We aim to once again reinvent ourselves, says Cognizant CEO

Chennai: Cognizant Technology Solutions Corp. on Monday once again raced past rivals’ revenue growth rates and surpassed its own second quarter earnings per share forecast. Shares of the US-based information technology (IT) company rose on the Nasdaq after it also affirmed its fiscal 2012 revenue growth outlook at 20%.

Francisco D’Souza, Cognizant’s chief executive officer, spoke in a phone interview a few hours after its results confirmed the firm had overtaken Infosys Ltd as India’s No. 2 software services provider based on quarterly revenue. Edited excerpts:

How does it feel to deliver industry leading growth consistently? Do you have a chance at being India’s No. 1 IT services provider?

Industry leading growth is the outcome of two things: reinvesting in the business over a long period of time and building capabilities relevant to the marketplace. The market is buying different services and capabilities than a few years ago. We have spent a long time building such capabilities. Clients are looking at us as partners. We’ve never focused solely on scale.

How is Cognizant piggybacking on its consulting business for growth?

Our clients are facing strong, secular changes in the industry. They are buying in different ways. They are not saying, “I know what I need to do,” but instead are saying, “Help me figure out what I need to do.” That’s where consulting plays a role. So we as consultants offer to not just help them understand the problem in detail and find a technology-enabled solution, but also take charge of developing and deploying the technology.

How important is leadership management for stability and growth in a company?

In a people business, the most critical capability you can have is your ability to develop leaders. Developing leaders is not just competence, but the responsibility of everyone in the company. We focus on an approach to leadership development that involves movement of people into different roles to have hands-on experience. As Cognizant has scaled, we’ve done so with largely the same management team and that is unique in the industry.

What is your hope for discretionary spending picking up? How are you dealing with the currency headwinds?

For the rest of the year, discretionary spending will continue to be muted in the markets and industry we serve. It is tough to say what next year will look like. I don’t see any catalyst that will provide an uptick to the existing trend in discretionary spending. With respect to currency volatility, there is only so much we can do.

What is your long-term strategy for Europe and the emerging markets, such as Latin America?

You have to separate the short-term events from the long-term market opportunity in Europe. Despite the bumpiness and lumpiness we are seeing in Europe, it is attractive as it is under-penetrated. So, I don’t intend to take my foot off the gas in Europe. The Middle East and Asia are showing strong growth and they will be our growth drivers. Latin America is a longer-term growth opportunity. It is still early days for us in Latin America. It will take us time to ramp up.