Good morning. Welcome to Cognizant's Investor Day. We're delighted to host you both online and here in the heart of New York City. Our executive team is quite excited to share with you today our strategic focus, our growth agenda, and our longer-term plan to drive value. We have a very busy day. Today, let me go briefly through the agenda. We split the agenda into three chapters. Chapter one focuses on our strategy, and that will be hosted by Francisco D'Souza and Malcolm Frank. Chapter two will focus on operations and delivery, and that will be hosted by Rajeev Mehta. Chapter three, we will focus on our financial plan, and that, of course, will be hosted by Karen McLoughlin. We'll have two opportunities to ask questions during the event, one in the middle and then again at the end of the day.
Also, I should say, for those of you who are attending the event by webcast, we will have an opportunity for you to submit questions throughout the day. We will collect these questions, and depending on the number of questions we do get, there will be an opportunity to submit these questions. We will submit them for the second Q&A session at the end of the day. Immediately following this event, we will host a lunch, obviously, for those of you here. If you look at the app for the event, we do have a section titled Lunch, and that will indicate where each of our executives will be sitting. You're welcome to sit at whatever table and join whichever executive you'd like to. Obviously, it's first come, first served. At the end of the day, we do have a survey which is connected with the app.
Delighted to have your feedback on that. Now, I can't leave the stage, obviously, without reminding you that some of the comments that we make today and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's financial filings with the SEC. With that, let's get started.
As technology advances, as industries advance, we are advancing with them, harnessing a culture of speed and continuous innovation to further our advantage in the digital space. While we are evolving our capabilities, expanding our offerings, reaching new audiences across industries, we remain cognizant, the very definition of the word, innately tuned to the demands of our clients' businesses. With digital as the engine of value creation, more and more companies are relying on that very cognizance to transform their business, operating, and technology models in increasingly intelligent ways. The market opportunity is clear to reimagine not just companies, but entire industries, and enable our clients and ourselves to continue to lead the way in an era where technology no longer supports business, but drives it.
Please welcome Francisco D'Souza.
Well, good morning, everyone, and welcome. Welcome to Cognizant's first-ever Investor Day. We've really been looking forward to this meeting. We're excited to see so many of you here today, and we welcome your interest in Cognizant. Thank you. Thank you for being here, and thank you for braving the weather to be with us this morning. Now, as all of you know, we're getting together today at a time when technology is having a really profound impact on many, many parts of the economy. Today's digital technology, which bring together software that learns, plus massive processing power and enormous amounts of data, are creating more engaging customer experiences. They're eliminating industrial-age inefficiencies and really amplifying human productivity. This fast-moving digital build-out is disrupting many aspects of commerce, of government, and society, and presenting significant opportunities for our company.
I hope you'll see that over the course of the day today, that the Cognizant leadership team is passionately dedicated to winning in the marketplace, and we're energized by these prospects. With that in mind, our discussion today will focus really on our midterm approach for sustainable, strong growth and value creation. Now, executing on this strategy means helping our clients pursue digital to advance their business leaderships, while at the same time, we speed our own pivot to digital to seize the substantial market opportunity ahead. Over the course of the day, we'll cover the financial model that underpins our strategy, along with the objectives that we expect this execution to deliver, which includes, of course, our targets for Revenue, for margin and capital return over the next several years.
Of course, we've structured the day so that throughout the morning and during lunch, you'll have a chance to meet and hear from many members of the extended executive leadership team. Now, the plans that you'll hear about today are also the result of an ongoing strategy development process in which our board has been integrally involved. Several of our board members-
Are here in the audience this morning. I'd like to take a moment to recognize them, beginning with our new chairman, Michael Patsalos-Fox; our former chairman and board member, John Klein; and other board members, John Dineen and Joseph Velli, who will be joining us shortly. I'm grateful to them and actually to all of our board members, for the ideas and the insights that they've contributed to shaping Cognizant's future. With that, let's get started. I'm going to focus my remarks on Cognizant's growth agenda. That's our plan for continuing to deliver disciplined, profitable growth. I've organized my comments into three parts. First, I want to set the context of our market opportunity. Second, what I'd like to do is discuss how we're executing against this opportunity to win in digital.
Third, I'd like to underscore the strong track record that we have in identifying and seizing growth opportunities. Let's jump in, starting with my view of the opportunity that the company is in an especially strong position to capture. I see a substantial target market across the industries that we specialize in, the geographies in which we operate, and the buyers that we serve with our solutions. Across these three dimensions of industries, geos, and buyer groups, we have tremendous headroom for growth, in areas where we already have strong presence, with proven capabilities, with experienced teams, and with market credibility. What I'd like to do is walk you through all three of these, starting with our industry footprint. Over the years, Cognizant, as you know, has achieved a market-leading position in banking and healthcare.
In these two industries, we've seen solid growth of our digital offerings. Although, in recent quarters, the intense focus of some of our banking clients on containing and optimizing the run-the-bank spending has affected that portion of our work for them. Beyond banking and healthcare, we believe that we can achieve similar levels of market penetration and scale in many of the other industries that we serve. I want to give you one data point, just to give you a sense of this opportunity. Far this year, we've added 21 clients that we consider to be strategic. Of those 21 clients, more than 80% of them come from outside healthcare and banking industries. Today, outside of banking and healthcare, we serve a wide range of industries, including insurance and life sciences, retail, manufacturing, travel, energy, communications, media, and technology.
We believe that many, if not all of these industries, are large enough to support multibillion-dollar businesses for Cognizant. We have a strong position in each of them to support that ambition. Just to give you a few examples, because some people are surprised to hear that we serve 30 of the top 30 global pharmaceutical companies, nine out of the top 10 biotech companies, eight out of the top 15 industrial manufacturers, and four out of the top five online companies. All of this puts us right in the middle of the fintech, the healthtech, the biotech, and the smart product revolutions. Our market opportunities are only going to get larger as digital continues to permeate and transform every industry. That's on the industry front. Now turning to our geographic footprint, we also see significant market upside.
We've achieved market leadership in North America. Last year, our businesses outside the U.S. crossed the $3 billion mark for the first time, reflecting the work that we've done and our successful efforts to serve those markets more deeply. By replicating our North American market share in our core global markets, we see a potentially addressable five-fold opportunity for growth over the next five to seven years. You may be aware that we've been investing heavily across Europe, Asia-Pacific, and Latin America, where many country markets have already become significant growth engines for us. Through continued investment in these core markets, we've been able to expand our client roster, build new delivery and operation centers, and really develop a critical mass of local talent in those markets.
If we look at our largest market opportunities outside the U.S., among them Germany and France and Italy and Spain, Benelux, the Nordics, Australia, and other parts of Southeast Asia, we believe that several of them have the potential, again, to become billion-dollar businesses for us early in the next decade. In short, we're investing strategically, and continue to do so, in expanding and deepening our geographic footprint. Then there's a third large opportunity that we see from the broadened profile of today's technology buyers. As digital has become a predominant driver of growth for our clients, the investment in technology is increasingly being made by buyers who are outside the CIO realm.
C-suite leaders, whether they're CFOs or CEOs, chief operating officers, chief marketing officers or business unit leaders, are getting far more involved in deciding which digital initiatives to pursue and which partners to entrust their company's transformation to. Whereas the prior focus of buyers was mostly on applying technology to drive greater efficiencies, that focus, as you know, is now on applying digital to generate new revenue streams, and to find new ways to delight customers. That has taken the scale of our market opportunity to a new level, since we estimate that the non-CIO portion of technology spend will be at least double our current addressable potential over the next few years. I hope it's clear then that when we think about the investments we've made in our core markets along the dimensions of industries, geographies, and buyers, we see tremendous upside.
Given this opportunity and the rapid rate of digitization across industries and countries, what are we doing to capture it? I'll start by saying that we're capitalizing on a pattern of technology adoption amongst our clients that we're very familiar with and that plays to our strengths. Over the years, we've served as a trusted partner and a guide to our clients as they've moved from the mainframe to client-server to the internet to e-commerce, to building digital with social and mobile and analytics and cloud, which back then we coined the SMAC stack. Now, of course, to building end-to-end digital businesses. As a result of that, we've developed a strong playbook for helping clients through these technology transitions and for making the pivot ourselves from one to the next.
Let me just explain what I mean in the context of the current transition to digital. Earlier in the decade, as the first wave of digital technologies, the SMAC stack, emerged, we worked with clients as they did proofs of concepts and ran pilots. Most of our clients back then, in essence, were trying to glue digital technologies onto traditional business models with limited results, frankly. That's really because the digital wave proved to be far more disruptive than many initially realized. Digital technologies are remaking most industries and creating significant threats and opportunities for our clients. To capitalize on these opportunities and to neutralize the threats and to generate growth, our clients must integrate digital into their business fully, and that means digitizing their entire enterprise, their business, their operating, and their technology models in concert.
That's what we call and have been calling digital at scale. Helping clients be digital at scale is hard work, and it requires really broad capabilities. To respond to that, two years ago, we organized the entire company to enable this front to back transformation for clients by establishing the three digital practice areas. The first is digital business. Digital business helps clients identify and grow new revenue sources by creating smart products infused with technology and developing virtual channels to connect with customers, partners, suppliers, and employees. It's this team that helps clients envision and build innovative products and user experiences, develop go-to-market approaches, and invent disruptive business models, all with the aim of, in the end, generating new growth for our clients.
The second practice is digital operations, and it draws on our deep knowledge of process and technology to help our clients re-engineer, digitize, manage, and operate their core business processes. This is essential because smart products and compelling experiences need seamless processes behind the scenes to deliver on that promise to customers. Our third practice area is digital systems and technology, and that works with clients to simplify, modernize, and secure their heritage IT infrastructure and applications. That's important because clients' digital revenue and growth opportunities are ultimately supported and built on top of parts of their existing technology and related infrastructure. These three practice areas at Cognizant are effective for two primary reasons. The first is that we've built a reservoir of trust with our clients by having been in the trenches with them through prior technology transitions.
The second is that our practices bring to bear Cognizant's deep knowledge of clients' industries, their systems, and processes, along with, of course, more than 6,000 Cognizant consultants who advise on strategy, operations, and technology, and help embed digital into the core of our clients' businesses. To help clients speed their journey from traditional IT to digital experimentation, and now to digital at scale, we've emphasized investing and expanding the scope of these three practice areas. In particular, our investments are focused on building distinctive leadership in six advanced capabilities that have become the core of our digital strategy. These six capabilities are aligned with the three practices I spoke about and are really a major part of today's agenda, what we want to cover with you. We set aside the time for you to hear directly from the leaders of these six capabilities.
What are they? Within Cognizant Digital Business, we're focused on investing heavily on Cognizant Interactive and on AI and analytics. Within Cognizant Digital Operations, the focus is on intelligent process automation and on platform solutions. Within Cognizant Digital Systems and Technology, we focus on core modernization and Cognizant Digital Engineering. The question you may have is, why these six capabilities? The answer is that these six are the linchpin technologies for building digital at scale businesses. We are convinced that these capabilities offer the promise of helping clients pivot quickly to a fully digital enterprise model. All six of them play to our expertise and to our strong market position. All six are areas that offer a lot of headroom for growth.
As Malcolm Frank and the other leaders who follow me, as they do a deep dive of these areas, they'll explain to you how our capabilities are differentiated, how they benefit our clients, and how they'll drive growth for our company. As you hear from these leaders, I hope it'll become clear that even as we've kept our margin targets in focus, we've continued to prioritize and make the investments that will accelerate our growth. As you know, since 2016, we've expanded our non-GAAP operating margin by approximately 140 basis points or a little over $200 million. This was driven by operational excellence initiatives that have allowed us to generate approximately $800 million in margin improvements by optimizing areas such as our pyramid utilization and from simplifying our business unit overhead structures, as well as through better pricing discipline.
These savings have allowed us to absorb typical operating cost increases, and more importantly, have enabled us to reinvest significantly back into the business for strategic partnerships, transformational deals, enhancing client engagement, training and reskilling, and automation for delivery and for our corporate infrastructure. So far this morning, I've discussed our market opportunity, I've spoken about the six digital focus areas that are aligned to our practices, which will enable us to capture this market opportunity across industries, geographies, and buyers. What I'd like to do is use the remainder of my time to talk about how we're scaling up these six capabilities. Let me start by mentioning that we've had a long and successful history of identifying emerging client needs, responding to these needs with expanded capabilities, and then really scaling growth opportunities.
This sensing and responding to market needs has enabled Cognizant Technology Solutions to scale from what, back at our founding in 1994, was a small IT firm with revenues that first year of just $1.7 million and fewer than 200 employees focused on software development and maintenance, into what today is a $16 billion Fortune 200 company that employs more than 270,000 associates across the globe and operates at global scale. Over that first quarter of a century, we've reshaped Cognizant Technology Solutions several times as we've ridden waves of technology innovation and responded to economic cycles, industry shifts, and evolving client needs with an expanding portfolio of services and solutions.
Some of you who followed the company for a while might recall that in order to institutionalize this process, this sense and respond capability, we decided nearly a decade ago to identify and invest across three horizons of growth simultaneously. The goal back then was to increase the scale of our existing or Horizon One services as we introduced next generation or the so-called Horizon Two services that would be essential to clients in the future, and to do all of that while at the same time evaluating Horizon Three capabilities that were in their infancy, which back then were the SMAC technologies that now underpin so much of our digital work. This three-horizon approach has been wonderfully successful. I'll just give you one example.
Earlier in the decade, we viewed Cognizant Consulting, IT infrastructure services, and business process outsourcing as second-horizon opportunities, meaning newer offerings with enormous potential. At that time, these three offerings were each sub-$100 million businesses for us. Today, one of them generates close to $1 billion in revenue, and the other two are just shy of the $2 billion mark. These six digital capabilities that I've spoken about that are core to our digital strategy are Cognizant's current Horizon Two priorities. Over the past few years, we've made significant investments and developed leadership capabilities in these high-growth segments. We continue to invest aggressively to scale them across our practices, industries, and geos. You'll hear a lot about these areas throughout the day today. When it comes to capturing market opportunities, the rubber really meets the road at the client interface.
It's how we show up to serve our clients and help them win in their markets each and every day. I'd like to just give you and offer a few comments on how we've evolved our client service model. We've substantially intensified our focus on approximately 100 largest clients, which in aggregate account for about 50% of our annual revenues. To deliver value to them, we've sharpened our account structure with three senior-level roles, the client partner, the engagement partner, and the delivery partner. Client partners focus on key CxO and other relationships across the client's business. Engagement partners, with one foot working closely with clients and the other foot in delivery, help sell and deliver our work. Our delivery partners orchestrate all of our company's resources and back up the engagement partners to ensure comprehensive, seamless global delivery.
In addition to that, in each of our industry verticals, we've appointed chief digital officers and specialized client service executives who focus on client transformation work and the deployment of integrated solutions. This new client service model has been a significant area of investment over the past couple of years. In recounting our track record of seizing growth opportunities, I don't want to overlook the important role of acquisitions. We know how to use M&A to catalyze growth. I can tell you that story through three quick examples that relate to the three dimensions of our market opportunities, the industries, the geographies, and the buyers. In the industry realm, I'll point to the Cadient Group, which is a full-service digital marketing agency that helps life sciences companies to enhance their time to market, drive growth, and provide compelling customer experiences.
We acquired Cadient back in 2014. Cadient has helped us establish a presence in multi-channel marketing and has elevated our position in life sciences with the CMOs, enabling us to build deeper relationships within our major pharma clients. Geographically, I'll point to Equinox Consulting, which is a French company known for its deep regulatory consulting expertise across investment and retail banking, asset management, and insurance. Equinox, which we acquired in 2013, has helped us develop very strong relationships with leading financial institutions in France. That in turn has enabled Cognizant France's revenue to grow six-fold in the last five years. As for buyer groups, there's last year's acquisition of Netcentric, which is a leading provider of digital experience and marketing solutions for some of the world's most recognized brands.
With the addition of Netcentric, we've become one of the leaders of services on the Adobe platform in Europe, and we further elevated our standing in the digital agency space, serving chief marketing officers. Now, given the speed at which technology is evolving, we're increasing the level and pace of our M&A activity. For us, acquisitions are important for capitalizing on the significant and expanding market opportunity across the digital landscape. Over the past three years, we've invested over $1.6 billion in business combinations, including M&A, acquiring 14 companies to deepen our digital capabilities. We'll continue to invest in both organic and inorganic capabilities that expand our intellectual property, that expand our industry expertise, platforms, and geographic reach. Okay, I'd like to make two last points that are important to providing exceptional client value and for us realizing our growth agenda. The first point relates to localization.
The growing volume of digital at scale work that we're doing with clients typically involves agile development and a deeply consultative in-person approach. We continue to invest extensively in training and re-skilling our teams and in substantially expanding our local workforces around the world. We've complemented our delivery capability and operations in India with significant additional specialized points of delivery around the globe. We've built a network of local and regional delivery centers in Europe, in Asia, in North America, and in Latin America. With their proximity to clients, these delivery centers also enable high-quality digital, agile, and secure services that comply with local regulations and are delivered using the technologies and the languages that clients require. The percentage of local employees in our on-site geographies has risen in recent years and today exceeds 40% of our headcount across North America and our global markets.
In the coming years, we expect that the majority of our workforce will be local in every geography in which we operate. My second point relates to our shared belief in performing with purpose and being a force for good in the world. We live our purpose every day through the transformative work that we do for our clients. Through our knowledge, our skills, our services, and our solutions, we make it possible for our clients to transform the way that the world's industries serve the needs and improve the lives of people everywhere. It's quite clear to us that the best way to serve our clients and to help them transform their businesses is for us to bring together people of diverse backgrounds, cultures, and experiences.
It's for that reason that diversity and inclusion are at the heart of our ability to execute successfully over the long term. We've woven diversity and inclusion into our operating plan and our growth agenda and have seen a significant increase in, for example, the percent of women and underrepresented minorities in our workforce. There you have it. Cognizant's agenda for growth in pursuit of a large and growing market opportunity. Our focus is to invest in attractive growth opportunities that will drive Cognizant's long-term value creation. Karen's presentation later this morning will explain how we see this unfolding in terms of financials and value creation. To wrap it up, I want you all to know that the entire leadership team is absolutely committed to executing on our agenda for growth.
As I think you'll see throughout the day, we believe that we have a substantial market opportunity across industries, geographies, and buyers. We have these six distinctive capabilities for building digital at scale businesses that will allow us to capture that market opportunity. We have a highly disciplined plan for execution, and perhaps most importantly, we have the talented, cohesive team to seize this opportunity and ensure the quality and the continuity of our growth. With that, I'd like to thank you very much for your attention, and it's now my pleasure to introduce my long-term colleague and Head of Strategy and our Chief Marketing Officer, Malcolm Frank. Malcolm?
Thank you, everybody, for being here. We're thrilled you're here this morning. We've got a lot to cover in the next 30 minutes. I'm going to give an overview on our six digital capabilities so you understand those that are at the heart of our digital strategy, where we've been investing for the past half-decade, what our progress is to date, and where and how we're going to compete and win going forward. Let's get right to it. I think to start, I should probably go back one chart, just digital transformation on how our clients are framing this issue and how they see it. I want to spend a few minutes on that to begin with.
What I'm going to describe, candidly, is a bit obvious, but I think all of us in this room are so close to technology on a daily basis that we lose sight of what a truly profound time this is. It's similar to, I don't know, the first time you bought an Alexa, you stuck it in your kitchen, and on day one, it felt like a magic trick. By day three, it just blended into the background, and you didn't pay much attention to it. That is occurring writ large with digital technology. It's useful to take a step back and see what's going on. Over the course of this decade, let's say in 2040, we go into Wikipedia, even if it exists at that point, and just ask about the economy during the teens.
In the first paragraph, it's going to outline that's when it all changed. That's when it pivoted to digital. That's where there's a huge value shift, we started the fourth industrial revolution. That may sound like a bit of hyperbole, but now there's a massive amount of data to support that assertion. Industrial revolutions always start with a machine. The first one was with the loom, the second, the steam engine, the third 100 years ago with the assembly line, and now it's software platforms infused with artificial intelligence. That is the new machine. When we look at this, it's changing everything within our clients. Where they started this decade, they had industrial business models in terms of how they interacted with their customers, what they sold, what their business model was, their financial model, and ultimately how they were valued.
If you look at where we're going to end this decade, it's all going to change around digital principles on each of those elements. I don't think software's necessarily eating the world. It's completely transforming the world and how our clients compete. Just a simple factoid to outline this. On the first day of 2010, if you looked at the 10 most valuable companies on Earth, they were I'm not being ageist, I'm looking around the room, but all of us, when we went to school, it's what we learned of as big business. That list was dominated by energy firms, industrial manufacturers, and money center banks that supported those business models.
Smash cut to today, even with the pullback in tech, that list is now 7 out of 10 are digital natives, and the cumulative value of those top 10 firms is 3x what the top 10 firms were worth in 2010. This is a value shift and a window of value creation, which in real terms is unprecedented in economic history. This is a meaningful time. When we spend time with our clients, and this is really the hallmark of the Cognizant experience, we spend a lot of time with our clients, and it's useful to sit with C-level executives and just ask a simple question. What if Google decided to enter your industry and take direct aim at you? It tends to focus the mind when our clients think in these terms, and this is not an idle thought.
If you look, for example, in big box retail, Amazon acquiring Whole Foods. By the way, I used to enjoy Twitter, but the last couple of years, it sort of turned me off. This was probably the tweet of the year last year. Bezos: "Alexa, buy me something from Whole Foods." Alexa: "Okay, buying Whole Foods." You may remember that when that occurred, this is what happened in that sector. Some of these firms, this is the day that that was announced. Some of these firms didn't even compete directly with Whole Foods, like Target and Costco. Kroger did to a certain extent. Look at what happened with those valuations upon that announcement. If you look from a Cognizant perspective, this is driving a lot of growth for us in retail.
In our last earnings announcement, we talked about we've had growth in retail now that's accelerating some of the best in years, and it's helping our clients deal with the Amazon challenge. If you go to communications, media, and entertainment, a lot of turmoil and change due to digital in that sector. For us, year-over-year now, it's growing at a 17% rate. You look at Netflix or ThreatFlex. I'm not going to talk about the Blockbuster story. We all know that it's an old story, even though it's amazing to think Blockbuster just shut their last retail store down from a peak of 9,000 stores. Netflix is now going after bigger prey. They're going after the digital or the media Goliaths.
In a conference similar to this several years ago, Jeffrey Bewkes, at a Q&A session, was asked about the potential threat of Netflix, and you may remember his answer. He's like, "Well, it's a little like, is the Albanian army going to take over the world?" Seems like the Albanian army took over the world. If you look at this, Netflix now in the U.S. has more subscribers than all paid cable TV combined. It really is quite remarkable, and they're just getting warmed up in that if you look internationally, they just crossed the line where they have more international subscribers than American subscribers. Considering the U.S. constitutes roughly 4% of the world population, it's really quite remarkable what's occurring here. In a third sector for us in healthcare.
Now, I put this chart up and you think, "Well, those are iconic brands, but they're not healthcare companies." A few months ago, these three got together to create a platform to address the healthcare needs through digital of their own employees. It was pretty isolated, what they were attempting to do. It still is in the formula stages of getting rolling. Look what occurred when they made that announcement. It was a $38 billion press release because that's what happens of the value destruction of some of the leading healthcare stocks once that was announced. This is why we've been investing so heavily in healthcare, regardless of where you stand politically. The system needs to be fixed, and politicians are struggling to do that.
We think that technology may be the solution, and I think that was the reaction that was here as well. We can no longer continue with one-fifth of GDP being gobbled up by healthcare costs, but we think digital can really be transformative and provide some long-term answers there. It gives you a view of how our clients are starting to see this. When they get to this position of the digital barbarians at the gate and having to respond, they need to respond with digital at scale. As Frank was describing, we've left the part of the market where you go to a strategy house and get a study or a strategy report or go to a boutique and do some pilots. Clients need to move, our Fortune 500 clients need to move metrics that matter. They need to transform the customer experience.
They need to find new avenues of revenue growth. They need to cut costs out of the system significantly through digital, ultimately change their own valuations. A way of looking at it is through this. Frank was talking about some of our new strategic clients. In fact, two of the FAANG vendors have now entered our top 10 in terms of clients. We're thrilled and honored that they've turned to us for some of their most significant initiatives and challenges, but it also gives us a lot of street cred with our traditional clients around digital. But the vast majority of our clients are what we would term as 100-year-old firms. Their starting point in digital and their endpoint is different than a digital native because they have hard assets, and they're never going to lose those.
They need to move to a world, it's a goofy term that's shown up in analyst circles, but it's stuck, so we'll work with it, is phygital. They have to be physical and digital and pull that together. That's a heavy lift. Think of it as an auto manufacturer, that they're always going to have to build a high-quality, stylish, safe car at a certain price point. The cabin has to be digitally infused where it's just is this ambient environment where it feels like everybody's just sitting in a big iPad. They need to get leadership around automated driving. If that starts to take off, they have to completely rethink automobile design and car ownership altogether. How do we help our clients manage through this phygital challenge?
Like this photo, once you see it's all you can see. It really starts to get our clients moving. Said differently, across the span of this decade, where we entered the decade in 2010, IT supported the business. It supported an industrial business model through a bespoke client-server stack that had been customized over time inside of our clients. We're moving to an era where technology is the business. Clients are really clearheaded about this. The market is crystallizing, and they have three starting points, as Frank described. The first, how do I transform the customer experience? We've all been now so deeply informed by FAANG vendors and looking at our phones 20 to 200 times a day, depending on who you are, that it's really informed our view of how an organization should interact with us.
The second is they need to digitize their processes to get to radically improved velocity, straight-through capability, and there's huge cost takeout opportunities there. The third is rebuilding the IT backbone to support a digital business. It has to be cloud first, software defined, elastic, and AI enabled. All three of these, when we talk about digital at scale, have to occur ultimately together. Frank talked about this, so I'll cover it quickly, but this is how we went through our reorganization about two and a half years ago, so that we are completely aligned with the needs of our clients and with their starting points. Transforming the customer experience, this has become the new battleground in marketing and in product management. If you look at digitizing operations, this is a crisis that has been foisted upon our clients.
It's not a crisis of their making, but it's a crisis nonetheless. They wake up and they go, "Oh, my goodness, these core processes by which we run our company, like claims processing and insurance, they're totally wrong now. We built them before digital, but now that digital is here, we would never architect and run that part of the business the way it is. We need to transform it." The backbone that the clients need to provide around IT. I'm going to talk now about our six services and give an introduction, a few minutes each, and then afterwards, you'll hear from each of the service line leaders to go in more detail around the operations of them. Let's start with interactive.
This is where we're focusing on the needs of chief marketing officers and marketing departments within our clients. I wear several hats at Cognizant, and one of them is I'm the CMO. I am a Fortune 200 CMO. When I hang out with my industry peers, this is the talk of the town. Marketing is going through a fundamental transformation and it's all being driven by technology. They need help. What they recognize is the transition is from brand marketing, where you try to come up with the iconic campaign that you put on television or putting up ads on billboards on Route 95 or on the sides of baseball stadiums or in magazines, so forth and so on, that interruption marketing, is now being displaced by experience marketing.
Experience marketing is what Amazon has been able to do, where they capture you in the moment and market to you while you're interacting with them, and they do it in a one-to-one curated real-time way. It's how they know, for example, your taste in literature better than your brother does. It's how Netflix knows your taste in film better than your spouse does, and actually knows what you want to watch 9:00 P.M. on Saturday or what you want to watch 7:00 A.M. on Tuesday. This is now the new metric that all of our clients need to meet. From a Cognizant perspective, what we've been doing, we've been at this for several years, and we've made a lot of progress.
We've acquired six firms, they're listed up here across Europe and the U.S., primarily with boutique design capabilities, but these are firms that all had a real digital sensibility as well. We made a significant investment in a seventh firm around anthropological research, that we really understand in those moments, what is a human being truly attempting to do, how do you connect with them? With that, we've built up a bench of over 8,500 design or digital content specialists, 1,000 marketing consultants, 2,500 creative technologists, 500 experienced design specialists. Ad Age has an annual survey to determine the league tables in this space. Earlier this year, they ranked us as a top three digital agency worldwide. Adobe has marked us as their partner of the year.
Maybe we haven't told this story well enough, but we've just been quietly building out this capability, and we've really made a lot of progress. Now, to give a strategic view of this market, this is a good two by two around interactive and marketing services. On the X-axis is empathy, meaning, do you really understand the needs and desires of that target customer, what they're looking for, how to distinguish yourself, build a campaign? On the left, you just don't understand that stuff. The Y-axis is technology. High, you got great technology chops, and then down here, you just don't know technology. Firms in the lower left, these are commodity shops, production firms. We use a lot of them at Cognizant.
You see the pens that are in front of you, the pads that are in front of you, the mouse pads, make the T-shirts and the coffee cups. That's just that sector. The upper left has been interesting for the last 20 years. These are enterprise apps for marketing. This is marketing automation and CRM, and we know all the vendors that have been performing up there. What's interesting on this chart is the right-hand side of this chart. This is where the action is today, and it explains what's going on and what our play is. We have boutique agencies that have been partnering with CMOs for a couple of generations. This is the Don Draper, Mad Men, Madison Avenue market.
Several firms created a ton of shareholder value the last generation, where they rolled up those firms because a Fortune 500 needed those capabilities up and down the marketing stack, or as a global organization, how do you roll out a campaign, and so you need a global network to support that. There's an enormous shift going on right now moving up into the top right because CMOs are saying, "I need a transformation partner that can deliver that technology at scale and create these one-to-one brand experiences with my consumers in the moment." That's why we're seeing tremendous growth, and we think that this is really getting warmed up in terms of the opportunity that's in front of us. We've created a global network of studios.
We've got about 35 studios now around the globe where we can get together with our clients, be it in North America, Europe, Asia, to connect, collaborate, and create these solutions and these campaigns. This here, this is what they look and feel like. This is our Amsterdam studio. You can tell by the little row houses, the models here. We need to talk to our team and get legal involved. I'm not sure about having a client wear a VR headset on a 20-foot balcony, but I guess we need to continue to work through the methodologies a little bit. This is something that we built out, and clients find it to be very attractive. Okay. Let me now get to what infuses that and creates these moments of magic. It's all about data, and it's all about AI.
From a data perspective, IDC said we started this decade where corporations were managing 0.8 zettabytes of data. A zettabyte is 10 to the 21st bytes. If you think through that math, it'll make your hair hurt. Where we're going by the end of the decade, they're estimating that there will be 44 zettabytes of data under management by corporations. This is a 50-fold growth in data. It makes a lot of sense because we're instrumenting machines, we're instrumenting humans, we're instrumenting events, and all of that data for some clients is just static. It's just noise. Others can see the signal through the noise and then really build with it, and that's where we start to come in. If you look at this, Kevin Kelly has a great line.
He says, "If you want to know the future, the future is just X plus AI," and that's where the whole future is going. In fact, we wrote a book about this. If you're looking for a last-minute Thanksgiving gift, this is fantastic. Anyhow, it's done quite well. It hit a chord in the marketplace. It's become a bestseller. Amazon had it as one of their best business books of the year. It's reprinted in several languages. More to the point are our operational capabilities. We've been at this for some time, and we're a top-three leader in this market as well. We have over 20,000 data analysts, people that are focused on AI technologies, over 500 data scientists, 6,000 AI, machine learning, and cognitive experts. This matters. There's a war for talent in this market.
People who know AI cold are massively concentrated in probably a dozen and a half companies around the world, and we're one of them, and we need to continue to press on the accelerator on that front. You can see the partnerships we have. We've got deep relationships in the VC community, so we can help our clients make sense of this world and really how do they implement in their organizations. AI is no longer the domain of debates. In some places, people still debate, are we going to be working for our robot overlords in 20 years? It's no longer about science projects. It is really just the next-generation productivity tool. Here are some of the areas where we are applying AI.
You can see targeted marketing and personalization, as I described, the machine learning, the natural language processing, the context-aware computing to create those moments of magic with Interactive. Product and service and intelligence. A lot of people say, "Why is my $30,000 car so dumb and my $300 phone so smart? That doesn't make any sense." How do we create smart machines with our clients? How do we get into autonomy? We are helping some automobile manufacturers with autonomy, but there's a faster-moving space, which is around robotics, around assembly lines in the manufacturing context. The final one, IT automation. This is a great double win. We strongly encourage our clients to do this, where they can get the automation benefits in IT, but then equally important, their IT staff becomes familiar with these tools, methodologies, approaches.
It can start to deploy them across their organization. We'll hear a lot more there. Let me go to the second major service line around digital operations, where we go inside our clients in intelligent process automation. The markets that we serve are information-rich. It's one of the distinguishing characteristics of Cognizant. If you look at banking, insurance, healthcare, a lot of these firms don't make widgets, but they have incredibly robust operational processes. As I was saying earlier, many of them need to be rethought and rewired. If you can go to a client in those markets that are having trouble with top-line growth, but you can find huge cost savings in their operations and boost quality, boost velocity operations, they are all ears.
This is a very hot market, it's been a great grower for us, it's the Uberization of process. That's how clients think of it. It's a simple concept, 10 years ago, if we wanted to leave here and get a cab across town, you'd call a cab company, it would go to dispatch, Danny DeVito would match supply and demand, then you would just be on your way, that would get multiplied thousands of times every day in New York City. What did Uber do? Uber clearly went in, software platform, they automated dynamically all of that supply and demand and applied intelligence to it, an entire industry was revolutionized.
That is how clients are now defining certain processes inside their organizations, where they want to have systems that do, that actually mimic human action, systems that think, that augment human intelligence, systems that learn, that can start to mimic human intelligence. This is a very hot area in enterprise software. There are several unicorns here that probably aren't getting the press that they deserve, firms like Automation Anywhere and Blue Prism and UiPath. This is an exciting market right in front of us. We are good at this. We've automated over 1,100 processes. Industry analysts are recognizing our leadership here, we think this is a space that's really going to gain momentum in the next several years. I've been hanging out in a lot of AI circles the last few years, everybody goes to the automated car example.
If you ask people who really know the space, if you ask, "In 10 years' time, will automated driving go mainstream?" The honest answer is, "I don't know." Nobody knows. If you want to know where automation is occurring now, it's right here. This is where the action is. If you go inside banking, insurance, healthcare, retail, these are the types of processes. In banking, payments or origination. Insurance, policy cancellation, set up of new business. Healthcare, claims, eligibility, benefits. Retail, catalog operations, recall matching, UPC validation. We're getting to the point where it's going to be management malfeasance if you run one of those areas in these firms and you don't investigate process automation in a very serious manner in the next couple of years. A related area for us is in platforms.
Many call this the platform economy, it makes sense. Apple is a platform, Google is a platform. If you get to Software as a Service, Salesforce, Workday, ServiceNow, wonderful companies, all performing very well. They are platforms. We're partners with all those firms, but there's a limitation that clients see from the client perspective because those firms in a Silicon Valley model had to go after big horizontal challenges that go across industries. They took that platform to things like CRM or IT management or human resources. The client sits there and says, "Well, I love this business model for many reasons, technically, financially, operationally. I still have 80% of the organization that it doesn't address." Enter Cognizant. Our BPO practice, if you're familiar with it, we distinguished ourselves years ago by going after vertical processes as opposed to horizontal ones.
We'd go into life sciences firms and address pharmacovigilance, things like that. Well, we've now been, for the past half-decade plus, applying software to that, where we will create platforms where it's business process as a service. You've got the infrastructure and the platform as a service, we've got Software as a Service. We add the people, that becomes business process as a service. It's a utility where clients can get these as-a-service attributes into some core parts of their business. You can see in the blue box some of the solutions now with which we go to market. The method behind the madness was some of our acquisitions in healthcare. This was the play of TriZetto and TMG Health and Boulder to pull that together. You can see now some of the momentum that we have.
78% of Blue lives in the U.S. are touched with this platform. You get 60% market share that we have with managed government programs on a per month, per patient basis. You're getting to a different industry, consumer goods. This firm here on the bottom right, it's a company you all know quite well. We have 30,000 customer contacts per day through the platform, it drives about $2.5 billion of revenue for that client. This requires, on our half, we got to get a portfolio of these. We have to get the market segmentation right. When we do get it right, the economics are fantastic over time. You can build moats around these businesses, it becomes very hard to compete against us. Okay, let me now go to the third area, which is around systems and technology and core modernization.
This is an issue that is not discussed enough. I think we all love to look at the bright, new, shiny thing and talk about a hot vendor that's taking off, but we forget about how robust and how rich our clients' heritage IT is, it's not going to be thrown away. In fact, just one factoid, there are more COBOL transactions each day than there are Google searches. Our clients have a dual challenge here. They need to renovate their heritage IT to simplify, modernize, and secure it, build the backbone for a digital business. This is a huge refactoring effort that has to happen at every layer of the stack. What do they do with their data? What do they do with their infrastructure, with their applications, with their devices? Go through this overhaul and refactoring of the IT backbone.
This is a great market that we have a home field advantage and nobody's really talking about. Just to give one example, let's say that you're going to fly home from this meeting and you've got a layover, and it's a tight layover. It's 60 to 90 minutes. With today's weather, you're late out of LaGuardia. You get up in the air, you circle a few times, and it's clear you're going to miss your connection. Well, we all have had that feeling. It's a horrible, helpless feeling, particularly when you're going home on a weekend. Let's say there's Wi-Fi on the plane, you've got the app on your phone, and you're able to rebook to the next flight. Is it a nuisance? Yes. You'll get home three hours later, but you can just relax knowing what's going to occur in front of you.
Well, for the client, for the airline to pull that off, they have to go into flight operations. They have to go into the baggage system. They have to go into reservations. They have to go into the loyalty program to see are they going to bump somebody or put you on that next flight? There's a lot of integration that has to occur to pull off that simple digital transaction. When you look at this, it's how do we help our clients change those systems of record into systems of engagement and then systems of intelligence. We have a whole portfolio that we're going to describe to you in a few moments that we do this. We've got industry-leading partnerships at the highest levels with firms like AWS and Microsoft Azure, SAP, Oracle, Salesforce, Google, to help clients through this.
We've made several acquisitions on this front and built several pre-built accelerators. We've got a lot of IP to help with this transition. Now, the final, the sixth area, the sixth capability is digital engineering. These machines have become the remote control for our lives. In fact, I get the little shame notification each Sunday of just how much screen time I'm spending per day, and I need to get that number down. The point is, when we download an app, there's an expectation we now have as consumers. That application has to be intuitive. I'm not going to go through user training. I need to figure it out in 60 seconds, and if I don't, I don't want to use it. It has to be beautiful. It has to be cool. It has to fit the context of what I'm using it for in that moment.
From a technical perspective, it's got to be bulletproof. It's got to have high performance and be secure. The point is, our clients need to build dozens of these, and they don't have the capability. This is a great demand-supply imbalance that currently exists in the market and will be here for some time because our clients internally, they know how to build enterprise apps for internal users, but they don't know how to build these cloud-native apps that require a lot of design thinking and require methodologies like Agile, and Fast, and DevOps. You need to surround that with the right cultural norms to really pull that off with collaborative quick-hit teams. This has been an area, again, that we've spent the last several years investing heavily in, and we are one of the top players in this space.
We're one of the top five players in this space, and we are growing our metrics. Our performance metrics, we believe, are better than a lot of the standalone players in this field. With this, we've got over 10,000 associates. We recently announced the acquisition of Softvision. It's catalyzed us a year or two in terms of our plan. Importantly, it's given us an Eastern European hub where there's a lot of talent for this market. We're Pivotal's partner of the year, and analysts have also recognized our capability in this space. I just want to give a quick slide on the growth opportunities here and then our strategy against it. This market is growing at about a 25% CAGR, so it should triple, I'm sorry, it should double by 2021. It's really two markets. We've outlined these, and we chose the colors purposely.
There's green and then brown. The green market going from $53 billion of services up to $94 billion. That is net new application development. These are systems, consumer apps that never existed before and are being built net new. Some people call that greenfield. That's why it's in green. The brown one is application transformation. Our clients have hundreds of enterprise apps. They've devoted money hand over fist over the years on these. How do you take those and transform them to be consumed in a completely new way? It's actually a bigger market, and some people call that the brownfield market. As I was saying, we can go toe-to-toe with anybody on the net new application developments. We're very confident with our capability in that space. The second area, transforming traditional apps, clients are very hesitant to let other firms touch this stuff.
These are systems that we built, we developed, we maintain, we know them cold, we know the client extraordinarily well, and so we know what that system is currently used for and how to transform it, and we think there's a real advantage there. Ultimately, once a client has a few dozen net new applications and transformed applications, those need to be pulled together in a digital mosaic where they are run as a business ecosystem, and we are very capable and very strong in doing that. This is a great growth market, and we think the way it's evolving is coming our way. Those are the six capabilities. Roughly a $500 billion-plus market opportunity. Similar to our industry now, we are not going to be constrained by market opportunity. It really is operationally, can we execute to capture that?
Each of these have strong growth and strong margin profiles. This fourth one is probably the most important, that they fit with who we are. Very simply, strategy has two components. One is, are you positioned for a market opportunity? The second is more important, is can your organization capture that opportunity? This is one of the things that we really ran these through that lens of, can we be honest with ourselves, and are these things that we can do, and we can do all of them. They fit our heritage, they fit our brand, our client relationships, and our culture. When you talk to clients, they're like, "Well, of course. This is exactly what I expect Cognizant to do. I would anticipate this is what you would deliver to us." We've been investing very heavily in these.
All right, let me just wrap up with two final thoughts. One is I look at this chart, it's old. It's an oldie but a goodie. I've been doing this almost 30 years. Scary to think that, I look in the room, and I met with some of you during the Clinton administration. I'm not going to name names, you know who you are. We have many models by which we craft strategy and look at the market and figure out what our next move is, and this one has really stood the test of time. It's simple and elegant. That our clients, their corporate architectures don't grow in a straight line. This industry goes in chapters, and the chapters are very distinct, and they move in an S curve.
There's incubation, and then it grabs hold and takes off, and then it matures, and then it gives way to another S curve. We've gone through the mainframe era, and then the mini computer, client server, distributed PC, internet, and now we're going digital. There are three things I'm going to leave you with on this chart. The first is that the digital wave is by far the biggest. I've had a front row seat to offshoring, to internet, to client server. It isn't even close. This one is so much bigger and is moving so much faster. The second, and very importantly, these curves, if you look, there's a gap that you go here, and when you transition, you actually go down before you go back up.
In many cases, this is the stall zone because services firms have to consciously go through a process where you change your methodologies, you change your service portfolio, you change technologies, skill sets, even culture in some cases. You can't just graduate straight from one to the other. In fact, if you stick with one too long, this is where we see firms go into that long death spiral. Too often, services companies don't have the grace just to die. They just hang around forever. What we see is what was that Southern expression? You got to go slow to go fast. That's what we've been going through the last several years, is going through this transition to get it right where we can go from one, rebuild the capabilities that I've been describing so that we can grab hold on the next curve and move fast.
The third point is that this is digital at scale. It's what clients need. Scale requires, well, scale. When clients define the problem that way, when they need to move metrics that matter and transform their firms across their operations on a global platform, it means that they go through a process of elimination, and it gives them a fairly short list. I think the leaders in this next space are going to be names that we all know and firms that are able to manage the stall zone and pivot to this next generation. To give an example of where this is, we're probably in the second inning of this baseball game. ITSMA, this is hot off the press. This is all they do. This is the Information Technology Services Marketing Association.
They looked at how clients, they polled 451 clients on their views of who is the leader in digital services today, and you can see here that we actually made the top category. The firms that are with us in the top category are larger and have been around for much longer than we have. They asked firm awareness, unaided awareness, aided awareness, familiarity, favorability. This gives you a sense through the eyes of the client. Who is making that transition, and who are they looking at for their lean-to partners in this journey? That's it. I wanted to just outline, we've got digital at scale. It means these three transitions and those six capabilities that we're focused on. I guess as a final thought, at risk of sounding a little bit melodramatic, I just adore New York.
I love this place for many reasons, but one is I'm a bit of an economic historian, which probably sounds like an oxymoron. I always walk around and look at the bridges or the first skyscrapers and just think, "What must it have been like to have been there, be there, and to have built those?" It must have been this sense of we're building the future. Where we are at Cognizant now, when we look at what we're endeavoring to do with our clients, that is our mission. We are trying to build the future and build the future together, and I think it really does give an incredible sense of purpose to all of us when we start to execute against that. That's the overview of the six services. At this point, what I'd like to do is introduce Raj Mehta.
I think many of you know Raj. He may be a little melancholy these days, so I'll explain why. See, Raj is a die-hard Dallas Cowboys fan. This time of year, most of us call November, but in Texas, it's known as the end of the illusions. They go through that this time of year every year. Raj is also the three orders of magnitude manager. He's our president, and actually, he joined when Cognizant's revenue was about $15 million. Raj has seen us go through a thousandfold growth up to north of $15 billion and $16 billion. From that perspective, please join me in welcoming Raj to the stage.
Thanks, Malcolm, and good morning, everyone. It's always hard to follow Malcolm on stage, right? I always get the lucky draw. Unfortunately, I don't have the powerful slides, and I always have a tough time saying anything good about the Cowboys. Anyway, good. It's good to be here. Look, over the past couple of years, we've been building out the next-generation growth drivers of Cognizant. We put together a world-class team, made significant headways in scaling these capabilities, and we've integrated the acquisitions to deploy industry-based solutions and our horizontal offerings. We've trained our teams to go beyond the CIO and to really start selling solutions. We think these growth drivers are going to represent a significant market opportunity, which will fuel above-industry average growth and healthy margins.
We think we're well-positioned to capture this growth because of our ability to address the front, the middle, and the back office and truly build out digital at scale. We feel that our clients are engaging us because there are very few companies that understand the technology, the processes, and the industries better than us. Malcolm outlined our six key capabilities, which will drive growth. Now what I'd like to do is bring up my team that is in charge in putting all this together. First, I'm going to introduce Donna. Donna is going to kick off and discuss our interactive business. Donna's the head of our Cognizant Interactive. Prior to Cognizant, Donna was the head of digital content at Accenture. Donna's going to explain to you how our 17,000 digital marketers specialists are helping our clients really on their journey of experience marketing.
After that, we're going to bring out Karthik, better known as KK. He's going to discuss our artificial intelligence and analytics capability. KK has a unique distinction. He's a member of 2 ELT groups at Cognizant. He joined us straight out of college. He was an entry-level trainee, and now he's part of the executive leadership team. Today, the AIA practice is one of the industry's largest, with over 22,000 data and analytics associates. After that, we're going to bring up Sumithra. Sumithra will highlight our strength in automation. Sumithra is our President of Cognizant Digital Operations, which has business process services, automation, and platform solutions. Earlier, she saw the global delivery of all of our industry verticals. A publication out of India had listed Sumithra as one of the most powerful women in India.
Trust me, I feel that every time the budget process goes on. Leading to Vipul. Vipul's going to discuss our platform business. He's our market head for digital operations. Vipul joined us in 2009 when he was the CEO of the UBS captive, a BPO captive that we acquired. It just shows you how we've been able to integrate key talent that we bring across through our acquisitions. He now drives our push into our platform business and will share our insights and approach and our progress that we're making. Debashis Chatterjee, better known as DC, will discuss core modernization. DC is our President of global delivery and digital systems and technology. DC's been with us actually longer than me, since 1996, but I have a longer tenure because DC went away for one year to join a competitor.
We're not going to hold that against him. We're lucky to have him back driving our digital systems and technology. And finally, Gajen. He's going to profile our digital engineering practice. Gajen is the President of Cognizant Digital Business. Gajen used to lead our business process outsourcing services. Gajen now has 10,000 engineers and cloud experts, and he's going to explain our digital engineering strategy. We've made tremendous progress through Softvision, TriZetto, and our own organic build-out, and we think we have one of the largest and the most robust capability in digital engineering. I'm going to ask this team, I'm going to ask each one of them to address 4 fundamental questions. Number one, what does Cognizant do in this capability area? Why do clients want to work with us over someone else? How do we plan to progress and build out this capability?
Why is this capability important to Cognizant? With that, I'm going to ask Donna to kick it off.
Thanks very much, Raj, hello, everyone. I'm going to start by answering the question why Interactive is important. The answer lies in the shift between marketing and experience that Malcolm talked about. Consider this: according to Gartner, by next year, 89% of companies are going to compete primarily on experience. Those that excel at experience are going to be five times more valuable than those that don't. What are we talking about, marketing and experience? Well, you can think of this as the shift between what a company might say about itself and its products and services. That's marketing. Versus fundamentally who a company is and how they behave towards their customers and their employees. That's what we now call experience. The bar for what good looks like continues to be raised. Okay? Think Spotify or Uber. Simple, easy, frictionless, instant gratification.
Well, creating these kinds of world-class experiences requires that a company think through virtually every single contact point that they have with their customers, and increasingly, with their employees and stakeholders, and designing these moments to literally surprise and delight. Oh, by the way, there is a lot of technical build and development to get these new experiences right, and Gajen and DC will be talking a little bit about that. It's extremely difficult to do, and it's the reason why it's really acknowledged right now that no one's job has changed more than the CMOs. Really helping them succeed is what we are now really laser-focused on. Let me talk about how we do this. Well, simply put, we connect insight, strategy, and design to technology and engineering to deliver experiences that help our clients win.
Let me break it down because I think the way we work with our clients is distinctive. We work collaboratively with them to define and detail this future state experience. We put a blueprint together to deliver that transformation initiative from end to end, and we build a business case. We do something more. We combine that with video storytelling and rapid prototyping, and that's really critical to help C-suite executives clearly understand that future state and what its costs are. This is really elemental in how they gain internal buy-in and alignment so that we can move forward on these initiatives. It's critical because they're often large, multi-year transformation initiatives. How are we doing? In May, Ad Age ranked Cognizant Interactive as the third-largest digital agency in the world and the largest in the U.S.
As this was our first ranking, I think frankly it surprised some to see just how far we've come in this space. We now have 17,000 interactive practitioners, including more than 1,000 experience designers, roughly 3,500 creatives, and more than 5,000 digital content specialists working in 52 offices and studios around the world. Partners and analysts have noticed our progress. This year, Adobe named us Partner of the Year in Europe and Delivery Partner of the Year in North America. Gartner now ranks us as a leader in customer experience. Let me talk now a little bit about how we've grown. We've done this by extending our capabilities and market reach through a combination of organic growth and selective acquisitions. Idea Couture and Cadient to North America, Mirabeau in the Netherlands, and Zone Digital in the U.K. strengthened our innovation, experience, and digital marketing capabilities.
Netcentric deepened our Adobe footprint in Europe. In fact, we now have more certified Adobe resources globally than any other partner. Our strategy, though, is to integrate and grow these acquired companies so that we have a cohesive global practice. Rather than taking that agency holding company approach, really that buildup that Malcolm talked about earlier. This is really important to us because it helps us to deliver seamless service to our clients around the globe. Let me speak now about why our clients choose to work with us and what makes us different. The first thing that I'll hit on is this notion of what it means to be human. One of the real distinctives here is that we believe it takes humans to understand humans, and let me talk about what I mean by this.
After nearly 30 years of database marketing and a generation of AI and machine learning, marketers still struggle to completely understand their customers. Why? Okay, it's because humans are, as the saying goes, that we're only human. We're very imperfect, and we're actually feeling machines that think, rather than thinking machines that feel. Algorithms actually only go so far in predicting what we will do. That's why we are one of the largest commercial employers of social scientists, like anthropologists and ethnographers in North America. What is unique actually, though, is how we combine this. This is what we call thick data with AI and machine learning to significantly improve upon our understanding of our clients' customers. Kartik actually will get into this in more detail right after me. Let me give you an example of what it means for business.
A top European telco was under pressure to grow faster and transform their retail experience. Our social scientists studied the expectations of hundreds of millennials around the world, and they found that millennials view internet access as a human right rather than something to pay for. This insight influenced every aspect of our design. We built an AI-powered self-service interface that increased cross-selling by 40%, a sales tool that is generating 2 billion EUR annually for our client, and three prototype high-traffic physical stores, where we reduced the walkout rate from 6% to 1/10 of 1%. Here's a second way in which we're different, and that's our commitment to helping our clients future-proof their business by delivering tomorrow's products and services today. We do this in two ways. The first is by employing foresight specialists or futurists upfront in the experience work that we do.
By being really good at what we call applied innovation, taking the latest advances in the technology and embedding them in solutions. Let me give you some examples. This past year, we helped a European airline use chatbot technology so its customers can book flights in a voice-enabled environment. We helped an insurance company use AR/VR to train its adjusters to evaluate property damage, and we helped an online bank provide voice access to all banking functions through Alexa. Being good at applied innovation ensures that our clients have fewer compromises, and that means that their experiences are as spectacular when delivered as they were when they were designed. One last point of differentiation, that's our sheer scale in this space. We help our clients operate in these new spaces at scale where it really matters. One of those is in content.
We moderate 100 million hours of content daily for our clients. This allows them to meet the challenge of being always on and marketing at the speed of social. That's really not easy. What's next? As we look ahead, one thing is certain, that's that this shift to experience is going to continue. There are estimates that companies will spend roughly $500 billion in the next few years to transform their organizations and capabilities to compete on experience.
With consumers and competitors continuing to raise the bar for what good look like and new technologies coming on more and more rapidly, the next opportunity we see is in helping our clients to continuously evolve their experience capabilities, where we literally become an ongoing part of how our clients deliver these living experiences, ones that are able to evolve over time, becoming an integral part of our clients' delivery ecosystem. We find that prospect of the client journey very exciting, that's why we're so pleased that Cognizant is positioned to lead in the interactive space. Thank you so much, and I'm going to welcome Karthik up to the stage to speak to you.
Thank you, Donna. Hello, everyone. I'm glad to be here to talk to you about what we do in AI and analytics. Let me start with an assertion. In AI and analytics, we believe that this space significantly enhances business value for our clients and helps them deliver digital at scale. It's going to be integral to everything you're going to hear today morning, and you will continue to hear that over the rest of the day. Now, it's not just us. Even our clients think the same way about AI and analytics. In fact, in a survey that we had done earlier this year for over about 1,000 executives, over 84% of them came back and said AI and analytics is critical to their roadmap. It's important for us to remember that.
Analysts like IDC are expecting this market to grow by over 12% up till 2022. Let's talk a little bit about who we are in this space. Some of you may know Cognizant was born in the data and analytics space, and we've been consolidating our position over the last 25 years in this space. Today, we have more than 22,000 associates, and more than 6,000 AI practitioners on our team. Makes us one of the largest practices in the world in this space. It's not just about the size, we're also one of the most decorated practices in this space, with over 50 industry awards that we've won. Our partners recognize the success as well, and I'll talk to you about that a little bit later. That's who we are. Let's talk a little bit about what we do in this space.
In AI and analytics, we combine human understanding, data, and predictive models to help our clients solve some of their most tangible business problems. We call it applied artificial intelligence, and it's a powerful concept for our clients. I'll explain that through a couple of examples. Customer intelligence right down there. In customer intelligence, in our offering for customer intelligence, we help CMOs and sales leaders use deep customer insights about the journeys, for example, that customers take with them to offer new products, to create new experiences, and in some cases, even generate a completely new revenue stream. I'll give you an example.
For a credit card company in the U.S., we applied artificial intelligence and machine learning to merchant data and consumer card data to create a new real-time loan service that we would offer to consumers as they transacted on the card, by monitoring their spend behaviors and seeing where they are with respect to their spend behaviors. This helped the client generate a completely new revenue stream for themselves. In risk and fraud intelligence, we're not just helping clients save money, we're helping them save lives. For a North American healthcare provider, we applied artificial intelligence and machine learning to help them prevent opioid addiction among their patients. We help them understand proactively drug-seeking behaviors that existed amongst their patients. In the process, we're helping them save about 85,000 lives. This is the sort of work that gets us excited.
This is the sort of work that we do that matters in this world. Our offerings here are also aligned with where we believe market growth is, where we believe our clients are spending their money. I'll give you a couple of examples to make my point. Adaptive Data Foundation, the offering that you see down there, is positioned from this standpoint in the direction of CIOs and other technology leaders that grapple with one of the most complex issues in their business. Dealing with their data and the fact that their data lies fragmented over many systems. As they try to execute on digital at scale, they need to modernize their data platforms and move data to the cloud.
Adaptive Data Foundation is our offering, which is specifically targeted towards this need in the market, helping our clients accelerate their journey of moving their data to the cloud. DC is going to talk in more detail about the modernization agenda, but for a client in the financial services space, we helped them reduce the time it takes to deal with credit risk by about 60% by leveraging Adaptive Data Foundation. I talked to you about another offering, and it goes back to what Donna said earlier around integrating thick data and big data, but it's what we call insight to AI. We believe that, again, understanding the human condition is at the center of the work that we do around technology in this space. I'll explain that through a case.
With a travel and hospitality client that we did work with, they engaged us to help them understand the guest experience in their theme parks and help them figure out how they can elongate the time that guests spend at their parks. Now, rather than going down the traditional mechanism of applying traditional analytics to it, we decided to do it a little differently. We deployed social scientists and ethnographic researchers to understand what motivates guests at the park. What gets them into the park? What makes us leave? When are we the happiest? We learned a lot. We learned, for example, that as you think about the itineraries that you build for your guests, you don't want to fill it up with a set of adventure activities all over the place.
You want to make sure that you create balanced itineraries where you have adequate adventure activities that are interspersed with enough rest times. That actually elongates the time that the guests spend at the park. Right? We took this insight, we deployed it into our analytics and algorithms. For example, we measured rest times. We helped them do that, and that helped our client deliver a much more enriched experience to their guests. This is what applied artificial intelligence is. Right? I spoke a little bit about who we are and what we do. Let me spend a second about what makes us different. Why Cognizant? Why do clients like to work with us? Number one is our industry-recognized depth and scale. Like I said, we were born in the space.
Over the last 25 years, we've built ourselves up to a position of leadership, but more importantly, from a client perspective, we understand their data, we understand their processes, and our clients trust us with some of their most complex problems around their data. Number two is the IP that we have created. Our IP helps us deliver solutions to our clients where we are able to reduce risk, and we're able to significantly reduce time to value. Our Big Decisions platform, for example, is specifically targeted for clients that are accelerating their journey to the cloud, helping them pull down what could be work that's done over a matter of years to weeks and months. That's from an IP perspective. The third point is the ecosystem itself.
We know, and more importantly, our clients know, that no one person can do this alone in the data and analytics space. We have put in place strategic relationships with AWS, with Microsoft, with Google, with Informatica, to the point, for example, that Microsoft actually awarded us the Data Partner of the Year award for the last couple of years. It's not just that. We also work with about 70 innovative partners that help us stay on the bleeding edge of innovation from the startup ecosystem. I've gone through a lot, but what's next? As we see our clients shift more and more towards becoming intelligence-driven, we continue to see a significant opportunity to lead in the space and be their preferred partners.
Towards that, we're making investments, and we'll continue to do that in applied artificial intelligence, Adaptive Data Foundation, our solutions, and the partnerships that we've created. Before I leave, I wanted to leave you with these three important takeaways, and hopefully this resonated through what I just told you. Number one, the market is strong. There's substantial market demand that's still unmet, and we believe we're ready. Number two, we're already a recognized leader in this space. I shared with you some of our statistics, capabilities, as well as some illustrative case studies. That leads me to number three, we've invested, and we'll continue to invest in our leadership position in the space. Thank you very much, and I'm going to call on Sumithra to walk through IPA.
Thank you, Karthik. Good morning, everyone. I'm Sumithra Gomatam, President, Cognizant Digital Operations. I want to start by explaining why intelligent process automation is critical in the context of digital evolution that my colleagues have been speaking about. You just heard Donna speak about the importance of customer experience towards driving competitive advantage and creating value. In order to deliver on this customer experience, you have to look at the process front office to back office and leverage automation to make it as straight through and as touchless as possible. The reality today, though, is that nearly every enterprise is still dealing with siloed processes built on legacy technology, with thousands of resources performing manual tasks from them. Despite all the investments in digital, the middle and back-office processes, the ones that power the business, have largely been ignored.
Intelligent process automation helps digitize and create agility into these processes. This is why certain firms can send you an insurance quote in 15 minutes or instantly approve your mortgage while others take hours or even days to do the same. Since launching our BPO practice in 2005, our focus has been on vertical BPO, as Malcolm mentioned, where we chose to address industry-specific business processes focused on delivering cost and operational efficiencies. This heritage, combined with our technology expertise, puts us in a very unique position to help our clients optimize their core operations through the deployment of automation technology. I cannot stress enough this home field advantage, and more importantly, that we're already seeing this play out in the market for us today. We have over 1,500 IPA consultants, a virtual workforce of 6,000 plus and growing, and strong industry recognition.
Let me take a moment to walk you through how we address the market. To begin with, our goal is to provide the highest impact solutions that allow our clients to achieve straight-through and touchless business operations. This is a journey. Here is where we leverage our core Do, Think, Learn paradigm, referenced by Malcolm earlier, to help our clients evolve on their automation maturity. We begin with repetitive actions that require minimal or no judgment. Then we take on actions that require some judgment and subject matter expertise. Finally, learn through discovering patterns from human actions. We have three core service offerings that we bring to market as part of our automation services. Advisory, where we help customers with an enterprise automation blueprint and value discovery. Implementation, where we first deconstruct the existing processes and use our digital-first methodology to reimagine them front to back.
We then develop and deploy bots using an Agile methodology. For front-office processes, we leverage chatbots for better customer and agent experience. For back-office processes, intake of structured and unstructured documents is very critical. This could be a healthcare claims form for reimbursement, or it could be a handwritten medical report by a doctor. By digitizing these, we can significantly increase the automation downstream and the potential for business benefits. In operations, we first monitor and manage the bots to drive continuous adoption and efficiencies. Then we gather and mine data using machine learning model to generate process insights. This drives better business outcomes for our clients. The technology fabric of automation comprises of multiple components for which there is a rapidly evolving set of software vendors. In order for us to deliver comprehensive solutions, we must bring together a variety of third-party products and in-house industry-specific IP.
HiveCenter is our overarching assemble for business purpose platform that helps achieve the same. Our key partners include vendors such as UiPath, Automation Anywhere, Blue Prism, WorkFusion, and many more. Our 2014 acquisition of TriZetto also included HPA, a healthcare automation company that provides a unique robots as a service offering to its customers. HPA's history and learnings have helped shape our thinking and capability and gave us a head start in addressing this opportunity. Let me give you a couple of real-life examples so you can better understand the kind of work we do today across advisory, implementation, and operation services. A large healthcare insurance company was dealing with a growing backlog of claims, which in turn was causing member and provider dissatisfaction and exposing the insurer to potential monetary penalties. We assessed the existing workflow and identified various scenarios that caused the rising backlog of claims.
Armed with a clear understanding of the workflow issue, we then developed an intelligent automation solution that leveraged both RPA and machine learning algorithms addressing 35 different processes. The end result, they improved the member and provider satisfaction by taking the claims backlog to zero, reduced the insurer's risk of monetary penalty, and increased their ability to take on new business, thanks to the significant boost in the claims capacity, processing capacity. Another example is the work we did for a large retail bank. They had a problem with identifying, validating, and addressing disputed transactions in a timely fashion, and this was driving very low customer satisfaction levels. We assessed 19 siloed applications across mainframes, Windows, and web. We learned that the existing processes required data to be reconciled across multiple business systems.
Once collected, bank specialists still had to review various reports and memos in order to make a decision on the claim. To address this issue, we developed a solution that automated the key steps in the process, from dispute registration to fund reclaiming. We developed bots that handled 3.8 million transactions worth approximately $420 million per year and representing a significant percentage of the bank's disputed claims. The end result, we not only reduced the time to resolve a claim, we were also able to improve accuracy to 90% from 70%, and all of this resulted in improved customer satisfaction levels. These are really two nice examples of the kind of work we're doing, and importantly for our clients, these are really very high return on investment projects. Let me quickly touch upon the opportunity for Cognizant.
While the industry is still in its early stage of adoption, we estimate the market for our automation advisory, implementation, and operations to be well over $1 billion today, and we think it will be $5 billion in the next three years. Fueling this growth will be the shift from proof of concepts to enterprise-scale automation, a shift we believe is already beginning to occur. For Cognizant, this service offering has grown 100% year-over-year for the last couple of years, and I see this growth momentum continuing. Equally important, automation is a beachhead that influences broader digital operations deals. More than 50% of our TCV year to date has been influenced strongly by our automation capability.
If I can leave you with three takeaways from our IPA practice, our deep industry process and technology expertise is a home field advantage. We have had a head start with the adoption of IPA technologies. Our IPA practice has experienced rapid growth in the last couple of years, and I'm confident this momentum will continue going forward. I'm personally very excited about the opportunity ahead for us, and I would now like to introduce my colleague and co-panelist, Vipul, who will speak to you on platforms. Thank you.
Thank you, Sumithra. Morning, everyone. My name is Vipul, and I lead global markets for Cognizant Digital Operations. I have the pleasure to talk to you about our platform business. I've been in the BPO business for more than 20 years, and I'm very excited about how the market opportunity is evolving for verticalized platform solutions. Let me share some context. Malcolm mentioned that value creation in the digital economy is disproportionately weighted towards platform businesses, Apple, Netflix, Uber, to name a few. To date, this has predominantly been a B2C phenomena, but we're now seeing increasing demand from enterprise buyers. All of you know how companies like ServiceNow, Salesforce, and Workday, all of whom, by the way, are great partners of ours. These companies integrate software with underlying cloud infrastructure to solve horizontal needs like CRM and finance.
This movement is fueling the opportunity and which underpins our strategy, which is to develop vertical platforms for business processes that we deeply understand and for which we provide not just software IP and the cloud infrastructure, but the entire business process management layer all in one integrated solution. We call this business process as a service. Keep in mind, BPaaS for standard corporate functions like HR and procurement has been around for a while. As Malcolm and Sumithra mentioned, Cognizant pioneered vertical BPO. Look at all these services that we do or core processes that we serve for industries. Industry analysts rate us as a leader in eight vertical and practice categories in BPO. It's this heritage which allows us a unique perspective and subject matter expertise to aggressively target the vertical BPaaS market. Cognizant's platform business includes SaaS analytics platforms and BPaaS.
Today, I'm gonna cover only BPaaS. Let's talk about what's driving client demand for BPaaS and our value proposition. As digital ushers new or changing opportunities across industries, our clients need to respond quickly. They want the flexibility of pay-as-you-go so that their costs rise in tandem with their revenue growth. Finally, they also want reduced complexity brought about by multiple vendors and handoff points. Gartner expects vertical BPaaS to be a $22 billion market in three years. HFS survey respondents said 25% of existing BPO contracts will be renewed on a BPaaS basis. Within this context, our client value proposition is threefold. One. We deliver specific business outcomes while taking accountability of all operating elements, apps, infrastructure, business process, analytics, and even third-party services, whether it's a mail room or a specialized data feed. Second. We price these services at an outcome or output basis.
Third, we reduce the go-to-market cycle time for our clients' products and services, and all this at a significantly reduced cost. In other words, we provide our clients with tier 1 service levels, variable pricing, flexibility to scale, and a frictionless user experience brought about from this integrated service value chain. What does it mean for us? Let me highlight the two levers. Platforms are inherently nonlinear after the initial build cost. The nonlinearity benefits us on both sides of the P&L. On the revenue side, the pricing model is transaction-based or outcome-based, not FTE. We already have BPaaS solutions priced as a percentage of revenue managed in the case of retail or per member per month pricing in the case of healthcare. On the cost side, these solutions have declining marginal costs. Each additional policy that we manage on our life admin BPaaS costs us less.
The journey or timing of this margin inflection will vary by BPaaS, but we are clearly seeing margin benefits as we scale individualized BPaaS offerings. The second benefit I want to highlight is BPaaS deals are longer tenure, sticky, and large. These solutions run core operations for our clients and hence these tend to be multi-year sticky relationships. Also they cover typically either the entire business function, like the healthcare plan administration or a specific process within it, take claims processing example. This broad scope drives deal values to be larger, it improves our revenue scalability and gives us better revenue visibility. This win-win proposition for clients and Cognizant is driving strong demand for BPaaS across industries. Let me share some color on how we choose our areas of focus. We use a structured methodology to continuously research the market and put promising ideas through a rigorous evaluation.
We identify market potential for industries' gain or pain areas, assess the competitive field, evaluate, build, buy or partner options for underlying technology and establish the financial viability both for the buyer and Cognizant. Currently, we have 25 solutions across industries at different levels of maturity. I work very closely with the vertical and geo leads in Santosh and Prasad's team to build and commercialize our respective BPaaS solutions. Let me share two examples of mature BPaaS solutions today. The first one I want to talk about is the healthcare BPaaS solution. As many of you are aware, Medicare and Medicaid are the fastest-growing part of the healthcare insurance marketplace. Health plans continue to aggressively expand into these markets. In 2017, we acquired TMG, a government healthcare processor. Leveraging our TriZetto product suite, we have built a scalable offering to target the Medicare and Medicaid market.
Our healthcare BPaaS solution covers the entire plan administration cycle, from enrolling new members, then through the year, processing claims, servicing members, servicing providers, and monitoring the medical utilization. It's a standard offering, easy to deploy, and facilitates a faster go-to-market for our clients. Quick example. Passport is a leading Kentucky Medicaid plan which wanted to get into Medicare market. Our solution enabled Passport to launch a new Medicare plan in less than six months, and it pays for as many members as they sign up. Typically, a new plan launch takes 18 to 24 months. Our solution did it in six months, which is a huge advantage to the client. Larry and I spend a lot of time with healthcare clients on this BPaaS solution. We believe we are a top choice in this $5 billion addressable market today.
The second example I want to talk to you about is the next-gen B2B sales solution that we have for retail, CPG, and hospitality sectors. These clients or companies in these sectors face the dual challenge of driving revenue growth in mature markets while simultaneously upgrading their customer-facing infrastructure to develop a contemporary user experience. Our next-gen B2B sales solution serves this entire sales life cycle, driving higher revenue at a world-class user experience. We built this BPaaS with a combination of in-house and third-party technologies for addressing omni-channel customer connect, marketing automation, e-commerce enablement, CRM, and predictive analytics. These applications in the hands of our sales practitioners drive sales lift at a reduced cost. One client experienced a 30% bump in their targeted growth rate while sales operations costs came down by 20%. It's a very compelling proposition for clients and for us.
We get paid a base rate and a gain share of the incremental revenue we generate. Let me leave you with three key takeaways. The market is rapidly evolving towards vertical platform-based services. The demand is there and building. Second, BPaaS solutions require technology, vertical, and operations expertise. Our strength in all three, and most importantly, the ability to synthesize them at scale, gives us a unique advantage. Last, BPaaS, we believe, will drive revenue and margin growth for us over the next few years. Essentially, go BPaaS. I thank you for your attention, and now let me invite DC to talk about core modernization.
Thank you, Vipul, and hello, everyone. I am Debashish Chatterjee, President of Digital Systems and Technology. Earlier, Malcolm talked about flight delays and missing a connecting flight. Every day, hundreds of thousands of passengers face this across the globe. Here in N.Y., where there's a storm, today is such a day. It costs airlines huge amount of money to deal with such disruptions. At the same time, for any airline, this presents a great opportunity to engage and assist customers with various options at the front end. Malcolm alluded to it. They can offer self-service options so that they can reschedule across kiosks and mobile devices. Instantly offer layover options on their devices as soon as they land. Where is your luggage? A real-time update will be definitely helpful.
This customer experience depends entirely on how the airline's front-end systems are seamlessly able to connect and integrate with their enterprise IT backbone, be it the infrastructure, application, database, and security systems. However, you can easily visualize the scale and the complexity of this problem given all the other operational challenges that the airlines face on a daily basis. Every other industry, be it banking, insurance, healthcare, retail, or manufacturing, face similar challenges as they aim to deliver unique customer experience and unlock new revenue opportunities. Let us talk about how legacy IT systems have to work in harmony with digital. This is extremely important to all our clients. This means that the role of the CIO in the digital journey has become more critical than ever before. It is anchored around two priorities: renovate the IT backbone and enable rapid digital transformation.
Let us look at the enterprise IT backbone of a typical Fortune 500 company. Experts reckon only 20%-25% of IT systems are getting shifted to the cloud-based models. While 75%-80% of the remaining environment have to be actively modernized and maintained. These dual priorities are resulting in three key imperatives. One, simplify the entire IT landscape. In an always-on, 24 by seven model and world, complexity in systems is instantly visible to our clients. Two, modernize systems to offer superior customer experience and accelerate the journey to digital. Customers expect new features and functionality to be available in matter of days and weeks, not months and years. Three, secure mission-critical applications to build resilient systems. As the number of users that digital systems support are significantly larger and more diverse than ever.
Let me explain why Cognizant is a force to reckon with in core modernization. Cognizant is one among maybe a handful of companies equipped to serve the dual mandate of the CIO, and here is how we are distinctive in that group. One, our integrated offerings portfolio. Our integrated offerings combine expertise across multiple service lines, such as applications, infrastructure, data, and security. We have created pre-packaged accelerators and intellectual property over decades. These have been fast-tracked, and execution for our clients have been given at a faster time to market. Here are a few integrated offerings that are working well with our clients. Our smart operations is a fully integrated transformational service that removes silos across applications, infrastructure, and security. We smartly operate an IT environment with a target cost savings of 30%-50%, which in turn can fund innovation investments.
Our Cognizant hybrid cloud offering enables rapid provisioning and orchestration of applications across multiple cloud environments. Our cloud migration services is a full stack migration approach, which is scalable, repeatable, and predictable. These are just a few examples. Two, our trusted client relationships. We touch the enterprise IT backbone of a majority of Fortune 500 clients. Over the past 25 years, we have grown and established ourselves as their trusted partners. We are the best positioned to use our business knowledge and context to transform and modernize from within, with significantly lower risk. You must understand the client environment well, so that you can modernize. If you don't understand the client environment well, you just can't modernize. Three, our skilled talent and scale. We have over 8,000 enterprise consultants, senior architects, and evangelists who are deeply embedded within clients.
They drive a proactive and risk-aligned modernization journey for all our clients. We have strong expertise in cloud. Our global cloud workforce of skilled and certified associates is expected to exceed 20,000 by this year-end. Four, our ecosystem of partners. We have longstanding association, well-defined joint go-to-market, and solution-based approach with AWS, Microsoft, Google, SAP, Oracle, and Salesforce, just to name a few. We are elevating our partnership status with each one of them. As a recent example, in Google Cloud Platform program, we have achieved the highest partner designation. This extends our opportunity to jointly and proactively deliver digital engineering at scale. Finally, our investments. Take for instance, our Salesforce practice, where we are focused on the entire Salesforce ecosystem, including the ISV partners, and this is a very fast-growing practice for us. We have the third largest team of Salesforce certified consultants.
We have recently doubled down with a couple of key tuck-in acquisitions. SaaSfocus, the largest independent platinum partner in Australia and New Zealand, which expands our presence in Asia Pacific. ATG, a Salesforce Ventures funded partner based here in North America. Our distinctive position lets us proactively pitch for modernization deals to our top clients. We are seeing momentum with our pipeline and deal wins. This provides us significant headroom to be the trusted core modernization partner to our top 100 clients. These clients are actively seeking to capitalize on the new growth opportunities presented by digital technologies in their respective industries. To reiterate our approach, first and foremost, our ability to drive digital at scale with an end-to-end approach to transformation. Our integrated offerings portfolio powered by automation and a lot of codified proprietary know-how is helping us rapidly deliver it.
Second, we are poised to further boost our pipeline of opportunities with our partners. We are doing it much more proactively and deliberately than in the past. Third, we continuously augment our associates through rapid re-skilling programs. This is helping us build one of the largest multi-skilled, full stack, and future-ready workforces in the industry. I'm very proud of my team and what they do for clients every day. Lastly, new digital opportunities will be based on modernizing existing IT environments. We have an intimate understanding of clients' IT estate. We have deep contextual knowledge of the clients' industries and their business models. This combination gives us a strategic advantage to execute on this. I will wrap up by stating that we are successfully executing on our core modernization agenda and mandate. We want to be the undisputable leader in accelerating digital transformation for our clients.
We are the safest pair of hands in ensuring that their front office dreams of digital don't get bogged down by back-end nightmares. Thank you very much. Now my colleague, Gajen, will talk to you about Digital Engineering.
Hello, everyone. It's not a very interactive crowd. Good morning. My name is Gajen Kandiah, and I'm President of Cloud Business, Digital Business. This morning, you heard about our Platform Business, our Automation Business, our AI and Analytics Business, and our Interactive Businesses, and how they come together to deliver extraordinary experiences, whether they be product or service experiences. The reality is, for those to come to life, you need to be able to modernize existing applications infrastructure that our clients have, and you need to be able to connect them to a new set of applications that ultimately deliver and drive those experiences for our clients and for their customers. DC and I, as you've heard, are partners or brothers in arms in building the modernized and the new innovation, if you will, applications that come together to ultimately deliver this end experience.
I'm excited to talk to you about our Digital Engineering practice because that is the piece that, the second part if you will, of what DC just talked about. It is one of our fastest-growing businesses. It's a clear strategic priority for the firm for obvious reasons. What I'll do is I'll briefly frame the market, which I think Malcolm already did for me. Thank you, Malcolm. I'll talk to you a little bit about how have we built this practice and positioned it to be unique in the market, and how we're differentiated as we compete with other partners to deliver to our clients. Also spend some time on our most recent acquisition of Softvision, and why we are so excited about what Softvision brings to us and how we believe it will accelerate our growth together.
Malcolm talked about the phone experience. Look, we all have these phones. We all live and our everyday lives are on these things and on web platforms and other gadgets and devices, from a personal life perspective. They work great and they're intuitive and so on and so forth. Unfortunately, our work experience, what corporate IT delivers to us isn't quite the same. The reality is that today, because of these great experiences that we have on our personal devices, there is now an expectation that all of our experiences need to be the same. This, to me, really for us, opens up the significant opportunity in digital because business and technology leaders alike now appreciate the need and recognize the need that they need to compete on the basis of software.
Whether that be existing internal software that they've maintained for decades, and there's thousands and thousands of apps, whether they be enterprise apps or just regular apps, or new consumer-facing apps that they need to build. They need to be able to rapidly build, launch, modernize, and deploy these applications in order to compete in this market. That's in essence what digital engineering does. Cognizant Digital Engineering helps clients conceive, design and build modern, innovative cloud native, and the cloud piece is really important, applications that deliver consumer grade experiences at enterprise class scale. This is no longer about just building the app. This is about how do you connect it all the way through so that you actually create production-ready systems that ultimately deliver these experiences that we're talking about. That's one part of what we do.
The second part is what DC just touched on, which is we modernize existing enterprise software so that they can meet the standards that are required to then plug in and support and integrate the outcomes that we're trying to drive. Lastly, and most importantly, we do this at digital velocity, which means we do it in weeks, and we do it at scale, and we do it while controlling risk for our clients through this iterative deployment process. There are a handful of companies today that are pure play engineering firms with growth rates in the 20s.
What you might not know is that today, and Malcolm touched on this, with approximately 10,000 associates, Cognizant Digital Engineering is already one of the largest players in this market and one of the fastest growing practices in this market with similar or better growth rates than many of these pure plays. I don't think you're surprised to learn that we build software, that we build applications. Today's C-suite executives have recognized that there's a new imperative in terms of how they design, build, launch, and manage these applications because they do need to be bulletproof back to the consumer grade experience. They need to be bulletproof, scalable, secure, and accessible on any platform. It's almost always something to do with a migration to the cloud and a lift up from the cloud.
These applications need to seamlessly integrate all the way through back to what DC was talking about. They need to be elegant, engaging, and intuitive back to what Kartik and Donna touched on. These pieces have to be glued together in order to, again, deliver that end experience. That's why we recognized this many years ago as Frank and Malcolm touched on. As a result, responding to this sort of need has been a strategic priority for us. To address this, digital engineering brings together what we call integrated teams that we put into pods.
These pods are, in essence, bringing multiple capability sets, if you will, together, like product managers, product engineers, user experience engineers, cutting edge experts like AI, VR, AR, and putting it all together in a pod that we then deploy at or near clients in the early stages of innovation because collaboration is super important in these early stages of innovation. We are also able to, and I think this is a critically important element, we're able to deploy them in a globally distributed model when it comes to scaling these because these apps need to get scaled in order to deliver business outcomes. The end result is fast time to market because we are close to the client when we are defining this and our ability to deliver consumer-grade experiences at scale because we can deploy them in a globally distributed model.
Becoming digital also requires significant shift in culture. This is not just about moving technology around, but it's fundamentally about how you do it. This is about Agile speed and the pace at which you can deliver these applications, but also the people, the environment. I call it the workplace, the workforce, are all critically important because they all underpin culture. What's interesting is our clients are starting to take notice of this and starting to embrace the need for also changing the culture. They're coming to us for this. Our approach, which is really catching on with clients, is that our focus on culture, team structure, and scale that has made digital engineering really one of the fastest growing businesses at Cognizant. I don't want to say fastest growing, Sumithra might get upset. We see a healthy growth trajectory ahead of us.
We differentiate in a few ways. First, it's capabilities which as you know there's engineering and everything you just heard about. All of the different capabilities that my colleagues have walked you through. Second, it's about the engineering approach and the time to market, the velocity with which we deliver, which is a big part of delivering at digital speed, if you will, and our ability to deliver in weeks. Third, tools. Tools become significantly important. We are investing in proprietary tools as well as leveraging existing tool sets that cloud native providers like AWS and Google and Azure provide us.
On top of that, leveraging platform vendors like Pivotal and OpenShift to be able to ride over the top of some of these cloud partners as clients may choose. Also building containerization, like Kubernetes or Docker and others that are also driving a lot of the change to the cloud. We're pulling these together to deliver to our clients an additional 30% of reduction in time to market. All of these pieces, so software for software, if you will, plus all of what you heard and the engineering capabilities, what drives this. Look, last but not least, we have, and you heard from many of my colleagues, we've been doing this for 25 years.
We've been a trusted partner for 25 years, putting all of these pieces together and gluing it and integrating it with Cognizant Digital Engineering, we believe really gives us the opportunity to be the first phone call for our clients when they want to build the next generation of software. We continue to invest in this space, we've invested in recruiting, in training, and really in space to really make engineering of what we do a destination. As we continue to do that, we've also looked at M&A as a mechanism to really drive what we're doing. To that, we went ahead and recently acquired Softvision. Softvision, I was very involved in this process. Fantastic company. There's a fantastic leadership team that will be joining us from Softvision, in addition to 2,300 creative technologists that will come on board with us.
What's even more important with Softvision is their Romania presence, the vibrant culture that they bring to us, their ability to engage and move at Agile speed with clients and business leaders and think on their feet and work very closely with them in designing and defining some of these outcomes that I just touched on. We are particularly excited about what all of these pieces put together also allow us to really expand our delivery capabilities and our footprint off of the Romanian piece of Softvision and really make it a big part of our Eastern European push in terms of delivery. We believe that the combination of Softvision and Cognizant Digital Engineering accelerates our organic growth plan by at least a year. Together, we are unequivocally one of the top digital engineering companies in the world.
Let me talk a little bit about one example, that is The Estée Lauder Companies. Cognizant and Softvision were working at The Estée Lauder Companies together, independently, but together. The Estée Lauder Companies is a $45 billion global leader in beauty products. In essence, what we're building for them is sort of the Amazon of beauty products. The experience of Amazon, but for beauty products. So we've partnered with them to build, the architect can build a custom global commerce capability, right? Using cloud technology, native cloud, and microservices. However, back to the point I made at the beginning, in order to deliver this, we need to be able to deliver the experience, which is through the interactive element. We need to be able to modernize inventory, replenishment, merchandising, all of the underlying systems, right?
Last but not least, we need to be able to deliver this at scale and at speed. So we've been able to pull this off together with Softvision. Today, as a combined entity, we believe it puts us in a significantly advantageous position, not just at The Estée Lauder Companies, but also for other clients to be able to deliver this. Today, the end-to-end platform at The Estée Lauder Companies has earned the recognition as a pioneer in digital commerce and a leader in the online beauty space. Now with Softvision, what we do is we've combined the best attributes of a focused pure play, but with the breadth and depth to address all of the process and technology needs of a Fortune 2000. There are very few, if any, in the market who can credibly deliver on this integrated value proposition.
To sum it all up, there's a maybe shift happening. The market is massive. Malcolm put up some numbers. Every client needs to build, transform and integrate hundreds, if not thousands of applications to stay relevant. To do this, they need a partner with the right culture, talent, breadth and depth to rapidly deliver consumer-grade applications with enterprise scale. Softvision plus our current practice makes us a tier 1 partner by any measure, and we will support our continued rapid growth in this space. Thank you. I'll hand it over to Raj.
All right. Thank you, team. That was the wealth of information. I just want everyone to take away a couple of key points. These six capabilities that we talked about, these are our future growth drivers. Frank talked about initially when he kicked off the Horizon 2 businesses that we invested in many years ago. These are our new Horizon 2 businesses, each one of these multi-billion dollar markets. Second, we've invested heavily in these capabilities to make sure they're integrated into our industry solutions and horizontal offerings. Malcolm touched on this, right? He talked about the changing S-curves. In order to make digital resonate at Cognizant, we had to change the entire operating layer. How we go to clients, how we deliver to our clients, how do we become an Agile company? That's a big process.
We took a 260,000 individual company, we realigned it because we fundamentally believe these are the opportunities for growth for our future
Finally, these solutions are resonating with our clients because we're at the early stages here. There's very few companies out there that can really deliver digital at scale. We think the way that we understand the business, the processes, and technologies, we think we have a great opportunity ahead of us. With that, we're going to go and do our first executive panel. I'm going to invite to stage, I'm going to invite Karen, Frank, and Malcolm to join me, I'm going to ask Karen to help facilitate and direct the questions. I guess, do we get chairs, guys? Okay. Joe Lenny. Joe Lenny? Yeah, I got a freaking spine on this place.
mentioned at the beginning, we are going to take questions from the audience. This is the first and the shorter of the two Q&A sessions. We will have a much longer session at the end, where we'll also include some of the questions from the webcast, time permitting. What we'd ask you to focus on in this first round is questions that really address the topics we've already covered. At this point, I wouldn't want to address any financial questions. We'll be addressing those after I give an update on the financial model and profile towards the end of the session. With that, we have a few folks, including Dave and Katie, with microphones, and let's open it up. Okay.
If we could just have people state your name and affiliation.
Yes. Rod Bourgeois here with DeepDive Equity Research. Guys, your history is absolutely impressive, and I think you just went through about six solution areas and all the advantages that you have in those areas, so that's helpful, and they make sense. I think one of the challenges, though, is that when we hear presentations from other companies, the list of advantages, they sound sort of the same. When we look right now, you've had a history of very impressive share gains over your lifetime. Those share gains are now not there. Some of your competitors, Accenture, TCS in particular, are, especially on an organic basis, growing faster.
The question is, I see all the advantages that you've listed, if there's not a growth versus margin trade-off as you've talked about on your recent conference calls, what is the reason why the share gains aren't there right now? Is that about to change given the advantages that you've listed? Why are you no longer gaining share, and will that change going forward here soon?
Frank, you want to-
Yes, Rod, look, I think I'll say a few things. Let me start with reiterating what I said, and then I'll sort of specifically address the share gain question. We have big market opportunities. We've got these sort of beachhead positions in core industries that we've served in the past and new industries that we have opportunity to grow in. These 6 solution areas that we Excuse me, I'm recovering from a cough here, so I'm losing my voice. The 6 solution areas that we've outlined for you today represent our go-to-market relative, thank you, Dave, relative to those industries. The last couple of years have been really about building the foundation, and this is the core for me. When we're navigating from one S-curve to another, you framed it up in terms of this conversation that's been had about the trade-off between margins and growth.
There's been a lot of conversation about that in the past earnings calls and so on and so forth. We, as a management team, think a lot about that. We've told you, and you'll hear again in the afternoon, that we don't think that we've made a trade-off between margins and growth up until this point. We think about another trade-off as well, and that is the trade-off between quality and quantity at this moment when we are navigating from one S-curve to another. What we really feel like we've done is we've spent the last couple of years putting the foundation for these 6 capabilities in place deeply. That's the quality side of things, right? This is about building the foundation. If you think about the transition that we've been through over the last couple of years, some stats that you've heard.
This year, we've hired tens of thousands of people in the company. We've retrained over 100,000 people. These are all the elements of quality that are building the foundation on top of which we'll grow the company in the coming decade, really. Really what we look at is we've spent the last couple of years putting the foundation for growth in place. These are the 6 things that are going to drive that growth going forward.
Hi, it's Bryan Keane, Deutsche Bank. Can you talk a little bit about win rates, how you guys stack up versus the competition? Obviously, that slide came out where you guys are in tier 1, but maybe it would be helpful to hear how you guys are doing in the marketplace competitively because people are trying to figure out the differences between some of the players because everybody says they do digital. Why is Cognizant better, and how are they doing in the marketplace for wins?
I'll take that. Look, Bryan, I think when you look at the overall, how we go against our competitors, I think you really have to look at what makes us win. When we win is when we have an opportunity to shape the solution. That's what we've invested very heavily in over the last 2 years to change the fundamental model and how we go to market to become much more consultative and to change the profile of the client partners that we have. Along with that, obviously, maintaining a strong delivery culture and delivering results. That's how we win with our clients. Obviously, each competitor does a little bit better in certain areas. There's certain capabilities that someone else is stronger than in others.
I think overall, when clients are trying to decide what is that long-term partner that can deliver both at the technology, the business, and the process layers, there's very few companies out there that have all that strong capability with the industry knowledge that we possess.
James Schneider from Goldman Sachs. Thanks for taking the question. I guess, maybe Frank, you outlined earlier the idea of getting one of the other verticals beyond financial services and healthcare to scale at the same level as those other ones are. Can maybe give us or share with us your thoughts on which are the one or two priority verticals you're investing in, and more importantly, going forward, the inorganic capital requirement that might be required to get you there in terms of acquiring new platforms, and how much of your total capital available that might require?
Look, I laid them out. I actually think that all of the other verticals that we serve at the individual vertical level, not at the segment level that we report, but at the more micro vertical level, have the opportunity to be billion-dollar-plus businesses for Cognizant in the coming years. They're all very large markets. They're all growing fast. If you look at our publicly reported segments for the last couple of quarters, you'll see that they're all fast-growing. We're investing against areas like communications and technology. I think it was Malcolm Frank who made the point that of our top 10 clients today, two of them are tech clients now, where just three years ago, all 10 of them were healthcare and life sciences clients. You see good growth there. Communications, technology, manufacturing, and retail continue to do very well for us.
Energy and utilities is another big opportunity. We're investing in all of these in the right proportion. I would say that we'll come back to your capital question in the afternoon, in the second Q&A session because I think we can give you some good color around that after you've heard Karen's presentation in the afternoon. What I'll say for now is that I don't expect that growing any of these industries is going to require a disproportionate amount of capital that's out of line with our broad trend historically or with our inorganic plan going forward.
Thanks. It's Tien-Tsin Huang from JPMorgan. Malcolm Frank, I like your stall zone sort of comment there. I'm curious, as we're transitioning S-curves, and we always see new companies come in and older companies maybe lose their way or fall out, and Cognizant is pivoting at scale, how long do you think this potential stall zone could last, and how quickly can we evaluate and see who sort of emerges and jumps on that right part of the curve, if you don't mind my question?
It's the $64,000 question. From our perspective, we're about two and a half years into that. The reorganization was in the summer of 2016, June, when we went through that and pivoted the whole company around it, and then invested as you've just seen. It's been, for us, about two and a half years, and as you recognize with the presentations, we really are starting to get our stride with that. It is a conscious effort to walk a company through it, and in some cases, it's not hard, or it is hard. Some cases it's not hard, but in many cases it is. It requires leading our employees through it, obviously, but also a lot of our business partners, and candidly, investors as well, to walk through where we are in that journey.
We believe now we are on the other side and really getting our stride, in these verticals and in these solutions that we were describing with our clients.
Hi, Jason Kupferberg from Bank of America, Merrill Lynch. I wanted to see if you could just talk a little bit about the supply side of digital. Obviously, top of mind for everybody in the space, and it just seems that attrition rates are increasing, not just at Cognizant, but frankly for most all the players out there, big war for talent going on. We'd love to hear a little bit about the strategic actions there, and do you feel that this is a big enough challenge that it's actually impeding revenue growth in digital?
Jason, if I might, I'd like to defer that question if you don't mind, because we were going to have a whole session around talent.
Okay
After the break, I think hopefully we'll address some of those questions, if you don't mind, we'll answer that in the second round, if that's okay?
Sure.
Hey, guys. It's Darrin Peller from Wolfe Research. Look, I want to go back to the topic around platforms, just because I know it was a big area of focus for you guys to build out, going back to the TriZetto acquisition and even earlier than that to some degree. First of all, how many actual clients have scaled? I know there's EmblemHealth, but how many clients have scaled do you actually have that you believe are running on your platforms now? I just haven't heard real numbers on that since. I think that's a good step towards the breaking linearity that you guys have talked about also. Where are you on that cycle? How much more can we see out of the platform initiative to drive that? Thanks.
Darrin, it varies. I think, as Vipul said, today in the market, we have about 25 platforms at various stages of maturity. If you look at the biggest platform, as you said, is the TriZetto-based platform. Vipul spoke about the TMG Health acquisition. If you put TMG, which are the government programs that run on the TriZetto platform, together with EmblemHealth and others that are the commercial plans that run on the TriZetto platform. It's a common platform running different lines of business, commercial, and various government programs. There, we probably have dozens of clients, big and small, together on the TriZetto platform. That size and scale is perfectly appropriate for that platform. On the other hand, we have a platform in the finance and accounting space, for example.
There, the number of clients is measured in the hundreds, because it's a very different kind of platform targeting a very different kind of market segment. Across these platforms, the characteristic of the platform, the characteristics of the end market, will dictate what is scale for that platform. In some cases, we have three or four clients, in some cases, as I said, we've got hundreds of clients on the platform, it just depends on the end market and the characteristics of that platform. We have, as I said, 25 platforms in the market, making good progress there. We'll continue to build out platforms. I think we're finding now more and more that we know the pattern, we know the playbook, we understand how to do these things.
We've created sort of a risk-mitigated way of identifying the market opportunities, we'll continue to make those investments, both organically and inorganically, aligned with the markets that we serve, the industries that we serve.
I know we're running a little over on time. We'll take one more question before the break, and then obviously, we'll have much more time at the end.
Thank you. Bryan Bergin from Cowen. I wanted to ask about the buyer profile. Can you just help us think about how the current mix of business caters to the revenue proposition versus currently the cost side? How should we think about that mix progressing over the midterm, and what do you have to do to change perception and capability to drive that?
Let me take a stab at that and have Malcolm and Raj jump in. It's very hard to make that distinction because as we made the case today, the reality is that much of what you might think of as the work that we do, even for the CIO's organization today, is really in support of revenue growth, right? We are re-engineering, we're modernizing, we are simplifying core legacy IT in that part of the business, but we're doing it in support of new revenue growth, new opportunities, new systems that our clients want to deploy in the marketplace. It's a very difficult distinction to make, candidly, because across the three practice areas that we've spoken about, Digital Business, Digital Operations, and Digital Systems and Technology, large parts of the work we're doing there is in support of a client's growth agenda.
If you want to get a little bit more granular than that, you can think everything we do in Cognizant Digital Business is almost entirely focused on revenue growth. I would say in Digital Ops, it's probably 50/50, and in Digital Systems and Technology, it's probably about the same. Kind of rule of thumb. These aren't exact numbers. These are rule-of-thumb kinds of things.
Just a specific answer on who the buyers are. A few years ago, I think it was in vogue to say the CIO role was diminishing in importance. That was all completely wrong. It's actually become much, much more important. That person has to lead the charge and work in conjunction with the other line of business executives. We've enjoyed those relationships for a long time, and we're helping that CIO evolve into these business-focused areas, as well as rewiring their legacy and environment. We know those people very well, and they usher us in to a lot of these digital opportunities because when they're doing their job properly, they not only know every opportunity in the company, but quite often they're leading them.
I think you guys summed it up.
Malcolm?
For now, we're going to take a break. 15 minutes? 15 minutes, and then we'll come back, and we'll go to the next talk about our markets and our industries. Thank you.
Thanks.
Please take your seats. We will begin shortly. Thank you. Please silence all devices and take your seats. We are about to begin.
Welcome. Welcome back. That was the fastest 15 minutes I think we ever had. Anyway, this morning you heard Frank profile our strategy, Malcolm outline our market opportunity and our positioning, followed by several of our leaders talk about how these capability areas will drive industry-leading growth with healthy margins. Every year we conduct a board strategy meeting where we invite our clients to speak about their future, direction, and provide us some feedback. This input really helps shape our strategic plan. We routinely hear from our clients that they love us because we're one of the few companies that have touched their business, technology, and processes. In fact, many of those leaders that join us feel that we have a better understanding of their organization than they do, because they only see one of those layers.
Our clients tell us, "Cognizant, you guys have earned a seat at the table. Now it's up to you to figure out how you're going to use it." That's why we've enhanced our go-to-market model with more consultative client partners, engagement partners, and delivery partners. This has allowed us to become with more proactive ideas to our clients, and we're seeing that materialize in our pipeline and in our win rates. We're no longer waiting for RFPs. We're helping shape solutions. To discuss our consultative approach, I've asked some other members of my team to join us. Prasad is the President of our global industries and consulting. Previously, Prasad used to run BFSI. And under his leadership, we've made tremendous progress in expanding outside of BFSI and healthcare into many of the new areas, the new industries that we're touching back, talked about today.
In addition to that, has really made sure that consulting is integral at every single account that we're in. Along with him, we have Santosh Thomas. Santosh is our President of Global Markets, which comprises of Europe, Asia Pac, Middle East, and Latin America. About 12 years ago, I went to Santosh. I said, "Santosh, I need you to move to Europe." He's like, "What, are you crazy?" I got him to go to Amsterdam, and with that, he really helped us. He built out our model for continental Europe, starting with the Benelux, going into Germany, going into France, going into the Nordics, Switzerland, on and on. He built out a great playbook that he was able to take all those markets with a very strong localization capability and set us up for potentials of multi-billion dollars in each one of those markets.
We asked him to take that same playbook with a strong localization and go into the markets of the Middle East, Asia, and obviously Latin America. We have Larry. Larry heads our healthcare strategy and development. Larry joined us through our acquisition of TriZetto. Another example of how we're integrating key talent in all of our acquisitions. Under Larry's leadership, we now have expanded our presence beyond the insurance payer market. Today, we also have a strong provider practice, including software solutions, platforms. Along with that, we have one of the strongest consulting teams within Cognizant. Chell, who's going to chair this panel, Chell leads our consulting globally. We have 6,000 professionals. Prior to Cognizant, Chell was America's innovation leader at EY and also the CEO of Capgemini. I begged Chell to please join us and help us lead consulting here.
With that, I'm going to let Chell kick off the panel. Go ahead. Thanks.
Thanks, Raj, and good morning. Thanks for coming back. You heard us talk this morning about the six critical capabilities. What we want to do now is talk about how we're bringing those capabilities to drive outsized impact for our clients as they achieve digital at scale. Three things we really want you to walk away from our panel with today. The first is how we're changing the way we engage with buyers. This is certainly about our traditional technology buyers, but this is about new and different buyers and about very different kinds of conversations. Secondly, we want you to understand how we're adapting our portfolio of services, solutions, and platforms, and how we're bringing those together to really drive this impact. Thirdly, we want to talk to you about how we're adding new and different capabilities and how that's allowing us to drive meaningful impact.
Gentlemen, let's start the conversation. Digital, of course, means different things to different clients. Let's talk about framing the power of digital. We've talked about different buyers and what's different about those conversations, how are we seeing this evolve? Prasad, if you could address this from the viewpoint of our industries, and Santosh, you from the growth markets, we'll get a comprehensive view.
Thank you, Chell. Good morning, everyone. As you heard all morning, I think we've been getting tremendous traction in digital based on very different kinds of conversations we have been having with our clients. I can at least highlight three significant changes in the way we are engaging with clients to drive digital. I want to give you some examples. Some of the points I'm going to say are possibly what you've already heard, but I want to reinforce the message. First, and if I had to give you the opening, it's who we engage with, what kinds of conversations we have, and what kind of propositions do we lead with, right? Let me go a level deeper and tell you what it's all about. First is, as you heard many times this morning, our client stakeholder coverage universe has expanded dramatically with digital.
It's no longer the CIO and the tech organization still remains a very important stakeholder group, but it's going well beyond that. You now engage with CEOs, COOs, CMOs, chief strategy officers, chief research officers, so on and so forth. The conversations are much richer in that regard. What's interesting, and maybe this didn't come out enough in the morning, the CIO and the tech organization is increasingly our primary sponsor to enable and facilitate stronger business stakeholder engagements, interactions, conversations. Just to give you an example, right? We work with one of the world's largest hospitality companies. As you're aware, with digital innovation and disruption, this hospitality company sees significant disruption from newer competitors like Airbnb. In this instance, we actually worked with the CMO and the CMO organization to dramatically reimagine customer experiences across their digital channels.
This just shows a very different type of engagement we have, unlike not so long ago, where large part of it was with CIO and tech engagements. The second thing is the type of conversations, right? What's been really interesting, and I've been in this industry for a long time, most conversations now are business proposition oriented, business transformation oriented. Every client conversation all of us have is around business issues, business outcomes, business solutions. Just to give you a flavor, what does that mean? If I'm talking to banking clients, it could be how do we use omni-channel banking initiatives to transform banking? It could be usage-based insurance propositions for insurance clients. It could be virtual care propositions for healthcare clients. It could be experience-driven commerce initiatives with retail clients. What does that mean for Cognizant?
One of our largest financial services clients, who we've served for many, many years, just over the past couple of years, over 40% of the book of business has become all things digital and all things business-oriented. All the way from digital wealth management, blockchain, digital payments, back office, process automation, so on and so forth. Thirdly, what's also interesting about digital is you heard six compelling digital offerings and capabilities all morning. Clients are now saying, "This is all great, but I really expect end-to-end propositions from you. It's great. I need AI, I need cloud, I need interactive, I need digital engineering, but I can't have all of these bespoke.
I need all of these truly integrated end-to-end in a seamless fashion and manifested into a holistic solution for my problem." To give you an example again, we worked with a large financial services client recently in North America, where we built a next-gen, cloud-based contact center platform for them, where it helps harmonize the customer experiences across all of their digital channels. To be able to pull this off, we had to bring our teams from user experience and interactive, our AI teams, our biometrics teams, our cloud teams. All of them had to come together to make the magic happen and deliver on this proposition. Going back to the overall summary, it's the broader set of stakeholders, it's the richness of client conversations, and it's the end-to-end propositions that's helping us win digital and drive digital at scale.
I'll have Santosh offer his perspective from the growth markets.
Yeah. Thanks, Prasad. Good morning. Let me give you a perspective of what we're seeing in markets around the world. We're seeing some common themes evolve, I'm going to cover that. One is a clear urgency across many clients in many industries and many markets that they have to get this transformation done. It's not a question of why, it's not a question of how, it's a question of when. That's a clear and present urgency. We're seeing this as a common perspective across. A realization that this is a hard journey. I think Frank referred to it in his slides. That this is a hard journey. They need a strong partner to take them across. They need a partner that can bring in a holistic solution, not approach it with a siloed, "I can fix this part.
Somebody else will come and fix the other part." They need a holistic end-to-end solution to take them across this transformation journey. In this highly heated talent market, our clients are also looking at what sort of a solution can you bring in for the people? It's not just about changing technology, changing operations, but we've got lots of people, and they've worked with us for a long time. How will you transform them in this journey? Can they be a part in this journey? What role do they play in this journey in transformation becomes key of what they expect from a partner to put forward.
The capabilities that we have invested in, together with the six capabilities that we presented in the morning, together with our localization foundation that we've invested in each and every country around the world, we continue to refine and enhance those foundations, help bring an environment of trust where we can be a true end-to-end transformation partner for many of our clients around the world.
Fantastic. Those are great insights. You guys teased us a little bit with these little client snippets. Can maybe the three of you share some client stories that go more in depth and really bring this to life?
Yeah. To start, let me start with an example that sort of exemplifies what this journey is like. This is a large European financial institution, and they've been a client of ours for about a decade. We worked with them for 10 years. The first seven years of this journey was around providing our traditional technology services to different parts of the financial institution. About three years back, there was a change in strategy around how the bank would approach the future. A clear vision in the words of the CEO was that they needed to move to be an extremely personal and digital bank in the future. They really want to move from a traditional bank to being a technology provider with a banking license.
When he set this journey out, it fundamentally meant a massive change across the organization in the way that the bank ran in the past 40 to 50 years. It meant a change in the way that the teams worked together. It was a change from when, in the last 30, 40 years, businesses defined the strategy and technology implemented, to a time when businesses and technology need to sit together to define and design a future together. This is what we call the creation of a business development DevOps environment. We were chosen as strategic provider to engage them in this transformation. The sort of things that you get engaged in into an assignment like this is, first, to change the playing field. Because the teams that integrate have to move from their old playing field to a new playing field.
The new playing field is around a foundation of cloud-enabled automation. It's around a layer of secure data which can help them make better data-driven decisions. It's about creating a level of automation which they can plug and play to simplify automation across the board. The creation of what Gajen referred to as pods. The pods are where cross-functional teams between business, between operations, and development come together to continuously deploy and develop these products and services at speed. So we help them in the design of these pods, in the build-out of these pods, and these pods are continuously in action. We've built dozens of these pods in the client environment, in the new operating models that we put together to build this out. This is an example of the things that go into this.
One of the few things that go in an engagement like this. We also bring in our consulting teams that we've integrated closer today. Our acquisitions and consulting come together, working with our automation teams to identify processes in wholesale banking, in retail banking, that can be automated into a touchless environment, as Sumithra talked about earlier. This is something that we see across the board, and why this exemplifies this transformation is that it's not just about a bank doing this. We're seeing similar transformations in technology companies, in telecom companies, in retailers, in pharmaceutical companies, with a different approach from the industry landscape, the rest of the pieces are very reusable. Just to give you a perspective of scale, before and after we engage in the transformation, the scale of our operations have tripled as we started engaging with them in this transformation.
That truly is the scale that's available out there to play with.
I think Santosh gave a great comprehensive example in financial services. Let me actually give you a couple of quick examples from other industries. I think the beauty of digital, you heard it over multiple presentations this morning, is digital truly helps us solve some real big problems from the real world. Right? My first example is how we are leveraging digital to solve for food wastage, right? How do you avoid food wastage? As all of us are aware, those of us in the developed world, we waste a lot of food. Right? A lot of food gets spoiled while many parts of the world, many underdeveloped parts of the world, don't have enough food to consume. Right? It's a serious issue, digital can make a huge impact. Right? In this instance, we work with a global retail client.
They lose $hundreds of millions each year due to wasted food or spoiled food. The failure of their legacy refrigeration systems is a big contributor to that. Right? When they have alarms from these controllers of these legacy refrigeration systems, it takes many hours for these alarms and alerts to reach their operations teams to have any meaningful timely intervention, that leads to food wastage. We worked with this client to create a state-of-the-art IoT platform to log, monitor, predict alarms and failures based on data we collect from all these controllers and provide it almost real-time, near real-time, to the ops team so that they can intervene in a very timely fashion. That has already created huge impact for this retailer. They're trying to roll this out across all of the global retail ecosystem. It's reduced 10% of food wastage.
The response time has gone from many hours to within minutes and has created tens of millions of dollars of operational cost savings. That's just one example. The power of it is, this is a small use case for addressing, leveraging the power of digital, right, and IoT and so on to solve for a big problem, food wastage, and this is reusable across many other contexts in the broader set of industries and clients we serve. The second example I want to talk about is how we use the power of digital in healthcare. I want to actually pick on what Kartik briefly alluded to in his presentation on AI and analytics around opioid addiction. As all of you are aware, opioid addiction is a huge crisis in the U.S. right now, and actually all over the world. Right?
We have possibly hundreds of thousands of people who get addicted in a fairly fast timeframe to opioids. Right? It costs the healthcare system billions and billions of dollars. We're trying to see how we can leverage the power of AI and machine learning to solve for this. We've worked with one of the largest healthcare companies in North America to see if we could use AI and ML to predict who are these patients at risk, who could get addicted to opioids. We developed this AI and ML solution that runs text analytics on physician notes based on their consultations with patients, based on how many times patients visit them, what symptoms they report, what's their behavior, what's their appearance, right? All of this data is synthesized, and you run machine learning.
You provide predictive analytics to the physician so that they can monitor when patients come to visit them who's potentially at risk to become addicts. Right? This has been hugely successful. Already with this client, we've been able to identify 85,000 at-risk patients. Beyond that, it saved tens of millions of dollars already for this client in a fairly short period of time. The beauty of digital is if a small digital solution like that can save tens of thousands of lives in such a short timeframe, you can only imagine the power of what it can be as we continue to drive these tangible digital solutions across the industries we serve.
That was exciting for a couple of reasons, Prasad. We brought together there our AI teams, our interactive teams, and our consulting teams, and deep domain expertise to really do that first project that we were doing for the chief medical officer. That obviously was a huge hit and created great profile inside the client organization. It led to a conversation with the chief marketing officer, and now we're doing the implementation of the Adobe platform for them. These things really do lead to great successes. Larry, tell us some more about healthcare, what we're doing there.
A lot of these things really are rolling out across healthcare. Let me highlight maybe the way our interactive team is getting involved in some of the major trends taking place. I think as most of the audience knows, the healthcare market, particularly here in the U.S., is undergoing some transformational changes. A couple of those, the shift from a wholesale to a retail model, and these rollout of these integrated care benefit design payment models called value-based care. Implicitly assume that you have a way for the payer, the provider, and the patient to collaborate. Those underlying collaboration platforms really haven't existed in the past. We've invested in creating those in a whole new solution family we've brought to market called Transform, which is that collaboration platform.
Once you have that, you have to have a way to get the patient engaged in taking part in their own healthcare. That doesn't sound like that should be a big problem, but actually, it's one of the biggest challenges, getting people to really care and engage in their own healthcare treatment. We've been working with our interactive and design teams to really take those mobile apps at the patient level and customize them, create a way that they can be designed around the individual needs, their communication preferences, understanding how they heal, and be able to use those to really drive engagement at that level.
A couple of our West Coast Medicaid clients were working on them right now in developing a mobile app for their Medicaid patients that they believe will be certainly the primary, and in some cases, the only way they have to engage that patient in their healthcare program, right? Because when you look at the Medicaid population, you have some housing uncertainty. You've got challenges with transportation, getting them to see the doctor and such. They're really relying on that application to get that patient involved. It's a big challenge, but I think it's also pretty exciting when you think of the role these apps could play in actually delivering better healthcare.
As I listen, it seems that every industry and every company is in some state of transformation where we're able to drive really big impact. I want to pick up on a word you used earlier, Santosh, urgency. Our clients are looking for impact at speed. Let's talk a little bit about how we're adapting our services, solutions, and platforms to respond to that need for speed.
Let me take that, Chell. Great question. All of our clients are seeing unprecedented levels of innovation and disruption. It should be no surprise to all of you. The clients who've worked with us, and we've been a service provider, a key partner for them for many, many years, they have, if at all, much higher expectations of us. They expect us to bring holistic solutions, end-to-end propositions that go well beyond just talent or skills or capabilities. I think, relative to these heightened expectations of us, we are trying to evolve a solution-centric future for Cognizant. I'm hoping a large part of the takeaway from all of the morning is, as you heard, many of the digital offerings and capabilities, many of these manifest themselves into meaningful solutions for clients and create a compelling growth path for the future.
We have a strategic enterprise-wide program to evolve a comprehensive set of industry digital solutions and digital offerings. We've made a lot of progress on this front. To give you examples of kinds of solutions, we're starting to roll out and work with clients. It could be digital payment solutions for our banking and financial services clients. We have connected factories, connected operation solutions for our manufacturing clients. We have digital supply chain solutions for our manufacturing and retail clients. We have a very successful integrated field service complaints management solution for our med devices clients. I want to maybe go a little deeper, give you one specific example to show the power of the solutions that we are trying to evolve. I'll pick a solution we call Smart Trials that we have developed for our life sciences clients.
As all of you are aware, for big bio and big pharma companies, reducing the time to market and bringing a new drug faster to the market creates tremendous value. However, 80% of clinical trials end up missing milestones and deadlines. It's just the complexity of the process, amount of data, the stakeholders, the regulatory compliance processes involved. We developed this AI-based solution, Smart Trials, that makes clinical data actionable. What it does is it applies AI and analytics to clinical trial data across locations, across populations, and across patient populations, across all stakeholders, provides actionable insights to our biopharma clients to make faster decision-making in terms of the steps they need to take and execute these studies faster. I think it's created a tremendous impact in accelerating time to market for new drug development.
Just to tell you the scale of it, we've already deployed this over 100-plus active clinical studies right now, and it's already been deployed for 100-plus clinical studies that were completed. This just shows the power of the kinds of solutions we're trying to evolve. Let me actually have Larry weigh in with what work we're doing on the platforms front.
Yeah, absolutely. Platforms certainly are a key part of our strategy in healthcare. We're actually starting to see traction in a number of different platforms in the market. Let me come back to one Vipul talked about this morning, TMG. The TMG acquisition a little over a year ago, which is the platform solution for the Medicare Advantage program. If you're not familiar with Medicare Advantage, Medicare is the fastest-growing line of business in the market. Medicare Advantage is the private portion of that within Medicare, where it's controlled by the private payer market. The large payers that are out there run Medicare Advantage programs. Medicare is growing faster than any other business segment within Medicare. Medicare Advantage is growing fastest of all, about 8%-9% annual growth. Cognizant is the leading healthcare IT vendor in the Medicare Advantage market.
We've got more than a 60% share of the clients, including the underlying Medicare Advantage license that come with that. That's about 112 clients at a parent level. Within those 112, we're supporting 33 Medicare Advantage programs that they offer out there in the market through our TMG platform. It's scaled. It has a lot of traction. It's been growing, and the pipeline is robust. This is one of the areas that's really taking off for us at a fairly fast and exciting rate.
33 plans sounds pretty robust. Talk to us about how you're driving value out of that.
Yeah. I think the value of this type of platform solution, and this is good because it really accrues to the client, but it accrues to Cognizant as well. If you look at the TMG program from a client perspective, and you look at getting into the Medicare Advantage market on your own and compare that to doing it with Cognizant, you're going to see a number of advantages. First of all, you're going to have about a 20%-40% cost savings of getting into the market originally, compared to what it would take you to do it on your own, because you've got this repeatable and scalable platform. The second thing is speed to market. We can get our typical client to market in about half the time that it would take for them to do this on their own.
When you're getting into Medicare Advantage, that's usually a whole open enrollment cycle earlier than you'd be able to get there yourself. That's key when you're bringing up a new line of business. I think the third thing from the client perspective, which is probably as important as anything, is we're bringing them an end-to-end solution to a business problem. Right? This is so different than it was five or 10 years ago, when you'd bring these pieces together, and you'd try to stitch them together as a client. This is a complete business platform services solution for Medicare Advantage. It really enables them to get in the market quicker and not have to go through all the regulatory issues and things, the learning curve that they would have if they were doing it on their own.
Very compelling from the client perspective, I think equally compelling from Cognizant's perspective as well. When you look at these platforms and think about them from a repeatability and scalability process, these solutions are probably 70% repeatable from client to client to client. What that allows us to do is when we go into a new client, even though we can bring the cost savings that we talked about, we can still bring them into Cognizant at our company target margins or better, with the expectation that we're going to be able to improve those margins over time through intelligent process automation, best practices, application of business optimization solutions, and things like that. Second key thing for Cognizant is the revenue value associated with these clients.
If you look at a typical platform solution client over a five-year relationship, they drive about 8-10 times the amount of revenue that we would get from that same client if we were just selling a piece of software or service or something like that. That's key. I think the last point from our perspective is client retention, as well as new service and solution pull-through. When you become a platform client, when you become this big a part of the client's operational ecosystem, you become very sticky. You're very hard to displace, which is great in an era of vendor consolidation, which we see taking place in healthcare.
In addition, you're in a very prime place to observe the way that client operates, what they do well, where they have challenges, and then bring new solutions in, new software, new services, things that can help the client, improves our value to them, but also expands the relationship they have with us and expands the value they have to us as well. Very successful part of our business. It's growing really well since we did the acquisition, we think it's going to be a key part of our business going forward.
All right, well, you described value. Thank you.
Yeah.
What I'm hearing from you guys is that we're changing the nature of the conversations we're having with more and different kinds of buyers, at the same time that we're changing the solutions and platforms that we're taking to them. That leads me to ask the question: How are we changing the way we're engaging with our clients?
I think it's a great question, Chell. I think based on some of the questions I heard earlier today, as well as all the compelling digital capabilities offerings that you heard, I think the only way to leverage the power of all of that and maximize the impact of digital would be the client interface. We need to transform the client interface. Frank talked about it as part of his opening presentation. To maximize the digital opportunity, you need to engage with CXO stakeholders. You need to lead with business transformation-oriented propositions. You need to be very consultative, right? In all of your engagements and conversations. We have taken the Cognizant client interface transformation as a very, very strategic initiative. We have made four areas of strategic investments that I'd love to highlight to you. I think some of these were mentioned earlier in the day.
I'm hoping I can reinforce that. The first strategic investment is the chief digital officers we have hired over the past couple of years into each of our industry practices. These are very experienced career digital practitioners who've led large-scale digital and business transformation initiatives. They're making a tremendous difference. They work with our consulting teams, the digital capabilities offerings teams, as well as our vertical teams, so put it all together and evolve more proactive propositions we can take to our clients. They also are leading the catalog of industry digital solutions that I talked about previously. That's the first strategic investment already made, making a huge impact. Secondly, we've re-looked at the client partner. Client partner has historically been one of the most important roles for Cognizant at the client interface. Frank talked about this.
We brought some very senior client executives, hired from the industry, hired from the top consulting firms, and infused them into some of our largest platinum client relationships over the past couple of years. This is again making a tremendous difference because these are senior executives with a very different gravitas, a very different consultative ability to engage with CXO stakeholders and reshape the conversations very differently. To give you a quick example, we hired the CEO of a small med devices company, to be the client partner for one of our largest life sciences relation, and you can see the kind of impact this kind of individual can make. The third point, I would say, going back to the comments made on consulting continues to be a key area of differentiation for us. We continue to invest aggressively into consulting.
More and more, we are infusing a consulting talent into our account team so that they become the account team of the future. They bring the industry domain knowledge. They bring the consultative flair to engage the clients differently, to drive very different kinds of digital propositions. Last but not the least, Cognizant still has very talented client partners, client service executives, and we continue to make significant investments to upskill, reskill them to engage with clients differently. A point that Frank made as part of his presentation, we also hired delivery executives now, in client locations to provide the delivery oversight in close proximity to clients so that this allows the bandwidth to be released of our traditional client partner CSE teams to focus more on proactive and consultative digital propositions.
This overall set of investments is making tremendous impact in us winning digital relative to our competitors. Again, one quick example, we've served one of the largest insurance companies in the U.S. many years, and we infused consulting team over the past 2 years to be the account team of the future for this relationship, and we've seen double-digit growth in the relationship. We've seen a huge shift of our business to digital, and we've seen 130% growth in the digital business at this client. Let me have Santosh weigh in on what he sees in the growth markets on this front.
Clearly the conversation has evolved, right? If you compare the conversations we had in the last S-curve that Malcolm indicated to the S-curve we are today in, we've moved from a time when we primarily had technology solutions with the technology department most of the time, to a time when we are having technology-enabled business discussions with businesses across the board. We're talking to the CEOs, we're talking to boards of companies, we're talking to CXOs, and of course, we continue to engage very closely with the traditional technology departments in this journey.
Getting that to come together has been quite a transformation journey, and you alluded to some of this, Prasad. Beyond that, right, the things that we're looking at, the transformation within Cognizant to be able to take on that evolution of the nature of discussion has been around, of course, the client-partner interface, which has to be evolved with consulting. We continue to do that in each of the growth markets. Also bring in the acquisitions that we've had around consulting in the countries, tie that into the interface so we can leverage on their existing interfaces to expand our playing field. The sales process has changed. The sales process, which traditionally used to run for a period with X number of stakeholders, the stakeholders have increased because the stakeholders in these transformations have gone much more than the traditional departments.
A broader set of stakeholders, a shortened sales cycle means needing a completely different level of sales automation, sales process, and sales training to get our sales teams to be able to manage this process. Getting our business development teams to get deeper into the technology. The technology is so important in these discussions across the board. We're having technology discussions across the board, and to have this dev teams come in with deeper technology is another transformation. We need, on top of that, to bring in large-scale, mission-critical program management on the ground. Those clients, as I said before, need holistic solutions. They want us to tie all of this together with clear business impact. Towards that, we've had to evolve the delivery model. The delivery leadership today is much closer to the client.
Delivery itself, we have invested in moving that closer to the client. We have invested in thousands of seats in delivery locations in Europe, in Asia, in Latin America, and we've built nearshore delivery at scale today, where we can deliver in the context of our client, in the language of our client. We're able to deliver in 35 languages, many of the services that we talked about, and to be able to connect across the board in our client organizations. To be able to tie all of these transformations together and land it on the ground in every market at the client location is key to being a trusted partner. Wherever we bring that together, we see massive benefit.
That's a lot of change we're talking about in the engagement model. Let me switch the topic to acquisitions. Larry, you joined us through the TriZetto acquisition, as Raj mentioned. Talk to us about the impact that we're seeing from the acquisitions we've done in healthcare.
Yeah, absolutely. Acquisitions certainly have been a key part of our healthcare growth strategy. I think we've done five healthcare-specific acquisitions in the past six years. They've really helped, I think, expand the way we can go to market on this. The first thing they've done is expand our addressable market. If you look at the acquisitions we've made in healthcare, they've all been very complementary to the capabilities that we already had, right? That was key. Second is they've helped us bring these platform solutions to market that we've been talking about today. Now, platforms are a challenge. They take time. You've got to invest up front, work the services and the platform together.
As you get momentum, as you get scale, they really start to produce some benefits. We talked about the TMG platform earlier, but we're also seeing things like risk adjustment as a service for our payer clients, end-to-end revenue cycle management for hospitals and health systems, which is the underlying thesis of our Boulder Healthcare acquisition of a few months back. That's been very helpful. I think the other key thing these acquisitions have done, though, is bring new talent and new capabilities into the company that we can leverage going forward. I think TriZetto, the company I came from, is actually a good example of that. When Cognizant bought TriZetto four years ago, they certainly got the entire TriZetto software portfolio, and the customers along with that, all very good.
They also got healthcare software product management and product development expertise that we've been able to leverage. In the past year alone, we've brought three new software platforms to market in healthcare. We've got two more under development, just starting to reach out into our client base, and I think building our wallet share, building our relationship with our clients. Also starting to pave the runway, if you will, for us to pull through in the digital solutions. I think, Shel, this is where your organization becomes key, consulting, as we starting to broaden those conversations, and talk more holistically. We move the conversations from run the business to change the business. I think consulting really takes the lead there.
All right. Now you're giving me an opportunity to plug consulting. Obviously, we have a lot of domain capabilities and a lot of depth in many areas, I think there's three things we really do that make a big difference to this ability to sell and drive transformation. The first is we are embedded in the accounts. We own those business relationships with the buyers. Probably the greatest skill that our consultants bring to those relationships is the ability to listen with empathy. By that, I mean the ability to look beyond the clinical definition of the business problem and understand the client's environment and understand their culture and see those potential barriers as we solution that would get in the way of success. That's the first thing. The second thing that we bring is innovation and ideation. All transformations today are Agile.
Innovation isn't a one-and-done kind of thing like it used to be. It's continuous, right? These agile programs are journeys of discovery by necessity. What we do is drive this continuous innovation as those discoveries come up. We do that by intense collaboration with diverse teams. By diverse teams, I mean certainly gender and ethnic diversity, but it's greater than that. It's educational diversity, experiential diversity, capability diversity. When we get those lenses looking at the same problem and talking about it, that's when the aha moments happen, and that's when we're able to drive really breakthrough kinds of answers to the problems that arise during these programs. Finally, in the implementation, the thing about these transformations is they drive a lot of disruption inside the client organization.
Roles change, processes change, it can cause an organization to lose focus on the prize and why they initially launched that transformation. We work side by side with them to remind them about the goals and how we're going to navigate through those troubled waters. End of the day, no company can be truly digital unless their talent is digital. We're working with them to help them develop the capabilities and skills that will drive that impact. When they're working with us on these transformations, yes, they're achieving their business case, which is critical, more than that, we're leaving them a stronger organization at the end of that transformation. Enough of the consulting commercial. Santosh, you've done a lot of acquisitions across Asia and Europe. Talk to us about how we're making those work.
Acquisitions is a key part of getting our model together around the world. Now we have our organic engines firing at full speed, building up many capabilities in many countries, that's not sufficient. To keep the pace, we continue to look for the right acquisitions, integrate them in. Over the last decade, we've brought in 15 acquisitions, which we successfully integrated. These acquisitions are on three primary areas. One is around local industry knowledge. That becomes so key to engaging with clients on the ground, local consulting companies that bring in a totally different knowledge, also a totally different client interface with them. Number 2, around local digital capabilities to understand digital capabilities like Netcentric that we talked about, design studios to enhance our technology capabilities, again, reinforcing the buyers. Number 3 is around technical capabilities.
We bring in acquisitions that can create access to new sets of talent in countries around the world. These 15 acquisitions have been in these, the benefits are substantial. I just want to talk about one example to wrap up, that's the case with Equinox. Frank referred to Equinox very briefly. Equinox is a banking strategy company that we acquired in France five years back. They came in with a completely different set of interfaces to buyers in the same clients that we worked with. We pretty much worked with the same clients that they worked with, there was absolutely nothing common between our interface and theirs. As we started integrating these interfaces, we see massive value.
We took their interfaces, their knowledge of the business, tied it with our global capabilities, our new investment capabilities, and started stitching together solutions that created a growth in France of 6x over the last five years. We're beginning to really bring that together to achieve digital at scale. For one Franco-Belgian organization last year, we worked with Equinox to do an at-scale transformation deal over 10 years where we would approach their operations layer, their technology layer, and their digital layers and transform that together with Equinox. This, in 2018, was one of the largest deals signed in France, period. These are the benefits of the right acquisitions with the right focus, and the right integration can create massive exponential improvement for us to truly achieve the promise of digital at scale for our clients and for us.
That's super. Thanks. I see our time is up. I want to thank my panelists here. Thank you, guys. Thank all of you for your time. We hope that what we've been able to do is show you that when we bring together our ability to engage and listen to our clients with our solutions and platforms, we are really able to accelerate them on their path to digital at scale. Raj, we're going to turn it back to you.
Okay. Thank you, Chell, Prasad, Santosh, Larry. I hope you took away the following key points. One, we've expanded beyond the CIO, and we're touching many buyers now. Two, consulting is front and center with everything we do, with all of our clients, all the opportunities that we're pursuing. Our industry expertise and the strong localization model is allowing us to make significant impact and drive digital at scale. Now finally, the glue that brings everything together, right? It's our associates, and it's our culture, which continues to resonate with our clients and with our teams. Malcolm's now going to host a panel discussion with Jim and Carol. Jim is our Chief People Officer. During Jim's 14 years at Cognizant, he's had the lucky distinction to work with both Frank and I as operation head.
I don't know which one was better, but today, he's really helping us build out HR capabilities in all the markets that we serve. Carol is the head of our executive talent and development. Today, we have a formal process that identifies all of our future leaders in a robust program to attract, develop, and retain key talent. With that, Malcolm's going to lead the panel. All right, Jim.
All right, Jim, Carol, let's talk people.
Let's do it.
Because the assets walk out of the building every night. Look, Frank put up the chart of the growth. It's actually unprecedented to have this level of growth in a people-based model. Jim, you've been here now a decade and a half. How have we been able to do that?
Yeah, look, the journey, Malcolm, the journey has been incredible, I use that term "is" intentionally because we're still on it's just been an exhilarating ride to be on it and to be part of it. When I joined, we were 15,000 employees. We're 270,000 strong now, that's a growth of 18x. If you think about the sheer magnitude of that's like adding the size of a Facebook every two years or the size of a Google every five years. It's an amazing story. Back in the day, we used to have this tagline, you've heard this before, when we were acquiring talent called, "Here at Cognizant, you grow." We used it in the recruiting sphere. We've certainly more than lived up to that, I think. It hasn't been an accident.
We have this kind of operating backbone that I'll call that helped drive and enable that growth. Let me just give you three examples of that. We have a recruiting engine that we've built over the past 25 years or so, that allows us to acquire talent from the campus side and the experience side. We have a learning organization, we call it Cognizant Academy, that we have the ability to scale and flex that infrastructure to train up to 100,000 employees simultaneously. Now, do we do that? No, we don't, but we have the capacity in case we need to. On the leadership team side, we have a leadership team and process that reviews talent in a very structured way from top to bottom. That discipline really does enable the growth.
I'll just sum it up by saying we simply know how to execute, know how to hire, develop, upskill, and train our people. At the end of all of that, while that is certainly true, I think at the end of the day, it's about our culture and our leaders for what's been that glue, as Raj would say.
You wrap it up talking about culture.
It sometimes seems ephemeral or people want to look on a spreadsheet, and they can't find it.
Yeah.
What is our culture, and how is that our secret sauce?
If I had to categorize it, I think it boils down to this hyper client focus, while at the same time, a humility to serve. That combination helps build strong client relationships that are rooted in trust and collaboration. That last word, collaboration, is truly key. In terms of who we look for, we look for this high IQ, Type A personality with a very low ego. At its core, that's kind of the Cognizant formula, a humble intelligence with an ability to deliver. Why is that important? Why does that matter? Well, clients see it as an actual differentiator for us. Look, if you go to the webpages of Cognizant and the webpages of our peer companies, one could argue that they're fairly similar.
What really matters is that when we show up every day in the trenches with our client, it actually feels different for them, and we never, ever want to lose that. Let me just say one last thing on talent and who we look for. We're looking for that person who is comfortable with the gray, comfortable with ambiguity, and why does that matter? Well, that characteristic, we believe, encourages entrepreneurship and innovation. Then in the future and in the fight for digital, those attributes, I think, are really important.
Yeah. Let's talk about the fight for digital because we've gone through it all morning, these six capabilities, trying to do this around the globe. From your perspective, what are we going to prioritize in digital in hiring or re-skilling, and what are we going to emphasize around digital?
Look, the way I describe it is, you're right. For a decade and a half, I think personally, we've been a very people-centered organization. Let me talk about three things in this fight for digital. The first is we obviously need to continue to attract and attain world-class and diverse talent. Everyone in this room, I think, would admit that the technology landscape is changing and the war for talent is ever more intense. Our value prop to candidates and employees aims to keep up with the changes in the market, whether it be changes from an employee perspective, a candidate perspective. We are, in fact, seeing changes in what employees are coming to expect from an employer. Like we've always done, we're responding to those changes. The second one, I think, is around development. Developing a workforce that is what I call constantly future-ready.
Let me just talk about a couple points here. Re-skilling and multi-skilling and upskilling have always been at the core of our development processes. Just one little fact here. For the last year and a half, our associates have devoted about 30 million hours to learning. That'll continue, but it'll take shape in new forms. We'll focus on new skills like AI and machine learning, like you've heard about, and new roles like data scientists and cloud architects. The third, I guess, is around leadership. Continuing to strengthen that leadership capability for digital at scale. Over the last few years, we're really taking that leadership capability and embedded it into our DNA. While we're developing a very strong leadership bench and a leadership talent pool, the programs that we're designing around that are trying to turn all professionals into leaders for their clients.
That's great. Carol, let's pull you into this. Jim talked about attracting world-class, diverse talent. Can you unpack that and give some detail around it?
Sure. There really is no one-size-fits-all approach to talent. Here at Cognizant, we try to find the best mix of entry-level trainees, experienced hires, and driving growth through acquisition. This year, we're going to invest in 20,000 campus hires, as well as continuing to build out regional delivery centers, collaboratories, and studios. We bring in these acquisitions to bring in highly skilled, highly demanded talent. Typically, we do four, maybe five of these per year. As you heard Gajen speak earlier, we brought in over 2,000 digital engineers with our Softvision acquisition into the Cognizant family. It's really important to think about assimilation as well, and I think we have a great track record there. You met Larry, Vipul earlier, successful members of our leadership team who came to us through acquisitions.
Finally, diversity is a known issue in technology, we are doubling down our focus there on diverse talent pools. Our industry is all about talent, we are casting a very wide net to bring in the best and brightest.
Carol, you head up leadership development for us, we're hiring at scale, can you talk about what we're doing to develop our leaders?
Sure. We've really focused on developing our internal leaders over the last few years and promoting some of our brightest into the senior ranks. Simultaneously, we have also focused on bringing in external talent from world-class organizations to add capability and fill gaps in our leadership ranks. We focus primarily in three areas. One, as you heard Prasad and Chell talk about, transforming the client interface. Two, developing people who can operate at scale. Finally, strengthening our digital capability. We have a proven leadership engine now, and it complements really nicely our disciplined approach to hiring and developing that workforce of the future.
Great. Jim, we talked this morning all about this pivot to digital.
Let's talk demographics.
Yep.
Because there's a shift in demographics in many different dimensions.
Yeah.
How are we responding to that, and how are we driving that through Cognizant?
It's so true, Malcolm. I get asked this a lot when I talk. Obviously, we've talked about this today, the competition in digital is making the competition for skills and talent so critical. There's a nuance there. Clients have told us that they want this talent closer to where they are so it's easier for them to collaborate. There's that word collaborate again. One way we're tackling that is to build out those regional delivery centers that Frank mentioned in his presentation in order to bring the work to our associates, as opposed to the other way around, which is kind of the way it's been for the last 20 years. It does work. Let me give you two simple facts on this. For this year alone in the U.S., our local hiring is 54% higher than it was last year.
In Europe, about 60% of our workforce are natives to the particular country where they were born and raised. We are making it local.
Great. Carol, skilling. We have a big platform. We've got, as we talked about, the number of associates, how are we going to re-skill our talent base as we go towards digital?
We have a proven learning engine, as Jim touched on, it's really impressive. Our associates, in the last 20 months alone, have invested 30 million hours of their time in learning. We now have 135,000 digitally skilled associates in areas such as design thinking, data science, cyber, IoT, artificial intelligence, with the majority of them trained in at least two skills. These programs are personalized, immersive, and very popular across cultures.
Yeah. Well, look, that's internally, no company is an island, this skills challenge is really pressing, particularly in Europe and in the U.S. In fact, the Bureau of Labor Statistics said that there'll be a gap of 1.5 million tech jobs by 2020. This is an acute pain point for us and for our clients, mostly.
What do we do to help address some of those societal issues around skills development?
Definitely. We want to be a part of that solution. Earlier this year, we made a $100 million contribution to the Cognizant U.S. Foundation, a newly formed nonprofit focused on creating more of that digital talent. By end of this year, we will have committed four multimillion-dollar grants, including some to diverse underrepresented groups and veterans. This also really adds to our global efforts and extends the reach of some of the STEM-related activity of our India foundation, while just embracing what Cognizant does really well. We know how to find talent pools, we know how to develop them, and we know how to successfully deploy them. We're truly focused on solving the skills shortage. The important thing too, here, is that it matters to the communities and the clients that we serve.
As one of four founding board members of the foundation, I'm really proud to be working on a solution to a problem that is top of mind for all of us.
Great. Well, Jim, I've saved a good juicy one for you. I'm sure a lot of folks want to ask this.
Okay
We'll try to head it off at the pass. Attrition.
Yeah.
It is an acute industry-wide issue.
Yep.
We talked about some supply-demand imbalance with specific skills.
Yeah.
What are we doing specifically to address the issue of attrition?
Look, that question's the elephant in the room, so thanks for asking, as you heard it today, it was asked, so thank you for that. Look, for us, you know this, all attrition is not the same. It's not a one-size-fits-all. We'll target our very specific segments in our employee population. Let me talk about a few things that we are in fact doing. For our junior employees, we've reintroduced quarterly promotions for that population. That group wants to see upward mobility earlier in their career. We've also introduced and created a handful of niche skill digital compensation programs where the market will support that. The goal is a couple things, right? We want to get people incentive and encouraged to build those skills that we've talked about, more importantly, to deploy them to clients and hopefully attain rate increases.
On the overall employee ecosystem, this year, we've launched a number of employee engagement programs around workforce flexibility, time off, health and wellness, and volunteering. Let me take a second just to talk about volunteering, because when I often mention that, I get kind of a handful of eye rolls. Volunteering for us is an interesting retention tool. Why do I say that? Just a quick fact. This year, our employees have contributed about a quarter million volunteer hours to things like tutoring and teaching and donating time at food banks and other causes that they're really passionate about. Okay, so what? Big deal. Why does that matter?
Well, when we look at the data, we see for that population who spends time on outreach activity, the attrition for them is about eight to nine points lower than for those employees who don't spend time in those activities. As an engagement tool, it's actually quite effective, and we need to kind of think about pushing it more. To my earlier point about segmentation, Malcolm, when we cut the data, we do notice that for our high performer population and how we measure that, attrition for them is about four to five points lower than for our overall population.
Wow.
We'll continue to push the segmentation avenue for that-
Yeah
Our best performance.
Great. Carol, let's talk about another industry issue, inclusion. It's a problem. It's a problem.
women in tech. It's a problem with underrepresented minorities, you have been a very passionate advocate and leader for this at Cognizant. Can you talk about how it's not just a check-the-box exercise, but a real business necessity and some of the programs that we have in that regard?
Sure. We have set a clear tone from the top at this point that diversity and inclusion is a very big, strong business imperative at Cognizant. It isn't just the right thing to do, it makes complete business sense. When we look to select talent from all available pools in the market, we're going to get the A players that are out there. Research shows that 70% of U.S. valedictorians are women. Why would we not tap that pool? We now include gender diversity as part of our annual operating plans for our senior leaders, we are making measurable impacts. From a hiring perspective, in the last couple of years, we've seen a 100% increase in hiring women in our leadership levels. Of course, we're continuing to invest internally as well. This year, we launched Cognizant's first ever company-wide women's leadership development program called Propel.
By the end of this year, we'll have invested in 400 of our women in leadership with several hundred more in the year to come. We are making material progress on diversity and inclusion at Cognizant, and I am confident that we will be a market leader in the coming years. Look, we know it's a journey, but it was really great to see Forbes ranking Cognizant in the top quadrant of the 2018 Great Places for Women to Work. As recent as last Friday, I have to embarrass her for a moment, our very own Karen McLoughlin was honored by Moves Magazine as one of the 2018 Power Women. Woo-hoo.
Bravo.
Let's get back to leadership development and tie it to digital.
Okay.
What are we doing to ensure that we have the leadership talent to execute against digital at scale?
This is a topic that we should feel really proud about, Malcolm. We have a robust pipeline of 4,500 leaders with the depth and the breadth to lead us well into the future, and we now have an engine to assess and develop all of them. In fact, we've embedded this management capability into our leadership DNA. As you know, of course, Malcolm, we've established the Talent Board, which comes together frequently, and it includes members of our leadership team like Karen, Malcolm, yourself, Raj, Frank, and others. What's unique about this is that we're managing our corporate assets in big, big decisions like moves and hiring and promotions. What's really important here is that we are setting a very clear tone from the top that leadership matters.
actually, it's a very unique differentiator for us because our talent knows that our C-suite is coming together very frequently to focus on their success.
Let me just tell you one more example of how we've been able to harness the energy of our leaders to be future-focused. Earlier this year, we identified 12 enterprise-wide projects that are critical to our future success. In a completely boundary-less way, we assigned 120 of our senior leaders, some of our best and brightest, to solve for those problems for us that will pay dividends for years to come. I have a real high degree of confidence in this leadership pipeline to both lead our associates at scale and help us win in digital.
Well, it's great, having seen the program firsthand, it's really robust, but it's for 4,500 folks. Now, on one hand, that sounds like a big number. It's bigger than the population of the town I grew up in. In a Cognizant context, it's still less than 2% of our population. In a pyramid business, how are we driving leadership through the entire organization?
Yeah, it's a really good point. That is a small number. We do aim to dig deep on talent management. We are building leadership capability in our middle managers, the 20,000 or so that we call emerging leaders, who lead our other 250,000 associates. We're investing in their leadership development story as well in what we call our ELT to ELT. That means that when you come to Cognizant as a technical entry-level trainee or ELT, you get to do game-changing work over the course of your career through to our executive leadership team.
Great. Well, Jim, let's wrap up with you.
Yep.
You've been at this a decade and a half. I remember you without the gray hair.
Yeah.
As we wrap up the session, what do you think is the most exciting part of our talent journey as we start to look forward?
Yeah, Malcolm, thanks for having me. For me, there's never been a better time to be in technology. The work that we're doing for our clients is impactful, and it really matters. The careers, the opportunities, and the learnings that we're able to offer today is unlike anything we've had in the past decade. Let me tell you a brief story to make my point on this one.
When I was in India last month, I was in the lobby of one of our development centers in Bangalore, this kid comes up to me, he asked me, he said, "Jim, can I take a selfie with you?" Now, beyond the ridiculously embarrassing fact of why anybody would want to take a selfie with me, I asked the kid, "What project are you working on?" He talked to me about a life sciences account where he was working on digitizing the results of cancer testing, and he was beaming. He comes at me with this smile saying, "Jim, I'm working on a cure for cancer." It just dawned on me that that's how he saw his role. Not that he's literally working on the medical protocols to cure cancer, but that's how he saw his small little contribution to that purpose.
We're providing these new opportunities and careers and a place for people to come do their best work. I've never been more excited about the opportunities ahead of us. Never.
Terrific. Well, Jim, Carol, thank you so much.
Thanks, Malcolm.
Welcome.
All right. Thank you, Malcolm, Jim, Carol. Again, three key points. We continue to invest in our associates, and we've trained about 135,000 associates on digital. That's bigger than the city that I live in as well. That's a huge number of folks. More importantly, it's not just about retraining them, it's about refitting them into the clients to make sure that they're leveraging their digital skills and being able to charge higher rates. We're broadening our reach of development. Frank talked about it briefly. 40% of our folks that we have are local folks that we have in our geographies, and our goal is to get them up to 50% in all the markets that we're in. That's an important point. There was a little confusion during one of the breaks.
It's not to say that we have 40% of our headcount that has shifted in the markets. It's just the population that we have in our markets, 40% of them are local. Finally, we're winning the war on talent. I think we have a very unique culture here, and that's really at the end of the day, we can hire all the associates we want, but it's the culture that brings everything together, and that's one of the unique things and competitive advantage that we have at Cognizant. With that, I'm going to invite Karen to profile our financial roadmap.
Thank you for joining us, and I hope that over the course of today so far, you've gotten a better chance to know some of our executives, to understand some of the investments that we've made in recent years, and why we continue to be so excited about the future that lies ahead of us as our clients continue to embrace the shift to digital. Over the course of the next 25 minutes or so, I'm going to try to recap some of what's happened over the last few years and then set the stage for how we expect to deliver significant shareholder value over the course of the next three to five years.
Before I move on, I just want to mention that my slides will be available on the website, so you don't have to try to read every little footnote and every number that's on the pages. As we move forward, I don't want to dwell too long on the past, but I do want to take a moment just to remind everyone of some of the more significant milestones along our journey. Just to level set, we recently celebrated our 20th anniversary as a NASDAQ-listed company, and we'll turn 25 on January 26th, which just happens to be my mother's 80th birthday. Over the years, we've experienced many significant events, but just to remind you of a few. As recently as 2006, we crossed the billion-dollar revenue mark for the first time, and just eight years later, in 2014, we crossed $10 billion.
We bought TriZetto in 2014, which launched our healthcare platform. In 2017, we pivoted to a new financial profile, balancing revenue growth along with new margin targets and a more structured capital return program, including for the first time in our history, a dividend. Over the past 10 years, we have had revenue CAGR of 19% and a stock price CAGR of about 24%. Throughout this period, we've ridden many technology waves and pivoted many times to ensure that we keep driving value for both our clients and our shareholders. Now today, we get to look forward and talk about the next phase of our journey. Looking ahead, as you know, for many years, the story has primarily been a revenue story with a fixed target margin and relatively little return of capital, despite strong cash flow and a very strong balance sheet.
Going forward, we're going to focus on a more balanced, three-legged approach to value creation. It will be comprised of robust revenue growth supported by opportunities we see in the digital marketplace, many of which you heard about this morning. We will have a continued focus on operational excellence to drive margin enhancement while continuing to invest in the business. We will have a balanced and consistent capital return program. We expect that this will deliver value creation of at least 10% annually. Along with this three-legged approach to value creation, we will launch a new guidance and reporting framework, which we believe will provide better insight to our performance and comparability to our peers. Let's shift gears to the first part of the framework, revenue growth. There we go.
As you've heard, there is significant opportunity for growth in this marketplace, and we believe that we are extremely well-positioned to take advantage of those opportunities as the digital enterprise becomes a mandate for our clients. Accordingly, based on the current environment and the economic indicators, we expect to drive organic constant currency revenue growth in the near term of 6%-9%. That is two to three times the growth rate as reported by Gartner for the marketplace in Q2 of this year. We will continue to invest in acquisitions. Sorry, hang on a second. There we go. Thanks, guys. We will continue to invest in acquisitions that are expected to add 100-200 basis points of revenue per year. With this M&A, combined with our organic investments in the digital capabilities, that should accelerate our overall growth within this range in the coming years.
These growth rates will result in continued geographic expansion, industry expansion, and diversification driven by our digital capabilities. Let me now try to give you a little bit more color on what's happening inside some of the industry verticals and why we are so confident that we can drive these growth rates. As you can see, all four of our industry segments are growing on an organic constant currency basis, and three out of our four industry segments are growing quite nicely in 2018. As Frank mentioned, our clients include many of the world's largest companies in each of our industry practices, and we are at the center of the fintech, the health tech, the biotech, and the smart product revolutions. We have added 21 new strategic clients this year.
2 of our top 10 clients now are from the tech industry, which compares to 3 years ago when all 10 of our top 10 clients were either from financial services or healthcare. All 4 of our industry segments are now represented in our top 20 clients. Yet in each of these markets, we still have less than 3% market share, and these markets continue to expand and be under-penetrated. While we are proud of the fact that our business outside North America has recently crossed the $3 billion mark, the reality is we realize we are under-penetrated in several of these geographies compared to our peer group. As Frank mentioned, we believe that many of these geographies have the potential to become billion-dollar or more businesses over the next decade.
Before I turn to the next slide, for the last several quarters, we've talked about the challenges in banking and the fact that the top-line challenges we have seen have been limited to a handful of our largest accounts. Today, I'm going to try and share with you a little bit more color on what's been happening there. As you can see, if you look at the 2017 top accounts in BFS, they generated about $900 million of revenue. However, as we look forward to 2018 on a year-to-date basis, those accounts have actually declined about 11% as a group. What's been happening is the rest of the business, as we have talked about, has actually grown very nicely. It's growing about 6.4% on an organic constant currency basis.
The top 5, as we have been talking about for the last few quarters, it's really a different story within each of those accounts. What we have seen in the recent quarters is that 2 of these top 5 accounts have in fact returned to very nice growth over the last few months. In the third quarter, those 2 accounts actually grew high single digits on a year-over-year basis on a combined calculation. I'm sorry, and one other thing I wanted to mention about that. In one of the 2 accounts, I think Prasad mentioned earlier that over 40% of our revenue now is digital in one of those accounts.
This is the whole thing we've been talking about all along, is that while we will have clients who are under pressure to reduce their BAU spend, and we've seen that in the banking industry, we will also reach a pivot point with clients where they start to reinvest in digital, and that's where we see the opportunity for growth. Now, we can't predict the future with certainty, and we may continue to see pressure on the other 3 out of the 5 accounts, but there will be a 4 at some point where you will hit stabilization and potentially a return to growth in those accounts. As we move forward and look at acquisitions, you've heard us talk a lot about this today. Over the past 5 years, we've completed about 20 acquisitions or other investments, and post the TriZetto acquisition, we've spent about $1.6 billion on new deals.
These deals have been across geographies, so things like Odecee and Adaptra in Australia. In Europe, Santosh talked about a number of acquisitions we've done with Zone, with Netcentric, Mirabeau, et cetera. We've done vertical industry acquisitions in healthcare with TriZetto, Boulder, Top Tier, Frontica in the energy space, and then several across our digital service lines, so Softvision, Idea Couture, Cadient, et cetera. As you've heard from Larry and Santosh in the earlier session, we have a very successful track record of integrating these deals and using them then to expand our offerings to clients. We believe that this has really become a core competency for us, and going forward, will be a meaningful contributor to our growth. There we go. Sorry, guys.
Going forward, we're going to continue to use M&A to help drive our growth, we will continue to focus on a disciplined and consistent approach to acquisitions. These could either continue to be smaller tuck-in acquisitions as we've done often in the past, or from time to time, we'll do larger deals if it meets our strategic objectives. Areas of focus for M&A will continue to be to enhance our digital capabilities, to expand our geographic footprint beyond the United States, or to enhance our vertical expertise. Some of the characteristics that we look for in deals will be an ability to accelerate both our own growth as well as the growth of the target. We also look for deals that in a relatively short window meet our financial objectives beyond just revenue. They have to meet our margin profile, our return of capital profile.
Then companies, most importantly, that align well with us and that we can integrate successfully with the Cognizant culture. Just to wrap up on this session about revenue, we are targeting 7%-11% constant currency revenue growth over the near term, inclusive of 20%-25% digital cadence. Moving on to the second leg of our framework, operating margin. I know a lot of you are concerned that we've been trading margin expansion for growth, and I want to address that today and confirm that while we have in fact been instilling operating discipline across the company, we have also invested significantly for growth. We also know there's been a lot of questions around what happens post 2019, let's get to that. First, I wanted to show you some of the savings versus the investments that we've made.
As you can see, by 2019, we expect to deliver approximately 650 basis points of cumulative margin enhancement. By the end of 2018, we'll have delivered about two-thirds of that, or 450 basis points, and we are on track to deliver another 200 basis points next year. This has been achieved, as we talked about over the past, by culling some of our overhead costs, instilling better operating discipline across the company. We've focused on pyramid optimization, we've focused on utilization increases, as well as improving pricing disciplines, including full adjustments.
This has been partially offset by the investments that we have made, that includes 350 basis points attributable to specific investments we've made in the business around M&A, platforms, large structured deals, client partners, enhancing our relationship teams, developing more digital skills, attracting more digital talent, employee development, and regional delivery centers, as well as the digital studios that you heard about earlier. 50 basis points of this has also come from or been used to offset things like wage inflation, FCPA expenses, other normal recurring expenses over the years. Taken together, these items are what are going to enable us to achieve our previous guidance of 22% non-GAAP operating margin in 2019. As we move forward into 2019 and beyond, we are going to change how we talk about margins for the company and how we define non-GAAP margins.
First, beginning in 2019, we plan to modify the current definition of non-GAAP. Going forward, we will no longer exclude stock-based compensation expense or acquisition-related amortization and expenses. This definition will more closely align to our GAAP margins, only large one-time or unusual transactions will be excluded. Under this new definition, the current 2019 of 22% would be equivalent to 19%. As we previously committed, this is a one-point increase over our expected 2018 margins. We believe that this change will better provide comparisons to our peer group, as well as better align our decision-making around build versus buy decisions. As we move beyond 2019, the plan is that we will commit to at least a 10-basis point improvement every year.
Keep in mind, this will be while we are driving organic revenue growth of 6%-9% and M&A of 1-2 points of revenue growth per year. We believe that the investments that we have made over the last few years will support this robust revenue growth, continuing the shift to higher value services and scaling our platform business. All while continuing to derive benefits from the operating discipline that we have embedded into the organization. Of course, there could be headwinds beyond what we have planned. It could be significant wage inflation if we don't have the ability to simultaneously raise prices, there could be changes in immigration laws or other regulatory changes or economic environment. Barring any of that, we're very comfortable with this profile.
This profile also does not account for potentially larger M&A transactions, anything beyond sort of the 1-2 points of incremental annual revenue, as depending on the deal specifics, those deals could either be margin accretive or they could be margin dilutive. We'll address those at the time. Moving on to the third leg of the stool, capital allocation. The capital allocation framework we will lay out today continues to place greater discipline around returning capital to shareholders while retaining the flexibility for us to pursue significant acquisitions and other investments. Before I get into the details, let me just also announce that today we are announcing an increase in our share repurchase authorization from $3.5 billion-$5.5 billion and extending that program till December 31st, 2020. As you know, we have very strong cash flow generation, roughly 1 times annual net income.
Post the U.S. Tax Reform Act, we do have access to more of our cash around the world. Accordingly, we commit that beginning with 2019, we will return to shareholders 50% of our global free cash flow each year. This will be in the form of dividends, where we intend to maintain the payout ratio of about 20%, and buybacks, which will provide for approximately a 1% annual reduction in our share count. 25% of our annual global free cash flow is intended to be used for acquisitions, which based on current market conditions, should be sufficient to fund the roughly 100-200 basis points of expected annual in organic revenue contribution. Obviously, we can tap into existing cash reserves or even our balance sheet should it be warranted for larger, more strategic deals.
While we have access to more of our cash around the world post-U.S. tax reform, the remaining approximately 25% of our free cash flow still goes to India and will continue to be difficult to access on a tax-efficient basis. We believe that this is a sustainable framework, however, that allows us to continue to fund investments in the business while providing a reasonable return of capital to shareholders. We also recognize that today we have about $3 billion of cash and investments outside of India that sits on the balance sheet. Over the next few years, we plan to reduce that either through accelerated investments or additional opportunistic return of capital to shareholders. Before I close, let me talk about some prospective changes to guidance and reporting that we believe will enhance investor communication, provide greater transparency into the business, and be more in line with peers.
Some of the key changes that we're going to make in 2019 are that we will continue to provide a range for both quarterly and annual revenue guidance, but we will move to providing that guidance in local currency. For margins, we will move to reporting this new adjusted operating margin, which should more closely approximate GAAP margins, except for one-time large or unusual transactions. In 2019, our adjusted margin target will be approximately 19%, which is equivalent to the previous non-GAAP operating margin target of approximately 22%. Then post-2019, we will move to an at-least margin target. EPS, we will continue to provide on an annual basis on the same basis that we are providing the operating margin, and we will reiterate or update on a quarterly basis as needed.
We will continue to provide a full-year tax rate, but we will now move to providing a range for our tax rate, then a full-year estimate of the average share count. For capital deployment, we will continue to reiterate this framework on an annual basis. Let me summarize where we are. We believe that the financial framework we've outlined today will drive annual returns of at least 10%. We expect to generate organic revenue growth of 6%-9% on a constant currency basis. We expect to use approximately 25% of our annual global free cash flow to generate an incremental 100-200 basis points of annual revenue. This will give us robust consolidated revenue growth of 7%-11% on a constant currency basis. Beginning in 2019, we will move to the new metric of adjusted operating margin.
As we said, we expect in 2019 that that margin target will be approximately 19%, which is equivalent to the previously communicated 22%. Thereafter, we expect to increase margins by at least 10 basis points a year. For capital deployment, beginning in 2019, we will return 50% of our annual global free cash flow to shareholders in a combination of buybacks and dividends. As I mentioned above, an additional 25% will be targeted for acquisitions. For larger transactions, we would either deploy existing cash on the balance sheet or leverage the incremental debt capacity that is available to us. With that, let me wrap up by thanking you again for joining us today.
As I hope you can tell, we are very excited about the growth opportunities ahead of us and the double-digit value creation that we believe will result from this financial model and includes revenue growth over the next few years of 7% to 11%. I would like to invite Frank, Malcolm, and Raj back up to the stage for our last Q&A session. Okay. I see hands already. Just like we had before, we've got Dave and Katie and some other folks who have mics. We'll go around. If you could say your name and where you're from, and then I think, Dave, there may also be a couple of webcast questions. Dave, I'll let you.
Hi, Jason Kupferberg from Bank of America again. Let me just circle back on the numbers here. Appreciate all the outlook. Can you just clarify the duration of midterm? Are we talking three years here? Can you just clarify whether there's any ASC 606 consideration here, particularly if we look at 2019 versus 2018? I know that that's been a little point of confusion during the course of 2018.
Sure. When we said sort of near to midterm, we were talking about three to five years. ASC 606, there's no adjustments in next year's numbers for that. You don't break it out in 2019. As most people know, we did get some benefit from that this year. That gets offset over time as contracts move to maturity and new contracts come in. We don't expect it to have a meaningful impact next year, but it is only a one-year disclosure.
All right, we're going to take one from the webcast quickly. What are some of the specific capabilities in digital that Cognizant possesses that give you a competitive advantage versus Accenture and top consultants like McKinsey or Bain? Can you provide specific metrics of share gain or customer wins? What are some of the areas that you still need to develop to compete more effectively against these companies?
I guess I'll take that. How much time do we have? There are six good questions in there, let me break it into two pieces. One is the strategy houses and then Accenture. Strategy houses, McKinsey, BCG, Bain. What was the old SNL skit? That digital had been very, very good to them. It's been a great growth area for those shops for the past three years, and it gets back to the S-curves. When clients were trying to get smart, frame the issue, understand what are the FAANG vendors' best practices that could be applied in their industry, and most importantly, where is digital manifesting itself in their industry? What's the insurer across the street doing, and how do they combat that? That's been a great growth business for the strategy firms.
With us, that's more collaborative than it is competitive, because they don't have the technology platform and capability that we have, we can come in and work in conjunction with them. A second thing is, we think it's going to come our way because once clients figure out at a high level what they want to do and start implementing, and this is a lesson from the FAANG vendors. The way the digital world works is it's a flywheel effect, where you implement, you see the data, you see what consumers are doing, and it leads to your next iteration on strategy. It builds upon itself. This is where our consulting becomes so important for us in digital when we go after that. I think that's relative to the strategy firms.
With Accenture, let me just broaden that a little bit, because I think if folks look at the growth leaders in this segment, there's a TCS model, a Cognizant model, an Accenture model. We sort of fit in the middle, meaning Accenture is approaching this market top-down. If you think of how we outline digital business and then process and systems and technology, TCS is coming bottoms-up for that market. If you look at the margin profiles, that's why our margin profile is really in the middle of those two margin profiles. The thesis of our strategy that we've talked about today is that we believe that clients ultimately cannot perform digital without addressing the digital business attributes, the process, and the systems attributes. When you go at scale, you got to pull those together. That's what we are doing in an industry context.
Just the final answer, there's so many in there, is as it matures around digital, think of it as a chessboard. There are industries and solutions, you've got to know an individual square on that chessboard cold. Clients don't suffer fools in this. They're trying to run their business through firms like us. I think when you assess the major players, start to break it into sub-markets, as we talked about today, in healthcare, in platforms, digital business, in financial services. I think it starts to give a clear picture of where strengths are and who's going to do well.
Hi, it's Lisa Ellis from MoffettNathanson. I believe you highlighted up there, Karen, that the digital business is expected to continue growing in that 25% range. It's now, I think, 30% of Cognizant's revenues. If I just do the math a little bit, hitting the medium-term revenue guidance that you outlined also, though, means managing that core, right? The other 70%. We learned a lot about digital today and showcased a lot of what Cognizant's doing in the 30%, can you talk a bit about what's in the other 70% and what gives you confidence that that side of the business isn't going to deteriorate and gives you confidence that you're going to be able to then re-accelerate the revenue line and meet the targets you laid out?
I'll maybe start Frank, because I know he wants to add some color on the legacy. As people know, today, we talk about digital being about 30% of our revenue. The six capabilities you heard about today, most of them are part of that digital revenue. The platform business is actually not, so that makes the 30% a little bit higher if we include the platform business. That today makes up the significant portion of the 30%, not all of it. Things like cybersecurity we didn't cover today. There's other practices and so forth. I think as Frank talked about in some of his comments, and I'll have him add more color around this, is those two pieces need to really work together.
That historical business, the core business, is really what gives us a lot of the capability to drive the digital services that we're offering today.
Yeah. I would just reiterate that, Lisa. Here's the bottom line. The 70% doesn't go away, right? In fact, I actually don't like calling that part of the business legacy because this is the heritage of our clients. This is what they've built their 100-year-old businesses on. These are the systems and the technologies that are the core backbones, right? Malcolm and D.C. talked about, we used that airline example a couple of times over the course of the day. Those airline reservation systems run, they run really well, they run on the mainframe. They're phenomenal, and I don't think they're going to go away overnight. So that 70%, I think you'll continue to see, as we've seen in every single S-curve that we've lived through. You'll see some of that come under pressure as we've seen, but it doesn't go away entirely.
More importantly, it's really important for us to be really strong there because that's the backbone on which we're building the new stuff. If we're not good at understanding and managing and maintaining and upgrading the core, you really can't do the new stuff. We'll manage the two pieces together. Clearly, the growth rates on the digital will be higher, I don't think the 70% declines substantially going forward either.
Thanks, Katie. Anurag Rana from Bloomberg Intelligence. Ever thought about expanding, just buying pure software companies in a lot more aggressive way? Helps gross margins, helps grows your revenue per employee, gross profit per employee, then expand the overall ecosystem.
Malcolm, you want to take that?
Sure. Services firms always look at successful software firms. We look at those margins and those growth rates and start to drool. Likewise, sometimes they look at firms like us and see the consistency of performance and the way we can transcend market shifts, and they look upon the model with jealousy as well. This is a time we are absolutely becoming more software infused. There's no question about that. To jump the curb to actually getting into product, there's a certain arrogance in there that how could a firm like us out-product all of Silicon Valley? Clients actually want us to be the honest broker to figure that world out and implement those in their context. That's what you're going to see.
Our software play is absolutely in a few areas we talked about today. It's in platforms. It's in bringing together AI and driving that. You're going to see a lot of reusable frameworks in digital engineering and interactive. Pure products, the market will always outpace any individual company. It's funny that people always look at the most successful software firms when they bring up that question. They don't look at the average performance of a software sector. Those are two very different things. When you look at the history of our industry, it's a trail of tears of services firms that make big plays into software and into product. We will absolutely become more software intensive, but I think there's a fine line between that and going into pure product.
Hi, thank you. It's Keith Bachman from Bank of Montreal. First off, David, thanks for orchestrating this Analyst Day. It's been very helpful. I did want to ask Karen to start off with on if you look at what you mentioned for year-to-date, I think you said about 7% growth year-to-date, but I think that has 606 in it.
If I look at what you're projecting for the medium term, it is an acceleration from what you've been demonstrating. I'm trying to understand, is the message that you think some of those money center banks that have been frankly hurting your growth rate, that those stabilize and begin to grow? Is it a combination of things that cause for what I think you're calling is if you took the midpoint, a pretty meaningful amount of revenue acceleration? Just a point of clarification before David takes the mike away because I know he's on me already. Sorry about my voice. If you could just talk a little bit about, maybe this is for you, Frank, as you think about digital scaling and it's become a bigger and bigger part of your business, does your headcount footprint change?
In other words, do you have more onshore labor or does that change? Karen, I do appreciate also your transition on operating margins more to a kind of GAAP focus. Thanks very much.
Great. Thanks for that. I do think on the revenue side, I think we absolutely see the ability for growth to accelerate. If you think about what we've said about banking, we certainly have seen the pivot in the two of the top five. The guidance we've laid out does not in the near term assume any big shift in the other three. Certainly we're starting to see acceleration with the digital capabilities that we've outlined across the business and the benefits from some of the acquisitions that we've done. The platform business, Digital Operations and so forth are going very nicely. We certainly do believe that as we look forward over the next three to five years, there is the ability for growth to accelerate.
Keith, on the headcount question, I'll use a phrase Malcolm used a minute ago, which is how much time do you have? It's a hard question to unpack, right? I think the headline is that I don't see the big split that is onshore and offshore, if you use that as the big split. I don't see that changing meaningfully. What I do see happening, though, is, first of all, you'll see a lot more nearshore and regional development centers. Romania, we talked about Romania today. We're going to go after local regional talent pools, which will be smaller because very few countries, if any, around the world have the scale that India has. These smaller regional talent pools they're very deep, they're very talented people, and we're going to go tap those.
In the country, if you take our U.S. footprint, we've already talked a few times today about the fact that we'll continue to localize further. As Raj clarified today, actually a little over 40% of our headcount in the U.S. is locally hired. We'll take that up to about 50% and north of that over the coming years. The nature of the people that we have onshore is changing. More consultative, more designers. Some of the marketing folks that Donna spoke about, design, all of that will be more here. If you think about the big picture, you think about it from a cost structure standpoint, I don't think the 70-30 split that we've had for a long time changes meaningfully. A point or two this way or that way.
Hi. Arvind Ramani from KeyBanc. You provided some interesting stats on penetration rates at your clients, 2% or 3%. Can you provide penetration rates as it pertains to how much is done in-house at your clients versus outsourced? Maybe explain why a large part of your growth may come from taking market share, and what drives that confidence?
Yeah, I'll take that. Great question. Let's just start with market sizing. McKinsey and Gartner both have about the same estimate that our sandbox is about $1 trillion, and that's IT technology-based services on a global basis. I've seen the most conservative estimate tightening that up against our peer set is about $200 billion per year, but I think the $1 trillion is probably closer. The $500 million I talked about is incremental digital on top of that. One thing to always remember, even at our scale or the scale of an Accenture or others, this is still a cottage industry. It is very fragmented, and it's different than software where clients are highly motivated to standardize on SAP. It'll be called an SAP shop or an Oracle shop. It's different with ours, where they actually want to have multiple service vendors, often in an account.
It's a fragmented industry, and so I think that that's one dynamic to never lose sight of. The second, if you look at what our IT clients, their IT organizations have done over the last 10 years, they've actually pulled out a lot of that in-house native systems development capability, and they've been leaning on our industry even more. They've become world-class at procurement in managing firms like us. But if they had to flip the switch and build a lot of these systems on their own, they don't have that muscle, or at least as much of that muscle as they used to. Now when it comes to digital, they just don't have it at all. You get some firms that are outliers. There are some, in certain industries, scale firms that have tried to do this on their own, but they're real outliers.
95% of the market that we serve are clients that don't have the capability to talk about the 6 service lines that we talked about today.
Oh, hi. Thank you. Brian Essex from Morgan Stanley. If I could just circle back on headcount for one minute, just to level set. In terms of percentage of headcount that's local, where do we stand now, and what can we expect for a trajectory to get to that 60% level?
Sorry, Brian. I think I understood the question. In North America, a little over 40% of our headcount today is locally hired. Think of that as citizens, green card holders, and so on and so forth. In virtually all meaningful parts of the rest of the world, we're already over 50% local. There might be some small countries where we haven't got there, but virtually everywhere else, we're over 50%. In North America, over the next, I would say three to five years, we'll be well over 50%.
Okay. That's very helpful. Thank you.
That's the local headcount. When you look at it in terms of percentages on-site versus offshore, we're still at that 25%, 30% on-site and the rest offshore.
Hi, it's Ashwin Shirvaikar from Citi. Thank you for the presentation. This was very useful. Operating margin question. As I look at your chart, Karen, on the left side, there is all these helps from pricing leverage pyramid, so on. On the right side, the investments. Sort of a how much can you stretch it type of a question with regards to the pyramid and SG&A leverage. Equally on the other side when I look at BPaaS investment automation, are you really looking basically for platform margin leverage, so to speak, those margins to increase to continue to kind of turn? Is that the plan as you think of forward margins?
Hopefully everybody can hear me. Sorry, my mic wasn't working earlier.
Ashwin, as we laid out back in February 2017, when we began to change the margin profile for the company, we knew that there were several levers that we could leverage in the first three years, which is why we gave the 2019 margin target. A lot of that was around pyramid utilization, overhead structures, and so forth. Now, some of those, you get a bump, it takes you a few years to feel the real benefit, but then it starts to stabilize. That's what we'll see as we move beyond 2019. At the same time, what we also talked about is that as we got towards 2019 and beyond, we would start to see the business mix shift. The platform business, as we've talked about, is a nice margin accretive business once it gets to steady state and to scale.
Similarly, as we've talked about, our digital business today is above company average margins. That will allow us to continue to help drive margin expansion while we continue to invest in the business. There'll be some levers that over time we can continue to pull, but utilization might go up a little bit over time, but it's not going to be a meaningful increase in the next couple of years.
Hi, good afternoon. This is Harshita Rawat from Bernstein. First, thank you for the greater clarity around reporting. This is very helpful. I have a question on managing the transition to digital. A few of the initiatives you have laid out in Digital Operations, Digital Systems, and Technology could potentially be viewed as cannibalistic to some of your core 70% of the business, some of them. My question is, how do you manage this potential internal conflict between the old and the new, which some of your digital native competitors don't have to contend with?
Let me break it into pieces. Let's do process work and then systems work. On the process side, we come with, I think, a good background in that we've made a lot of progress in that business over the past decade plus, but we have not been a scale horizontal BPO shop like a lot of our competitors. We have that vertical approach, there's not much cannibalization in that market. Most of what we do on the process side is just going to be net new growth. There really isn't anything there. When you look on the system side, I think that's where it is. It gets back to Frank's point that he was just outlining, that this heritage IT isn't going to go anywhere, number one.
Number two, if you look at the demands that are then being put on that, they are massive. I went to the automated vehicle. Forget automation of a vehicle, just the instrumentation of a vehicle. When our clients start to do that, it puts remarkable strain on their legacy system. They may actually have to enhance those and invest in them further. You may have seen in IBM's earnings over the past couple of years, some quarters, their mainframe was actually what was driving a lot of their growth. That's an area that we're seeing. Just I think a final point on that is how do we take digital and automation and apply it to ourselves?
There's a lot of room for that around automated testing, around some of the things that we do in the core business that can drive velocity of our operations as well. There's a lot that's moving in the system side, we don't sit there. We've modeled it out, and we really don't see tremendous cannibalization at all because the pie is getting bigger and bigger in terms of what clients need from a systems perspective.
I'll also make a culture point here. This is a really important thing. 25 years ago, more or less, we made a decision in terms of how we address the market, we said we're going to go after a small number of clients in a small number of industries and serve them extremely deeply. What you've seen over 25 years are these long, enduring client relationships, these relationships that we've had. Year after year, we continue to serve clients, grow the relationships, do new things, and so on and so forth. You don't do that by being selfish about how you treat a client. You do it actually the other way around, by thinking about being selflessly independent about how you serve a client. That's a really integral part of our culture.
If there's a short-term decision to be made about cannibalizing this piece of revenue because it's the right thing to do for the client, we will do that every day of the week because we're not thinking about that transaction or that contract. We're thinking about the lifetime value of that client. That's something that's deeply embedded in the culture, is how we think about clients. I think it's one of the things that makes our client relationships sticky and long-term and kind of unique about our culture.
Yeah.
I'm just going to add one thing to that. There used to be a time where we had over 20 different horizontals with their own internal structures, with revenue, P&L. That's where all those conflicts, those internal conflicts that you talked about, how do you grow one area and move someone else's P&L? That was one of the big initiatives that we went into organizing by the three service lines to really focus around our clients, not internally with us. That's allowed us to be more solutions oriented. If one piece of the business needs to go down to go sell the other one, that's internally much easier to do and much simpler.
Thank you. David Togut with Evercore ISI. Karen, question about the midterm forecast. What's embedded in the midterm forecast in terms of wage inflation, especially as you make this transition to digital at scale and go after more of the in-demand skill sets? Then the other side of that, what are your assumptions around pricing? In other words, can you recoup all these higher wages?
Yeah. What's embedded into the margin profile that we outlined this morning is essentially that wage inflation stays where it is. Right now in the U.S., that's been low single digits to high single digits offshore, which has been the run rate now for quite some time. We did call out that one of the possible headwinds could be if there is a sudden spike in wage inflation, and we can't get a corresponding increase for in pricing, and there typically would be a lag. If all of a sudden there's a wage increase spike, it typically will take a little bit of time to get the pricing adjusted for that. That could put pressure potentially on the margin targets. Certainly first and foremost, our objective is to drive growth. We will adjust if we needed to on the margin side.
Right now, based on what we're seeing, we're not seeing significant wage inflation. Now, what you do have is with the newer skills that we're bringing in, the digital skills, they are higher compensation skills, but the market also allows for that from a pricing perspective. Certainly in today's environment, clients are willing to pay for that talent. That in and of itself doesn't really have a margin impact. The other thing we have seen this year, and we've talked about this a little bit, is partially because of the strength of the economy and the shortage of talent in the marketplace today, we have had better success in the last year or so in terms of getting price adjustments, COLA increases, as we promote people being able to get new bill rates and so forth.
That is something that really had not happened for the last several years. That has been a fairly new phenomenon recently.
Hi, it's Bryan Keane, Deutsche Bank. Can you talk a little bit about your line of sight into the 22% adjusted operating margin? How do you help us get confidence in that? Because there's some people thinking that number's too high, and maybe you should have taken it down and started with 21% operating margin and then go from there. Secondly, 10 basis points expansion thereafter is pretty specific. How did you get to that number? Is there going to be some fluctuation up and down from that 10?
On the approximately 22%, which was the commitment that we had made back in 2017 for next year, we have a very good line of sight into that. Obviously, we know what the cost savings are that we've been able to drive to date. We talked about over 600 basis points there, and we've got about 85% of that to date. We have good visibility into what that looks like as we move forward into next year. We also have great visibility into the investments that we've made and will continue to make next year. We have a good sense now of what M&A deals cost us, and if there is margin dilution in the early days, what that looks like, what it takes us to integrate a deal. We're actually very comfortable with the margin target for next year.
What we talked about is that moving forward from 2020 and beyond, it would be at least 10 basis points. In years where if there is slower growth, obviously we would potentially accelerate that. Certainly, again, first and foremost is to continue to drive revenue growth with a reasonable margin expansion. When you go through what we've gone through over the last two and three years as we move into next year, we knew that there was money to be had inside the company. That's why we were very comfortable when we outlined the new margin profile back in February of 2017. That doesn't continue forever. At some point, you hit stabilization, and it gets harder and harder to squeeze out dollars.
We want to make sure that we're not doing anything that holds back our growth and the opportunities that we see in the marketplace.
Let me just add to that, Bryan. This question of operating margin has been persistent for some time. In some senses, the undertone is driving the operating margin and it's hurting the business in some way. There's another side of this, which is that, candidly, over the last 25 years, many of you have asked me consistently in our subtle, "What do you worry about, Frank?" I think my answer has been consistently over 25 years. The one thing that I've always worried about in this business is continuing to scale the business with quality, right? I've always said that that's the thing that I go to bed worrying about and wake up in the morning worrying about. The discipline that we've put into this place over the last couple of years on operating excellence is a backbone that will serve this company well into the future.
This was about operating discipline around utilization, operating discipline around pricing, operating discipline around the pyramid. These are good things that are going to serve the company well for a long time. Rather than thinking about this as somehow a trade-off between operating discipline and margin, I'd encourage you to think about this as good operating hygiene that we now have in place that will continue to get better as we get to the approximately 22% in 2019. We'll continue to find incremental opportunities to continue to drive operating excellence, which is why we think we can drive at least 10% or 10 basis points, rather, 10%. 10 basis points of improvement year-over-year after that.
I think we have time for one more question, Dave.
Hi, this is Divya Nagarajan from UBS. Thanks for the presentations and thanks for the forecast. Two questions on your medium-term targets. The 6%-9% organic growth guidance that we're talking about now, how should we think about the progression of this? Should we assume that as your digital exposure continues to grow, that we see an acceleration over the time frame, or is this something that's more close to an annual number that we're looking at? The second is on the operating margin guidance. How should we view the 19% for 2019? Is that for next year at least as close as it gets to the GAAP EBIT margin? Thank you.
Let me talk I'll start with margin first, then we can all jump in on revenue, I guess. On the margin, as we outlined, we said with the new definition of adjusted operating margin-That right now equates to about 19%. Obviously, we'll reset that at the beginning of the year if there's any material difference, but there shouldn't be. That should be about the right number. That should be, barring any large one-time or unusual charges, of which I don't know anything at this point, there's nothing in our radar, that would be very close to our GAAP margin. In terms of the revenue growth, we actually do believe that revenue will actually accelerate in the coming years as we continue to see the digital opportunities expand, as we continue to add to our capabilities with more acquisitions and the growth that comes with those acquisitions.
We actually do believe that over the next few years, there is the opportunity for revenue growth to accelerate.
Okay. Very good. I think we want to thank you all for your questions, and maybe wrap up the panel. I want to just make a couple of closing remarks if I can. First of all, I think that I want to thank all of you. We know it's a big investment of your time to be with us. This was our first-ever investor day, and we appreciate the time that you put into being with us. I know that I speak for the entire executive team and our board in saying that we really do appreciate your sincere interest in Cognizant, and we're grateful again for the substantial amount of time that you've spent with us today. We hope that it's been an informative day for all of you. I also want to say that it took us 25 years to do this.
We hope it won't be another 25 years before we do the next one, but we know it won't be another 25 years. I do want to take a moment to recognize and thank the whole Cognizant team that put this together, the speakers, the finance and investor relations team, and a whole cast of others who supported us as we got this together. Thank you very much, team. It was awesome. I'm glad it all came together, and despite the weather and all the changes we had to make last night, I appreciate that. For all of you in the audience, look, we tried to lay out for you our approach to sustainable, strong growth and value creation for the medium-term. It's a story that we completely and passionately believe in.
We made the strong case for you that we have a substantial market opportunity across industries, across geographies, and across buyers, and it's an opportunity that I really believe we are in an especially strong position to capture. You learned about these six distinctive digital capabilities that we think are integral to building digital at-scale businesses, capabilities in these high-growth segments that are essential for clients, and we think that play to our home field advantage. Therefore, I think we're confident in our ability to drive the execution and as a result of that, to drive the double-digit annual returns that Karen spoke about. Maybe the most important thing, at least for me, of the day today was that I hope that, as you've seen, our ability to execute depends on the Cognizant leadership team, the folks that you had a small window in to today.
These are the folks who come to work every day and make it all happen, make it all possible, and who I think are collectively absolutely determined to seize this growth opportunity that's ahead of us. I'd like to just finish by saying, look, it was our first investor day, as you know. We'd really like to hear from you and get your feedback. I think that if you've downloaded the app, there's a survey in the app, and we'd love you to fill that out so that we can learn from your experience and do better the next time we do this. I'll just finish by thanking you again for your attention. I invite you to join us for lunch, where you'll get an opportunity to talk to the leaders who've been here with you, and some of our board members. Thank you again.