aSatyam wnat does it mean to all of us

ASatyam

Satyam debacle is 26/11 of Corporate India. People thought things like Enron, Worldcom happen only in the west and we are away from scams in corporate world of this magnitude. Some thought such large case frauds do take place only in Government sector and entrepreneurial corporate India is insulated and scams are of smaller magnitude. All these theories have been proved wrong by Mr Raju.

There are many aspects to Satyam story.

Customers :

Many of us have toiled hard to bring global outsourcing clients to India and Brand India was getting stronger day by day. Satyam debacle is a slap on India's IT image. Our Audit system, Corporate Governance, Banking system, promises made by the board, role of Independent directors is all under scanner now. It will take lot of efforts to rebuild India's IT image in the west. Induction of 3 wise men on the board is a welcome step. They will take time to rebuild But customers are bound to be cautious now. Future business contracts will have stricter due diligence, strong exit clauses, credential cheques and third party audits. Bad news always spreads faster than the good news. We all are witnessing thisn currently.

AP Government as an IT destination (Cyberabad to Satyamabad)

Andhra Pradesh was considered a rising IT/ITES destination and Mr Ramlingam Raju was like a Brand Ambassador of Cyberbad. Brand AP will definitely be hit hard and investors wishing to invest in AP will now be more cautious.

Suppliers/Service Providers

No Company of this size and magnitude can do business without many vendors, service providers and sub contractors. All of them are now worried about their business prospects and receivables. Many are dependent on Satyam and some are doing business only on word of mouth and they are not sure if they will be paid. All of them cant be absorbed elsewhere since overall mood in the corporate India is that of gloom and cost cutting.

Ordinary Shareholders

Everybody was louding Satyam and its results year after year and based on available data were quoting Satyam as a safe investment bet. many got handsome returns in the past. Many ordinary shareholders have lost huge money in the last few days. Who knows when will the stock recover ? Institutional investors have different agony.

Employees

Working with Satyam was a Dream Job once. Now the party is over. Employees on bench, freshers, those on offer are the ones who will be axed or affected. You dont need an astrologer to tell this. Repositioning at the last minute will take time. Experienced staffers having ESOP shares with Lock In are now looking at the vapour of their share dreams. Suddenly Cost to Company (CTC) package of Satyam staffers is evaporated. Pay cuts, job loss, relocations are in the offing for many staffers.

All in all everything looks like a Bollywood pot boiler. An Imaginary tale happening on celluloid is now suddenly Real. It will take time to heal the wounds.

Amidst slowdown young students and professionals must focus on skill building

In a time of economic slowdown, IT ITES students must pick up industry-specific skills during their college days, rather than expecting to be trained after they join their first job.“You need ready-to-go skills…You need to be ready to start work with just two weeks training,” Slodown is an opportunity to inject a much-needed dose of optimism about the Indian IT sector among the student population. “In the first half of this (financial) year, from April to September, IT posted 24 per cent growth. While job addition may be slow, there will still be job growth. We’re expecting 100,000 to 150,000 new jobs in the IT sector this year, IT sector had been hit by a “double whammy”: the economic slowdown and the “corporate terrorism” in the form of the Satyam fiasco. In such a situation, students had to change their expectations. “You may think that ‘why should I bother to get extra training now. The company will give me training’. But times have changed…IT industry used to give you six months’ training after fresh students joined. But the people who get jobs now will be those who have employable skills when they join,” Skills is the new global currency and not degree or experience.

Three top skills
I strongly infrastructure management, enterprise resource planning (ERP) and software engineering with domain knowledge as three of the major areas in which students should acquire skills in order to be employable in the IT industry today. “Infrastructure management is a $11 billion industry…I estimate that it can employ five lakh people over the next few years,” .With regard to ERP skills, he suggested that students use their time in college to understand business applications and the way that businesses work. Similarly, software engineering is not just about knowing programming languages, but about being able to architect a system, he said. I admit that while students from premier institutions such as Pune University were unlikely to suffer from the slowdown, those from second-line institutions would face a rougher time. The top 20 per cent of engineering graduates would remain easily employable, while the bottom 20 per cent had few chances. However, it is the 60 per cent in between, who snapped up IT jobs with mediocre skills in the good times, who would have to work hard on their skills to be able to survive the downturn.

Is Pune loosing its shine as preferred IT destination

Pune considered once as oxford, Detroit, silicon vally of India was a natural choice of any global IT investment decision. But its growth and expansion is taking its toll on the Basic competitiveness now.

Many delegations and investors are now pointing out following issues.

· Lack of connectivity (fewer Air connections and now international airport).
· High cost of land and office rentals. (sometimes foreign locations cheaper than pune)
· Frequent power cuts and lack of diesel availability to run generators
· Poor public transport and traffic indiscipline leading to long traffic hours.
· Absence of proactive Government official controlling crisis management
· Not a capital city.
· High wage structure expectation due to higher cost of living.

Now the next growth cities could be places like Kolhapur, nagpur, mangalore, ahmedabad, indore, chandigad, coimbatore, triavdnrum etc.