About three years ago, Cognizant began closing in on India’s third largest IT services firm Wipro Technologies. By the middle of 2011, Cognizant had pulled past Wipro at least as far as quarterly revenues were concerned. Now Cognizant has Infosys firmly in its sights. (It is currently just $ 1 billion in revenues behind Infosys). CEO Francisco D’Souza expects to keep growing his company’s revenues at about 30 per cent year-on-year, against Infosys’s 20 per cent CAGR over the past three years. BW’s Rajeev Dubey and Venkatesha Babu spoke to him to know how Cognizant continues to avoid the slowdown in growth that inevitably affects all companies once they have reached a certain size. Excerpts:

How has your business model changed in the past year? What would be the most disruptive thing your organisation would have done in the marketplace?
The world is not following the normal economic recovery now. In 2007-08, the view was that this was another cyclical downturn and we expected that — like previous cyclical downturns — things would return to normal in a couple of years. That has not happened. It has been characterised by much more volatility than any other time in recent memory. The result is the new normal. When you have increased volatility, for organisations the killer behaviour becomes agility. If you can embrace that volatility, understand how to find the ability to uncover trends and find solutions for them, then opportunities can be significant. For us, the realisation of this notion of agility has been the disrupting factor in the past two years. It has forced us to change, to organise ourselves around this notion that if we can be more agile than our competitors there is tremendous advantage.

How has it translated into action?
Externally, through the new service offerings. Over the past 18 months, we have launched more solution offerings in the marketplace than in the past two to three years. That is the most evident way you can see from the outside. Internally, we have taken actions to keep offerings on the lines of what is happening in the marketplace, how we can organise ourselves to take advantage of those opportunities, and at the scale we are at, how we can continue to remain agile and move fast to respond to those threats.

What are the new service offerings? Are these in verticals or horizontals?
It is in three major areas. The first relates to new markets. Here, we are simply taking traditional services to newer areas such as South America and to new verticals such as government in some parts of the world. New markets are a category. The second is solution offerings for what we think is the emerging new IT architecture. These technologies represent a new architecture for corporate IT, and so we are focussed on a few particular areas — mobile, enterprise, social computing, cloud computing and analytics. The last is what we think of as a new delivery model. These are IP-based delivery models such as business process or industry specific offerings. For retail, we have the intelligent store for helping clients through the peak period.

Any innovations in a vertical that have made the most impact last year?
There are a few different things. The first is intellectual property and the solutions we are driving within our industry practice. In retail, we have two service offerings. One is IntelliStore, a technology and business process for the brick-and-mortar retailer to take the best of the physical and combine it with the best of the online experience. We create a hybrid real world experience for stores, which we think will be easier. We are working with a couple of key retailers . The second solution from our retail practice is Intellipeak. It is designed to help retailers manage the peak period — which in the US runs from Thanksgiving to past Christmas. A lot of transactions, volumes and sales happen during this period. It is important to have systems functioning efficiently at peak capacity as even small outages will have a profound revenue effect. We have developed a solution that allows us to work systematically with retailers, making sure all their systems are ready for the peak period.

How successful have they been? How many clients they have won for you?
We have 15 clients using IntelliStore and Intellipeak. IntelliStore is working on pilot clients. It is a much more significant deployment because the retailer has to deploy across many stores.

When do you expect the newer segments to shore up revenue?
In our business, when you look at the dynamics of the market and the size and scale of Cognizant, most solution offerings have a 3-5-year gestation before contributing meaningfully to the top line. That is not to say we do not make progress. Our mobile practice is relatively young — a year and a half. But if you look at our work, it is quite impactful to our client. But it is still going to take a few years for that practice to contribute to overall growth. So, you have to see what services you incubated 3-4 years ago and their contribution to growth now. The horizontals are consulting, BPO and IT/ITeS. The verticals are retail, manufacturing and communications. These are the significant revenue contributors. On average, these are growing faster than the core business. In the more recent past, engineering services was launched two years ago and the government business a year and a half ago. These will begin to contribute significantly to overall growth in a year or so.