While it isn’t a big surprise that Cognizant Technology Solutions, which has been growing rapidly, has reported a great Q4 and excellent year end in 2011, it is interesting that the Teaneck-based company announced a number of promotions and changes to its executive team at this time.
Francisco D’Souza remains as CEO, stepping down as president, and will play a more strategic role, targeting Cognizant’s long-term growth agenda. He will head a small team of company execs to focus on extended growth and make sure the firm’s new initiatives are profitable, sustainable, contribute to company development and adopted by customers, he said in the company’s investor conference call.
The new projects, dubbed “Horizon 3,” are initiatives in emerging capabilities, such as mobile, cloud and social computing, that address changes brought on by new developments in the “future of work.” These initiatives are highly important to Cognizant’s clients. They include, as D’Souza said during the call, adapting the company’s current model to serve new industries, including “targeted” government sectors and new geographies like Latin America. D’Souza said the firm is “seeding investments” in the Horizon 3 offerings to create a “clear foundation” for growth.
Cognizant’s new president is its former CFO, Gordon Coburn, who has been with the company since 1996. Coburn has been involved in every aspect of Cognizant’s business and will step into the presidential role of managing the company’s overall profit and loss with a lot of experience behind him.
The firm’s new CFO, Karen McLoughlin, has led the development of Cognizant’s financial planning and analysis capability. McLoughlin has headed up the Cognizant 2015 program, the company’s five-year strategic plan to move from its status as a tier one offshore services provider to being universally recognized as a tier one global services provider.
Rajeev Mehta has been promoted to group chief executive of industries and markets, and Chandra Sekaran to group chief executive of technology and operations. Finally, Malcolm Frank has become the executive vice president for strategy and marketing. During the conference call, D’Souza called Frank an “industry-recognized thought leader.” All the new members of the executive team were promoted from within, in keeping with Cognizant’s policy.
The numbers at Cognizant are impressive. The company has reported fourth-quarter revenue up 3.9 percent sequentially and 27 percent year-over-year. The firm’s 2011 revenue of $6.12 billion was up 33 percent year-over-year. In addition, Cognizant has provided guidance for 2012, with an expected revenue growth of at least 23 percent.
Cognizant has reported more weakness and volatility in Europe than it had expected. During the conference call Coburn said the economic challenges Europe is facing are leading to “an openness” there toward global outsourcing. He believes it is just a matter of time before that kicks in.
The company happily discussed its very low attrition numbers, around 10 percent, saying this is a factor of both the economy and Cognizant policy of trying to retain talent. The supply of technically trained individuals is beginning to keep up with demand, and many companies have returned to college hiring. However, Cognizant also has something to offer employees. The firm has increased its efforts to promote from within, so “perhaps people are realizing that their career growth can be affected by staying here,” Coburn said.