Cognizant's Value Creation Framework helps guide companies to become more virtual, collaborative and connected by reconfiguring their business models and operational processes, thus reaching new thresholds of performance.
A New Value Creation Model for a New Workplace Reality
• Future of WorkA New Value Creation Model for aNew 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
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 achieveFostering the capacity to create new products, maximum efficiency from existing technology,services, channels, and market opportunities that systems, and business processes. The valuewill result in new revenue streams. unlocked by the Optimize process can then beWithin this framework, the Cognizant Value re-invested in new business opportunities identifiedDiscovery Assessment (CVDA) methodology is during the Extend stage of the CVDA process.used to map a company’s current performancerelative to these four axes. We then help the • EXTENDclient stake out a new position, defining the right The next stage of transformation is to extend thebalance of these factors that will deliver the enterprise’s value-creation capacity beyond currentgreatest value going forward. In this manner, we limits. We do this by identifying core businessidentify 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 thisideas 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 principlesThe CVDA framework is divided into two imple- is that there should be no organizational boundariesmentation stages: Optimize and Extend. For each on where innovation comes from. Using newstage, 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 arereturn 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 SolutionsIn the first stage of the CVDA methodology, we Our approach recognizes that, in the changingwork with the client to unlock value by optimizing work environment, optimizing cost efficiency isthe 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 byis operating efficiently and effectively. We design improving key operational processes, applyingsolutions that extract costs from our customer’s virtualization techniques across people, processesoperations, apply Lean principles to eliminate and platforms to achieve more innovative andwaste and inefficiency, take advantage of collaborative ways of working. Cognizant Value Creation Framework 2
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 inAssessment methodology helps several industries. portfolio of world-leading partners, and a trackclients 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-valueVirtualization 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 email@example.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