LAKSHMI NARAYANAN, the chief executive of Cognizant Technology Solutions, an outsourcing company that is based in Teaneck, N.J., but has most of its employees in India, says it can compete against giants like I.B.M. and Accenture partly by borrowing American-style management techniques.
Q. Right now, is your company doing relatively unsophisticated work such as writing the code that goes into software?
A. To a large extent, yes. But there is some amount of system integration consulting work that is beginning to happen.
Q. Who are the major players in India?
A. Some of the companies have broken away from the rest of the pack and came to be known as Tier 1. Those are Cognizant, Infosys, Wipro and Tata. This group of companies has grown from just writing code. They are seen as viable alternatives to the I.B.M.'s and Accentures of the world in certain areas like application outsourcing and application development.
Q. You're projecting that you'll grow to $1.3 billion in sales this year from $900 million last year. That's fast growth, but nowhere near I.B.M.'s $90 billion in sales, right?
A. Because we operate in a low-cost area, that $1.3 billion in revenue is equivalent to $4 billion or $5 billion of what a Western company would offer in terms of its billing rates. What we need to build is not so much the size and scale, but rather the ability to expand our service offerings. An Accenture, for example, can invest in a partnership with Microsoft and try to provide complete solutions. That's not a capability that any of the outsourcing companies have today.
Q. Do the big companies have an advantage because they have been around a long time and have advanced management systems?
A. The advantage they have is more in terms of the relationships they enjoy and the brand they have in the marketplace. But in terms of systems and processes, I believe companies like Cognizant have a clear advantage because we have no legacy of having worked for 20 to 30 years with what are today considered archaic processes. We are more current and more modern in terms of applying technology. The gap we have to close is the relationship with the customer. But it's just a question of time.
Q. How do the Big Four from India compare with one another?
A. Tata is very cost- and price-focused. Infosys tries to be very innovative. Cognizant has a reputation for offering the best customer experience. That's what we concentrate on, building a strong relationship. We are flexible because we adapt to the customer's situation. Wipro is seen as a research and development company because close to half their revenue is from working with telecom companies in chip design and software.
Q. Are you hiring Americans to broaden your company's expertise?
A. We are hiring a lot of local people, Americans here and Europeans in Europe.
Q. How many people work for you, and where are they from?
A. We have close to 27,000 people, some 21,000 of whom are in development centers in India. We have small work forces in China and Canada. Then there are about 5,000 in the United States and about 1,000 in Europe, predominantly at customer locations and customer centers. We hire, on average, about 30 people a week in the United States, both local people as well as people of Indian origin who have been here for a long time.
Q. What are the challenges in transforming yourself to more of a multinational firm?
A. The key thing we are focused on is developing a global mind-set in our leadership. You cannot think of us as an Indian company or an American company. You have to think of us as a global company. If we say, "Let's focus on the customer," there is great alignment among all the people in the company, wherever they're from.
Q. Who are your biggest customers here?
A. We work with 7 of the world's top 10 pharmaceutical companies, including Pfizer. In health care insurance and H.M.O.'s, 3 of the top 10 global players are our customers. In banking and financial services, 5 or 6 of the top 20 banks and investment banks are our customers.
Q. How did you absorb American management know-how?
A. We started in 1994 as a development arm of Dun & Bradstreet. Because Dun & Bradstreet has such a great name and such a great brand, we were able to attract many people of Indian origin working in the United States who wanted to return to India and work for a U.S. company. Our entire leadership team of 50 or 60 people has spent at least a year working in the United States and then moved back. That affected our culture and our knowledge of the market. Because of our heritage with D.& B., we also managed to get a lot of processes and people from them. For example, our chief financial officer, chief operating officer and our vice president of corporate development are all from D.& B.
Q. Have you also absorbed Americans on your board?
A. Our board, right from the beginning, has been international. I'm the only executive member of the board and the only Indian. Our chairman of the board, John Klein, was a former I.B.M. executive. One of the lead directors, Bob Weissman, used to be chairman and chief executive officer of Dun & Bradstreet. Bob Wendel, a financial expert, was C.E.O. of Paine Webber.
Q. Right now, is your company doing relatively unsophisticated work such as writing the code that goes into software?
A. To a large extent, yes. But there is some amount of system integration consulting work that is beginning to happen.
Q. Who are the major players in India?
A. Some of the companies have broken away from the rest of the pack and came to be known as Tier 1. Those are Cognizant, Infosys, Wipro and Tata. This group of companies has grown from just writing code. They are seen as viable alternatives to the I.B.M.'s and Accentures of the world in certain areas like application outsourcing and application development.
Q. You're projecting that you'll grow to $1.3 billion in sales this year from $900 million last year. That's fast growth, but nowhere near I.B.M.'s $90 billion in sales, right?
A. Because we operate in a low-cost area, that $1.3 billion in revenue is equivalent to $4 billion or $5 billion of what a Western company would offer in terms of its billing rates. What we need to build is not so much the size and scale, but rather the ability to expand our service offerings. An Accenture, for example, can invest in a partnership with Microsoft and try to provide complete solutions. That's not a capability that any of the outsourcing companies have today.
Q. Do the big companies have an advantage because they have been around a long time and have advanced management systems?
A. The advantage they have is more in terms of the relationships they enjoy and the brand they have in the marketplace. But in terms of systems and processes, I believe companies like Cognizant have a clear advantage because we have no legacy of having worked for 20 to 30 years with what are today considered archaic processes. We are more current and more modern in terms of applying technology. The gap we have to close is the relationship with the customer. But it's just a question of time.
Q. How do the Big Four from India compare with one another?
A. Tata is very cost- and price-focused. Infosys tries to be very innovative. Cognizant has a reputation for offering the best customer experience. That's what we concentrate on, building a strong relationship. We are flexible because we adapt to the customer's situation. Wipro is seen as a research and development company because close to half their revenue is from working with telecom companies in chip design and software.
Q. Are you hiring Americans to broaden your company's expertise?
A. We are hiring a lot of local people, Americans here and Europeans in Europe.
Q. How many people work for you, and where are they from?
A. We have close to 27,000 people, some 21,000 of whom are in development centers in India. We have small work forces in China and Canada. Then there are about 5,000 in the United States and about 1,000 in Europe, predominantly at customer locations and customer centers. We hire, on average, about 30 people a week in the United States, both local people as well as people of Indian origin who have been here for a long time.
Q. What are the challenges in transforming yourself to more of a multinational firm?
A. The key thing we are focused on is developing a global mind-set in our leadership. You cannot think of us as an Indian company or an American company. You have to think of us as a global company. If we say, "Let's focus on the customer," there is great alignment among all the people in the company, wherever they're from.
Q. Who are your biggest customers here?
A. We work with 7 of the world's top 10 pharmaceutical companies, including Pfizer. In health care insurance and H.M.O.'s, 3 of the top 10 global players are our customers. In banking and financial services, 5 or 6 of the top 20 banks and investment banks are our customers.
Q. How did you absorb American management know-how?
A. We started in 1994 as a development arm of Dun & Bradstreet. Because Dun & Bradstreet has such a great name and such a great brand, we were able to attract many people of Indian origin working in the United States who wanted to return to India and work for a U.S. company. Our entire leadership team of 50 or 60 people has spent at least a year working in the United States and then moved back. That affected our culture and our knowledge of the market. Because of our heritage with D.& B., we also managed to get a lot of processes and people from them. For example, our chief financial officer, chief operating officer and our vice president of corporate development are all from D.& B.
Q. Have you also absorbed Americans on your board?
A. Our board, right from the beginning, has been international. I'm the only executive member of the board and the only Indian. Our chairman of the board, John Klein, was a former I.B.M. executive. One of the lead directors, Bob Weissman, used to be chairman and chief executive officer of Dun & Bradstreet. Bob Wendel, a financial expert, was C.E.O. of Paine Webber.