What’s the value of working for an agency?

Submitted by Darren Oh on
Two gears connected to each other by a third gear labeled with a question mark

I work for Cognizant, a technology consulting company. My division, Cognizant Softvision, provides digital engineering services to clients. What this means in practice is that I am embedded in a client’s engineering team. This works fine for me, but I have wondered how the business model works for Cognizant and for clients and whether it limits my earnings. How can Cognizant afford to pay me a market rate and still charge the client enough to make a profit? Wouldn’t clients who have enough work for full-time engineers prefer to keep part of the markup they pay to Cognizant and use the rest to outbid Cognizant for talent?

I think the answer lies in the value that Cognizant provides to clients and in the value that Cognizant captures from its engineers. Both exceed the value of the individual work those engineers do for clients. Together, they justify what Cognizant pays to engineers and what Cognizant charges to clients.

Value of Cognizant to clients

  1. Cognizant manages a worldwide pool of talent. We have the scale to deal with the complexities and legal requirements of managing teams distributed across multiple countries efficiently.
  2. Cognizant provides flexibility to clients. Clients have access to extra staff when required. This reduces the risk of any team member becoming a single point of failure.
  3. Cognizant already knows its engineers, so our chance of finding someone who is a good fit for an assignment is better than that of clients who do their own hiring.
  4. Clients can make binding long-term contracts with Cognizant that they could not make with individual engineers. This helps them plan for the future.

Value of engineers to Cognizant

  1. Engineers can use their skills on multiple projects for multiple clients. This makes their skills more valuable than they would be to a single client.
  2. Engineers can teach their skills to each other. This increases the value of all engineers.

Through the combined efforts of Cognizant and its engineers, the value of each engineer working for Cognizant can exceed the value that same engineer would have working directly for a client.

That’s my theory. I would like to get perspectives from agency managers and from clients. Do I understand the agency business model? What should engineers focus on to maximize their value to an agency?