How and Why Satyam Customers Should React

As if the overall gloomy economic picture wasn’t bad enough, another corporate scandal on par with the Madoff fallout is now impacting the integrity of your daily operations.  You’re company needs to be taking immediate steps to avoid a major interruption in your ability to do business for the following three reasons:

1. Satyam’s Grossly Under Capitalized: The company has overstated it’s cash position by the equivalent of more than 1 Billion dollars, and its ability to sustain operations are questionable at best.  The Indian government doesn’t have a reputation for being able to quickly structure government bailouts like we’ve seen recently in the US, which leaves very few “Hail Mary” options for the company.
2. The Vultures Are Circling: The vultures in this case are Satyam’s competitors like WIPRO, TCS, and IBM.  I know for a fact of one Satyam account that was using another large outsourcing vendor in parallel, and immediately requested that all Satyam employees be rebadged to the other vendor.  It’s a great option for the few companies that are in such an enviable position, but what about everyone else? 
3. Employee Departures: Although the top executives have vowed to stay on, it means nothing if the rank-and-file that generate the income walk out due to lack of confidence.  Nobody works for free and if Satyam can’t retain their employees, they won’t have any services to offer.  This will further erode Satyam’s ability to earn revenue, and stay afloat. 

The combination of these 3 factors playing out are likely to be the death sentence for Satyam and the best hope for both employees and investors is that one of the vultures mentioned above snatches them up at fire sale prices.   The likelihood of this happening is relatively small since any would-be buyer would have a very difficult time assessing what they are buying since the PWC audited books are clearly not worth the paper they are written on.

So what should any Satyam customer be doing?  

Build a transition plan- NOW!

The best course of action will depend on the location, size, and type of work performed at your Satyam facility.  Laganella Consulting Group can help your organization begin that transition process immediate.  I’d encourage you to learn more about our consulting practice at www.laganella.com/outsoucing.html and then give us a call at 888-822-6461.  LCG has and development center in Hyderabad, and can complete the rebadged process in as little as 24 hours.  For those not as lucky, we can assess your company’s exposure, and immediately execute a mitigation plan to reduce it.