Situation: Why Stagnation Risk Existed in 1996

You should self-promote. No one is as interested as you are in showcasing your value to an organization for the purpose of securing compensation as big as your contribution. Step 1 in crafting your Contribution chart is understanding the organization's situation in response to which you made a high-impact contribution. I understood the importance of my contribution only when I analyzed Cognizant's situation that I helped change. Read below my analysis of the situation.

Milestones

1994: Dun & Bradstreet turned its IT team into an offshore joint venture called Dun & Bradstreet Satyam Software, with Srini Raju as CEO
1996: Turned the JV into an independent company called Cognizant Technology Solutions, with Kumar Mahadeva as CEO
1998: Venture went public
2000: Gained traction
2003: Stormed into Fortune 100 Fastest-Growing Companies

What the Venture Had Going For It

Kumar Mahadeva: Visionary founder with restructuring and capital markets capability
Strong founding logic: US parent + India execution, Capitalized parent company’s customers, Capitalized low-risk, high-volume demand for maintenance work, Capitalized tech IPO craze
Early good financial performance: Revenue doubled from $24.7M to $58.6M (1997-1998) and net income increased sixfold from $1M to $6M
Demonstrated excellent technical and project management capabilities
Clearly a promising venture (as my offer letter said)

What the Status Quo Model Actually Was

Revenue concentrated in parent-company relationships
Project mix heavy in legacy maintenance / Y2K work that would repel high-end talent
Engineering-centric delivery
No user-centric design capability: unusable user interfaces
No technical writing capability that could soften the lack of UCD
No business-savvy in software development
Operating during tech bubble
Operating during backlash on offshoring model, backlash accelerated by India’s lack of user-centric design capability
Offshore labor-arbitrage image: Cost-efficient execution engine, not a full-service technology firm.

Questions

Will Western enterprises trust such a venture with emerging-tech (web) projects?
Will a “low-cost, body-billing” image work for a US venture like it did for Indian companies such as TCS?

The Counterfactual: What If They Simply Tried to Scale That Model?

Add more engineers
Add more maintenance contracts
Expand body-billing capacity
Compete on cost
What happens when Y2K fades and web/digital rises?

Demand Shift Mismatch

Enterprise demand is moving toward: Web-based systems, Customer-facing applications, Integrated business solutions, and High-quality user experiences. A narrow engineering-only shop, focused on maintenance and backend work, operates in a commoditized segment and is structurally misaligned with where value is growing. Result: Limits the ability to capture high-value opportunities, slows growth, and constrains margins due to pressure from current and new low-cost competitors.

Client Portfolio Constraint

Heavy reliance on inherited customers and low-visibility projects limits the firm to transactional projects with no access to innovation budgets. Result: Plateauing of customer acquisition and growth-critical revenue.

Offshoring Backlash Amplified

With rising skepticism toward offshore labor, a “low-cost offshore coding shop” image limits access to high-value projects and strategic customer relationships. Lack of user-centric design and business-savvy amplifies the negative impact on customer acquisition and revenue growth, creating a structural ceiling on addressable market and ability to scale profitably.

So What Was the Real Risk?

The venture was under risk of being confined to low-value commoditized offshore execution, with constrained margin, reduced relevance, and an elevated probability of medium-term stagnation

Back to: My Contribution to Cognizant's Success