Satyam Fiasco - The Indian IT Tsunami.

I don’t need to drag here to set the context for my opening of the blog. We have the memories of the Tsunami still fresh in our minds, which swept us back in 2005 (If I am correct). Here I see around 50,000 + employees and thousands of Shareholders being swept away by the Raju’s Asatyam tide. I am discussing below what all should be done immediately on priority to project the thousands of Satyam employees whom I see as my colleagues next door.

Satyam was no fly by Night Company. It has a brand name and it took years for Raju to build the brand. Today Satyam is facing all sorts of irregularities and may be short of cash, but one of the biggest assets it has even today is the huge cost conscience customer base and highly talented employees. With my limited knowledge of Satyam business, I am aware of Satyam's low cost business model and the GE saga. Among the Indian IT providers, Satyam is one of the strongest SAP players in EAS (Enterprise Applications Solution) domain. Without basic level of quality it’s very difficult to retain the customers. I am convinced that all this can’t be a fraud. The laws will take it's own course of action against the management, but rehabilitation (yes rehabilitation) of the employees should be the top most priority for the government and other responsible corporate citizens. Raju had strong political connections. I am sure all must have reaped rich benefits from it as well. This is the opportunity to give it back to the society. Today everybody has some liabilities. Forget the long term liabilities; I am thinking if I don't get one month's salary what will happen. I just don’t want to think.

Today there is utter chaos not only among Satyam but overall IT industry. This should not have happened at worst time than this. For all of us the situation is not at all good as these are the times of worst ever slowdown. Customer has already tightened the noose. They are not investing in new initiatives, all existing investments are looked into and cuts are made wherever possible. We are literally struggling to hold on our existing projects and contracts.

I have heard about stories of customers just squeezing Satyam employees about everything. The employees are morally down and I don't think anybody will be in the best mood to search or get a job. May be 50% of the Junata may find another equal job or may even go with salary cuts. How about the rest? Even 15,000 – 20, 000 is a no small number. They have dependent families and have dreams over the shoulders. The layoffs and wind up is kind of new to India. We are not used to it like the America’s where companies get dwindled likes the Enron’s, Lehman’s etc. I guess they have well defined policies to handle and manage the unemployment. In India unemployment is still treated as matter of social shame.

This should not be treated as issue of only Satyam or it's employees. I may be overreacting, but is it not less than a national disaster?

Few things which come to my mind which are possible and should be tried.
1> All big corporate (Infosys, TCS, Wipro, HCL, CTS) should immediately get into action and distribute and move the business units to their respective organizations. But everyone would like to have the bigger pie. They will treat this as a business opportunity. Not sure how much practical it is.
2> Stalwarts like Anil Ambani, Mukesh Ambani and others should take over Satyam. This will enhance the portfolio and give breadth to the business. The board of directors should be revamped. Ram Mynampati does not have big credentials today. He was the man behind World Bank disaster, all his investment strategies for Satyam failed. E should be kept away. New set of directors with totally fresh ideas need to be brought in. Rather than selling Satyam to foreign companies, it should remain with Indians.
3>If nothing works out, finally AP government or Central Government should just step in and take over Satyam immediately. Atleast they can do this to protect its citizens.
4>Nasscom should definitely step in and drive this.
Yes we should and they will get into the roots of this Satyam fiasco. It will take ages.