Cognizant Flags GCCs as Potential Threat in Annual Report
21 Apr 2025 / 02 min read
Information technology (IT) services major Cognizant Technology Solution Corp. has flagged risks from the growing business spread of global capability centres (GCCs), offshore captive hubs of multinationals offering a range of solutions for their parents, including value-added services such as Software as a Service (SaaS), Platform as a Service (PaaS) as also sophisticated engineering, legal and insurance services.
Information technology (IT) services major Cognizant Technology Solution Corp. has flagged risks from the growing business spread of global capability centres (GCCs), offshore captive hubs of multinationals offering a range of solutions for their parents, including value-added services such as Software as a Service (SaaS), Platform as a Service (PaaS) as also sophisticated engineering, legal and insurance services.
Cognizant, in its annual report, has signposted key areas obliquely alluding to potential business loss from clients who could prefer assigning work to their homespun offshore GCCs driven by cost and efficiency arbitrage, besides clamouring to draw talent from the same pool.
“The markets for our services are highly competitive, characterized by a large number of participants and subject to rapid change. Competitors may include systems integration firms, contract programming companies, application software companies, cloud computing service providers, traditional consulting firms, professional services groups of computer equipment companies, infrastructure management companies, outsourcing companies, boutique digital companies and clients’ in-house technology resources, such as GCCs,” the IT major said in its annual report.
“In addition to large, global competitors, we face competition in many geographic markets from numerous smaller, local competitors that may have more experience with operations in these markets, have well-established relationships with our desired clients, or be able to provide services and solutions at lower costs or on terms more attractive to clients than we can. Additionally, we face competition from clients’ in-house technology resources, such as GCCs, which may provide a lower cost alternative to our services,” it said.
Besides, there is also the aspect of attracting talent that has become competitive among IT services companies and GCCs.
“Competition for skilled labor is intense and, in some jurisdictions in which we operate and in key AI and digital areas, there are more open positions than qualified persons to fill these positions. 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 Cognizant report said.
