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TCS, Cognizant plan to buy Lodestone Management

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TNI Bureau: Tata Consultancy Services (TCS) and Cognizant, two of the country’s leading software services reportedly have plans to acquire Lodestone Management Consultants, the Swiss management and technology consulting firm headquartered in Zurich.

As per reports, the above stated two firms along with Infosys have responded to the invitation of bids from this firm, which has revenues of 207 million Swiss francs.

The best possible reason to own this Swiss firm is that – Indian IT services companies generally miss out to multinational players like IBM or Accenture in terms of providing higher-value services like consulting or solution.

But acquisition of a company like Lodestone would positively bring them higher billing rates; for which these biggies of India have joined the race to own the firm.

But none of the companies have officially confirmed this report yet.

Cognizant and TCS have been the most active on the inorganic front, acquiring companies that provide them the scale or domain capability.

Also, even the strategy taken by each of them in the marketplace has been extremely different. While TCS’ scale of operations with a significant presence in every continent allows it to do business at almost every point of the IT services value chain, Cognizant deliberately keeps its operating profit margin on the lower side so as to invest the money back into the business for closer customer connect.

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