{"id":1544,"date":"2011-03-05T05:01:00","date_gmt":"2011-03-05T05:01:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/frank-dsouza-part-i_030511\/"},"modified":"2011-03-05T05:01:00","modified_gmt":"2011-03-05T05:01:00","slug":"frank-dsouza-part-i_030511","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/frank-dsouza-part-i_030511\/","title":{"rendered":"Frank’s still Frank: Cognizant CEO Francisco D\u2019Souza talks to HfS about his 40% growth year"},"content":{"rendered":"

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Cognizant had an unprecedenced growth spurt in 2010, \u00a0attaining annual revenues of $4.59 billion – up 40% year-over-year. We have arrived at the growth peak of offshore IT services, and Cognizant has led this acceleration coming out of the Recession.<\/strong><\/p>\n

Things have certainly kicked on since\u00a0we talked with President and CEO, Francisco D’Souza,\u00a0a couple of years’ ago<\/a>, and what’s alarming for the rest of the industry, is that “Frank” (as Francicso tends to be called these days) isn’t resting now. The company has provided guidance for 2011 predicting revenue growth of at least 26% – and this is a firm that tends to stick to the conservative side of its financial predictions.<\/p>\n

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So we caught up with Frank this week\u00a0to discuss the dynamics behind Cognizant’s growth, the state of the services industry, the global economic outlook and (of course) his perspective on the Cloud, among other issues. \u00a0Here is part 1 of this 2-part interview:<\/p>\n

HfS Research: <\/strong>Frank, firstly, congratulations on such a barnstorming financial performance \u2013 and over such a prolonged period of time. What\u2019s the \u201csecret sauce\u201d you can share with our readers? Is it all about focus on revenue growth and account management, or are there other critical elements to achieving such prolonged financial success?<\/span><\/p>\n

Francisco D\u2019Souza:<\/strong> Thank you, Phil, and congratulations to HfS Research for a great inaugural year and to you on being named Analyst of the Year<\/a>.<\/p>\n

As for Cognizant\u2019s success, we have always been very open about our \u201csecret sauce\u201d \u2013 we put our client first. Of course every professional services firm approaches the market that way, but we have made some unique business decisions \u2013 namely our reinvestment model \u2013 to support that principle.<\/p>\n

Cognizant manages our non-GAAP (before the impact of equity compensation expense) operating margins in the range of 19 to 20 percent \u2013 below that of many of our competitors. We invest that difference back in to our business in a number of different ways.<\/p>\n

For example, in strong client facing teams. Our 2-in-a-box model \u2013 which pairs an on-site client manager with an offshore delivery manager — provides superior customer intimacy and an enhanced relationship experience. We continue to strengthen that experience through investments in consulting teams and, most recently, in Program Management resources capable of driving large-scale organizational transformation.<\/p>\n

We also invest in new service offerings to stay on top of our clients\u2019 evolving business and technology needs. Offerings such as Infrastructure Services, Business Process Outsourcing, Enterprise Analytics, and Engineering & Manufacturing Solutions give us entr\u00e9e to serve clients in new areas as the offshore \u201cshare shift\u201d continues.<\/p>\n

And, finally, we hire and retain the best talent in the marketplace. Last year we added over 25,000 associates in over 50 centers across 22 cities around the globe. We improved already strong relationships with key Indian universities \u2013 a primary source of talent for the company \u2013 and began an undergraduate recruiting program in the US and Europe to capture a new pipeline of strong talent. And we continued to provide the best career opportunities for our existing associates by, for example, promoting nearly a third of our workforce in 2010.<\/p>\n

HfS Research: <\/strong>We\u2019ve talked a lot about the changing economy and secular change within industries over the Recession years. Now the fog is lifting, is your outlook any different?<\/span><\/p>\n

Francisco D\u2019Souza: <\/strong>While we continuously refine our outlook, we see things unfolding the way we had anticipated. The economic environment is generally more stable, IT and Outsourcing budgets seem to be showing modest increases, and Cognizant\u2019s investments over the past few years position us well for growth at the intersection of three large trends.<\/p>\n