Remember something..... Arnold Schwarzenegger. Now do Ur eyes widen? Arre, the movie yaar.....But I am not talking about that. For the past two weeks everyday when I pick up the newspaper, I feel a sense of urgency in the news. It is full of news of "Satyam and its fiasco" and a lot of political blame game and not to forget "Maytas”, the name from where it all started.
The primary findings of the whole saga(up till now) and the primary issue of concern is of "Corporate Governance"...There might be a lot more issues to handle once the investigations into the matter are complete. Any which ways this whole event has already left a black spot on the Indian Inc. Although the Indian IT companies are saying that this event is not going to affect there business, I think they are not 100% correct.
You might have by now understood that what I am pointing out.... Yes? No?Ok, I mean to say that there certainly will be a huge impact on the "Off-shoring" business in India. India has always been an attractive off-shoring hub even the price of living is constantly increasing, thanks to lower cost of operations coupled with lower attrition. But this is not the most important thing to fetch business to India. The "most" important thing is "Trust" of their clients and stakeholders. Now with a question over the corp. gov. of the companies this trust seems to lessen and the companies understand this. And for this reason most of them have started to go up to there clients tell them of the authenticity of there businesses and finances and balance sheets. But this is easier said then done. The foreign companies will have a little bit of hesitation in giving new and strategic projects to Indian companies. This is addition to an already tough process of getting new projects. We can relate it to the World Bank’s statements where they refrained from giving any project to Wipro for 4 years now.
Here I would like to take the issue to a broader horizon... With the globalization of Indian economy it has become easier for any company to have there own business in India. This area is not much explored as of now coz the Indian companies have always given good returns and major off-shoring business is with them. But now this area will be explored. If this happens we will loose a chunk of our profits and that really hampers the growth. This would intensify the already existing competition.
Now one solution could be that we move to IP based solutions, like Infosys Finacle, Mastek's Elixir... Having said that its not easy to do that and takes a bit of time. So while developing IP an organization has also to be efficient in their existing business. Have extra concentration on projects at hand and try to make our deliveries efficient and on time. Actually this should be the thumb rule. You must not hamper your client's productivity. Client happy, your business grows stakeholders happy. Another thing that can be put immediately in place is the actual work in the area of "Corporate governance". I have heard a lot of companies taking their clients into confidence abt their governance but I have not come to know of any extra measures taken by any of them to ascertain themselves and their employees. I feel some actions, even though subtle should be taken immediately to improve our "Corporate governance"... The onus is not only on the companies but also on our government. It can give more rights to ICAI which will take care of the auditors. Moreover, a direct look-up sort of a power given to SEBI so that a check can be done. Well I would not like to get into details of the corporate governance as of now.
Now this is just one, but a major issue. If we think positively, the Satyam Fiasco is an eve-opener for the Indian Inc. The quick interference of the Government was commendable but the need now is to take decisions fast and efficient not only for the future of Satyam but also for the Indian IT industry as a whole.
mate i m not 2 sure abt this having a major imapct on our business as indian companies have a distinct advantage of being well versed with "English" language...and above that an entire industry cannot be judged on an aberration....even the clients understand it....but saying that we need to strengthen our invigilation process on both companies as well as auditors and banks whose role also cant be denied to say the least,.....
ReplyDeleteI do not know the impact. I don't think I have 'the visibility' to that level. What I can tell for sure is: 'End-at-all-cost' attitude, which is termed "Driver of Ambition", as is displayed in more than adequate quantities by the management of Satyam, will sure-as-hell get you near your destination. But you have already 'sealed your fate', whatever that means. You would not reach the destination. Period.
ReplyDeleteMorality should be made essential part of the 'corporate governance'. This may sound a li'll harsh but Capitalism aint all-good. Na-ah.!
I liked the title of this discussion. I liked movie more. I like Arny even more. He doesn't say 'HASTALA-VISTA, baby' in this movie, does he?
Well Yash its all about the business an economy does... The issue is simple, I as a FII would now take extra precaution in investing into a IT company coz i am scared that the company might turn out to be similar to Satyam. I even might refrain from investing altogether it... This is what the world bank has done in case of
ReplyDeleteWipro. So i think a lot many things are to be taken care off now more then ever!!!!
let em be xtra cautious...being xtra cautious just means that they r ready to do business wid us but after taking some xtra measures...which is fine, until we r clean we dont need to worry that much...do we...nd for the world bank case wid wipro...u may hav notced tat the business has gone to another indian cmpny TCS....
ReplyDeleteYash!!!!
ReplyDeletethe thing is that we dont even know how clean we are... No one in dreams would have imagined the Satyam fraud. The questions are raised over the whole system. all the other companies are in the same system. I mean to say that a lot of moral damage has been done and its really dangerous.And as u said the World bank project going to TCS. Who knows the reason for it but the reason for the project taken away from Wipro is clear. Its actually another nail in the coffin. So now a lot of mending work has to be done.
I am just giving perspectives....