Cognizant vs EPAM: On-Premise to Cloud Managed Services | In Practise

Cognizant vs EPAM: On-Premise to Cloud Managed Services

Former VP at EPAM Systems and Cognizant

Learning outcomes

  • How large enterprise customers choose managed service providers for mainframe and cloud application services
  • Typical contract structures and how pricing is set for projects
  • The impact of shorter contract durations and renewal risk
  • How EPAM is positioned versus Cognizant
  • Drivers of gross and operating margin for managed service contracts for the cloud today
  • The importance of driving innovation and cost savings for the customer
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Executive profile

Kamesh Chetty

Former VP at EPAM Systems and Cognizant

Kamesh has over 20 years experience delivering managed services for large global consultancies. Kamesh is the Former VP at Cognizant where he led various digital transformation projects for large healthcare payers. He also enjoyed 3 years at EPAM where he was VP of Financial Services and Application Managed Services where he was leading projects for the world’s largest banks and insurers. Prior to EPAM, Kamesh spent 10 years at Unisys as VP of Services Delivery where he was leading the delivery of application services globally. Kamesh started his career leading professional services at Firepond and is now Digital General Manager at DXC Technology. Read more

Kamesh, can you share a short introduction of your background, in the industry, over the last 20 years?

Over the last 20 years, I have held leadership roles across a handful of companies. I was the vice president of professional services and support at Firepond. I was the vice president of worldwide applications services at Unisys. I then moved on to EPAM, to help their worldwide application managed services. Currently, I’m the digital general manager at DXC.

Can we take a step back to the early 2000s, when you were at Unisys. What did a typical managed service project look like, back then?

Managed services, by definition, are when the technology services provider is willing to put skin in the game and is willing to share the risk with the client. I identified the risks and the client and the service provider agreed to enter into an agreement to split and share the risk; this can vary from contract to contract and that’s when we enter into managed services. In managed services, typically, you have a few different flavors, when it comes to support and maintenance of either applications or infrastructure. That’s one kind of managed service. The other type is referred to as fixed bid development of very large custom application development initiatives.

The one thing that is clear is, when it comes to support and maintenance of a portfolio of applications or infrastructure, that hasn’t evolved much, but it has evolved in the right direction, as evolution happens. One area that has drastically changed is when it comes to these really large, fixed bid developments, where you take the risk up front and submit a fixed bid and do a custom development project. I think the industry has come to a realization that we still do not have the right tools, methodologies and technologies to do a fixed bid for a ground up development. What has happened is, from waterfall it has gone to agile. Overall, I see less and less very large fixed bid development coming on, which is very good, otherwise the relationships tend to suffer very early on in the engagement cycle. That has moved in the right direction.

Those fixed bid contracts are just too risky for the provider, in that you have to predict the time, the duration, the materials and labor required to fill the project?

Right. There are so many unknowns at the early stages of a project, when the bid is proposed. Everyone has a set of assumptions and they all hire the best project managers to manage the gig and there is a constant discussion of change. Is this in scope? Is this out of scope? The relationship tends to suffer very early on and I see less and less of that happening. I think the clients have come to a realization that it is not the right thing. We are seeing more collaborative bids and agile development where, typically, you don’t put a big estimate up front, on the table. This is a good evolution.

Has that changed the nature of the customer relationship?

Significantly. The minute you get into these very controversial discussions – this was not in scope; let me pull up my 100-page document and I can show you, on page 23, paragraph 3, look at this – the relationship is never going to be good. I believe, when that is not there and when both parties are not trying to find faults with the other, then the relationship is much better.

Arguably, this shift to a more maintenance or recurring revenue, plus agile development, is stickier for the providers, with clients?

Absolutely. It is stickier for the provider; the relationship is much better and the benefit is mutual. In some of the earlier fixed bids I have personally seen, when the providers have lost their shirts and pants, ultimately, both of them are in a business engagement and we have to create a win/win and to make sure that both are profitable. When that doesn’t happen, it’s never good. Now I love what I am seeing on that front.

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Cognizant vs EPAM: On-Premise to Cloud Managed Services

September 7, 2020

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