Cognizant secured a Horizon 3 position in the recently released report, HFS Horizons: Services for the Platform Economy, 2023. The report found that platform businesses such as Uber, Airbnb, and Meta are scouting for providers with end-to-end capabilities spanning consulting, engineering, IT, and business operations. Cognizant presents a compelling case underscored by several client illustrations. Consequently, Cognizant has experienced double-digit year-on-year revenue growth from the platform economy over the past four years. This impressive track record is built upon a robust talent management program, substantial corporate investments, proven playbooks, and customer-centric commercial models. However, Cognizant could expand its consulting offerings portfolio by adding focused services such as IPO readiness assessment.
Cognizant’s engagement with the platform economy encompasses engineering, IT services, and business operations
Cognizant has been following a one-stop-shop approach to help its platform clients navigate fiercely competitive ecosystems. The variety of work performed stands out—from refining a voice assistant via NLP for a prominent internet search engine to providing anticipatory video call assistance to content creators on a prominent online video-sharing platform.
Below are a few client examples highlighting the wide scope and variety of work performed:
- Cognizant manages trust and safety to support a global technology major’s 14+ core product areas: The client asked for expert ethical hackers in the US and India who could reverse engineer application code and address malware. Cognizant overcame two major hurdles: finding and deploying talent (ethical hackers) quickly and devising an artificial intelligence/machine learning-based (AI/ML) risk engine to address the safety and integrity of online users. Cognizant prevented more than 7.5 billion harmful installs, evidence of the magnitude of damage avoided.
- Cognizant formulated a CRM transformation program for a leading SaaS company: The client was continuously missing sales opportunities due to inefficient lead and accounts data. Cognizant improved data for more than 1,000+ client accounts by re-platforming the CRM system. It followed a hybrid agile scrum methodology to deliver a high sprint velocity. Cognizant also built a collaborative and interactive sales forecasting platform with analytics capabilities, leading to a 360-degree view of the customers.
Cognizant has an excellent offerings portfolio, but it needs tailored offerings, such as off-the-shelf offerings for multi-sided clientele, to accommodate the platform businesses’ unique characteristics.
Four central pillars underpin Cognizant’s growth with platform clients
Cognizant has prioritized talent, tech investments, IP development, and business-oriented commercials to grow its presence within the platform economy.
- Skill development and building an adaptive workforce remain key priorities. In the past 10 months, Cognizant employees have attained more than 3,000 certifications and clocked at least 500,000 learning hours across various packaged technologies. It co-designed new talent acquisition and development programs, such as “Aim Higher,” a 12-week consultant-trainee program, with Salesforce and the University of Montana. However, Cognizant has room for improvement, as employees rated their loyalty toward Cognizant moderately low in HFS’ Super Seven Services Employers 2023 study.
- Investments in skill acquisition, tools, and training increase wallet share. Cognizant made $200 million in investments in tools and training and incubated more than 40 classified tech programs in 2022, including opening a lab for testing advanced driver assistance systems.
- Developing IP helps the company stay relevant for platform clients. Cognizant created 50+ customized tools to serve its platform clientele better. For example, 4th Eye is a machine learning algorithm tool leveraging Google’s Vision API to predict labels from an image and run content checks for prohibited content. Clients can apply these tools in multiple areas, including content moderation.
- Creative commercial models reciprocate with platform clients’ business dynamics. A significant number of these deals have been restructured to more purpose-oriented models, such as outcome-based and performance-based pay, working toward a fairer partnership arrangement.
The Bottom Line: Platform businesses should consider a provider’s track record, people expertise, tooling capabilities, financial commitment, and commercial flexibility to make the right choice.
Platform businesses’ growth is a function of network effects. Therefore, they heavily rely on tactically flexible and operationally agile providers to match the fast pace of development. Large and committed players like Cognizant are relatively safer choices to help navigate the difficult path of faster decision-making, operational optimization, and rapid scaling.
