Summary
The news coming out of Satyam is serious indeed and has broad implications. However, the article gets a bit sensationalist by implying that accounting irregularities may be occuring at other companies in the industry.
Analysis
The Satyam situation is most certainly a serious matter and will affect
the future of the company and the industry as a whole. The brand is
now tainted and will likely not survive as a stand alone organization.
However, at the field level, clients continue to be quite happy with
the service being provided by the dedicated Satyam teams...and
privately clients are telling Satyam this. The point will of course be
moot if Satyam gets to a point where they are unable to pay salaries.
Now, although the situation is serious and we do recommend our clients
cautiously evaluate the other Indian vendors they are working with to
make certain corporate governance and financial matters are in order,
at this time there is absolutely no evidence to suggest widespread
accounting irregularities among other Indian service providers.
Additionally, it is highly unusual for a client to publicize a
relationship breakdown. It appears there's more to the World Bank
issue than meets the eye.
