For years, Indian technology firms have struggled to increase their presence in the consulting segment, which has also meant low revenues from this sphere of business. Now, Nadaq-listed Cognizant seems to have finally got a plan to make its consulting strategy work, according to a recent article in The Business Standard.

Cognizant’s consulting practice now has 5,500 consultants, one of the highest among Indian IT players. This number has gone up from about 1,000 in 2008. Consulting constitutes seven to eight per cent of Cognizant’s revenue now, says a JP Morgan report. The shift in Cognizant’s strategy is significant, as IT consulting accounts for 13 per cent of the overall IT services market and is growing faster than the market, says a study by research firm Gartner.

According to Mark Livingston, executive vice-president of the consulting business at Cognizant, the consulting arms have been able to open 50 new accounts on an average, every year for the past few years. Livingston, who joined the firm in 2008, attributes the success of its consulting practice to the strategy that the company laid out in 2009-2010.

“Initially, I had a hard time hiring consultants because there had been technology-oriented companies that had tried to build consulting arm, but were not too successful with it. We have done a really good job at building an operative model at Cognizant, where our consulting team is aligned to the delivery organisation that is focused on selling consultant work,” said Livingston.

Cognizant has designed a matrix model where consultants report not only to the consulting practice head, but also to the delivery manager. For instance, the banking and finance services (BFS) practice has about 1,000 consultants. This synergy between consultants and delivery operations is evident in the growth of the consulting practice.

According to a JP Morgan report, high-level consulting has not been Indian IT’s cup of tea. “This brand of consulting, as we call it, pertains to strategy, business model change, organization change management, M&A – typically, the type that engages the CEO and the board.

Legacy consulting brands, such as Deloitte, Accenture, KPMG and EY, along with other big players, have maintained focus here. In the recent past, only Cognizant among system integrators has attempted to break into this club of players offering ‘high-level’ strategy,” said Viju George and Amit Sharma of JP Morgan in their report.

For the full article, please see here.

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