Satyam: after the shock, it's time for makeover

When the Satyam (SATYAM.BO : 103.35 +0.7) scandal rocked the nation, not many believed that the IT major would be back in news for the right reasons. Six months on, with Tech Mahindra (TECHM.NS : 934.05 +3.65) in the saddle, the scenario is well changing for the company. The past few months have been a roller coaster ride for Satyam employees. The company has undergone so much of change in such a short time that it is now seen in an all-together different light by both its employees and outsiders.

During a revisit to Satyam, one can sense that the employees are relatively relaxed. The new investor Tech Mahindra has quickly undertaken the reorganisation exercise. With a new brand name Mahindra Satyam, the board has named Chander Prakash Gurnani, as its chief executive, Subramaniam Durgashankar, former senior vice-president for mergers and acquisitions at Mahindra and Mahindra, has been appointed chief financial officer. "This re-branding exercise symbolises an amalgamation of the Mahindra Group's values with Satyam's well known expertise, even as it retains that part of Satyam's identity which signifies commitment, purpose and proficiency of the organisation and its people," Anand Mahindra, vice-chairman and managing director of the Mahindra Group, had announced.

The financial result of Satyam has been quite respectable. It has posted a standalone net profit of Rs 181 crore on revenues of Rs 2,294 crore for the quarter ending December 2008. The company's total bank balance as on March 31, 2009, were Rs 373 crore ($74.6 million). The company has repaid loans of about Rs 56 crore, bringing down the loan dues to Rs 169 crore at the end of March 31. So does this mean the company is re emerging in a new avatar? "I am interested in the future when we emerge as "true partners" for our customers. We have redesigned the organisation structure to make it even more customer-centric and agile. Our access to customers and geographic penetration stands further enhanced, decision-making is being accelerated and a greater role is being envisaged for the delivery teams in nurturing accounts," CP Gurnani said in his first address to the employees. He also pledged to improve corporate governance and customer ties.

But experts opine that the road to recovery will require the duo to bring synergy between their 'go to market' and 'back end strategies', in a bid to bring clients a large number of service options. Analysts warn it will become increasingly important for Mahindra Satyam to stop customer attrition in a bid to get ready to face competition with large giants like TCS and Infosys (INFOSYS.BO : 2217.8 -5.3). How Mahindra Satyam lives up to this challenge remains to be seen.