The new consistent Cognizant looks to move clients from business as usual to AI as usual

Cognizant practically invented digital transformation more than a decade ago with its vision of the “SMAC Stack,” which combined social, mobile, analytics, and cloud. The invention of “Digital” soon followed, which built on Cognizant’s vision and became the new raison d’être for the data-driven, cloud-enabled, scalable business.

However, with the onset of the pandemic years driving differing leadership priorities, the firm has been struggling to rediscover its mojo in a post-digital world.

Now, 18 months into his tenure as Cognizant’s CEO, IT services veteran Ravi Kumar S is making patient but deliberate progress amid mighty market headwinds and a cacophony of AI noise.

HFS attended the firm’s recent Americas Analyst and Advisor Summit and left with three key observations:

1. Consistency of strategy and message—Ravi reinforced the theme of capabilities at the intersection of technology and industry, echoing last year’s messaging, and showcased the results with nine clients from various sectors. We also noted continued progress with women in leadership, significant strides in reducing attrition, and ongoing talent upskilling. Consistency is critical when you’re on the comeback trail.
2. Differentiated and compelling AI focus—This event theme struck us as an apt description of both Cognizant’s own effort as AI client zero and how they are trying to help clients. We credit Ravi with finally activating a great AI acquisition from way back in 2018—certain assets of Sentient Technologies—and elevating its founder and chief scientist, Babak Hodjat, to serve as Cognizant’s AI CTO. Babak did one of the best AI demos we’ve seen—yes, live demo, not PowerPoint—showcasing the power of an agent-based approach to GenAI using synthetic, industry-specific data. Cognizant has not been known for its intellectual property recently and is ready to change that. #letBabaktalk
3. Many of Cognizant’s enterprise clients are sharing their experiences—Cognizant’s clients, from financial services, life sciences, retail and CPG, and logistics, really showed up and took the stage. Their participation reminded us that the company may have stranded itself as a business-as-usual supplier with many clients. Still, its relationships with many of the global 2000 remain intact and are ready for an upgrade. CoreLogic, The Bancorp, and six others shared details of their partnerships with Cognizant. Doubling down on its existing clients and helping them move from business as usual to AI as usual is the mission of the moment.

The combination of these three elements may be enough to give Cognizant a competitive edge in a fast-evolving market, where the rapid emergence of GenAI is proving a great leveler across the tech services landscape. This is an opportunity for providers to demonstrate unique AI competency, especially the ability to mix traditional AI technologies and algorithms with the latest GenAI LLMs. This is particularly important given the rapid advancements recently announced by OpenAI with the launch of ChatGPT-4o.

In our opinion, the fourth element will be speed. Cognizant must move quickly as client zero to show how GenAI and the broader AI canon will change the company. Having a million Copilot licenses is not the point. What is being done with them to transform the company and its services is the story that needs to be told.

Cue the detail—AI stats

Cognizant is making significant strides in generative AI (GenAI) to drive innovation and productivity. With 500 GenAI projects in production and another 500 in the pipeline, Cognizant is committed to becoming a leading player in bridging the gap from labor arbitrage to technology arbitrage-based services in the industries in which it competes. As voiced by its CEO, Cognizant’s focus on AI is not just a case of following a trend. It’s a strategic imperative that will redefine how businesses operate and compete. This ‘all in’ on AI may finally be the glue that brings Cognizant’s breadth of offerings into the complete solutions of customer productivity enablement, business transformation, and data modernization.

Cognizant’s strategic shift: Diversification and AI integration

Cognizant is diversifying its focus beyond its traditional strongholds in the BFSI (banking, financial services, and insurance) and healthcare sectors. At its annual analyst event, Cognizant showcased examples from food & beverage, logistics, and telecommunications companies by bringing clients to the stage to tell their stories. It was open to showing how its partners, from SAP to MuleSoft to Microsoft, are part of Cognizant’s AI-based solutions journey.

The company is expanding geographically to capture new markets. This diversification is crucial for mitigating risks and tapping into new revenue streams—making it less North American (in a good way). Further, the integration of GenAI into its operations and client solutions is a testament to its commitment to staying ahead of the technology curve. Thus, it also seeks to be seen as a company willing to eat its own dog food.

The role of GenAI in modernizing operations

Cognizant is leveraging its acquisition of Sentient Technologies to enhance its AI capabilities. Babak Hodjat, Prasad Sankaran (EVP, software and platform engineering), and Naveen Sharma (global head of the AI & Analytics business) have critical roles to play if the company’s transformation is to succeed. Together, their AI, data, and GenAI team will play a crucial role in developing the latest solution in their Neuro X suite. With Neuro AI, Cognizant can work with customers to combine the flexibility of low-code development, prompt engineering, and LLMs to accelerate the conversion and creation of software-enabled workflows and functionality.

Additionally, platforms such as Flowsource and SkyGrade offer clients the potential to reduce tech debt and modernize operations. These platforms aim to streamline processes and improve efficiency, enabling enterprises to focus on optimization and innovation. While a platform such as Flowsource can simplify and accelerate workflows, we remain skeptical about its reusability across clients and processes.

Employee experience: The key to customer satisfaction

Cognizant understands that a satisfied workforce is crucial for delivering exceptional customer experiences. The company strongly emphasizes improving employee experience, recognizing that employee satisfaction directly impacts customer satisfaction. This approach boosts morale and enhances productivity, creating a win-win situation for employees and clients. Several client panelists echoed this philosophy, speaking about putting employees first and developing a culture of trust that will significantly impact customer experiences and revenue growth.

Industry-specific solutions: Tailoring AI to client needs

Cognizant is focusing on delivering industry-specific solutions, such as modernizing contact centers for clients like PepsiCo. This tailored approach enables Cognizant to leverage its expertise in various sectors and offer customized solutions that meet clients’ needs. By doing so, it provides technology while enabling outcomes that align with its clients’ business objectives.

Challenges and opportunities in AI adoption

While Cognizant is making significant strides, it still faces challenges. Managing and reducing technology debt is a critical issue, which makes its efforts to migrate systems to the cloud and streamline operations vitally important. Enterprises are still adjusting to OpEx cost models post-cloud transformation, which affects their ability to fund new innovations. However, the opportunities are immense.

The Bottom Line: It’s time for Cognizant to energize its client relationships and drive impact at the intersection of technology and industry.

The message to enterprises is clear—embrace AI or risk falling behind. Embracing Generative AI is no longer optional but a necessity for staying competitive. Cognizant’s strategic focus on AI, employee experience, and industry-specific solutions offers a roadmap and deep resource pool for enterprises seeking to navigate the complexities of modern technology landscapes. The firm can leverage its role as a trusted business-as-usual partner for many clients and help firms across industries effectively embrace AI.