In April 2019, Brian Humphries replaced Francisco D’Souza as CEO of the $17 billion Cognizant Technology Solutions at a time when the US-based software company was facing a series of challenges, including a court case on tax evasion, enquiry on illegal construction in India, and charges of bribery in the US. A year later, there are more challenges as the Covid-19 crisis has disrupted the entire world, and is likely to have a cascading effect across all industries. The IT industry will be hit badly as spending by clients would reduce dramatically. Humphries and his team of 2.90 lakh employees — a majority of them in India — are gearing up to face the challenges post Covid. In this interaction with BusinessLine, Humphries discusses the impact of the pandemic and the road ahead. Excerpts:
What do you think will be the impact of Covid-19 ?
Covid-19 will create winners and losers. On the demand side, we expect all industries to be hit, but some like retail, travel and hospitality will be particularly impacted. We are determined to emerge from the crisis stronger through our close partnerships with our associates, clients and communities. We feel confident that Cognizant will weather the storm better than others.
…. How?
Because of our strong balance sheet and liquidity, and our client mix, geographic mix and industry mix.
What will be the priorities of clients?
The pandemic’s shockwaves have spurred clients to speed up their digital transformations. Major IT trends like core modernisation, data modernisation and cloud adoption will accelerate. These trends are aligned with our strategy to win in the digital battlegrounds of artificial intelligence and analytics, digital engineering, cloud and internet of things. Our strategy is more relevant than ever to clients.
How do you see spending on IT by clients?
CEOs and CFOs are reviewing their balance sheets, liquidity and cost structures. Business investments and IT projects are being prioritised. Discretionary projects are likely to be delayed. We see a clear shift towards innovation, automation and efficiency through application and platform modernisation. We will help clients evolve into modern businesses that are able to stay relevant and sustain growth in the face of continuous technological change.
How challenging the year 2020 is going to be?
The IT services industry is now expected to shrink 5 per cent in 2020, versus original expectations of 5 per cent growth. But I view this as a short-term anomaly and I remain extremely confident in the growth prospects of the services industry. While 2020 will be a challenging year given Covid-19, we are confident that our industry, geographic, and customer segment mix, strong balance sheet, momentum in our digital imperatives, and growing competitiveness will enable us to compete well on a relative basis, regardless of the macro environment.
Where will you invest?
We continue to invest in our business by protecting and developing our digital skills, building out our commercial team, and advancing our work to correct our pyramid by onboarding approximately 20,000 entry-level hires.
What are your focus areas going to be?
No one knows how long the pandemic will last — only that eventually it will fade. We are focussed on controlling everything that is within our control. That begins with ensuring the safety and well-being of our associates as we maintain business continuity for our clients. We have continued to execute our Fit for Growth plan to improve cost structure and fund investments aligned with our long-term growth. We continue to use M&A to advance the execution of our strategy, as evidenced by the four cloud-focussed acquisitions we have announced so far this year. We have strengthened our financial flexibility.
What are the key learning from this pandemic?
The pandemic has reaffirmed two core beliefs about our company: First, the importance of the deep and enduring relationships we have with clients. Over the years, we have earned their trust. Second, the unwavering commitment and tenacity of our 290,000 associates (most of them working from home in India). Despite all the stress and uncertainty in their own lives, they came together to serve our clients, support one another, and keep the company moving forward. Their efforts, visible in every part of the company, from our commercial and delivery teams to all of our support functions, were simply extraordinary.