Recently, Cognizant Technologies
) has been selected by a global leader in healthcare, lighting, and consumer lifestyle solutions, Royal Philips Electronics
), to provide a wide range of technology-enabled business transformation and growth programs.
Being a strategic partner, Cognizant will provide a widespread range of services to Philips, which include consulting and application services on a global basis.
These services, in turn, will enable Philips to consolidate, rationalize, and improve its IT landscape for better operational efficiency, business agility, and governance leading to a superior customer service.
As per the terms of the multiyear engagement, Cognizant will allow Philips to switch the IT organization to a platform and output-based managed services model across multiple business lines and corporate functions. Philips will be able to improve business value of IT, get insight into its demand chain and hence respond more effectively to the needs of its markets, businesses and functions.
These changes will eventually improve cost structure, drive structural savings, and release resources to create higher value business capabilities.
Cognizant did not provide the financial details of the transaction. The agreement will enable Cognizant to expand its footprint in Continental Europe.
Earlier, Cognizant extended its relationship with ING U.S., whereby the former can offer a broad array of insurance business process services to the latter. The agreement valued at $330 million spans over a period of seven years.
The U.S. arm of Dutch-based ING Groep N.V. (ING
), ING U.S. family of companies, offers a widespread array of financial services to retail and institutional clients in the U.S. These services include life insurance, retirement plans, mutual funds, managed accounts, alternative investments, institutional investment management, annuities, employee benefits and financial planning.
As per the expanded agreement, Cognizant will now employ more than 1,000 ING U.S. employees in Minot, North Dakota and Des Moines, Iowa with the intent of creating a U.S.-based center of excellence for insurance and finance business process services. The expanded agreement is expected to build on Cognizant's ongoing success in providing specific technology systems management for ING U.S.
We continue to maintain a Neutral recommendation on Cognizant in the long run. Our Neutral recommendation is supported by a Zacks #3 Rank, which translates into a short-term rating of Hold.