Cognizant Technology Solutions

From Wikipedia, the free encyclopedia
  (Redirected from Cognizant Corporation)
Jump to: navigation, search
This article is about the corporation. For a definition of the word "cognizant", see the Wiktionary entry cognizant.
Cognizant Technology Solutions Corp.
Type Public
Traded as NASDAQ: CTSH
S&P 500 Component
Industry IT services, IT consulting
Founded 1994
Founder(s) Kumar Mahadeva
Headquarters Teaneck, New Jersey, United States
Area served Worldwide
Key people John E. Klein (Chairman)
Francisco D'Souza (CEO)
Services IT, business consulting and outsourcing services
Revenue increase $4.59 billion (2011)[1]
Operating income increase $1.13 billion (2011)[1]
Profit increase $883 million (2011)[1]
Total assets increase $3.51 billion (2011)[1]
Total equity increase $3.95 billion (2011)[1]
Employees 137,700 (Q4, 2011)[1]
Website www.cognizant.com

Cognizant Technology Solutions Corp. (NASDAQ: CTSH) is an American multinational provider of custom information technology, consulting and business process outsourcing services. Its headquartered in Teaneck, New Jersey, United States and is a member of NASDAQ-100, the S&P 500 and Fortune 500. Cognizant has been named to Fortune magazine's 100 Fastest-Growing Companies list for nine consecutive years, including 2011 when it was ranked first in the "All-Stars" list of 16 companies that appear on the fastest-growing list year after year.[2][3]

Contents

[edit] History

The company that is now called Cognizant has its root in Dun & Bradstreet Satyam Systems (DBSS), an India-based joint venture between Dun & Bradstreet (76%) and Satyam Computers (24%).[4] Srini Raju was the CEO of this company, which was established in 1994.[5] Kumar Mahadeva played a major role in convincing D&B to invest $2 million in the joint venture. DBSS was set up as an in-house technology unit, and focused on implementing large-scale IT projects for the D&B businesses. In 1996, the company started pursuing the Y2K-related projects outside of D&B, and won two large accounts outside of D&B: Northwest Airlines and Aetna. It put in one of the lowest bids for a Y2K-compliance project for Pacific Exchange, and delivered the work a month before the May 1997 deadline.[6]

In 1996, Dun & Bradstreet (D&B) spun off several of its subsidiaries including Erisco, IMS International, Nielsen Media Research, Pilot Software, Strategic Technologies and DBSS, to form a new company called Cognizant Corporation. Three months later, in 1997, DBSS was renamed to Cognizant Technology Solutions. In July 1997, D&B bought Satyam's 24% stake in DBSS for $3.4 million.[4][7] The headquarters were moved back to the United States, and in March 1998, Kumar Mahadeva was named the CEO.[8][9] Operating as a division of the Cognizant Corporation, the company mainly focused on Y2K-related projects and web development at this stage.[10]

In 1998, the parent company Cognizant Corporation was split into two companies: IMS Health and Nielsen Media Research.[11] After this restructuring, Cognizant Technology Solutions became a public subsidiary of IMS Health. In June 1998, IMS Health partially spun off the company, conducting an initial public offering of the Cognizant stock. The company raised $34 million, less than what the IMS Health underwriters had hoped for. The money was earmarked for debt payments and upgradation of the company's Indian offices.[10]

Kumar Mahadeva decided to reduce the company's dependence on Y2K projects: by Q1 1999, 26% of company's revenues came from Y2K projects, compared to 49% in early 1998. Believing that the $16.6 billion enterprise resource planning (ERP) software was saturated, Mahadeva decided to stay away from the large-scale ERP implementation projects. Instead he focused on applications management, which accounted for 37% of Cognizant's revenue in Q1 1999.[6] Cognizant's revenues in 2002 were $229 million, and the company had zero debt with $100 million in the bank.[10]

In 2003, IMS Health sold its entire 56% stake in Cognizant, which instituted a poison pill provision to prevent hostile takeover attempts.[12][10] Kumar Mahadeva resigned as the CEO in 2003, and was replaced by Lakshmi Narayanan.[13]

In June 2002, the company had acquired United Healthcare Ireland Limited (70 software professionals). This was followed by the acquisition of American Express Travel-related Services account from Silverline Technologies (300 software personnel). In 2003, Cognizant acquired the CRM firm Aces International and the Dutch IT service firm Infopulse.[14] Due to strong competition from Accenture and IBM, Cognizant had offer lower prices as a differentiator. To overcome this problem, it decided to start offering higher-end technology consulting like these companies.[10] It acquired the Pune-based Ygyan Consulting in 2004.[15] In 2005, it acquired Chicago-based consulting firm Fathom Solutions for $35 million.[16]

Lakshmi Narayanan was succeeded by Francisco D'Souza in 2006. Gradually, the Company's service portfolio has expanded to IT services, BPO and business consulting, with significant practices in Banking and Financial services, Communications, Consumer Goods, Energy & Utilities, Health care, Information, Media & Entertainment, Insurance, Life Sciences, Manufacturing, Retail, Technology, Transportation & Logistics and Travel and Hospitality.

[edit] List of companies acquired by Cognizant

Company acquired Geography Announcement Date Area of Business
Zaffera United States September 27, 2011 SAP Consulting
CoreLogic India July 26, 2011 Mortgage processing
Galileo Performance France June 17, 2010
PIPC Group United Kingdom May 10, 2010 Program & Project Management Consulting
UBS India Service Center India October 15, 2009 Business process outsourcing, industry research
Pepperweed Advisors Europe, Australia September 8, 2009 Business Consulting, Program Management
Strategic Vision Consulting United States June 9, 2008 Business Consulting for media and entertainment companies
marketRx United States, India November 16, 2007 Life Sciences Analytics
AimNet United States September 5, 2006 IT infrastructure services
Fathom Consulting Canada April 18, 2005 Telecom & FinServices IT
Ygyan Consulting United States, India February 22, 2004 SAP consulting
Aces International US, India April 1, 2003 Siebel CRM consulting

[edit] Financial Health

Cognizant was listed on NASDAQ in 1998 and moved to the NASDAQ-100 Index in 2004. After the close of trading on 16 November 2006, Cognizant moved from the mid cap S&P 400 to the S&P 500. The company claims to be in excellent financial health, reporting over $2.2 billion in cash and short term investments for the quarter ending June 30, 2011.[17]

According to the 2011 figures, the major portion of the Cognizant revenues is derived out of clients from US.[18] (North America: 77.2%, Europe: 19.2%, Rest of World: 3.6%). Most of this revenue comes from the clients in the Financial Services (42.3%) and Health-care (25.9%) industries. Other substantial revenue sources include clients from Manufacturing, Retail & Logistics (18.6%) and Communications, Information, Media & Entertainment and Technology (13.2%) industries.

[edit] Services

Cognizant provides a range of information technology, consulting and Business Processing Outsourcing (BPO) services, including Business and Technology Consulting, Complex Systems Integration, Application Development and Maintenance, Business Process Outsourcing, IT Infrastructure Services, Analytics, Web Analytics, Business Intelligence, Data Warehousing, CRM and social CRM, Supply Chain Management, Engineering & Manufacturing Solutions, ERP, R&D Outsourcing, and Testing solutions.

The company's revenue from IT services is split roughly evenly between application development (which is considered discretionary spend and hence arguably more susceptible to the economic climate) and application maintenance.

Cognizant's largest horizontals are Testing and DW/BI (Data warehousing and business intelligence).

Its business process outsourcing unit leans towards "higher-end" services i.e. work that involves unique skills and domain knowledge, such as legal services or healthcare claims processing rather than simple voice-based support services.

[edit] Offshoring and Hiring in the U.S.

Cognizant is among the Top 10 companies receiving L1 visas to bring highly skilled immigrant workers to the United States. In their SEC 10-k filing of 2/23/2011, they recognize their dependence on the practice: "Our future success will depend on our ability to attract and retain employees with technical and project management skills from developing countries, especially India. The vast majority of our professionals in the United States and in Europe are Indian nationals. The ability of Indian nationals to work in the United States and Europe depends on their ability and our ability to obtain the necessary visas and work permits.[19]

The company has been steadily increasing its U.S. work force. In January 2011, the company announced plans to expand its U.S. delivery centers including a new 1,000-person facility in Phoenix, Ariz.[20] In Feb 2011 the company said it had 60 full time recruiters actively hiring in the U.S.[21] Over 70% of its 120,000-plus employees are based in India or other offshore service locations like Philippines, China, Hungary and Argentina.[22]

In 2009, a Department of Labor (DOL) investigation found Cognizant in violation of the H-1B provisions of the Immigration and Nationality Administrative Act. Out of the several thousand non-immigrant workers that the company employs, 67 were found to have been underpaid. Per the Department of Labor Press release "An investigation by the department's Wage and Hour Division found that the company violated the law when it failed to pay computer professionals hired under the H-1B program the proper wages, failed to offer all H-1B workers equal benefits or eligibility for equal benefits, and failed to maintain required records." The company paid $509,607 in back wages to these employees. While these were administrative errors, the Department of Labor did not find a pattern of wrongdoing. According to a DOL statement: "'Cognizant Technology Solutions has taken immediate steps to correct all identified violations and ensure future compliance,' said Joseph Petrecca, director of the Wage and Hour Division's Northern New Jersey District Office. 'This level of cooperation sets a standard for others in the industry.'"[23]

[edit] Corporate Social Responsibility

Cognizant's philanthropic efforts are conducted through the voluntary efforts of Cognizant employees and the financial and administrative support of the Cognizant Foundation, which is its ppcorporate social responsibility]] (CSR) arm.[24][25] Registered in March 2005 as a "Charitable Company" under the Indian Companies Act, the Cognizant Foundation aims to helps "unprivileged members of society gain access to quality education and healthcare by providing financial and technical support; designing and implementing educational and healthcare improvement programs; and partnering with Non-Government Organizations (NGOs), educational institutions, healthcare institutions, government agencies and corporations".

Cognizant's has a grassroots corporate social responsibility project called Outreach, for which Cognizant's employees volunteer to support schools and orphanages.[26][27]

Cognizant's sustainability efforts include a Go Green initiative launched in 2008 focused on energy conservation, recycling, and responsible waste management.[28] In October 2011, Newsweek magazine announced their annual Green Rankings; Cognizant moved up from 138th to 16th place in the Green Rankings of the 500 largest publicly traded companies in America.[29]

At the 2011 Maker Faire, the company announced plans to fund a Maker Space at the New York Hall of Science, a Making the Future after-school program and a partnership with Citizen Schools to promote STEM education in the United States.[30][31]

[edit] Community

The company's flagship customer conference is Cognizant Community—sometimes simply called Community. It is usually held in the spring in the United States and in the fall in Europe. The summit, which features notable keynote speakers in the world of business, technology, economics and even adventure sports, has been praised as "a model industry event".[32]

[edit] Cognizant Academy

All learning programs are conducted through Cognizant Academy, the in-house training center. The four key educational initiatives are: Continuing Education, Role-based Training, Executive Training program, Certification. In addition to internal training programs, associates undergo management-specific training at notable universities and colleges. In addition to the formal learning in classrooms, Cognizant Academy takes learning to employees' desktops. They use multi-modal learning, as well as Technology-Based Training (TBT) material.[33]

[edit] Global Offices

  • In addition to its headquarters and delivery center in Teaneck, N.J., Cognizant has five additional delivery centers in the United States of America: Bentonville, Arkansas; Bridgewater, New Jersey; Chicago, Illinois; Holliston, Massachusetts; and Phoenix, Arizona
  • The company also has local, regional and global delivery centers in the UK, Europe, India, China, The Philippines, Canada, Argentina, and Mexico. It has over 130,000 employees (Sep. 2011), the majority of those are based in China and India, while the leadership is mainly based in the United States.

  • Cognizant's Delivery Center in Pune, India.

  • Cognizant's Delivery Center in Chennai, India.

  • Cognizant's Delivery Center in Kolkata, India.

[edit] See also

Portal icon Companies portal

[edit] References

  1. ^ a b c d e f "Cognizant Reports Fourth Quarter and Full Year 2010 Results". Cognizant Technology Solutions Investor Relations. http://news.cognizant.com/index.php?s=14083&item=20277/. Retrieved 2011-03-16. 
  2. ^ Fastest-growing: 16 all-stars. Forbes. By Anne VanderMey. September 14 2011: 2:51 PM ET
  3. ^ America's Fastest-Growing Tech Companies. John J. Ray, Forbes, 04.01.10, 06:00 PM EDT.
  4. ^ a b "No modest ambitions for Cognizant". Express Computer (Indian Express Group). 08 October 2011. http://www.expresscomputeronline.com/20011008/comwatch1.htm. Retrieved 6 March 2012. 
  5. ^ Swati Anand & Ishan Srivastava (Nov 6 2010). "'Cognizant is like a $4-billion tech startup'". Times of India. http://articles.timesofindia.indiatimes.com/2010-11-06/india-business/28246713_1_cognizant-technology-solutions-corp-r-chandrasekaran-net-profit. Retrieved 6 March 2012. 
  6. ^ a b The contrarian by Silvia Sansoni, 06.14.99. Forbes magazine.
  7. ^ Cognizant back in search of Satyam
  8. ^ HBS Alumni - Kumar Mahadeva
  9. ^ Kumar Mahadeva quits as Cognizant chief
  10. ^ a b c d e International Directory of Company Histories, Vol.59. St. James Press, 2004.
  11. ^ "Dun & Bradstreet Spinoff Will Split in Two". January 16, 1998. http://www.nytimes.com/1998/01/16/business/dun-bradstreet-spinoff-will-split-in-two.html. Retrieved 6 March 2012. 
  12. ^ IMS sees some positive impact from Cognizant sale by Eric Auchard. Rediff, November 16, 2002 | 1149 IST.
  13. ^ "Cognizant founder steps down". The Hindu Business Line. http://www.thehindubusinessline.com/2003/12/23/stories/2003122302000700.htm. Retrieved 2010-09-27. 
  14. ^ Cognizant buys Dutch IT firm Infopulse for $5 million. By SiliconIndia | Wednesday, 03 December 2003, 12:30 IST.
  15. ^ Cognizant Tech Acquires Pune SAP Firm For $2 Mn. Financial Express - Monday, Feb 23, 2004 at 0000 hrs IST.
  16. ^ Cognizant buys Fathom for $35 mn. April 18, 2005 17:45 IST.
  17. ^ "Cognizant (CTSH) Financials". Google Finance. http://www.google.com/finance?q=NASDAQ:CTSH&fstype=ii. Retrieved 2011-08-29. 
  18. ^ 2011 Corporate Fact Sheet
  19. ^ "Cognizant 10-K". http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7747225-80385-174615&type=sect&dcn=0001193125-11-043696. 
  20. ^ "Cognizant Expands North American Delivery Center Footprint to Accommodate Rapid Growth". http://news.cognizant.com/index.php?s=14083&item=20272. 
  21. ^ "Twitter status". Cognizant. 2011-02-24. http://twitter.com/#!/Cognizant/status/40842155698159616. 
  22. ^ "India Outsourcing Boosts Cognizant". http://www.bloggingstocks.com/2011/01/20/india-outsourcing-boosts-cognizant-ctsh/. 
  23. ^ "Teaneck N.J. information technology company agrees to pay more than $509,000 in back wages following U.S. Labor Department investigation". http://www.dol.gov/whd/media/press/whdpressVB3.asp?pressdoc=Northeast/20090330.xml. 
  24. ^ CSR World. Last accessed on 6 March 2012.
  25. ^ Cognizant Foundation extends aid to five NGOs
  26. ^ Cognizant Outreach distributes notebooks. The Hindu, June 27, 2010.
  27. ^ Industry insights from Cognizant for AUT faculty. The Hindu, Monday, Mar 14, 2011.
  28. ^ Cognizant goes for green I.T. Manila Bulletin. August 15, 2011.
  29. ^ "Newsweek Green Rankings 2011". http://www.thedailybeast.com/newsweek/features/green-rankings/2011/international.html. 
  30. ^ "Cognizant to Unveil 'Making the Future' STEM Education Initiative at World Maker Faire, New York Hall of Science". http://news.cognizant.com/index.php?s=14083&item=20312. 
  31. ^ Cognizant to donate $810K to Museum of Science for STEM. Boston Business Journal by Mary Moore. Monday, December 12, 2011, 2:07pm EST.
  32. ^ "Cognizant Community: a model industry event". Vinnie Mirchandani. 2011-03-15. http://dealarchitect.typepad.com/deal_architect/2011/03/cognizant-community-a-model-industry-event.html. Retrieved 2011-03-16. 
  33. ^ "Cognizant Academy". http://www.cognizant.com/aboutus/cognizant-academy. Retrieved 2011-03-16. 

[edit] External links

United States Companies of the NASDAQ-100 index
Retrieved from "http://en.wikipedia.org/w/index.php?title=Cognizant_Technology_Solutions&oldid=480486793#History"
Personal tools
Namespaces

Variants
Actions
Navigation
Interaction
Toolbox
Print/export
Languages