Utegration acquisition burnishes Cognizant’s SAP Chops

To provide more value for customers and further strengthen its SAP capabilities, Cognizant acquired Houston-based Utegration, a services and solutions provider for the utilities and energy (E&U) industry. The acquisition broadens Cognizant’s SAP services portfolio for the E&U sectors with a much-needed injection of industry-specific expertise, best practices, and skilled employees. SAP clients in the E&U industry potentially have another provider to assist with complicated migrations.

Utegration provides consulting services and solutions for core operations to the E&U industry, including customer experience, billing, and advanced metering infrastructure; managed services; data science and analytics; and finance and asset performance management. Cognizant added Utegration’s accelerators and 350 North American and Indian associates to its SAP business.

Utegration brings the right mix of IP, talent, and service capabilities for Cognizant’s SAP business

Enterprise SAP clients are cautious when converting systems from ERP Central Component (ECC) to S/4HANA because the task involves complex business processes and conversion activities. Unfortunately, enterprises often lack SAP-specific knowledge and resources to perform large conversions. In such cases, they seek service partners with industry-specific capabilities, skilled talent, domain expertise, IP, accelerators, and the ability to deliver value for their investments. Customers emphasized these requirements last year during interviews for our SAP S/4HANA services study.

Utegration has been an SAP strategic partner for more than a decade, delivering solutions and implementation services to E&U customers. Its industry specific-solutions, experience, and resource pool complement the Cognizant SAP practice.

Cognizant fills a gap in the E&U space and enhances its market position through appropriate investment

Our 2022 Top 10 SAP S/4HANA services study showed that Cognizant has significant room for growth in the E&U SAP market; its market share and revenue mix are significantly lower than its competitors’ performance in the market, as Exhibit 1 shows.

Exhibit 1: Cognizant has significant room for growth in the E&U SAP market

Data sample: HFS SAP S/4 HANA services 2022 Top 10 study, August–November 2021, based on estimated revenue
Source: HFS Research, 2023

The acquisition will instantly provide Cognizant SAP practice access to more talents, experience, and know-how. Furthermore, it adds approximately 50 SAP E&U customers, creating an opportunity for more revenue. This strategic investment in the SAP E&U space will strengthen Cognizant’s market position in the long run. Cognizant has a strong SAP customer base in North America, and the acquisition adds more delivery resources that could further boost customer confidence. Utegration’s customers are in North America, which allows Cognizant to cross-sell its offerings in that region.

With the Utegration acquisition, Cognizant strengthened its SAP E&U capabilities through industry-specific custom solutions such as Finance4U, Utility4U, MeterData4U, and Load Planning4U.

The Bottom Line: Cognizant’s Utegration acquisition can deliver customer needs and add value for its SAP clients with industry specialization and consulting capabilities.

Cognizant’s SAP E&U focused acquisition instantly equips the company to meet customer requirements, including industry-specific capabilities and solutions for core operations, industry best practices, and much-needed skilled talents. With this acquisition, customers in SAP E&U space have one more partner option to evaluate as it brings together the industry capabilities and experience to deliver value. On the other hand, the acquisition’s success depends on how well Cognizant leverages Utegration’s SAP capabilities and how well they can synergize to deliver smooth transformations and value to the customers.