaneck, New Jersey-based company that employs an onsite/offshore development model to provide application maintenance services and enterprise consulting solutions to major corporations, primarily in the United States. Cognizant is one of the few companies that has found a way to take advantage of the large pool of English-speaking IT professionals produced in India, where approximately 80,000 programmers graduate each year from universities. Because these software professionals typically make around $15,000 a year, compared with $75,000 in the United States, Cognizant is able to offer considerable savings to its customers. The onsite/offshore model also allows the company to work 24 hours a day on a project. During the U.S. work day, Cognizant's onsite team meets with the customer to review the work their Indian colleagues completed the night before. Feedback is then available for the Indian programmers when they begin their day. A further advantage is that system work is done at a time when there is little network congestion. Moreover, cultural differences between the United States and India work in Cognizant's favor. In India, the position of software engineer is more prestigious, meaning that scores of talented people enter the field. Indians are also less individualistic than their American counterparts and more willing to adhere to a process, which is an important factor in making the onsite/offshore approach run smoothly. To provide security, the company runs background checks on overseas employees; to prevent theft of data, it provides only diskless personal computers. Cognizant operates 11 software development centers in India, as well as centers in Limerick, Ireland, and in Phoenix, Arizona. Sales offices are located in Atlanta, Chicago, Dallas, Minneapolis, Los Angeles, San Francisco, Toronto, London, and Frankfurt. With a focus on North American and European Fortune 1000 companies in the healthcare, financial services, and information fields, Cognizant boasts such major customers as AC Nielsen Corporation, The Dun & Bradstreet Corporation, First Data Corporation, and Metropolitan Life Insurance Company.
In 2000 Cognizant looked to become involved in e-business, introducing a suite of services and offering to help customers build IT systems that it could then maintain on an outsourcing basis. The company also expressed interest in funding Internet start-ups in both the United States and India. When the Internet bubble burst and the tech sector in general suffered from the effects of a recession, Cognizant was nimble enough to stay afloat and actually maintain its growth.
eRising Stock Prices in 2002
Because of its onsite/offshore arrangement, Cognizant was able to realize significant tax savings that also helped to improve profits during lean times. In 2002, with the Y2K consulting business behind it, Cognizant realized revenues of $229 million, with no balance sheet debt, and over $100 million in cash on hand.
Leadership Changes and Growth 2003-2010
In 2003, Kumar Mahadeva resigned as CEO, and was replaced by Lakshmi Narayanan. Under his leadership, the company expanded its offerings in the IT arena to become a premier leader in business process outsourcing (BPO). Francisco D'Souza succeeded Narayanan as CEO in 2006, and remains the CEO today. During this decade, Cognizant enjoyed rapid growth, and for 9 years straight made the Fortune magazines "100 Fastest-Growing Companies", from 2003-2011.