Being Frank about Global Sourcing: An interview with Cognizant's CEO (Part II) - Horses for Sources

Since Part I of the Francisco D’Souza interview, I’ve been assured Frank has improved his golf handicap. Now he’ll discuss his views on how ITO service providers can differentiate themselves, the convergence of IT and BPO solutions… and a few other tidbits…

PF: How can ITO providers differentiate themselves in today’s market? Is it by vertical focus, or other elements?

FD: Given the extraordinary pressure that clients are under, I think that the key to differentiation is to focus on how to make clients’ businesses stronger. Rather than focusing on technology, process or methodology, I think providers need to really understand a client’s business drivers and then sell and deliver solutions that further those business objectives. As I said before, clients are facing both cyclical and secular pressures. As a result, depending on the client, their objectives of outsourcing will be very different. Some clients seek to improve efficiency or effectiveness. Others are looking to use outsourcing as a enabler of innovation. Still others are looking at outsourcing as a tool to gain access to the best talent in the world – regardless of where that talent is located. And of course, given the significant secular changes we are seeing, many clients are looking to outsource as a way to enable agility and transformation within the organization.

Against this backdrop, I think providers can differentiate themselves in a number of ways. First, vertical knowledge is key – you have to understand your clients’ business in more than a cursory way. Second, you need a world class, tightly integrated global delivery system – just having scattered delivery locations around the globe is no longer enough. Third, you need to have a full range of services and an organization that has the ability to put bundles of services together in creative ways to craft tailored solutions for clients – the old thinking of outsourcing “towers” is somewhat limiting in that it tends to consider outsourcing as a series of silos. Finally, consultative relationships with your client are critical – in today’s world, providers that rely on contracts and SLAs as opposed to consultative relationships don’t find too much success.

PF: How about BPO – how do you see this market developing, and are you seeing the worlds of BPO/IT coming closer together? Can you see more of the IT-centric service providers such as Cognizant developing more BPO-centric services?

FD: I think that the case of IT/BPO coming together is extremely strong. In fact, I’ll go as far as saying (maybe controversial) that BPO which is based solely on labor and process is not a sustainable model in the long run for most business process areas. The evidence of the synergies that can be unlocked when ITO and BPO are combined together is compelling. We have demonstrated this synergy in many cases and we continue to push the envelope on delivering IT/BPO synergies through automation of processes and also through development of common tools and platforms that we can share across multiple customers.

PF: And finally – you have had a very notable rise to prominence in the outsourcing industry over the last decade. What advice would you impart to ambitious executives today hoping to achieve success, especially in light of the economy?

FD: Focus, focus and focus. It’s been the simple mantra at Cognizant from the start. First, we focus on doing a small number of things – and applying all available resource (talent, management, finances) against those things. Our strategic plan is as much about the things that we will NOT do as about the things that we WILL do. Second, we have a relentless focus on serving the customer. In our culture, the voice of the customer is always the “true north”. And finally, focus on execution – the best laid plans are no use if you can’t execute against them…

PF: Frank, thanks so much for sharing your views with us.