Cognizant's digital revenue at 23% in 2016

This is much higher than TCS, which was the only one so far giving a break up of its digital revenue

Cognizant for the first time disclosed that revenue from digital services was at 23 per cent of its 2016 revenue.

However, the company did not give a vertical-wise break up of this revenue. Of the total revenue, 40 per cent was contributed by financial services, healthcare 29 per cent, manufacturing, retail & logistics 19 per cent and others 12 per cent.

This is much higher than Tata Consultancy Services (TCS), which was the only firm so far giving a break up of digital revenue. For the third quarter of FY17, TCS reported that its digital revenue was at 16.8 per cent, representing a growth of 4.7 per cent on sequential basis.

The company stated that the digital revenues were growing well above company average and going ahead the momentum is expected to be the same.

Cognizant also announced a comprehensive plan to accelerate the shift to digital services and solutions, execute on operational opportunities to drive leverage in its cost structure and return significant capital to shareholders.

As part of this shift, Cognizant will aggressively scale its digital capabilities across geographies and industry segments through both organic investments, in areas such as re-skilling and new technology practices, and through acquisitions. The company is intensifying its M&A efforts to expand intellectual property, industry expertise, and platform and technology capabilities, by focusing primarily on strategic tuck-in acquisitions.

As a result of the company's strategic planning process and after reviewing its operational and corporate cost structures with a top-tier consulting firm, the company will accelerate the pursuit of high-value digital transformation work, drive leverage in its cost structure, execute on opportunities to improve operational efficiency and aggressively employ automation to optimise traditional services.