The consultative approach of Cognizant is tailored to specific but major industries
Cognizant vision alignment
It’s very important to have a clear strategic distinctive and specific vision of where the company needs to head and charts its long-term direction in terms of defining the road ahead and the optimal business mix of product-market-customer. But equally important is to align the company’s objectives and actions to achieve that vision and to communicate it clearly with the stakeholders including customers, employees, stockholders, suppliers, etc. (see A. Thompson, A. Peteraf, E. Gamble, J. Strickland, 2016, p. 20-22).
Cognizant defines its vision as “one of the world’s leading professional services companies, transforming clients’ business, operating and technology models for the digital era. Our unique industry-based, the consultative approach helps clients envision, build and run more innovative and efficient businesses.” (see Cognizant, n.d., n.p.). Based on the preceding statement, below is a table showing to what extent Cognizant’s vision is strategic.
Cognizant mission statement
In Contrast to the vision, a mission statement describes the enterprise’s present business and purpose “who we are, what we do and why we are here” (see A. Thompson, A. Peteraf, E. Gamble, J. Strickland, 2016, p. 20-22). In the same way, Cognizant vice president David Nelson stated: “Cognizant’s mission is to help clients transform their business models, their operating models, and their technology models in tandem to deliver the promise of digital at scale” (Seeking Alpha, 2017, n.p.).
Although Cognizant’s mission statement seems to be clear, and despite the fact of that digital transformation industry has a very wide range of prospects, still the described mission statement looks very generic and it provides no sense of “where we are headed”. On the other hand, the statement conveys the essence of the Cognizant’s activities and purpose, as well as the buyer, needs that the company seeks to satisfy (see A. Thompson, A. Peteraf, E. Gamble, J. Strickland, 2016, p. 24).
Furthermore, the company’s values are the beliefs, traits and behavioural norms that company personnel are expected to display in conducting the company’s business and pursuing its strategic vision and mission (see A. Thompson, A. Peteraf, E. Gamble, J. Strickland, 2016, p. 24-25).
Cognizant strategy analysis
Strategy means competing differently, and according to M. Porter, “strategy is about making choices, trade-offs; it’s about deliberately choosing to be different (cited in A. Thompson, A. Peteraf, E. Gamble, J.Strickland, 2016, p. 2). One of the main strategic actions of Cognizant is centred in maintaining favourable pricing for the services which is offering in order to increase the rates of operating margin and profitability, which in its turn will increase the company’s ability to add value through its services. That’s and according to Cognizant’s report, is being implemented through different set of actions including adopting the perceptions of the clients, introducing new services and products, implementing a competitive pricing model, optimizing its ability to accurately estimating, attaining and sustaining contract revenues, margins and cash flows over increasing negotiation for longer contract periods with the clients, lower-cost service delivery capabilities and last but not least the ability to charge premium prices when applicable (see Cognizant, 2016, p. 1-16).
Furthermore, Cognizant is trying to achieve its competitive pricing model using different policies including firstly, offshoring where 188000 employees are based in India (see Cognizant, 2016, p. 9) while the majority of Cognizant’s revenue is coming from North America.
Secondly, hiring professionals and maintaining an appropriate utilization rate of the manpower by efficiently transitioning employees from completed projects to new assignments, maintaining an appropriate headcount in each of the geographies and workforces, managing attrition and devoting time and resources for training, re-skilling and professional development. The main objective behind those actions is to control the costs and reach the optimal efficiency manner in the business operation and thus achieve the highest possible operating margin and profitability in order to stay ahead on the competition (see Cognizant, 2016, p. 14).
Another important aspect to notice in Cognizant’s strategy is its approach in gaining sales and market share via a unique industry-based consultative approach which helps the customers envision build and run more innovative and efficient businesses.
The consultative approach is tailored to specific industries and it’s implemented via customer service teams typically based at the customer locations and delivery teams located at dedicated global delivery centres. The consultancy covers core services including business process services, process operations and technology, application development and systems integration, enterprise information management and infrastructure services (see Cognizant, 2016, p. 35).
Cognizant acquisitions strategy
Cognizant is strengthening its market standing and competitiveness by acquiring and combining new businesses. In 2016, the company completed eight business combinations for approximately $270M. The transactions included three acquisitions meant to enhance the company’s capabilities in the European and Australian markets, and they covered different industries including technology, delivery centres in oil and gas services, steel and metal products, banking and insurance (see Cognizant Annual report, 2016, F- 15). Moreover, and in addition to Cognizant strategic acquisitions, joint ventures, investments, the company established strong partnerships and strategic alliances with more than 120 world-class organizations.
Without a doubt, that allows Cognizant to expand its service offerings and deliver comprehensive and optimal solutions to clients. Among the alliances and partnerships, it’s worth to mention Adobe, Amazon, Cisco, Dell, HP, Microsoft, alphabet, Oracle, SAP, Siemens and many others. (see Cognizant, Partners, n.d).
Additionally, emerging market opportunities such as healthcare, financial services, and healthcare and insurance are among the most important business prospects of Cognizant. In 2016, Cognizant’s financial services revenue represented 39.8% while the healthcare business revenue represented 28.7%. In addition to the recent acquisitions which the company completed in 2016, Cognizant is continuously analyzing and identifying opportunities for advanced automation and delivery efficiencies in those markets using technologies such as blockchain, big data and digital solutions. Geographically speaking, Cognizant believes that Europe, the Middle East, the Asia Pacifica region and Latin America will continue to be areas of significant investments, seeking more global expansion through long-term growth opportunities (see Cognizant Annual report, 2016, P. 2).
In the same way, Cognizant is implementing several important actions and approaches in order to manage its key activities to distinguish itself in each industry. Among these activities, Cognizant believes in gaining deep domain expertise for each industry it is operating in, by hiring professionals with in-depth industry experience and by investing continually in industry training for the staff which bring high levels of customer satisfaction. On the service level, Cognizant implements a four-tiered global architecture delivery model with delivery centres worldwide consisted of (1) employees co-located at customer’s sites, (2) at local or in-country delivery centres, (3) at regional delivery centres and (4) at offshore delivery centres. The reason behind this model is to provide a high response at competitive rates by ensuring interconnectivity of the different associates and teams across segments and practice areas which will lead to smart and innovative solutions and thus high customer satisfaction level. (see Cognizant Annual report, 2016, P. 2-3).
Cognizant as a top performer
Similarly, investment in infrastructure and research and development takes the main part in Cognizant’s strategy where the company was considered many times as one of the top consulting providers for new technologies. For example on Jan 20, 2016, it has been recognized as a top performer in the Internet of Things IT Consulting report by ALM Intelligence (see Cognizant press release, 20-01-2016). Similarly, on June 1, 2016, Cognizant was named a leader in Worldwide Business Analytics Consulting and Systems Integration in IDC MarketScape report (see Cognizant, 2016, n.p.). Additionally Cognizant published many programs and research centres related to Blockchain, Business Automation, Artificial Intelligence, Digital Economy, Internet of Things and many others (see Cognizant, n.d., n.p.).
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