Cognizant acquires IT team at German steel giant Klöckner

Cognizant buys the IT operation of one of its customers to gain additional sector and technology knowledge

IT services company Cognizant has acquired the 100-strong internal IT team of German steel company Klöckner as part of its IT contract.

The deal will see Cognizant support Klöckner’s IT strategy, which includes adopting digital technologies across its European business. Klöckner has more than 9,000 employees in 14 countries, and made sales worth €6.4bn in 2015.

Marcus Ketter, chief financial officer at Klöckner, said Cognizant will support the company’s digital transformation: “We needed a strategic partner with proven expertise in IT consolidation, global scale, and the ability to deliver the robust capabilities required to foster our digital transformation goals.”

To ensure that Cognizant understands the business processes required by a steel company, it has acquired Klöckner Information Services (KIS), giving it about 100 IT professionals with the right experience.

“KIS has deep expertise in business processes, pertaining to multi-metal distribution and logistics, as well as SAP Hana and cloud services,” said Cognizant.

Cognizant will use these resources to expand its network of local delivery centres in Europe. Santosh Thomas, president of global growth markets at Cognizant, said the KIS expertise establishes a strong regional hub for the company in Germany’s industrial corridor.

Building regional hubs and increasing skills in vertical markets is an ambition of companies in the IT services sector. As these companies attempt to increase the services they offer to established customers they need a combination of domain expertise and local services.

For example, HCL recently completed the integration of the internal IT operation of Sweden’s Volvo Group, which gave it 2,560 extra IT staff with skills in mainframe technology.

This $200m acquisition was part of an IT outsourcing deal.

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