A New Value Creation Model for a New Workplace Reality
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Cognizant has developed a framework called the Cognizant Value Creation Framework to help clients optimize costs, improve effectiveness, leverage virtualization, and foster innovation. The framework uses a methodology called the Cognizant Value Discovery Assessment to benchmark clients and identify opportunities across these four value levers. Cognizant then works with clients on a two-stage implementation process - Optimize to streamline costs, followed by Extend to extend benefits through virtualization and new revenue opportunities. The goal is to transform businesses for new levels of performance.
A New Value Creation Model for a New Workplace Reality
- 1. • Future of Work A New Value Creation Model for a New Workplace Reality Technological, social and economic forces are reconfigure and redeploy their core business driving enterprises to rethink fundamental business processes, and guide them step-by-step to new assumptions. The rise of cloud computing, the levels of performance. proliferation of social networks to access collective At Cognizant, we are already partnering with the knowledge, the emergence of Millennials –– the world’s leading companies to do just that. We cre- “digital generation” –– as both employees and ated the Cognizant Value Creation Framework customers, and the continued push toward glob- through an intensive and rigorous two-year alization are all transforming businesses, while process in collaboration with leading global forcing them to be more virtual, collaborative, and companies worldwide. This framework helps connected. guide our clients through the process of recon- In this evolving environment, businesses are figuring their business models and operational rethinking conventional notions of how work is processes to become next-generation businesses done, where it is done, and by whom. Reaching with enhanced levels of performance. new thresholds of performance will require The Cognizant “Diamond” framework is based on businesses to reinvent many of their existing four value levers (see chart on following page): knowledge processes –– how they organize teams, gather and share knowledge, cultivate 1. EFFICIENCY innovation, allocate resources, engage with employees and customers, and build partnerships. Optimizing the cost structure of the business, This is the future of work –– and the future has streamlining processes, reducing waste, and arrived. generating higher returns on investment. New Framework for Creating Value 2. EFFECTIVENESS In the current economic climate, forward-thinking Improving productivity and operational performance companies know they need to do more than simply in such areas as quality control, customer satis- contain costs. They need to create value –– for faction, decreased time to market, etc. customers, employees, and all stakeholders. As 3. VIRTUALIZATION businesses rethink their mission-critical business processes in this unfamiliar landscape, they will Sharing work processes, knowledge and technology need a partner who understands the changing both within and outside the enterprise in a collab- nature of work –– and can help them benchmark orative and flexible manner. their current position, define a new vision, help Cognizant Value Creation Framework | November 2010
- 2. Cognizant “Diamond” Framework VIRTUALIZATION Shift capex from context to core... EFFECTIVENESS BUILDING INNOVATION Improve quality, control, STRONGER Creating new customer satisfaction... revenue streams... BUSINESSES EFFICIENCY Eliminate waste, streamline processes.. 4. INNOVATION economies of scale, leverage global service delivery, maximize value-added activities, and achieve Fostering the capacity to create new products, maximum efficiency from existing technology, services, channels, and market opportunities that systems, and business processes. The value will result in new revenue streams. unlocked by the Optimize process can then be Within this framework, the Cognizant Value re-invested in new business opportunities identified Discovery Assessment (CVDA) methodology is during the Extend stage of the CVDA process. used to map a company’s current performance relative to these four axes. We then help the • EXTEND client stake out a new position, defining the right The next stage of transformation is to extend the balance of these factors that will deliver the enterprise’s value-creation capacity beyond current greatest value going forward. In this manner, we limits. We do this by identifying core business identify opportunities to leverage the client’s cost processes that can benefit from new techniques, base, improve business processes, unleash the such as the virtualization of services, globalization, power of virtualization, and harvest innovative and cloud-based computing. The objective of this ideas for profitable growth. stage is to accelerate collaboration and flexibility, and thus integrate innovation in products, services, Practical Transformation and delivery channels. One of our core principles The CVDA framework is divided into two imple- is that there should be no organizational boundaries mentation stages: Optimize and Extend. For each on where innovation comes from. Using new stage, we collaborate closely with the client to techniques, the entire enterprise –– and customers, define program objectives, responsibilities, and too – can be brought into the innovation process, metrics for transformation, as well as a clear yielding new products and services that are return on investment (ROI). We then apply our already “customer-tested” and “customer-certified” benchmarking and analysis methodologies to in advance. This results in additional revenue- track, manage, and measure progress toward generating opportunities, taking business per- meeting these pre-set goals and ROI metrics. formance to new levels. • OPTIMIZE Practical Business Process Solutions In the first stage of the CVDA methodology, we Our approach recognizes that, in the changing work with the client to unlock value by optimizing work environment, optimizing cost efficiency is the cost structure of core operational processes. the starting point for value delivery. Our CVDA, In the Optimize process, we ensure that the business however, extends the potential of the business by is operating efficiently and effectively. We design improving key operational processes, applying solutions that extract costs from our customer’s virtualization techniques across people, processes operations, apply Lean principles to eliminate and platforms to achieve more innovative and waste and inefficiency, take advantage of collaborative ways of working. Cognizant Value Creation Framework 2
- 3. The CVDA: Transforming Over Time to Extend Value Future state Virtualization Current state Intermediate state Virtualization Virtualization Optimize Extend Innovation Innovation Innovation Effectiveness Effectiveness Effectiveness Efficiency Efficiency Efficiency Enabling capabilities To produce meaningful value, business process business as a means of reaching new performance solutions must be rooted in a deep understanding thresholds. Starting from the optimization of cost of the unique requirements and challenges of structure, we then extend the benefits of our each industry and each business. For this reason, global services solutions across the entire enterprise an important part of our Extend phase is to identify –– mapping a course toward the right balance of industry-specific customer business processes efficiency, effectiveness, innovation and virtual- for which we can provide high-value, productized ization to transform the business. solutions. Tapping our deep industry domain With our broad portfolio of information technology, expertise, we have created end-to-end, cloud- consulting and business process outsourcing The Cognizant Value Delivery enabled business services, we have extensive global resources, a process solutions in Assessment methodology helps several industries. portfolio of world-leading partners, and a track clients define the right balance record of providing strategic solutions to our of Efficiency, Effectiveness, By freeing our clients clients’ most complex needs. to focus on high-value Virtualization and Innovation to And, as a global and highly virtual organization, activities that are core transform the business and to their businesses, our we practice what we preach. Our Cognizant 2.0 maximize value. collaboration and knowledge-sharing platform business process solu- enables the seamless sharing of insights and best tions deliver strategic value. For example, a leading practices across our global delivery network, pharmaceuticals company worked with us to create allowing us to bring the best resources and most a next-generation enterprise analytics and relevant expertise to any client, anywhere. reporting solution for its commercial operations. Not only did the company realize cost and The Cognizant Value Creation Framework is helping process efficiencies, but sales and marketing clients embrace new ways of working. We are effectiveness soared. committed to delivering next-generation solutions to enable your business now to meet tomorrow’s These industry-focused business process solutions challenges. can be readily adapted and applied to the client’s business to drive immediate performance Start Today improvements and help our clients deliver differ- entiating value to their customers. For more information on how to drive your busi- ness results with Cognizant, contact us at A Passion for Building Value inquiry@cognizant.com or visit our website at www.cognizant.com. Our Value Creation Framework and CVDA methodology offer a new pathway to business process improvement. These tools enable a deep exploration of a company’s specific industry and Cognizant Value Creation Framework 3
- 4. A Cognizant Framework for Disruptive Value Creation Value Lever Summary Typical Customer Benefits Efficiency Leveraging Cognizant's process, technology, and Cost optimization via global service delivery, global delivery strengths to rapidly and cost- economies of scale, etc. effectively design and implement solutions that Maximizing use of existing assets and resources to optimize spend, reduce unit costs, and eliminate waste, reduce cost per unit, and implement positively impact your bottom line. cross-organizational standards for lower cost. Subscription-based pricing to reduce capital expenditures while optimizing processes. Effectiveness Improving productivity and operational Process optimization that fosters quality performance via standardization, better tools, improvements while controlling costs. automation, etc., to achieve more effective Increased control, transparency, and adaptability of business processes (driving reduced ticket ongoing operations. volume, higher levels of availability, streamlined Decreased time-to-market for products and services. processes, improved satisfaction metrics, etc.) Virtualization Addressing multiple levels of virtualization Consolidated resources that enable lower cost of including work (global knowledge and ownership on existing assets and reduced collaboration), process (atomization of investment on new technology. processes), and technology (servers, Improved flexibility and collaboration across the applications, cloud-enablement) helps lower enterprise through technologies that allow better operational and CAPEX costs while boosting resource utilization, new ideas, and knowledge brand and shareholder equity. management for global workers. Innovation Business technology innovation to enhance Growth opportunities that provide direct revenue. revenue opportunities via new products, new IP, Refined business models that drive additional new market channels, etc., facilitated by revenue and strengthen bottom and top lines. Cognizant's domain expertise and knowledge. Joint go-to-market opportunities with shared investments and revenue. About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services. Cognizant’s single-minded passion is to dedicate our global technology and innovation know-how, our industry expertise and worldwide resources to working together with clients to make their businesses stronger. With over 50 global delivery centers and more than 100,000 employees as of December 1, 2010, we combine a unique global delivery model infused with a distinct culture of customer satisfaction. A member of the NASDAQ-100 Index and S&P 500 Index, Cognizant is a Forbes Global 2000 company and a member of the Fortune 1000 and is ranked among the top infor- mation technology companies in BusinessWeek’s Hot Growth and Top 50 Performers listings. Visit us online at www.cognizant.com for more information. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. Haymarket House #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA 28-29 Haymarket Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London SW1Y 4SP UK Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7321 4888 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7321 4890 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com © Copyright 2010, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.