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The rise of the phoenix

Zafar Anjum | July 7, 2009
New owners of the tainted Indian software company Satyam resurrect it as Mahindra Satyam, to appoint chief risk officer amid slew of new changes

Changes after the takeover

One of the major aspects of the company's reorganisation is that the company has been divided into 11 business groups, said Nayyar. Each group is comprehensive, with its own business and delivery arm. And both of them are aligned towards exactly the same goals. It will be good for customers and from the overall accountability perspective.

Even though Mahindra Satyam and Tech Mahindra will work closely, they will not merge as yet.

We are keeping these two companies separate for the time being, he said. They will have their own management. They will have their own employees. Each company will work independently till it merges… It (the merger) will happen one or two years down the road.

The new management is also looking to rationalise Satyam's infrastructure and staff strength. There may be places where Satyam has excess infrastructure, where Tech Mahindra will move in but as a sub-lessee, not as a part of the same office, said Nayyar.

He gave the example of their Singapore office (in Changi Business Park) which will house both Satyam and Tech Mahindra offices but as separate entities.

Clearly, there is a lot of synergy between Tech M and Satyam which we will be continuously using, he said. They will be cross-selling their respective capabilities to each other's clients.

Governance model

A flawed governance model was old Satyam's Achilles' heel. The new management has given due attention to this aspect in the reorganisation process.

Essentially, the governance model (that) we have (has been) reorganised with certain objectives, said Nayyar. One, responsibility and accountability have been brought together. Two, we have tried to make sure that diverse interests are converged and their incentives are aligned. Normally, earlier, the sales and the delivery groups were two different parts of the company. Quite often, their incentives were never aligned. We have aligned them together.

Next thing we have done is we have made sure that cost becomes transparent. That every business unit knows what its costs are. And knows and focuses on the cost of each project and its profitability. This was not that clear earlier.

Lastly, as an element of governance which has been brought in, what we have made sure is that through the appointment of accountants and consultants, there is a system which cannot be fiddled with. Ever. And we will have a chief risk officer who will report to the board and will really be looking at overall issues of ethics and governance.

Plans for the region

Asia has always been important for Satyam's business. The new owners will continue to support and augment their presence in the Asia Pacific. According to Mahindra Satyam, it has about 3,000 employees in the region. In Singapore alone, it has more than 400 employees. The region's revenue contribution to the company's total revenues is estimated to be 10-15 per cent.

 

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