Cognizant shakes IT market with subdued future outlook

It started with Infosys declaring zero wage increase followed by Wipro with flat outlook and shaky growth results. Now Cognizant Technologies has come out loud and clear that IT market globally is not increasing enough to continue with their growth stories.

IT employees in India who in general were a pampered lot would be very soon staring at a not so bright future which had almost a free run for last two decades barring a brief period during dot com bust and 2007 recession.

“ IT employees in India who in general were a pampered lot would be very soon staring at a not so bright future which had almost a free run for last two decades …”

Most of the mid and small scale companies who have been struggling to keep employees ranks intact and have been plagued with average of 25% attrition rate are already looking at lower attrition. Moreover several companies have also started taking action by letting go several of their employees who were on bench.

Infosys and Wipro had already taken such measures apart from holding salary increase. Almost all companies have experienced more than average business loss where customers have moved out due to reasons like budget cut, getting a better deal or even opting out for their own captive company in India.

Coming times over next 12 to 18 months will have clear path for most of the IT sector where focus on retaining the customer would be prime rather than acquiring new customers. This would essentially mean that luring the customers into continuing doing business by passing discounts or doing a lot of free work or even pay per use model to mitigate the risks even further.

All this is also going to end up in lower cash flow and higher cost of retaining the customer and straining profitability even further. All this would mean that employees of IT companies will have to be satisfied with low or no pay increase for some more time to come. On more cautious side, retaining job would be a matter of good luck in such a choppy situation because once lost; getting a new job would be even more challenging.

The only bright spot with IT export would be the high cost of USD which is giving sufficient cushion as of now, but banking on such uncontrollable factors would be the last thing for matured IT industries.

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Picture Credits : Cognizant, For representational purposes only

Alok Kumar

Alok Kumar is Managing Partner of SRKay Consulting group, a private equity company, nurturing innovative ventures. Alok also serves on the board of ICCL (Indian Clearing Corporation Limited - A subsidiary of BSE- Bombay Stock Exchange) as an external advisor for technology and information security. Prior to this, Alok had been Managing Director of Sears IT & Management Services India Private Limited (SHI) since its inception in December 2009 and served in the same position till very recently. Having been in senior IT management positions in Fortune 500 companies, Alok has won several national and international awards. Alok is instrumental in planning and setting up SHI and thereafter growing it to a multi-locational thousand-plus people organization. Over the last five years, with his strategic vision, Alok helped SHI grow roots in India, develop and support technology applications and infrastructure across core mainframe, cutting edge e-Commerce and big data technologies. With his unique people-oriented transformational leadership style, Alok turned SHI into one of the most valued investments of Sears, garnering great ROIs, and creating value much beyond cost arbitrage. Under his tutelage, SHI has filed two patents and is recognized widely for its best practices in various areas, the latter, currently featured in Indian Institute of Management (IIM) case studies. SHI also became a CMMI Level 3, PCMM Level 3, and ISO 20000 certified organization. Alok is a widely acclaimed corporate leader in India today. He regularly participates and leads various forums as a keynote speaker and is an author of several books in different genres. Alok has several awards to his credit. He is particularly known in the industry for his people management skills and innovative ideas in improving the productivity of employees through unique people practices. He has been credited with the following industry awards: ¬ Emerging Leader of the Year award 2013 by ¬ Game Changer CEO of the Year 2013 (SHRM) ¬ CIO 100 - The Bold CIOs - 2008 (Reliance Infosolutions) ¬ CIO - Ones to Watch Award 2008 (Reliance Industries) ¬ Extended Manager Award - CIOL 2004 (Tata Teleservices) As an able leader of SHI, Alok got SHI recognized widely in the industry with the following several awards: ¬ CII Award for HR Best Practices in 2014 ¬ Global Excellence in Outsourcing Award - AIOP (Phoenix 2013) ¬ IT Innovation Award (Design & Engineering) - Computer Society of India 2012 ¬ Golden Company of the Year - Economic Times 2011-12 ¬ 7th Employer Branding Awards - World HRD Congress (Mumbai, India) 2013: • ‘Asia’s Best Employer’ Award • ‘Best HR Strategy’ in line with business • HR Leadership Award • Talent Management Award by Bloomberg TV India ¬ Employer Branding Awards - World HRD Congress (Singapore, Asia) 2013: • 7th rank in ‘Asia’s Best Employer’ award • Award for ‘Best HR Strategy’ in line with the business • HR Leadership Award Other recognitions: Alok had served on the distinguished panel of NASSCOM's GIC (Global In-house Centers) National Council members. The council members play a key role in major initiatives of the industry and include the torch bearers of IT industry as panel members. Books and Papers: Alok is an established author, with three books to his credit. Alok’s third and latest book, a novel, “The Spy from Unaula” is a 2015 publication. A handwriting analysis enthusiast, Alok collaborated with his wife Nandani on the book, “Handwriting Speaks” in 2006. “Value Sourcing – Future of IT Outsourcing” was co-authored with Keith Sherwell (currently CIO, Altice USA) and was released in 2013. Alok also researched and published two whitepapers: a. “Creating next generation captives” talks about the best practices that are helping generate higher value from the IT company captives.

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