The NGO that Satyam's Raju founded

Thomas Friedman's Hot, Flat and Crowded has a very interesting story ...

Read on ...

I had traveled to the central Indian city [central Indian?] of Hyderabad to visit B. Ramalinga Raju, the founder and chairman of Satyam, one of India's premier technology firms and also cofounder of one of his country's biggest charitable foundations, Byrraju, which is working to alleviate rural poverty. ... [I]n the village of Podagatlapalli, at a small elementary school supported by Byrraju ... the classroom I visited was apcked with Indian kids, who were taking turns working on four colourful "kidproof" learning stations manufactured by Little Tikes and IBM that come loaded with interactive educational software. Each of these KidSmart Early Learning Program terminals were made of blue plastic and had a computer touch screen in the middle. They are specifically designed to promote learning in remote areas, where quakified reading and writing teachers are always short in supply.

How wonderful!

I was wondering what happened to Byrraju . If you visit the site, the foundation seems to be functional, but then it could be an old website that hasn't been updated since the fall of Mr. Raju.

I hope Byrraju will continue to get funds from some source to continue doing what it claims to be doing.
Or was this a front for fraud too? That would be terribly sad.

Does any one know if this NGO, Byrraju, is still functional?

Yellow Journalism at its Best

"Satyam Posts Rs. 181 Crore Profit" screams the headline of Indian newspapers.
"Wow!", you say.
You read the first paragraph and go to the next news item.

The third paragraph tells you the correct story

However, the Satyam management in its filing has cautioned thatthe results are based on information available in the company's management information system [yes the same one which Raju ran all these years] and not necessarily in compliance with generally accepted accounting principles, It informed that "in absence of proper records a lot of information has been derived on the basis on assumptions. In other words, the information may prove to be incorrect after Satyam's incomes are restated by the two auditing companies that are on the job presently.

This is sensationalism at its best.

By the way, read my previous post on assumptions. Some coincidence.

The Three Wise Men of Satyam

The three wise men AKA Government-appointed Board of Directors for Satyam, have painstakingly interviewed around 50 candidates and after much delay finally landed up with a new CEO of Satyam Computers, Mr. A. S. Murthy (ASM). I do not wish to go into ASM's capability or discuss at length the implication of having a CEO who dumped his shares just before the Maytas episode.

No.
Instead let us investigate something more terrible.

What is greatest threat that Satyam faces today? It is not paucity of funds; they are not exactly bankrupt, are they? The employees are more or less still with Satyam - by choice or otherwise. The threat is from the customers. Some of them have cut off relationship with Satyam; while others are on a watch mode. So the prudent decision would have been to take on board someone who could instill confidence in the customer. Someone who could signal a fresh start - a clean break from the past.

ASM is not a clean break from the past. He is a Raju man. He may have worked with Satyam for the last 15 years and he may know all the customers; but that does not qualify him to become a CEO.

Satyam may survive. It may prosper once again. But only if the customers do not desert Satyam. A dynamic, known outsider would have been a much better choice. ASM may be capable, but he is not the man of the hour. If Satyam regains its lost glory, it would be in spite of and not because of ASM.

A thought pops up: Is this a political appointment designed to control damage?
I hope it is.
The alternative is even more distressing. If this is not a political appointment, then it shows a deeper problem that perhaps pervades the whole of corporate India.

Companies exist only for customer (Yeah! Yeah! I am aware of a certain CEO who thinks employees come before customer. He is wrong - I will explain this some other day, why he is wrong. The same CEO also goes around using "Blue Ocean" for every strategic(??) move. The only Blue Ocean created by an Indian, that I know of, is by Sabir Bhatia, creator of Hotmail.) Each and every action taken by the company should be focused only at the customer. This is something that no one needs to learn from a humble blogger. By not thinking about the customer while choosing the new Satyam CEO, the three wise-men have clearly signaled that corporate India thinks otherwise.

It is impossible to judge now the impact of this appointment. The implications lie in the future and is not visible to us. The best I can hope that it turns out inconsequential. At stake is the future of 40,000+ Satyam employees.

Picture courtesy: enimal

The Sad Case of Satyam Employees and Warning Bells For Indian IT Companies

Satyam employees must be feeling kicked in the guts. Many of them have put in years of service, worked diligently, and were hoping for a great career ahead in Satyam. So what happened? Is it fair that they be penalized for a bunch of A******S led by running the company?

What I am going to quote below may seem heartless but believe me nothing could be further from truth. No schandenfreude here.

This is from The Purple Cow by Seth Godin.

Why do birds fly in formation? Because the birds that follow the leader have an easier flight. The leader breaks the wind resistance, and the following birds can fly far more efficiently. ...

If you watch the flock closely, though, you'll notice that the flock doesn't really fly in formation. Every few minutes one of the birds from the back of the flock will break away, fly to the front and take over, giving the previous leader a chance to move to the back and take a break.

The problem with people who would avoid a remarkable career is that they never end up as a leader. They decide to work for a big company, intentionally functioning as an anonymous drone, staying way back to avoid risk and criticism. If they make a mistake and choose a wrong bird to follow, they lose.

So the employees of Satyam make a mistake and chose a wrong leader. But what of the rest of the company. Seth Godin further continues ...

A lot of risk-averse businesspeople believe that they can follow a similar strategy. They think they can wait until a leader demonstrates a breakthrough idea, and then rush to copy it, enjoying the break in wind resistance from the leader ... In the long run of course they will fail.

Now why am I quoting this? Collect the annual reports of the following companies, Infosys, Wipro, HCL, Satyam, ... Ask your friend to look away and read out aloud the annual report. Ask him/her to guess the company. I bet you will get a confused answer. Every single biggie has the same genetic configuration. The first big wave that turns the apple cart will serve as a death knell for all of these companies.

You still don't agree? Answer this question?

Which Indian company has a product to its name? Hmmm.... you don't remember.

Alright I will make it easier.

Name me a software product comparable to Windows, SAP, Oracle, or any of the hundreds of software / freeware that are in your machine right now, that is developed by an Indian company.

With the sole exception of Tally, put it down to my ignorance, I am not aware of any India developed software product that is burning up the market. Feel free to enlighten me.

I predict that this will come from one of the smaller companies. Entrepreneurs who are hungry to become the leader of tomorrow. There is a tremendous talent available in India, coming out of our IITs and Regional Engineering colleges. Could be a bright spark from there. I hope that company (could be the one I work in!!) does it soon, before India is hit by gale forces of change.

Watch this space!

  
 

Picture courtesy: Asif Akbar

Did Credit Crunch Claim Satyam?

Satyam is imploding as I type out this blog.
The chairman of Satyam Computers has resigned. In his letter to the board of directors he has confessed that the balance sheet was inflated.
Consider this ...
In the September (Q2) 2008, the balance sheet showed an operating margin of 24% as against merely 3% of the revenues. The balance sheet shows an accrued interest of Rs 376 crores, which is non-existent.
In his letter, the chairman says "it was like riding a tiger, not knowing how to get off without being eaten."
Breaking news on all channels indicate that all major clients are washing their hands off Satyam. They are terminating their services.
So, why was this disclosure made now? Is it just because "tremendous burden I am carrying on my conscience" as stated in the letter? Or do you think this is a domino effect of the aborted Maytas deal?
Actually it is nothing of that sort. And this is my understanding ... though I cannot prove it.
Scams operate well when there is plenty of cash around; when banks are more than willing to part with cash where ever they see profit coming in. But when cash is tight and the banks are less than willing to provide loans, the bottom falls off and scams are exposed. Case in point: Madoff and his Ponzi scheme.
And I bet that if every thing was fine and there was no cash crisis this would have gone for a very long time.
Watch out for this space. If the credit crisis prolongs you will see more such skeletons tumbling out.
So in a way such crisis is good. It has a purgatory effect on a system. Rotten apples are exposed and that actually helps the system overall in long run.
And if you see an expert telling you that credit crisis was the reason behind the Satyam implosion, remember you read it here first!

Question: Who are their accountants?

Note: The picture used here belongs to Tory Byrne. To see more pictures, visit her gallery.