Bringing the momentum back to country: Cognizant CEO Ravi Kumar S

Momentum back; wish next CEO from within Cognizant: Ravi Kumar S

Ravi Kumar S will complete two years as chief executive officer of Nasdaq-listed Cognizant at the turn of this year. The company grabbed headlines for hiring senior talent from rivals. Kumar has remained unfazed and focused on bringing back the firm to growth. In an interview with Shivani Shinde in Mumbai he says the focus on getting the momentum back and getting his A team has brought the mojo back to the firm. He also talks about the opportunity of global capability centres. Edited excerpts.

You will soon complete two years at the helm of Cognizant. How has been the journey?
 

I enjoyed bringing the commercial momentum of the company back. This has meant drawing from the heritage and changing enough to stay relevant.
 

We did have a period of lull. To come out of this you need to create a self-belief and confidence in your teams. I think I’ve got that back. Our clients are rallying behind us. Last year we announced 17 large deals in the $100 million category. In the first half of this year we signed 13 large deals. Financial services, which were struggling for a couple of years, are back to growth.
 

Employees have been one of my big focuses. We had a historically high attrition rate in 2022 because of both the labour market as well as our own challenges. At present it is back on track.

We’ve got the India focus back. A lot of my leadership now is located in India. I have hired a chief operating officer, head of strategy … have hired multiple senior leaders in India. We are progressively going to Tier-II cities … 35 per cent of our Indian workforce has been promoted or progressed into new roles since I came on board.

Internal mobility is very high. In the last three years we sent almost 14,000 people to more prosperous and better careers. This year almost 3,000 people have already travelled. I think the mojo of the company is back. In a period of time, we will be back in the winner’s circle.

Does Cognizant missing the growth opportunity of 2021-22 make your work difficult?

It was much harder. But I am not complaining because I have to admit that the platform by itself is resilient. Those two years of underperformance didn’t weaken the platform. I still have 70,000 people who worked for more than 10 years at Cognizant.

We now have a solid leadership team, which I have built from inside and outside.

How are you making sure that the internal leaders and the new leaders work in sync?

Culture is the most important thing. I have told this to my team as well — the first right of refusal or the first right of choice is for the internal teams. I wish the next chief executive officer and CFO of the company come from within the company. We now have the mission to build the next 100 leaders from within the firm.

What will be the strategy for growth?

If you look at the financial year gone by (FY24), you would notice the gap between us and our peers has shrunk. One would argue this is a low-velocity market. I am testing internally, as the velocity goes up, whether we have the same appetite to be in the ball park range.
 

In this market, where expenditure is tight, there’s a lot related to cost optimisation, vendor consolidation, and productivity-led deals, and we are present in all these categories. When expenditure comes back, a lot of it will be dependent on the transformational opportunities available. In the next four or five years, the transformation opportunities are going to be powered by artificial intelligence (AI). We have invested almost $1 billion on AI-led work.
 

How do you see GCC expansion in India? How does it impact you and the industry?
 

I’m a big proponent of the fact that technology is the core to every business. To clients I say “as much as you should outsource, they should also insource and build their own muscle”. I believe that for systems integrators like us this is a big opportunity. I have constructed six to seven deals by which we are setting up captives for our clients in India. Here is a unique opportunity where they can rely on our human capital, but also my value chain.

Belcan acquisition is a big one. How do you see this progressing?

I have taken very calculated merger and acquisition (M&A) moves. We did two acquisitions since I came on board. If you look at our revenue spread, it comes from financial services and healthcare…for a $20 billion company, you need a much bigger breadth of industry exposure. Belcan is a unique opportunity to go into industries where we had lesser presence, which is manufacturing, industrial automotive, aerospace and defence. We operated in three vectors of our business--infrastructure and cloud, tech services and BPO. Over the last four or five years we've been progressively buying and inorganically building engineering research and development (ER&D) capability. We roughly have a $1 billion of ER&D business internally. With Belcan, we have created a $2 billion opportunity that gives me a horizontal capability. It also gives me a unique opportunity to explore Europe, which is a pretty big spender of ER&D.

How do you see the GenAI wave, both from opportunity and talent side?

I've been a believer that whenever there was a discontinuity, it has led to lower cost of deployment of technology. Interestingly, it has led to more spend on technology. In the 90s when offshoring happened, the cost of deployment of technology went down significantly. And when it went down, spending on technology actually went up. Same is the case with Cloud. AI is going to at least add significant productivity on a software development cycle. When that happens, spending on technology will only go up. One of the reasons why the tech industry has been struggling in the last two years is also because discretionary spend went down. Discretionary spend is dependent on interest rates. Now, if the cost of technology deployment goes down, the trigger on new projects will go up. So I'm a believer that this is only going to create more value for technology investments. When it comes to talent, I think talent from schools can become more productive using this technology. AI is a great leveller. We have seen that the bottom 50 percentile of my developers have gained 37 per cent in productivity. The top 50 percentile of my developers have only gained 17 per cent. AI uplifts people at the bottom to perform better.

Since you took over, Cognizant has created several headlines, As a leader, did it bother you and how did you handle it?

When you're going through transformation and change, you have to be focused on the purpose and the core. There's so much misinformation around everybody, and part of the responsibility is to make sure that the misinformation doesn't amplify. I wasn't trying to poach people from other companies. I was only trying to build my team. And these are people who joined that journey…I’m very grateful for that. I'm very excited about the fact that I also got returners into the mix.