Cognizant Becomes First IT Co to Call Out Risk From GCCs

Firm's annual report acknowledges rising competition from in-house tech arms

- Jas Bardia

BENGALURU: Cognizant Technology Solutions Corp.'s annual report describes global captive centers (GCC) operated by its clients as a potential risk, making the Nasdaq-listed company the first large IT firm to cite the GCC shadow over outsourcing.

Though a Cognizant spokesperson said the New Jersey-based firm's position has since "evolved," the development raises the question of whether more IT services firms would acknowledge the rising competition from these in-house technology centers. Technology analysts have previously pointed to the risk from GCCs, though IT companies themselves have dismissed it so far.

"Additionally, we face competition from clients' in-house technology resources, such as GCCs, which may provide a lower cost alternative to our services," said Cognizant's annual report released on Friday. "We compete for employees not only with other companies in our industry, but also with companies in other industries, such as software services, engineering services and financial services companies, as well as our clients' GCCs," the report said. Cognizant has three-fourths of its employees in India.