© 2006, Cognizant Technology Solutions. All Rights Reserved.The information contained herein is subject to change without notice.

Cognizant Budapest: A Value Proposition

Cooperating in Technology /Company testimonial by Peter van Wely/15 April

2010

© 2007, Cognizant Technology Solutions. Confidential 2

Cognizant Budapest: Near shore Center

East Europe as an IT Services destination

Agenda

Cognizant Budapest: Revenue Perspective

Cognizant Budapest: Glocalization

© 2007, Cognizant Technology Solutions. Confidential 3

Nearshore Destination Analysis

Overview: Offshoring in Central & Eastern Europe

CEE is an important region for

services offshoring

» Imports of IT services from CEE

countries into EU-15 increased by

13% y-o-y between 1992 and 2004

» India grew by 14% in this period

Continental Europe is an

attractive market as backlog

demand is greater than in UK &

Ireland

Objectives:

» Build a Bridgehead for Global Delivery

• Important qualification criteria for many medium-large deals in EU

» Add Multilingual Capabilities

• Important for BPO business

» Expand Service Offerings in Europe

• BPO & Infrastructure Mgmt Services

© 2007, Cognizant Technology Solutions. Confidential 4

EE as IT services destination

Market Characteristics

The IT services market alone was at US$21.5 bn in

2005, growing to reach US$32 billion by 2009

Imports of IT based services from CEE into the EU-15

rose by average 13% per year between 1992 - 2004

IDC estimates spending on IT offshoring will grow by

avg 16.5% per year and 14.6% on BPO in WE until

2009

Human Talent

Good language skills – 40% of school children learn

German and over 70% learn English

West European Culture Compatibility.

Good domain skills in Life Sciences, Financial Services

& Manufacturing Verticals

CEE-3 (Poland, Czech, Hungary) have a high % (50% )

of actually suitable job candidates vs. the no. of

persons with requisite formal qualification (As compared

to 10% in China & 17% in India)

Infrastructure and Government Policy

Favorable Government policies and procedures –

Compliance to EU regulations

Positive long term economic, political & social outlook

Good road, rail and air connectivity

Less no. of days required for starting a business in

Eastern Europe - 26 days…(Source: World Bank

Report)

Projects & Processes

Good project management systems

Geographical proximity and similar time zones will

induce firms to move nearshore that are reluctant to

offshoring

Increased intensity of communication - makes it easier

to exchange complex business processes.

(IDC estimates that BPO will reach a volume of

US $35bn in Western Europe by 2009)

© 2007, Cognizant Technology Solutions. Confidential 5

Offshoring Moving Closer to HomeSource: Economist Intelligence Unit

European companies need shared-service centers that can operate in European languages - Close cultural and geographical ties make suppliers from EE an attractive option.

•New Offshoring functions require more interactions – Similar time zones and ease of travel from EE locations

Rise of global service delivery –With demand now stronger from Europe, global outsourcers are boosting there capabilities in EMEA (Europe, Middle East & Africa).

A survey of European chief information officers (CIOs) found that nearly 90 per cent would prefer a more local supplier for their IT services…(Source: KPMG Survey)

Of more than 100 companies surveyed, more than half of CIOs said that they planned to boost spending on suppliers in Central and Eastern Europe, including Romania, the Czech Republic, and Hungary; less than a third forecast similar increases in Asia’s emerging markets…(Source: KPMG Survey)

© 2007, Cognizant Technology Solutions. Confidential 6

Cognizant Budapest: Near shore Center

East Europe as an IT Services destination

Agenda

Cognizant Budapest: Revenue Perspective

Cognizant Budapest: Glocalization

© 2007, Cognizant Technology Solutions. Confidential 7

Budapest emerges as the Best Location

Resources

» Budapest

» Ostrava/Debrecen/Lodz

Financial Structure

» Brno, Ostrava/Lodz/Debrecen

» Prague

Business Environment

» Prague

» Krakow/Lodz CURRENT ATTRACTIVENESSFU

TU

RE

AT

TR

AC

TIV

EN

ES

S

CURRENT RATINGS

HIGH

HIG

H

© 2007, Cognizant Technology Solutions. Confidential 8

AT Kearney – Global Services Location Index

It evaluates 40 countries as potential locations for most common remote services, including IT services and support and back office support.

Hungary scores high in comparison to Romania & Czech Republic.

The weight distribution for the three categories are

40:30:30. Financials are rated on a scale of 0 –

4and the other 2 parameters on a scale of 0 - 3

GSLI 2007 shows an improved Business Environment in Hungary as compared to 2005

© 2007, Cognizant Technology Solutions. Confidential 9

EE Market & Competition – Indian Players

Infosys overseas center in Brno, Czech Republic is operational from April 2006

Wipro is setting up a near shoring facility in Romania with $250 mn initial investment

•10% of its revenues about $ 13mn come from EE center - Hungary

•Satyam planning to set additional delivery centers in Poland & Russia

•Center in Hungary set up with an investment of $100 mn

•Outsourcing Center in Poland intends to recruit 1500 employees investment of $ 400 mn

•TCS delivers 25% of its Europe projects from EE – about $125mn in revenues

Source: Competitive Intelligence Cell - CTS

© 2007, Cognizant Technology Solutions. Confidential 10

Cognizant Budapest: Near shore Center

East Europe as an IT Services destination

Agenda

Cognizant Budapest: Revenue Perspective

Cognizant Budapest: Glocalization

© 2007, Cognizant Technology Solutions. Confidential 11

Roadmap

Short Term

• BCP / DR (24*7 Support)

• Govt. / EU Projects

• BPO / IT IS

Mid Term

• Domain Building –

(Telecom / Retail)

• BPC / BTC

Long Term

• EE as emerging markets

•Future IT Business Size

© 2007, Cognizant Technology Solutions. Confidential 12

Objectives

Build a Bridgehead for Global Delivery

» Important qualification criteria for many medium-large deals in EU

Add Multilingual Capabilities

» Bilingual skills (German, French) key to BPO business

Expand Service Offerings in Europe

» BPO & Infrastructure Management Services

» Customer plans for captive in German speaking country to

provide ITO/BPO services

Comply with EU Regulations

» Access to customer environment & data within EU countries

© 2007, Cognizant Technology Solutions. Confidential 13

Demand from Western Europe

% of companies citing Language and

Culture as obstacles to offshoring

0

20

40

60

80

100

France Germany Netherlands Great Britain

Source: IDC

Source: Forrester Research

Western European outsourcing expenditure

(USD bn)

0

20

40

60

80

2004 2009

BPO: CAGR 14.6%

ITO: CAGR 7.2%

Demand Analysis:

• IDC estimates that spending on IT offshoring will grow by an average of 14.4% per year in the US and by 16.5% per year in Western Europe until 2009

• IDC estimates that BPO will reach a volume of more than USD 35 bn in Western Europe by 2009 bringing it almost on a par with ITO

Language Capabilities in Budapest:

• Percentage of students studying:

• English - 23%

•German - 25%

• French - 2%, Spanish - 1%, Italian - 2%

Cultural Sensitization:

• 30% of foreign Students in Western European countries are from East Europe countries. This gives them a good understanding of cultural aspects of these countries

• Availability of language skills and Cultural fit is attracting Western European companies to East Europe countries

© 2007, Cognizant Technology Solutions. Confidential 14

Cognizant Budapest: Near shore Center

East Europe as an IT Services destination

Agenda

Cognizant Budapest: Revenue Perspective

Cognizant Budapest: Glocalization

© 2007, Cognizant Technology Solutions. Confidential 15

Cognizant Budapest providing Global Partnership

GLOBALIZATION LOCALIZATION

• Consistency and

compliance to client’s

standards

• Sharing Best

Practices across IT

functions in diverse

geographies

• Economies of Scale

– leading to improved

long – term mutual

benefits

• Sharing knowledge

about processes with

client’s subsidiaries

Price

People

Language

Investments

TimeScale

Partnerships

Standards

Processes

Best Practices

GLOBALIZATION LOCALIZATION

• Good understanding

of the local market

• Local personnel in

client interfacing

roles with a mix of

the global people

• Local resources

fluent in English and

European

languages to handle

all language issues

• Better understanding

of the local culture

and ability to service

customer needs

better

A truly Global Partnership requires a judicious mix of Globalization and Localization

© 2007, Cognizant Technology Solutions. Confidential 16

Thank you