Mahindra Satyam should get out of past: study

By : |May 23, 2011 0

[image_library_tag 459/12459, align=”left” title=”Mahindra Satyam” alt=”Mahindra Satyam” hspace=”7″ vspace=”7″ border=”0″ ,default]BANGALORE, INDIA: Tech Mahindra acquired a host of clients, with the acquisition of the Hyderabad-based Satyam Computers following the financial scandal. Three years post, retaining and servicing these clients, Mahindra Satyam could not reap the yield.

According to a study by Offshore Insights, based on latest results and client interviews, while clients may be positive about Satyam, the company — and especially its client-facing officials — has not fully come out of the trauma they faced. “Based on what we heard from clients, we find them (the company) still defensive about what had happened two years ago,” the study observed.

The study indicated:

a) The company is able to deliver the work to clients’ satisfaction

b) Attrition — though still high — has come down a little and Satyam has back-up plans in place to handle people leaving

c) Generally clients are open to explore giving more work (renew current contracts as well as award new projects) to Mahindra Satyam.

Commenting on the study and Mahindra Satyam’s financial results, Sudin Apte, CEO and principal analyst of Offshore Insights said, “Our interactions with their clients show their inclination to work, and possibly expand with the firm. But, our analysis and the results announced today show that Mahindra Satyam has not been completely successful in converting this client mood into dollars in revenue.”

Satyam should upgrade its value proposition: Analyst

According to the analyst, Mahindra Satyam needs to get out of the past, get much more proactive, and upgrade its value proposition and differentiation.

The study highlighted that the clients on an average expressed satisfaction with the company’s performance over the past years and the fears about exiting the relationship had now ebbed away. Because of the timely and within-the-budgets competition of the project, the clients are positively talking about extending the relationship with renewed contracts.

“The journey may be somewhat slower than what many expected, but Mahindra Satyam has come a long way. They have brought stability to the organization and its business and also claim to have a plan in place to take the company to the next level,” he said.

However, the analyst still won’t put Mahindra Satyam in the same bracket as Cognizant, Infosys, or Tata Consultancy Services and review them as a sizeable mid-market player.

“They now need to show a substantial increase in their sales and marketing confidence and revamp their client facing message. Clients want to know how much they are investing in new technologies and models so they can see value as a precursor before they award more business,” Apte added.

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