Cognizant is looking to boost its focus on those segments of its business, including Communications, Media and Technology, that are growing in double digits, according to company CEO Brian Humphries.
“I want to double down on” those businesses, he said Sept. 4 at the Citi Global Technology Conference in New York.
To that end, Humphries said he spent “all of last week in the Bay Area trying to understand our partnership strategies and major customers out there.” He’s spent most of his working career in the tech industry “figuring out how I can get more into bed with some of these companies and become a stronger vendor to them and indeed a stronger partner to them,” he told attendees, adding: “There’s lots of things we need to do” on the technology front.
Cognizant recently set up a transformation office that he said on the company’s last earnings call had been “charged with reviewing six areas of focus” for the company. Those six areas, he said at the time, were: Strategic choices, which include “where we want to make strategic bets to better expose us to growth categories”; organizational structure; talent; delivery transformation, which includes optimizing unit cost of delivery across a global delivery model; sales force transformation, including compensation plans, customer segmentation, increased partnerships, sales coverage ratios and consultative selling; and “fit for growth, which “aims to ensure we have the cost structure, processes and tools to facilitate growth.”
He told the Citi conference: “Here we are now, four months after all of that [and] I would say we’re well down a path of putting ourselves in a position to draw conclusions and start pulling the gun on some of those conclusions and execute them” in the coming year.
Although Cognizant is looking to double down on its growing Communications, Media and Technology and Products and Resources businesses, he told attendees: “Please don’t leave this room thinking” that means “we’re going to diversify away from” the company’s healthcare and financial services businesses and “not invest to make them strong again — we want to fix those business, whilst diversifying.”
But he said: “At the end of the day, if you have 63% of your business in healthcare and financial services that are largely flat or declining, you will not get to the growth rate that I’m aspiring to get to unless we fix those.” In the second quarter (ended June 30), Communications, Media and Technology accounted for 14.6% of company revenue, compared to 22.4% for Products and Resources, 27.4% for healthcare and 35.6% for financial services.
Cognizant is looking to “rapidly scale our digital operations,” he said. For example, with enterprise application services, “we need to do a much bigger job at scaling into” Software-as-a-Service (SaaS), have a “much more tighter partnership” with Amazon Web Services (AWS) and “have to be much more in bed with Microsoft and the like, and that’s something we’re setting out to achieve,” he said.
“There is no way anybody’s going to dissuade me from saying that cloud, cloud migration, SaaS is a big battle we need to win in, and it’s worth winning,” he went on to say. Also important: The Internet of Things (IoT), digital engineering and data, he said, adding Cognizant has “tens of thousands of data scientists who’ve been very deliberately working, over the years, around data warehousing.” Artificial intelligence and analytics and “what we can do with that is pretty critical to our future as well,” he said.
Therefore, he told attendees: “You’ll see us put a huge effort behind some of those pillars,” including an acceleration of cloud migration as workloads increasingly move to the cloud.