Vikram duvvuri cognizant technology solutions

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What are you doing for your employees and your clients in India in this crisis? Yes, so not just in India but around the world. The vast majority of our people are working from home. In India, we have nobody doing client-facing work, really, in any of our facilities. It's all work from home. The only folks who are in our facilities today are some of our internal IT support and security and so forth to keep the buildings running.

And that's true in the Philippines, that's true in India and really most of our delivery centers around the world. In the U. We have a few clients that are asking to bring people back to work in country. But at this point, we're not anticipating a rush back into the delivery centers in India. We will start to pilot some return to work on a very, very small-scale in one or two of our centers in India in the coming weeks.

But we do not expect to have everybody in the centers in any time in the near future. We will continue to have most folks work from home. And then, Karen, just taking a step back, can you compare and contrast, a potential downturn, not just what we are seeing right now, potentially like COVID triggered down to now versus what happened back in '08, '09?

Because as you can imagine, these also been the top questions investors are now trying to figure out because, obviously, there's many differences, we've talked about it a couple of weeks ago. You no longer have offshoring as a secular growth driver. It's probably best pushing for margins, but then on the flip side, digital is a driver of growth.

You — financial services, not in the front line this time. So what should investors keep in mind? Because as you said in the last recession, a lot of it was about financial services and the banks were under a lot of pressure, money dried up and so forth. This time, I think, obviously, the financial institutions are in better shape.

The governments are supporting the economy more rapidly and so access to capital has not really been an issue at this point for most organizations. And so certainly, the behavior that we're seeing from clients is that desire to really protect the transformation work. That agenda seems to be — and, I think, believe it is more critical to clients now than it was ten years ago.

Ten years ago, it really was about the cost cutting. And as you said, you could drive a lot of work offshore. There were lots of levers. A lot of those levers still exist today. And so when we think about clients who are looking on the cost side of the business, they are in a lot of opportunities for vendor consolidation.

We're seeing a lot of clients say, I don't want to run my captive anymore, right, can you come and take my captive over. So there's still a lot of opportunities on the cost side of business to help clients but it's really then about how do take those savings and continue to protect that digital transformation investment that we're seeing. It is really a quite different than what we saw ten, 12 years ago. I do — it's still a question in my mind of if this becomes a prolonged recession, what does happen to the financial institutions and the capital markets, it doesn't have a different impact than what we're seeing today.

But certainly, right now, it feels very different than it did last time. And Karen, let's talk about Cognizant's turnaround journey. It's been more than a year since Brian became CEO. I know it's been a very busy last 12 months for Cognizant. Looking back at the last year, what are some of the key changes you and Brian have put in place to put Cognizant back in a good trajectory?

Yes, I think first and foremost, is the energy and getting everybody focused back on our clients, which is what this company has always done best and so making sure that people across the board are out in front of clients, everyday.

And even though now it's virtually, we're still doing client meetings and client sales calls and so forth and engaging with clients proactively. I'm really keeping people focused on that. As he talked about when he joined — unfortunately, he had gone to see several clients where he didn't feel like the executive team or other leaders in the company have really been out in front of our clients and not really showcasing what the organization can do for our clients.

So that's been a big focus. And I think with some of the leadership changes we've made last year, in particular, in some of the North America changes where we moved DK Sinha to North America. We've got new leadership in many of our businesses in North America. And really reenergize the teams, and we've been able to make some great internal promotions.

The folks have really taken off, such as our Healthcare business, where we have an internal promotion. Even as difficult as our retail and channel and hospitality businesses there, we have an internal promotion there and that team has been doing great as well as our communications and tech businesses. So lots of great stories coming about from that. And you could really feel that energy, I think, in the company, particularly in Q1. And then as we got into the COVID situation, in April, Cognizant did what it did, what it does best, which is it rallies around the crisis.

And the energy and the passion coming from our teams during that first couple of weeks of trying to get everybody set up to work from home and really getting our teams to do it, whatever they could do to support clients through this time, it's just amazing to see.

And certainly, as we closed out the March revenue, and into the first part of the second quarter, the performance of the company certainly was better than we might have hoped for going into this.

So it's been great to see that energy level. I think at the same time, I think we've also gotten more disciplined on the cost side. And I think importantly, really thinking about the bifurcation and the types of services we offer. So we've been so fortunate over the years to be such a high growth company, and we didn't have to really necessarily think about whether we were going to invest in one business versus the other because we had enough funding to invest in everybody.

But at this scale, and when you have businesses that are at different growth rates, different margin profiles and more mature businesses versus less mature businesses, we have to be more thoughtful about where we spend our dollars and where we want to make investments. And so I think we've been able to bring some of that rigor and discipline to the company, at the same time as we continue to invest for growth.

And Karen, you'd upon a lot of really good points there and I want to zoom in on some of those. So the one of two most critical aspects of Cognizant turnaround or pivot towards digital and also at same time optimizing the cost structure.

So let's starting with digital, and we kind of touched upon that a little bit earlier, but can you talk about Cognizant's digital capabilities holistically as they stand today?

How have they changed over the last few years? And how does that compare versus your peers? And more broadly, how does a part to accelerate the digital growth look like for Cognizant? So, I think if we go back, we were really one of the initial companies to start talking about digital with smack back in the day, and horizon one, two and three businesses.

So I think we really coined a lot of that. So I do think we've got an early head start. I think so, particularly in the last, call it, 12 to 15 months, I think we have done a better job of focusing in on what are the areas of digital we want to be strong in. And while you need to play across the board, obviously, I think each firm will have its own strengths. And for us, we've chosen to focus a lot on digital engineering and analytics and cloud and core modernization and so forth, while we'll continue to have a strong interactive business, that is not necessarily just the primary focus of our investments.

So I think we've done a better job of thinking about that and building out those capabilities, both organically and inorganically. I think we've also done a much better job in the last year or so building out partnerships. So with SaaS providers and other cloud providers and really having those strong engagements and relationships and getting their support to help grow our business, which is important.

And partnerships wasn't always a really strong point for us. But I think that is something that as soon as Brian came on board, he realized the need for that.

He came from a strong alliance of partnership background. And so we've worked very quickly to put a lot of that in place. And so I think when we look at some of the parts of our digital practice, we are one of the top couple of firms in that space. And we do think that coming out of this downturn, this will be the driver of growth, not to say that other parts of the business won't grow, but in terms of where we expect meaningful growth to come from, it will be from our digital businesses.

And we will continue to drive investment there, both organically and inorganically in the coming months and quarters. And Karen, you touched upon the cost structure. Your cost structure today is higher versus your peers? Why is that? And what does the journey look like for optimizing the cost structure for Cognizant? So I think it depends which peers you're obviously comparing to.

So I think while it's fair to say that our cost structure is higher than some of the India pure plays or India players, rather, when you look at some of the other firms like Accenture and then even some of the more pure-play digital firms, the digital engineering firms and so forth, their margins are actually lower than ours. So I do think it's a balance, and I do think it matters where you're playing in the space. I think when we look at the sort of heritage Cognizant business and the sort of the core legacy IT business, we do know that our delivery structure was more expensive.

There it always was. And that was by design in the early days of the company. Now as that business has matured, obviously, the reality is it needs less investment than it did, say, 5, 10 years ago. And I think that's the pivot we have to make is how do we think about that cost structure on that part of the business differently.

And I'm not sure we will ever get to the levels of a TCS. They do a remarkable job on that and driving margins. But certainly, we know that we can deliver those services at a more effective cost and ultimately price point them to clients so that you can compete effectively in that business, and that's what we've been working on, certainly for the last year or so. At the same time, we do want to continue to increase the investments on the digital side of the business.

Digital in and of itself is a very high value business, and you've got great pricing in that market, and it can drive great margins. But it is still very much in an investment phase, and particularly with the acquisitions and so forth that we're bringing in, we do need to make sure that we can free up some costs from the other parts of the business to fund that.

And Karen, can you talk about the employee morale as you navigate Cognizant through this crisis as well as the turnaround?

How do you attract and retain talent in this environment? So I think a lot of it was giving the energy back into the company. So certainly, attrition has been higher than it historically had run and voluntary attrition, both voluntary and involuntary, obviously, involuntary, we were pushing, but voluntary has been a little bit higher.

I think part of it is the market. So certainly before COVID, right, we were at a very hot job market around the world, and particularly in India, which, obviously, our largest people base is.

The market in India is vastly different than it was a few years ago. A few years ago, really, firms like ourselves or the market in India, and that's where all the young engineers wanted to come to work and they would get an opportunity to go on-site to whether it be the U.

And it was a great vision for employees. As the market in India has changed and you now have a lot more captives in India, all the big tech companies have moved into India, the banks have moved into India, you have a lot of start-ups now in India that didn't really exists the same level that they do now. And so the market for talent in India is much different than it was a few years ago. And folks who come to a firm whether it be Cognizant, Infosys, TCS, Accenture in India, get this great training background, and then they're given these wonderful opportunities to potentially go and join other firms, which didn't exist before.

So I think, certainly, it's fair to say that unless there's a big change in the market, attrition for that purpose will probably stay a little bit high. Now slowed down considerably, obviously, with COVID, but if we were still in a normal economy, I think we would continue to see some fairly high voluntary attrition.

The flip side is, though, we are really focused on getting the company back to growth. There is a certain amount of energy that has come back to the organization.

We certainly went through a lot of change last year, and we're still going through some of that. But as we bring new talent in and as we bring in some of the new sales teams, some of the leadership that Brian bought in, they bring a wealth of experience to us, and you can really start to see those teams starting to settle in and become part of the fabric of the company, and getting off to a strong start in the first quarter certainly helped with that.

And Karen, the most encouraging aspects coming out of the first quarter earnings call was this win rates improving considerably. Can you talk — can you give a little bit more color on where are you seeing those win rates in terms of the workloads, verticals, cheers? Where are you seeing that? So we saw strong growth across the industries. It's built a really nice balance of particularly strong growth in digital as well as in some of the core IT work, very good growth in North America as well as some of the growth markets.

But I think North America was the piece that we really needed to reaccelerate in many ways. Obviously, such a big piece of all of our healthcare business is in North America, and such a big piece of our banking and insurance businesses are there as well.

And so it's important to really get those markets back on a growth trajectory. And as we looked at the pipeline and the wins that we had in Q1, it really was across the spectrum, particularly strong in healthcare, which is great to see the healthcare business, as we know, has been struggling a little bit the last couple of years.

And with the new leadership we've put in there and the energy that that team has put into being back on the road, getting in front of clients and making sure that we have the right solutions to deliver to clients. They're very quickly starting to see a nice turnaround there. So that was particularly exciting and encouraging to see and great for that team. But strength was really across the board, and that's what was creating really could feel this great sense of energy and passion across the board and a lot of opportunities to celebrate.

And Karen, Brian has talked about this difference, which it emerged over the last few years in terms of the true capabilities of Cognizant and clients' perception of it. Do you think that in some of your core verticals, you're seeing evidence that some of this energy is starting to come back, that client perception starting to change? We really have seen a marked turnaround with some of our client conversations.

And the notion that we do have solutions that we can bring to bear upon clients and making sure that the sales teams and our client partners had the confidence to go into clients and deliver these opportunities, and make sure that they were bringing in the right talent from around the company to do that. And a lot of that was — some of it was comp changes, obviously, we've put in place, but those are recent.

The comp changes are really a initiative, but it was really about making sure that our teams are working together and just opening up the doors to each other. We have become probably a little bit too silo-ed or matrix organization. So by definition, those could be hard. But I think putting the right leaders in place who are much more open to collaboration and bringing teams in, and Brian, leading by example, frankly.

He spent the vast majority of his time until the middle of March on a plane, not just every week, but almost every day. I think he was really out there helping teams and sort of leading by example and encouraging them to get reengaged.

And Karen, just switching gears a little bit. Over the last few years, Cognizant had a little bit of volatility in its financial performance relative to its guidance. And I know there's a lot of factors there, especially with regard to concentration in Financial Services and Healthcare, where just a few clients could really impact your financial performance? But more broadly, has your guidance and forecasting framework changed under Brian's leadership?

It's necessarily changed. Certainly, Brian is a believer of beat-and-raise as a philosophy and certainly always make sure we guide to something that we think we can achieve. And so we certainly have tried to make sure that we do that the last few quarters. But it is somewhat of a science because there's a lot of art as well, and then forecasting, particularly when you're at a time like this, where things are moving so quickly.

But I think it really is about making sure we get the energy back and setting targets and creating an environment where the team can be successful.

Starting with Financial Services, can you talk about the structural dynamics there? It was a growth sector many years ago because of this secular shift towards offshoring, and that also does compliance-related spend. But now this vertical is not just weak for Cognizant, weak for almost everybody. So in terms Financial Services so important for Cognizant, what's your strategy to accelerate the growth here?

And I think I would break banking and insurance into separate thesis because, to your point, I think banking across the board, it is a much more mature industry for the services players. And I think everybody has struggled a little bit with growth in banking. I do think, certainly, for us, that has been focused on a handful of clients. And so certainly, as we look to build out the rest of the portfolio, there's still a number of banks around the world that are not part of — certainly part of our business and part of our model.

We did — done some nice work with smaller regional banks in the U. And I would assume we'll continue to be, but there's still pockets of those institutions that are really not in the market yet. I think as we look into other geographies, I think there's room for geographic expansion in Financial Services. But I do think it's — it is a different footprint. And certainly, I wouldn't expect it to get back to the growth that it had several years ago.

If it does, that's wonderful, but I'm not banking on that right now. No pun intended. But as I think about insurance, we are seeing a lot of traction in insurance, particularly around captives and some bigger transformation deals in the insurance space. So I do think that has the potential to be a bigger opportunity in the short-term than seeing a lot of growth on the banking side. There's also political uncertainty.

How should we think about the long-term growth potential in Healthcare for Cognizant? Again, I separate Life Sciences and Healthcare. But Life Sciences has been doing quite well. And we're really excited about some of the investments we've made in Life Sciences growth in the platforms.

And then more recently, last year with the Zenith acquisition, which is in the IoT space for Life Sciences manufacturing. So I think that will continue to be a nice driver of growth for us. More recently, with Healthcare, as you said, Healthcare was impacted by acquisitions and lots of different things. I think we've lapped the acquisition impact at this point. So again, barring the COVID situation, I think we would have seen some much better performance in Q2, all else being equal, just because of lapping the acquisitions and the impact of a client building up captive last year.

But at the same time, we've seen very nice recent wins in healthcare. Across the spectrum, so both with some of our larger existing clients as well as starting to expand the footprint beyond that core group of clients.

And we have a real strength in Healthcare on the back of the TriZetto acquisition. There's a lot of things we can do in Healthcare in terms of delivering real solutions to the healthcare industry. As I mentioned with the leadership change we've made in that practice recently, that team has really been out working with clients on building out solutions that they know clients are looking for that we can take to market using the experience we have with TriZetto with the product side of the business.

Knowing — despite its troubles over the last few years, I think there is — and will continue to be a big opportunity there over the next couple of years. It has worked really well for some of your peers, but for some of your peers it hasn't. Look, in this business, it's a people business. So when you're looking at acquisitions, a lot of it really does come down to the people.

And can you integrate that acquisition effectively into your culture? When we do acquisitions, we are doing acquisitions to drive growth. And our intent is that we are able to help the acquired company grow faster, and they are able to help us grow faster in the space that they are in.

And it always comes down to a build versus buy decision. And so with acquisitions, we're looking to really attain talent, first and foremost. And so we spend a lot of time thinking about that cultural fit with the talent. And it doesn't always mean that we're going to impose the Cognizant culture on the acquisition. A lot of times, particularly with the digital acquisitions, we're looking to take some of their culture and bring it to Cognizant in terms of how we think about work and engagement with employees and clients and so forth.

But is there a good fit there between the two organizations, where we know we can synergistically come together to make us better as a whole. And that's really the key for us when we think about these. Also, when you're buying smaller companies, which tends to be more of the acquisitions in our industry, we also assume that these features are Founder-led companies.

The Founder themselves, hopefully, as a true entrepreneur, and we'll probably need to go do their next deal. And so you're looking at that next layer of management, and those are the folks who are really going to be able to grow with our organization and to sustain the value from the acquisition.

So there's a lot of things that go into looking at these deals in which ones will make sense and which ones won't. And just switching gears a little bit, Karen. One of the most frequently asked questions I receive in Cognizant is balancing revenue growth with profitability.

Can you have both, especially with this urgent need for reinvestment in the business? So I think it's a balance, and you give — you have to make decisions. Anything he did miss can easily be found in the textbook. Great professor. Definitely a class to look forward to everyday. Amazing lectures Hilarious Accessible outside class.

Dec 4th, Quizzes are insanely difficult.. Do not take Vikram or Gabe. The other reviews are nonsense. The guy below this review got a C and gave Vikram a 2. Why did you get a C then? Tough grader Lecture heavy Test heavy. Nov 21st, He understands the material extremely well; he doesn't need books to teach, given that he always provides interesting and interactive PowerPoint to class.

The course itself is a very challenging course, but he makes the class fun to those who want to be there. In order to pass the class, you will need high amounts of practice doing problems. Amazing lectures Caring Respected. May 24th, Duuvuri was a cool and engaged professor. His lecture was clear overall, but sometimes his powerpoint and lecture were not organized that makes me hard to understand. His weekly quiz was reasonable that based on the homework and lecture examples. Also, the midterm was pretty easy, but the final was pretty hard.

Clear grading criteria Hilarious. Feb 18th, Duuvuri is a really funny guy and you will find yourself laughing every lecture. His lecture strategy is usually good and he will ask questions to see if everyone understands a concept.

I took the class online, so his writing was pretty messy constricted to one screen, but that was pretty much it. He makes the course as easy as physics can be.

Skip class? You won't pass. Hilarious Lecture heavy. May 14th, Great at explaining and demonstrating concepts. A very cool guy that was able to talk pretty casually during class.

Was late multiple times though which wasn't appreciated but still a great professor. Accessible outside class Hilarious. Mar 10th,

Opinion. highmark pcp pity

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Search Tickers. MarketWatch Dow Jones. ET by MarketWatch Automation. ET by Tomi Kilgore. Cognizant Technology downgraded to neutral from overweight at J.

Morgan Jul. ET by Barron's. Cognizant Technology started at equal weight at Morgan Stanley Apr. Cognizant Technology upgraded to overweight at Morgan Stanley Jan. Cognizant Technology upgraded to overweight vs. ET by Ciara Linnane. Cognizant upgraded to positive from neutral at Susquehanna Oct. Cognizant upgraded to buy from neutral at BofA Securities Sep. No Headlines Available.

Other News Press Releases. ET on Zacks. ET on Benzinga. ET on TipRanks. ET on GuruFocus. ET on InvestorPlace. Tech Stocks Under Pressure; Here are 3 to Pick Up at Bargain Prices Although the wild volatility of negatively impacted most sectors, tech stocks disproportionately suffered extensive damage. ET on StockNews. Search Clear. And it was a great vision for employees. As the market in India has changed and you now have a lot more captives in India, all the big tech companies have moved into India, the banks have moved into India, you have a lot of start-ups now in India that didn't really exists the same level that they do now.

And so the market for talent in India is much different than it was a few years ago. And folks who come to a firm whether it be Cognizant, Infosys, TCS, Accenture in India, get this great training background, and then they're given these wonderful opportunities to potentially go and join other firms, which didn't exist before. So I think, certainly, it's fair to say that unless there's a big change in the market, attrition for that purpose will probably stay a little bit high.

Now slowed down considerably, obviously, with COVID, but if we were still in a normal economy, I think we would continue to see some fairly high voluntary attrition. The flip side is, though, we are really focused on getting the company back to growth. There is a certain amount of energy that has come back to the organization. We certainly went through a lot of change last year, and we're still going through some of that.

But as we bring new talent in and as we bring in some of the new sales teams, some of the leadership that Brian bought in, they bring a wealth of experience to us, and you can really start to see those teams starting to settle in and become part of the fabric of the company, and getting off to a strong start in the first quarter certainly helped with that.

And Karen, the most encouraging aspects coming out of the first quarter earnings call was this win rates improving considerably. Can you talk — can you give a little bit more color on where are you seeing those win rates in terms of the workloads, verticals, cheers? Where are you seeing that? So we saw strong growth across the industries. It's built a really nice balance of particularly strong growth in digital as well as in some of the core IT work, very good growth in North America as well as some of the growth markets.

But I think North America was the piece that we really needed to reaccelerate in many ways. Obviously, such a big piece of all of our healthcare business is in North America, and such a big piece of our banking and insurance businesses are there as well. And so it's important to really get those markets back on a growth trajectory.

And as we looked at the pipeline and the wins that we had in Q1, it really was across the spectrum, particularly strong in healthcare, which is great to see the healthcare business, as we know, has been struggling a little bit the last couple of years. And with the new leadership we've put in there and the energy that that team has put into being back on the road, getting in front of clients and making sure that we have the right solutions to deliver to clients.

They're very quickly starting to see a nice turnaround there. So that was particularly exciting and encouraging to see and great for that team.

But strength was really across the board, and that's what was creating really could feel this great sense of energy and passion across the board and a lot of opportunities to celebrate. And Karen, Brian has talked about this difference, which it emerged over the last few years in terms of the true capabilities of Cognizant and clients' perception of it.

Do you think that in some of your core verticals, you're seeing evidence that some of this energy is starting to come back, that client perception starting to change? We really have seen a marked turnaround with some of our client conversations.

And the notion that we do have solutions that we can bring to bear upon clients and making sure that the sales teams and our client partners had the confidence to go into clients and deliver these opportunities, and make sure that they were bringing in the right talent from around the company to do that.

And a lot of that was — some of it was comp changes, obviously, we've put in place, but those are recent. The comp changes are really a initiative, but it was really about making sure that our teams are working together and just opening up the doors to each other. We have become probably a little bit too silo-ed or matrix organization. So by definition, those could be hard. But I think putting the right leaders in place who are much more open to collaboration and bringing teams in, and Brian, leading by example, frankly.

He spent the vast majority of his time until the middle of March on a plane, not just every week, but almost every day. I think he was really out there helping teams and sort of leading by example and encouraging them to get reengaged.

And Karen, just switching gears a little bit. Over the last few years, Cognizant had a little bit of volatility in its financial performance relative to its guidance. And I know there's a lot of factors there, especially with regard to concentration in Financial Services and Healthcare, where just a few clients could really impact your financial performance?

But more broadly, has your guidance and forecasting framework changed under Brian's leadership? It's necessarily changed. Certainly, Brian is a believer of beat-and-raise as a philosophy and certainly always make sure we guide to something that we think we can achieve. And so we certainly have tried to make sure that we do that the last few quarters. But it is somewhat of a science because there's a lot of art as well, and then forecasting, particularly when you're at a time like this, where things are moving so quickly.

But I think it really is about making sure we get the energy back and setting targets and creating an environment where the team can be successful. Starting with Financial Services, can you talk about the structural dynamics there? It was a growth sector many years ago because of this secular shift towards offshoring, and that also does compliance-related spend.

But now this vertical is not just weak for Cognizant, weak for almost everybody. So in terms Financial Services so important for Cognizant, what's your strategy to accelerate the growth here? And I think I would break banking and insurance into separate thesis because, to your point, I think banking across the board, it is a much more mature industry for the services players. And I think everybody has struggled a little bit with growth in banking.

I do think, certainly, for us, that has been focused on a handful of clients. And so certainly, as we look to build out the rest of the portfolio, there's still a number of banks around the world that are not part of — certainly part of our business and part of our model.

We did — done some nice work with smaller regional banks in the U. And I would assume we'll continue to be, but there's still pockets of those institutions that are really not in the market yet. I think as we look into other geographies, I think there's room for geographic expansion in Financial Services. But I do think it's — it is a different footprint.

And certainly, I wouldn't expect it to get back to the growth that it had several years ago. If it does, that's wonderful, but I'm not banking on that right now.

No pun intended. But as I think about insurance, we are seeing a lot of traction in insurance, particularly around captives and some bigger transformation deals in the insurance space. So I do think that has the potential to be a bigger opportunity in the short-term than seeing a lot of growth on the banking side.

There's also political uncertainty. How should we think about the long-term growth potential in Healthcare for Cognizant? Again, I separate Life Sciences and Healthcare. But Life Sciences has been doing quite well. And we're really excited about some of the investments we've made in Life Sciences growth in the platforms. And then more recently, last year with the Zenith acquisition, which is in the IoT space for Life Sciences manufacturing.

So I think that will continue to be a nice driver of growth for us. More recently, with Healthcare, as you said, Healthcare was impacted by acquisitions and lots of different things.

I think we've lapped the acquisition impact at this point. So again, barring the COVID situation, I think we would have seen some much better performance in Q2, all else being equal, just because of lapping the acquisitions and the impact of a client building up captive last year.

But at the same time, we've seen very nice recent wins in healthcare. Across the spectrum, so both with some of our larger existing clients as well as starting to expand the footprint beyond that core group of clients.

And we have a real strength in Healthcare on the back of the TriZetto acquisition. There's a lot of things we can do in Healthcare in terms of delivering real solutions to the healthcare industry. As I mentioned with the leadership change we've made in that practice recently, that team has really been out working with clients on building out solutions that they know clients are looking for that we can take to market using the experience we have with TriZetto with the product side of the business.

Knowing — despite its troubles over the last few years, I think there is — and will continue to be a big opportunity there over the next couple of years. It has worked really well for some of your peers, but for some of your peers it hasn't. Look, in this business, it's a people business. So when you're looking at acquisitions, a lot of it really does come down to the people.

And can you integrate that acquisition effectively into your culture? When we do acquisitions, we are doing acquisitions to drive growth. And our intent is that we are able to help the acquired company grow faster, and they are able to help us grow faster in the space that they are in. And it always comes down to a build versus buy decision. And so with acquisitions, we're looking to really attain talent, first and foremost. And so we spend a lot of time thinking about that cultural fit with the talent.

And it doesn't always mean that we're going to impose the Cognizant culture on the acquisition. A lot of times, particularly with the digital acquisitions, we're looking to take some of their culture and bring it to Cognizant in terms of how we think about work and engagement with employees and clients and so forth. But is there a good fit there between the two organizations, where we know we can synergistically come together to make us better as a whole.

And that's really the key for us when we think about these. Also, when you're buying smaller companies, which tends to be more of the acquisitions in our industry, we also assume that these features are Founder-led companies. The Founder themselves, hopefully, as a true entrepreneur, and we'll probably need to go do their next deal.

And so you're looking at that next layer of management, and those are the folks who are really going to be able to grow with our organization and to sustain the value from the acquisition. So there's a lot of things that go into looking at these deals in which ones will make sense and which ones won't.

And just switching gears a little bit, Karen. One of the most frequently asked questions I receive in Cognizant is balancing revenue growth with profitability. Can you have both, especially with this urgent need for reinvestment in the business? So I think it's a balance, and you give — you have to make decisions. But I think, first and foremost, this is still a growth market, particularly when we think about digital.

And so you want to make sure that you are equipped to take advantage of that and to gain market share, which is certainly our first priority. I think you can manage to a balance of reasonable margins. That's not our intention, certainly not when we see this kind of opportunity for growth over the next few years.

But I think it's possible to have reasonable margins and also drive strong growth and certainly better growth than we had last year. And let's talk about the recent ransomware attack, Karen.

You — I think it was a very thoughtful color you gave, the earnings call around the near-term impact that you foresee. What's the long-term impact that we can expect from this? You talked about, so the legal and security costs for the remainder of the year, but there's any impact on reputational damage or litigation compliance that we should think about? I think it's a bit early to say on that. Clearly, our focus, first and foremost, was to bring all of our systems back up and ensure that we were able to support the clients that we have today, which we've been able to do.

Certainly, as I think about the pipeline of deals right now, it continues to be strong. We've had one or two companies that we're concerned about, proposals, RFPs that they had underway. But as far as I know, they've all agreed to keep us in the process. Now they may choose to go with us or not down the road.

I think that's really to be seen. Is it likely there could be some reputational damage? But at this point, we haven't really seen any significant evidence of that.

And then, Karen, we talked about many different aspects of turnaround for Cognizant. What do you think, more broadly, the biggest risk as you execute your growth plan over the next few years? We're making big bets in areas that we believe are relevant to clients' agenda. And I think making sure we continue to invest enough in those areas of focus for us that we stay in touch with clients. First and foremost, we can't presume we know what's on clients' minds unless we're out talking to clients.

And so I think always engaging with clients and partners in those conversations about where are we investing, what are the solutions that we are planning to build to bring to market is really key, making sure we have access to the right talent, and then our folks on the ground to our sales teams, our client partners who are really are frontline with our clients, have the skill set they need to have the business conversations, which is most important today, right?

While technology is a component of the solution, first and foremost, these are business problems that our clients are trying to solve.

And so if we don't have the right relationships within the senior ranks of our clients and have people who have the ability to have the right business conversations, then obviously, it's harder to get a seat at the table. So those are all things we're very aware of and have been focused on investing in, but I think that's where we need to keep our focus at all times.

And then what aspects about Cognizant's business, do you think, Karen, is the most underappreciated by investors right now? So I think, certainly, some of our digital capability and the innovation that our teams are able to drive. And I don't think that's just an issue with investors. I think that was an issue with clients that Brian realized when came in that we had all this great work going on, but we weren't doing a great job of showcasing it to clients.

So I think, first and foremost, it's been that. I also think there is just such a sense of this company when it's faced with a challenge being able to come together to overcome. And we've seen this time and time again, whenever there's, what I call real challenges in the world. So whether it was the Chennai floods back in or the COVID situation and even the ransomware situation, where this team and our — particularly, our account teams just never lose sight of our customers.

And that our job is to be here to serve and help our customers. And the passion and the energy and the collaboration that comes together, when we're faced with a challenge, until you see it, I don't think people can really appreciate it. But it's really quite remarkable to watch when it comes into action. And Karen, we're almost running out of time. So my final question for you is, as you think through and beyond this pandemic, how do you expect your priorities to shift, especially if it relates to cutting costs or increasing levels of investments?

So I think we really want to protect the investments we're making. So both inorganic and organic acquisitions or investments, we are continuing with the sales hiring that we had underway at the beginning of the quarter.

As we talked about on our earnings call, we will protect digital resources. So even if, for some reason, we have digital talent that becomes unutilized during this timeframe, assuming that they have the right skills and capabilities and so forth, we will protect that talent for the recovery. On the cost side of the business, we are continuing with our critical growth program. And as we've said, most of those resources would be exited by the middle of the year, we're still on track for that.

Lost a little bit of time in April, but we think we're still generally on track with that timing. And then if the bench grows beyond the levels that we think are reasonable for maintaining good utilization rates and what we see in terms of the demand environment. As we said, we will manage the bench.

We've put in place some voluntary programs. So for folks who come to the bench stream, we do have a voluntary separation package that people can avail of if they want to or they could stay on the bench and follow the normal bench policies. But that's really focused on skills that we think are fairly reasonably and easy to replace in the marketplace.

So for skills that are harder to find in the marketplace, we will retain that talent as best we can, but there are certain skills in the market that we all understand are easier to find at any point in time. And so those are the folks that would be on the bench. I think that's about all the time we have.

For those of you, who are listening in, please complete the Procensus poll and you will have immediate access to the full results. And thank you very much, Karen, for the great discussion today. Thank you, everyone, for listening in. Question-and-Answer Session. SA Transcripts Now, with that, let's begin. Karen, thank you very much for joining us today.

Karen McLoughlin Thank you, Harshita. Harshita Rawat The safest for now. Karen McLoughlin Exactly. Harshita Rawat So, Karen, and this is going to end up some of the top questions I have now in my inbox too. Karen McLoughlin Yes, absolutely.

Harshita Rawat And, Karen, can you talk about how is Cognizant stand positioned in this demand environment, which in terms of what percentage of your revenue is exposed to critical systems and infrastructure versus revenue exposure to discretionary projects with longer payback thesis? Karen McLoughlin Sure. Harshita Rawat And Karen, I have a number of questions for you on the digital side, but before we get there, just two more follow-up questions here.

Karen McLoughlin So we have a few requests from clients to give them some temporary breaks on specific projects or pieces of work within a client. So… Harshita Rawat And Karen, the demand side, the near-term demand impact, is it more deferment of projects or cancellations that you're seeing right now?

Harshita Rawat And Karen, you and many of your peers also have called out the demand for increased demand for modernization projects, remote work, cloud in this current crisis. Harshita Rawat And Karen, just talking about the delivery side of this equation. Karen McLoughlin Yes, so not just in India but around the world. Harshita Rawat And then, Karen, just taking a step back, can you compare and contrast, a potential downturn, not just what we are seeing right now, potentially like COVID triggered down to now versus what happened back in '08, '09?

Harshita Rawat And Karen, let's talk about Cognizant's turnaround journey. Karen McLoughlin Yes, I think first and foremost, is the energy and getting everybody focused back on our clients, which is what this company has always done best and so making sure that people across the board are out in front of clients, everyday.

Harshita Rawat And Karen, you'd upon a lot of really good points there and I want to zoom in on some of those. Karen McLoughlin So, I think if we go back, we were really one of the initial companies to start talking about digital with smack back in the day, and horizon one, two and three businesses.

Harshita Rawat And Karen, you touched upon the cost structure. Karen McLoughlin Yes. Harshita Rawat And Karen, can you talk about the employee morale as you navigate Cognizant through this crisis as well as the turnaround? Harshita Rawat And Karen, the most encouraging aspects coming out of the first quarter earnings call was this win rates improving considerably.

Harshita Rawat And Karen, Brian has talked about this difference, which it emerged over the last few years in terms of the true capabilities of Cognizant and clients' perception of it. Karen McLoughlin I do. Harshita Rawat And Karen, just switching gears a little bit. Karen McLoughlin It's necessarily changed.

Karen McLoughlin And I think I would break banking and insurance into separate thesis because, to your point, I think banking across the board, it is a much more mature industry for the services players. Harshita Rawat And just switching gears a little bit, Karen. Karen McLoughlin So I think it's a balance, and you give — you have to make decisions. Harshita Rawat And let's talk about the recent ransomware attack, Karen. Harshita Rawat And then, Karen, we talked about many different aspects of turnaround for Cognizant.

Karen McLoughlin We're making big bets in areas that we believe are relevant to clients' agenda. Harshita Rawat And then what aspects about Cognizant's business, do you think, Karen, is the most underappreciated by investors right now?

Karen McLoughlin So I think, certainly, some of our digital capability and the innovation that our teams are able to drive. Harshita Rawat And Karen, we're almost running out of time. Harshita Rawat I think that's about all the time we have. Karen McLoughlin Thank you very much. Take care. Harshita Rawat Okay. Question-and-Answer Session Q -. Recommended For You. Comments Newest. Is this happening to you frequently? Please report it on our feedback forum. If you have an ad-blocker enabled you may be blocked from proceeding.