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Genpact is likely to benefit the most, while Accenture and Wipro, too, stand to gain as Cognizant’s clients are expected to initiate a rebidding process to assign contracts to new service providers, analysts said.
Industry experts expect the rebidding process to begin soon. In fact, some of the work from a Cognizant client has already moved to Genpact, said a person aware of the development. “They are already a large client for Genpact. But a lot of the other IT services and BPM (business process management) companies are pushing for the business as well. It’s good for companies because a major competitor has left the business,” a BPM industry executive said.
The decision to move out of the business, which focuses on determining whether content violated client standards, is in line with Cognizant’s strategy towards becoming a more cost-efficient and digital-driven company. Genpact, meanwhile, had sounded upbeat about the business. “Like all the work that we do, we focus really strongly on operational delivery, excellence and so on,” CEO NV Tyagarajan had told analysts earlier this month. “And, therefore, we feel good about the position that we have in that business, the relationship with our clients in that business, so all good.”
Cognizant would exit the content moderation business gradually in the coming year, chief financial officer Karen McLoughlin said in a recent analyst call. Following this, there would be a transition process.
“It takes a minimum of three months to rebid and often as much as six-nine months to complete (the process). It will take a minimum of three months to transition and probably as much as six months,” said Peter Bender Samuel, the CEO of IT advisory firm Everest Research.
He said among others, few would follow Cognizant’s precedent and exit the space which is witnessing strong growth. He expects Accenture, Genpact and Wipro to get much of the business that Cognizant is exiting.
Cognizant CEO Brian Humphries, in an analyst call earlier this year, had said the company had decided that content moderation work was now not a part of its strategic vision. Some analysts suggested that given the manual nature of content moderation work, the company’s exit from it was well-timed.
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