Cognizant growth is sustainable, says R Chandrasekaran
Saturday, 19th March 2011
Cognizant Technology Solutions, which recently announced a 200 per cent bonus, having beaten street expectations for five quarters in a row, is on a high. Nipping at Wipro�s heels to become India�s third largest information technology service provider, it is looking at sustaining the momentum. President and Managing Director, global delivery, R Chandrasekaran, outlines the plan in an interview with Swati Garg. Edited excerpts:
How sustainable is the growth of 45 per cent, q-o-q?
The Cognizant growth story is driven by three aspects� building customer businesses, focus and discipline, and re-investment into business for growth and deeper differentiation. We have built on the customer relationship model, and are looking at continued expansion in the scale and scope of global sourcing to new areas, the so-called share shift. We are also looking at cashing in on the continued spending on discretionary projects that started in 2010 and are slated to carry on into 2011. Also, new opportunities presented by the future of work is characterised by virtualised business models such as cloud and mobile technologies.
How will you deal with wage inflation and growing attrition?
We are comfortable handling wage inflation within our margin structure. Historically, we have been able to absorb cost increases through price increases or cost management strategies, such as managing discretionary costs, a mix of professional staff and utilisation levels and achieving other operating efficiencies.
We have fared better than most of our peers were in dealing with attrition. In the December 2010-ended quarter, we saw a decline in attrition as compared to the third quarter. We have historically reported attrition by annualising the turnover which occurred within the quarter, including both voluntary and involuntary. This number decreased sequentially to 16 per cent in the fourth quarter. Our attrition statistics include all departures, including BPO and employees in our training programme. Over the next several quarters, we are going to step up efforts to ensure these opportunities manifest themselves for our associates, so that they continue to benefit from Cognizant�s growth.
Publication : Business Standard
TAGS : Cognizant
follow us on :