Forrester's Satyam report card: 6 pain points to address

Bangalore: More than a year after its Chairman B Ramalinga Raju confessed to playing a lead role in the biggest corporate fraud in India, Satyam Computer Services in its new avatar as Mahindra Satyam still needs to deal with the aftershocks, says a Forrester report. 'The Satyam Saga - First Anniversary Report Card' by research firm Forrester gives six out of 10 rating for the company's road to revival.

According to the report, though the company has taken several steps to restore its lost brand and its business, there is still a long way to go. Mahindra Satyam may see an increase in employee attrition from the current levels of 'more than 20 percent' as the world economy improves further says the report.
According to Forrester, Mahindra Satyam witnessed employee attrition of as high as 25 percent during the recessionary period of 2009. Some of the senior executives who have left the company like Keshab Panda, Subu D Subramanian and Virender Aggarwal were a part of the group who had 'collectively committed not to resign from the company.'

Another concern expressed in the Forrester report is regarding company's investment in new technologies. Sudin Apte, a Principal Analyst with Forrester, reportedly said that the company, which spent most of last year fighting for survival and defending its client base after the fraud broke out, did not invest in new technologies such as cloud-based delivery of services.

Mahindra Satyam has surely come a long way. However, it seems it will take some more time for the company to win back customer faith. According to Apte, the company is typically not considered for new deals of a value of above $100 million. The customers that it has added recently are for small deals of $5 million to $7 million.

The fact that the company is still to reinstate its accounts is also a concern for several clients. According to Forrester, there are customers who might have awarded business to Satyam, but for their hesitation to do business with a company that is not in compliance on its accounts.

According to PCWorld, Satyam is involved in legal battles including with 37 companies that claim a refund of 12.3 billion ($270 million) that was allegedly given to the company as temporary advances.

Mahindra Satyam's low-pricing and low-margin model too seem to be a worry point. With its low-pricing and low-margin model, analysts believe that Satyam may have difficulty in investing in new technologies that its competitors in India have already invested in.