Home > Business, General > The Satyam fiasco

The Satyam fiasco

Well, for the benefit of my friends, who aren’t from Indian sub-continent, and / or who aren’t familiar with one of the Indian languages, the word “Satya” in Hindi (and some other Indian languages too) means “Truth” πŸ™‚ so it seems the founder, B Ramalinga Raju, forgot to append a leading “A” in the name of the company πŸ˜‰ [ btw, “Asatya” means “False” in Hindi ].

I still vividly remember him (Raju) standing by his Mercedes in one of the popular magazines in IT (maybe Dataquest) a few years back. It was definitely awe-inspiring to someone fresh out of college and starting his career. Hardly did anyone (or me) imagine that this guy (or a “former” CEO of one of the biggest Indian IT companies) would stoop to such levels.

Co-incidentally, but not surprisingly at all, he hails from a community which is already notorious (in India and amongst Indians in US) for doing all kinds of stuff (read cheating) in the IT industry. Hyderabad city, where Satyam’s headquarters are located, also boasts of making (fake) industry certifications like MCSD, Java Sun certification etc. salable. The Times of India, in today’s edition (dated 13 Jan, 2009) carries a report of how Raju duped the APIDC (Andhra Pradesh Industrial Development Corporation) of Rs. 52 Lakh, 25 years ago.

I know of at least one person who would be happier than me after reading all this – my dear friend, Hari Raghava Bhargava; because of the profligacy we’ve seen in the Indian IT industry, and also because we’ve seen in how many different ways, a perfectly good project could be screwed. What more proof is needed than the fact that most of the managers in such Indian IT service providers are either non-technical (came from some other industry, though very rare), or off-technical (a DB guy managing Java or C# projects, very common) or obsolete technically (a PB guy managing, some OO projects, again very common) and they are the ones who are actually drawing fat salaries as compared to the programmers, or the guys who actually get the things done.

Also, what more can one expect from an industry which stands on only one pillar – cost (or to be more precise, lower cost)? Most of the time, I hear people (Project Managers) talking about any project in terms of revenues (x-million dollar contract) or cost (x man-days; which was y man-days lower than what the z company could quote for).

Well, if you think I am talking BS, then please be informed that I’ve worked with one such big (amongst the top-five Indian software service provider) firm for a little more than 3 years.Β  I once asked my BUH (Business Unit head) that why do you accept such ridiculous time lines (doing a project in x/3 man-days, when reasonably, it should take x man-days)? His terse reply – “So what do you want to say? I should lose business to some other Indian company”?

And I perfectly understand his position. But the sad part is that the US companies, who actually own that piece of software, are ready to accept such code, because, again all they care about is BUDGET!!! So the lowest bidder wins 😦 Would the guy accepting the proposal of lowest bidder, take the same decision, if he were building his own house?

And once an Indian company gets the project (on such terms), it resorts to all kinds of mis-doings like “ghost-billings” – i.e. billing for a person when he is actually not working on that project. And believe me or not (I don’t care), but I’ve seen it with my own eyes. Yes, I may not be able to prove it, but talk to any Indian (with the condition that his identity won’t be disclosed) if this happens in their own company? You’ll be surprised or shocked, but mostly both πŸ™‚

I think I should stop this rant, because it is more than evident now, that capitalism (practiced in its extreme) also has its own pitfalls. Need I point you to scores of American companies (like Merrill Lynch, GM etc.) or whole industries (investment banking, auto) πŸ˜‰ ? US has a true competitor here, India is not far behind…

Of course, what happened (Satyam) is really bad for Indian software industry, but if things don’t improve, like –

1) hiring technically solid people and paying them a lot more than the other average guys
2) dismantling the BS pay-brackets i.e. for x-y years of experience, Rs. a-b salary range, or Programmer Rs. a-b Lakhs, Senior Programmer Rs. c-d Lakhs, where obviously, a < b < c < d and so on…
3) taking proactive steps for corporate governance like zero tolerance (kicking a guy out, if he indulges in any malpractices) and setting up email ids where any employee can anonymously post occurrences of such malpractices
4) taking pride in delivering projects on some other scale than merely, cost and revenue
5) useless yearly reviews, which state that performances of members of every project has to fit the bell curve (exceptionally good or bad performances rare, and average performances common), which is true, but what is also true (and conveniently but purposefully overlooked) is that a programmer doing a good job on a fresh development project is better than a programmer doing an exceptional job on a maintenance project

the day is not far off when this sunrise industry (for India) may be doomed for an early sunset.

I sincerely wish that I may be proven wrong.

Categories: Business, General
  1. January 14, 2009 at 11:13 pm

    Bell curve etc does not matter. Only point #4 of your blog matters.

    Satyam has earned a bad name for Indian industry. With recent Sangur, petroleum strike
    and local-thinking politico, and now Satyam .. india is showing its true colors to the
    world. These will not go down very well for future. But then, such things do happen.
    US also has had similar and probably bigger cases. It is not majorly important that we
    fell. How quickly you get up, get running _and_ how well you ensure you do not fall again,
    is what is important. But we all know how lousily indian govt moves .. it will be easily
    10-20 years before solid laws come into being. And for all you know, no law may really be created. We do need laws like Sarbanes-oxly (I may not be 100% correct on the name here) of US.

    • mmwaikar
      January 15, 2009 at 7:47 am

      Hi bhaiya,

      Thanks for your comments – I won’t improve until someone tells me if what I write makes sense or not.

      Btw, I feel, you mean point 3, instead of 4, right? Or it could be both. And you are right, maybe I’ve mixed some thoughts (past frustrations which never got expressed) which should belong to some other posts. And you are also right on the name of the law – its Sarbanes-Oxley.

      Also, please visit the ‘Moments’ link on the home page of my blog to see some of our recent snaps. And wish all of you a belated Happy New Year.

  2. Raj Radhakrishnan
    January 22, 2009 at 8:17 pm

    I agree with Anil that the work environment or quality of deliverables had nothing to do with what happened at Satyam. This is a matter of morality, ethics and hope of thousands of people. I think this could have happened even Satyam was doing a construction business.

    And .. your frustration about your bad experience with s/w industry.. you better try to take advantage of it and do the best you can.

    • mmwaikar
      January 26, 2009 at 11:30 pm

      I understand Raj, but my point was that US companies’ offering a project to lowest bidder gives the less moral or less ethical people, a lousy excuse, that the US company itself knows that a project can’t be done in such ridiculously short time, so we’ll do the ghost-billings πŸ™‚

      I also know that there is no such thing as less moral or more moral, but this is the sad reality that many Indian software engineers (that I’ve spoken to) also approve of the ghost billing. And obviously, this behavior of US companies hardly does anything to discourage this trend.

  1. January 14, 2009 at 4:02 am

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