The rise of a new Satyam: Lessons of a crisis

Satyam became Mahindra Satyam last week. The adoption of a […]

July 3, 2009

Satyam became Mahindra Satyam last week. The adoption of a new name is an important step for a company that has gone through a lot of work over the past months to retain the trust of their customers and employees.

(ph: Peter Heij, Head of Continental Europe of Mahindra Satyam)

Since former Satyam CEO, Raju, resigned last January after having unveiled a massive profit-fraud scandal that threatened to pull the roots of the company out of the ground, partners of the Indian-based company have seen their teams’ motivation drop before meeting new heights. The good news was the arrival of Tech Mahindra, also Indian, which helped ensure stability in the company. “Most customers are happy that the acquisition of Satyam was made by another Indian company”, says Peter Heij, Head of Continental Europe of Mahindra Satyam. Tech Mahindra, a joint venture between BT and Indian group Mahindra/Mahindra, is “a very large and successful group, with revenues close to a billion dollars”. A valuable statement in times of economic crisis.

In the near future, Mahindra Satyam will certainly look at cross-selling opportunities through a combination of services inherited from both companies. “We have complementary clients in our businesses”, says Peter Heij. While Tech Mahindra is focusing on telecom solutions, Satyam is known for its competencies in SAP and the automotive industry. “The focuses will remain the same”, Heij says, underlining the will of “Satyamites” to keep know-how intact. Since the discovery of the fraud in January 2009, the new appointed board members, representing both business and IT, have reiterated their goals of advancing in this direction. “We still have the same maturity level, CMMi 5, says Heij. What happened did not happen throughout the company; the numbers consolidated on our chairman’s desk had nothing to do with the company processes themselves.”

Regaining trust

In the first few weeks after the fraud, Satyam was “in very bad shape”. “There was a big insecurity, we were wondering if we could still pay salaries”. With 53,000 employees worldwide, the company was facing a possible financial collapse due to lack of trust. “We had to make sure that our people did not leave the company, so as to fulfil our contracts.” Communication was key during the whole crisis. “We did not want to be perceived in any wrong way. To ensure this, there was much coverage in the media, we wrote a daily newsletter and were connected once a week with the board to ask questions directly to them.” As for the customers, “there has been energy and commitment among “Satyamites” from the very first day. We rolled out plans and visited customers much more often than in the past.”
Today, the future looks bright again. “Given the current recession, we are doing quite well. “Satyam has demonstrated its resilience and its will to fight”.

A look at KPN

Telecommunications may represent top-of-the-agenda solutions for the soon-to-be outsourcing giant. In the recent past, Mahindra Satyam has already secured a trustworthy relationship with Dutch-based KPN. “A lot of people from Satyam work at KPN, says Benito Shukrula, Change Manager at KPN. We are facing dialogue with them every day.” KPN outsources test execution to India “because Satyam has acquired CMMi 5” so as “to improve it” and also “focus on risk management”. Mahindra Satyam will play an even more important role in the future, as the company is already involved in the implementation of the all-IP architecture of KPN. “IT is supporting this strategy, says Benito Shukrula. Our outsourcer is not in the old legacy system but in the new architecture.” In replacing copper, fiber needs tightly monitored business processes and the related technology. “The Telecommunication segment is an important element in Mahindra Satyam’s European growth strategy”, says Peter Heij. In the same way, the company is working on tightening partnerships with local contractors such as Ordina. A brighter future ahead…

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