Infosys and Wipro, two large Indian outsourcing concerns, have in recent years struggled to reel in big fish clients for their consulting arms. Recent research finds that outsourcing firms that leverage their well-developed consulting practices are set to be winners in the battle to cross-sell solutions to big international clients. The firms have therefore sought to transform their consulting practice, with a keen eye on best practice at Cognizant Technology Solutions.
The Cognizant approach
Cognizant Technology Solutions is one of the larger consulting deliverers in the IT ecosystem. The firm claims to have perfected an operational model for leveraging IT outsourcing and consulting practices. “We have created a unique and highly operating successful model that you could say is the magic sauce behind Cognizant recording massive numbers for the last five years,” explains Mark Livingston, Executive Vice-President of Consulting at Cognizant.
Since 2008, under the guidance of Livingston, the firm has grown its practice from a footprint of 1,000 consultants to a practice of more than 5,400, with many of the new hires acquired from EY and Deloitte. The firm pioneered the ‘three-in-a-box’ approach, which sees at least one consultant, one client partner and one delivery director operative for each large client. The client partner provides operations management, while the consultant seeks to identify potential improvements to business operations. The three are, according to Sandy Gopalan, Vice-President of Consulting at Teaneck, New Jersey-based Cognizant, “[…] tied to the hip.”
According to Livingstone, the strategic approach provides clients with the right mix of strategy and implementation for their potential needs. He remarks that: “Our consulting practice is not standalone. In our model, consultants are more like software delivery sales guys. It’s a matrix model where the consultancy organisation reports to the vertical in the business and reports to me. So it’s aligned with delivery and we go jointly to market.”
In recent years, the demand for technology driven solutions to business problems, as well as the development of analytics and forms of social media, continues to drive consultant demand, a recent Source study finds. It has been this demand – and Cognizant’s adequate solution – that has propelled its strong growth. “Strategy without technology is no strategy at all. Now as digital becomes default, clients are simply not buying strategy alone from top-tier consultancies. Every great idea has to have technology as a backbone. This explains how we win in more than 70% of times competing against the top consulting firms. So we are using consulting to help accelerate growth of delivery (of our technology offerings) because we can implement the idea, we can quickly develop a prototype, using design thinking and other things and that is what has helped us,” says Livingston.
Infosys, Tata Consultancy Services and Wipro each built consulting practices to provide advice to large enterprises worldwide about opportunities to simplify their technology and business operations with Indian business services. Their consulting expertise as well as Indian hosted IT outsourcing would provide competition to the more expensive services of consulting giants. With the increased demand for digital, as well as the need to provide clear consulting advice to potential clients, Indian IT suppliers are seeking to strengthen their positions.
Infosys for instance, is reorganising its consulting practice by merging its Swiss consulting unit Lodestone with its consulting practice, and has – following Cognizant’s success – bound 100 of the firm’s consultants to the management of 200 of its largest clients. The hope of the integration is to develop a new way of working that will bring about a $20 billion giant by 2020. So far the strategy has managed to increase business by 5.7% from its top clients. Wipro is playing also catch-up. According to the firm’s Chief Operating Officer Abid Ali Neemuchwala, the consulting practice will have three distinct foci: business operations consulting, IT strategy and operations and organisational change management. TCS too is repositioning itself, with the key move to provide business consulting services as part of its wider IT services packages.
Ray Wang, founder of Constellation Research, a technology research and advisory firm, comments: “However, as IT service firms mature, they realise that this [business consulting] is a key driver for future deals. The firm which can service a client with more of their offerings will win in the next three to five years.”