“Artificial Intelligence is a profound shift, what I call a double engine transformation, because it offers Cognizant the chance to disrupt ourselves as much as it does for our clients,” said the company’s CEO S Ravi Kumar. The US-based IT company with large workforce in India now has over 1,000 GenAI early engagements compared to about 750 at the end of the second quarter, he told analysts while discussing the company’s third quarter financial results.

“Consistent with our heritage, we spotted the AI opportunity early and in mid-2023, announced plans to invest $1 billion into AI initiatives, platforms and capabilities,” he added.

Giving some examples on AI, Kumar said the foundation of the company’s AI strategy was powered by the Cognizant data and toolkit, which was utilised to increase speed, reduce costs and improve the predictability of our clients’ data modernisation journeys. Today, there are over 225 project implementations supporting over 120 clients, he said.

On the company’s Flowsource platform, which is a developer workbench that is integrating human and AI effort to improve productivity, Cognizant is in various phases of testing and adoption with over 150 clients. Using AI tooling, Cognizant is generating 150,000 lines of accepted code per month. That means on an annualised basis, two million lines of code are accepted by the company’s developers into the projects to deliver to clients. It’s an example of how AI is enabling hyper productivity as Cognizant shares these productivity gains with clients and lowers the cost of technology deployment, he told analysts.

AI tooling is helping us do more for less. And those savings are getting translated to innovation dollars and translated to backlog getting cleared. It is a new model, which is helping us to win those deals. When we win these large deals, those dollars are not going back elsewhere, they’re actually going back to technology. And we are able to put a model where we underwrite those dollars for the innovation. So that’s the change. That’s what clients are looking for in an industry of this kind where you can do more for less, the spend is elastic, said Kumar

Deals

“We are seeing a gradual rebound of spend cycles and gaining wallet share in financial services. While our historical strength in health sciences is driving differentiation and growth,” said Kumar.

For the entire last year, Cognizant did 17 deals that were worth $100 million. This year, for the first nine months, the company has done 19 more than $100 million deals. “I am confident that we can sustain the momentum,” he said. The company is starting to see large deals in Europe and Asia Pacific. In fact, out of the six deals done in the third quarter, one of them was in Asia Pacific and one in Europe, he added.

Cognizant, which reported revenue of $5 billion in September quarter, had a strong growth in health sciences, up 7.8 per cent year-over-year and return to growth in financial services, up 0.7 per cent year-over-year.

“We are very excited about the opportunities in healthcare, the differentiation we have and the lead we have in some of the areas is unmatched. So healthcare, we are very confident. Financial services, we are back on track,” he said.

“There is an uptick in spending in financial services clients, and we are probably seizing those dollars from our peers, and therefore, we are starting to see that,” he said. “I am optimistic that financial services will continue to go back to a high discretionary environment at some point in time because it’s also one of the most cutting-edge innovative industries. And they all have retailed organisations where a lot of technology innovation is done in partnership with companies like ours,” he added.