Francisco D’Souza, president and CEO of Teaneck-based Cognizant Technology Solutions, recently discussed major innovations that have caused his company to thrive. Chief among them: an innovative business model and investment in developing Cognizant 2.0, a real-time operating system D’Souza says is the “glue” holding his knowledge-based workforce together.
Speaking recently at Fairleigh Dickinson University’s Rothman Institute of Entrepreneurship 6th Annual CEO Innovation Lecture, held in Madison, D’Souza attributed much company success to its ability to innovate in the face of complexity and uncertainty.
Cognizant’s achievements are many. The firm is now on the Fortune 500, Barron’s 500 and S&P; 500 lists. Last quarter Cognizant earned more than $1.6 billion in revenue. Since D’Souza’s promotion to CEO in 2007, company revenues have tripled to more than $4.5 billion.
D’Souza said his company is growing so rapidly, it hires 20 people every hour of every business day, a remarkable achievement in a time of economic instability. With 130,000 employees scattered throughout more than 40 countries, Cognizant operates in a world of uncertainty. D’Souza says his company is an example of “what is possible when entrepreneurship and innovation come together in an era of uncertainty … Complexity is a great source of opportunity.” While some wake up in the morning frightened of complexity, “I wake up … ,” look at the complexity and uncertainty in the world and say, “this is a great opportunity for innovation,” he remarked.
Cognizant was built on business model innovation, D’Souza said. The founders studied the software industry as it was. On one side was a group of companies building custom software in close proximity to their customers and doing very well. On the other was a group that had strong relationships with their clients, deep knowledge of client industries and strong project management skills. “We set out to create a company in the middle of these two worlds, with a business model providing our clients the best of both.” It was a simple idea that you could build a better business model, he said.
As the business progressed, innovations in technology and deregulation began to affect the company, and Cognizant began to see interaction costs, which had been causing friction in the business model, start to come down. “We never could have imagined how fast and dramatic that shift would be,” D’Souza said. Cognizant hadn’t imagined innovations like the Internet, fiber everywhere, email, Voice over Internet Protocol (VoIP) and Skype would affect its business for the better, but the company took advantage of these trends. Today “software can be produced anywhere in the world and delivered anywhere else,” he said. The model has evolved to the point that Cognizant employs people seamlessly and internationally, wherever it makes the most sense for the work to be performed, he explained.
It’s important for companies to look forward, D’Souza noted, and he believes in the next five years, “we will move to a world where bandwidth is almost free.” Communications and collaboration costs will decrease to zero. “Whether desktop peer conferencing, unified communications, seamless messaging or social networking, all these things will drive collaboration and interaction and allow knowledge to be delivered from any part of the world to any other part seamlessly…. Geographic boundaries will disappear. The best minds will be distributed around the world, and problem solving will happen on a global scale,” he predicted.
Already making this happen at the company is the Cognizant 2.0 platform, which lets the firm break work into relatively small pieces and “parse” it out to it anywhere in the world. Employees do the work, seamlessly return it to the system and reassemble it. The system includes built-in knowledge management, “so we can solve the know-how problem” and “orchestrate complicated processes to make sure they happen in the right sequence.” There is also governance, so the company can ensure actions occur when and how they are supposed to, D’Souza said. This innovative, massive software project, undertaken to make Cognizant run more smoothly, has sparked interest within the industry. The answer to the question, “Would Cognizant consider selling it as a product right now?” is “No,” he said. Right now the company is content to use the platform to make its own business processes run smoothly.
At the end of his talk, D’Souza took audience questions, noting that despite its size, Cognizant still tries to maintain a startup culture. It’s a very entrepreneurial company, he noted, that has decentralized and pushed accountability down the line. “When you hire the best and brightest in the world, you can’t manage them centrally. You’ve got to let them do what they want to do,” he stated.
Asked about U.S.-based positions, D’Souza said this country has a job skills mismatch. For the positions for which Cognizant is hiring, unemployment is very low and there just isn’t the right talent available. “The jobs are here but the talent isn’t; we are not producing scientists and engineers in sufficient volume and quantity needed in the U.S.” Later, asked specifically about N.J., D’Souza said he is seeking skilled computer engineers with in-depth knowledge of the pharmaceutical and life sciences industries to match client needs in the state.