Satyam crisis puts CIO eyes on India
The Indian offshore industry faces a new challenge to its pre-eminent position as the IT outsourcing destination as the ramifications of the $1bn fraud at Satyam unfold.
The IT services provider is fighting to restore confidence among users following its chairman's confession that he falsely inflated the firm's revenues. The fall out from the fraud could damage confidence in the Indian outsourcing market as a whole, industry observers fear.
The demise of Satyam is a real possibility. According to its Interim CEO, Ram Mynampati, the firm needs cash to pay the bills. "We need some assistance as far as liquidity is concerned to pay [suppliers]."
Financial stability is an important consideration when choosing an outsourcing partner to control often mission-critical IT.
Satyam has more than 600 customers in 66 countries receiving services such as software development, business process outsourcing, as well as support for suppliers such as Oracle and SAP. Customers include Unilever, Sony, Tesco, Boots, Nestle and Fifa. They will be keeping their IT contracts with Satyam under close review as the implications of the fraud become clear.
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More than 14,000 Satyam workers had their CVs on the web within a day of the news breaking that the company's chairman had been cooking the books.
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What does that mean for IT jobs here? Will there be openings here? Will companies just move to another off-shore support company or stay where they are for the time being? Only time will tell...