Jessica Mehroin Irani, Mumbai
The Economic Times (Kolkata edition)
While most Indian IT firms are looking at acquisitions to grow their business, India’s fourth largest IT exporter Cognizant believes in growing organically. It is also spending more on its sales and marketing as this will help higher client addition and a strong revenue growth.
“We don’t do acquisitions for growth, but for capabilities. We focus on small acquisitions, which will add capabilities and skills. We will not do any acquisitions for scaling up our business as that is something we believe we can do organically,” said MD and president R Chandrasekaran. The rationale for this is that large scale acquisitions are difficult to integrate with the existing business.
“Small-sized acquisitions are easier to integrate as there are no conflicts between existing teams, but are more complimentary as people embrace the new capability easily and quickly,” he said.
Late last year, Cognizant acquired marketRx for $135 million to add sales and marketing analytic capability to its already existing solutions in the life sciences space. Currently, the healthcare division contributes 24 percent to Cognizant’s top line. “With this, we are the only company to provide end-to-end capability in the life sciences space,” said Chandrasekaran.
He believed that Cognizant is good at creating focused capability. “This can either be done organically or faster if we can do it through an acquisition. We will continue to look for small niche targets which fulfil these,” he said. Their other small-size acquisition of the US-based Aimnet was to push up its infrastructure services. “We bought the company for its capability and some of the IT they own,” he said.
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