Showing posts with label Satyam. Show all posts
Showing posts with label Satyam. Show all posts

Thursday, October 22, 2009

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Satyam wins $8 mn worth new deals in Q2

Mahindra Satyam said on Wednesday it had won 30 million dirhams ($8 million) worth of new contracts in the Middle East and North Africa region in the July-September quarter.

Mahindra Satyam is planning to double its business in the region in the next 18 to 24 months, said a company statement.

Earlier the company had said that it is winning new outsourcing deals, but business is yet to see a total turnaround as some cautious clients wait for stability to return to the company.

“While there have not been any major client losses since April, some customers continue to keep Mahindra Satyam on their "watch list" to track its performance for about six months,” said Atul Kunwar, head of operations in Europe, Asia Pacific, the Middle East, Africa and India.

Mahindra Satyam was earlier known as Satyam Computer Services. Satyam was acquired by India's Tech Mahindra in an auction in April after the firm was hit by India's biggest corporate fraud that was revealed in January.

"Definitely, there is a sense of optimism that has started to come back but it isn't something that's windfall kind of a situation right now," Kunwar said.

Kunwar said Mahindra Satyam was seeing good business momentum in the geographies excluding the United States, with the company "actively participating" in some deals in Europe that could bring in revenues of about $50 million over four to five years.

"Europe is actually, from the point of view of looking at all these terrains, moving faster towards getting the momentum."

Non-US regions bring in about 50 per cent of Mahindra Satyam's revenue and the firm expects a sharp surge in India, Africa and the Middle East businesses in about two years, Kunwar said.

Friday, October 9, 2009

Mahindra Satyam partners with Vision Solutions

IT services firm Mahindra Satyam on Wednesday announced a global alliance partnership with Vision Solutions, the worldwide provider of IBM power high availability (HA), disaster recovery (DR) and transformation solutions. This alliance will further strengthen Mahindra Satyam’s offerings in these segments.

“This tie-up will enable us leverage the growing market for HA/DR services by exploring new markets and supporting existing customers. These solutions ensure that business-critical information is continuously protected, available, minimize downtime and enhance productivity”, said AS Murthy, Chief Technology Officer, Mahindra Satyam.

According to Allan Campbell, VP Sales and Channels (APAC) Vision Solutions, “Be it quality customer service or excellence in delivery, Mahindra Satyam is a consistent performer, even during challenging times. We hope to leverage their expertise by taking our suite to their existing large customer base and beyond.”

Vision Solutions has a committed investment strategy in India. The recent appointment of Bhavik Dangarwala as regional director will be followed by further investments in 2010, he said.

David Augustine, VP Infrastructure Services at Mahindra Satyam reckons that the alliance will enhance the firm’s competency in HA/DR and is a re-affirmation of its commitment to further expand the infrastructure services portfolio, a potential area of growth for Mahindra Satyam.

“These solutions and services are offered to our customers by leveraging our world class Global delivery infrastructure and processes on a 24 x 7 basis, delivering optimum business value.

Vision Solutions and Mahindra Satyam have already started delineating a joint go-to Marketing plan to tap into the multi million dollar market in these two segments.

Thursday, October 8, 2009

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Variable, pay hike make a comeback this Diwali

Salary-earners are seeing their pinched pockets bulging, as companies are untying their purse strings. Top IT companies such as TCS and Infosys are leading a revival of employee-centric HR policies in India Inc marked by high variable payouts, double-digit salary hikes and promotions, less than a year after the global meltdown forced them to slash salaries and freeze hiring.

Buoyed by signs of faster-than-expected economic recovery from India and elsewhere and a jump in demand, a clutch of companies across sectors including carmakers Maruti Suzuki, Tata Motors and Hyundai Motors are busy paying out variable bonuses ahead of Diwali.

Some others, like top white goods maker LG Electronics, biotech firm Avesthagen, consumer products company Dabur and private insurer Bharti AXA Life Insurance are rewarding select employees with salary hikes and promotions.

India Inc has turned its focus back on its people power as companies are looking to expand, encouraged by improved demand and enquiries, BSE Sensex more than doubling in just six months, and signs of faster-than-expected global recovery that made the International Monetary Fund up its forecast for world economic growth in 2010 to 3.1% from 2.5% predicted in July.

This is in stark contrast to just a year ago when the global recession that felled several global financial giants including Lehman Brothers hit India, forcing companies to shelve expansion plans, downsize operations, cut salaries and freeze recruitment.

“In the past 15 months, HR heads were not at all bothered about attrition. But now that several sectors are bouncing back to normalcy, poaching might see a rise. Hence, companies want to secure their talent pool with mid-term hikes and promotions,” said P Dwarkanath, Max India group director (human capital) and a former president of the National HRD Network.

The drive to please employees is most visible in the country’s $60-billion technology services sector that is seeing more business trickling in.

Worst-hit sectors may give hikes

"It is a people-driven industry. At a time when the sector is witnessing positive signs of recovery, such announcements become even more relevant for both the company and employees. This would not only help companies in retaining their existing talent, but attracting new talent as well," said Joy Nandi, client partner, global technology practice, with Delhi-based headhunting firm Korn/Ferry International.

Tata Consultancy Services, the largest IT exporter, for example, has restored variable pay it had cut earlier this year due to a drastic demand slump.

Its main rival Infosys Technologies plans to give higher variable pay for the second quarter, besides declaring salary hikes and promotions across levels in October.

The firm will increase the variable component of employee salary if its overall performance is up in the second quarter, said a company executive requesting anonymity. Infosys will announce its Q2 results on October 9.
TCS did not pay variables in the January-March quarter due to overall decline in performance, while Infosys cut its variable pay by up to 55% in the first quarter. The average variable component in both firms is 30% of an employee's total salary.

The third largest player, Wipro, did not cut any variable pay and will continue to give variable linked with performance, a company executive said. Earlier this month, Mahindra Satyam (erstwhile Satyam Computer Services) announced restoration of variable pay of its 28,000 employees. Satyam had held back variable payouts from April to trim costs as revenues were under pressure.

Zensar Technologies, which employs more than 5,000 people, has hiked salaries by 6.5% on an average on a selective basis, besides paying full variable to 95% of its employees, its CEO Ganesh Natarajan said. With the recovery in economy activating the job markets again, companies in other sectors too are promoting key performers and doling out 8-12% mid-year salary hikes.

Avesthagen, for example, is promoting employees "who have worked overtime during the recession and were loyal to us", according to Villoo Morawala-Patell, its founder and CMD. Similarly, LG Electronics has just promoted a select bunch of employees in the general manager level and gave them a mid-term hike, according to Y V Verma, its HR director. Bharti AXA Life Insurance's HR director Priya Ranjan said the insurer will hand out about 15% hike to some 20-odd employees later this month.

Also, several companies that had last year migrated from half-yearly appraisal cycle to one-year cycle due to the slowdown are returning to six-month appraisal cycle. "For companies who had given measly hikes or cut salaries, a mid-term appraisal provides an opportunity for salary correction," said E Balaji, CEO of executive search firm Ma Foi Management Consultants.

HR circles say the trend is seen in some of the erstwhile worst-hit sectors like real estate, stockbroking and mutual funds. Brokerage firm Angel Broking recently gave 8% hike to its top 5% talent base of 6,200 people.
DLF, the country's largest real estate firm, said it was yet to decide on a mid-term appraisal, while Kolkata-based Ambuja Realty chairman Harsh Neotia said the firm was evaluating it.

Dabur India, which had already hiked salaries in April and July this year, plans to undertake another round of salary correction in January next year. It will undertake mid-term appraisals this month, according to HR head A Sudhakar.

Tyremaker Ceat too plans to go in for mid-term appraisal confirming the fact that companies are no longer fighting shy when it comes to pay packets.

Tuesday, October 6, 2009

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Mahindra Satyam to reshuffle US team

Having effected changes to its top deck in Australia and New Zealand earlier, and in Europe just last week, Mahindra Satyam is now planning a reallocation of responsibilities at its bread-and-butter US operations that accounts for a major portion of its revenue.

Mahindra Satyam CEO C P Gurnani said a "reshuffle" in the United States is likely to be announced "in the next 7-10 days", while remaining hazy on what the proposed modifications would entail.
While it was under Ramalinga Raju, the US accounted for 59-60% of the firm's revenue, a scenario that, Gurnani said, might not have changed much.

However, Gurnani (an ex-Tech Mahindra honcho) was quick to clarify that it would be incorrect to presume that the likely re-arrangement would necessarily result in a Tech Mahindra person being asked to head Mahindra Satyam's US operations.

Incidentally, the new head of Mahindra Satyam's Europe operations, Vikram Nair, used to enjoy the same position at Tech Mahindra before. Last month, GE -- Mahindra Satyam's key client in the US and also one of its top 5 customers worldwide -- announced that it was extending its multi-million dollar contract with the Indian company for three years, starting January 2010.

In September, another important US customer O C Tanner reaffirmed its commitment to Mahindra Satyam. "Clearly, we will get to handle the enterprise applications side of the order that Tech Mahindra has bagged from Etisalat," Gurnani said.
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TechM wins $50-m Saudi Telecom deal

Close on the heels of clinching an IT outsourcing deal with Etisalat DB, the Indian arm of Emirates Telecom, Tech Mahindra is learnt to have won another deal for a greenfield IT implementation for a telecom major in the Middle East. The IT firm has won a deal with Saudi Telecom, which is rolling out GSM services in Bahrain, said a person familiar with the development.

Saudi Telecom competes with Etisalat and the Zain consortium in its home market. The largest telecom operator in West Asia, Saudi Telecom also has a presence in Indonesia, Malaysia, Turkey, South Africa, Lebanon, Jordan, and Kuwait. In India, it has a presence through a 25% stake in Maxis Telecom, the Malaysian operator that is the majority stakeholder in Aircel. Earlier this year, it bagged the licence for the third-mobile operator in Bahrain.

“The deal with Tech Mahindra includes IT implementation and managed services. It is one of the largest deals for Tech Mahindra in the region,” said the person quoted earlier. He said the deal size could be between $40 million and $50 million. Multinational firms Hewlett Packard and Cisco, which provide server and networking hardware, have also won different parts of the deal. Tech Mahindra shares fell marginally on Monday to Rs 937.75 on BSE.

A Tech Mahindra spokesperson responded to an e-mail from ET saying, “As a corporate policy, Tech Mahindra does not comment on any market speculative stories.” Tech Mahindra, which is focused on exclusively on outsourcing services to the telecom sector, is facing growth challenges from its number one customer and shareholder, British Telecom. In the recent past, it has clinched several deals in emerging markets, such as India, Middle East and Africa, where the telecom market is still witnessing a rapid growth. Saudi Telecom, for instance, has announced investments of around $3 billion in the telecom markets of India, Malaysia and Indonesia.

Tech Mahindra is also the largest stakeholder in the scam-hit Satyam Computer Services. The Tech Mahindra management has publicly stated that it intends to eventually merge both companies giving it a presence in all sectors.
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Tech Mahindra opens BPO unit in Chandigarh

Tech Mahindra, the country's fifth largest software exporter, said it has opened a BPO facility in Chandigarh. The facility focuses on BPO operations at present, and will provide other IT services and end-to-end customer support to both international and domestic clients later, Tech Mahindra said in a statement.

The campus will have 500 seats initially and another 900 seats are planned to be added by the end of November this year, it added.

"Chandigarh is known for its exceptional BPO and IT culture, infrastructure, local support from the government, availability of skilled manpower and low rate of attrition," Tech Mahindra Vice Chairman Vineet Nayyar said.

The company has facilities across Noida, Pune, Hyderabad, Kolkata, Chennai, Pune and Mumbai.

"This fully operational facility is a new addition to Tech Mahindra's operations in the northern region and we look forward to servicing our esteemed clients across the globe from this new campus," he added.

Friday, October 2, 2009

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Mahindra Satyam gives new structure to Europe operations

Mahindra Satyam, the information technology services company, has reorganised its structure after its acquisition by Tech Mahindra and combined sales and delivery functions into a single business unit.

“In the new structure, Vikram Nair, who since August 2005 headed European operations for Tech Mahindra, will head the business operations of Europe and will be responsible for the growth and expansion of Mahindra Satyam in the region. He will focus on driving synergies between Tech Mahindra and Mahindra Satyam in Europe, to leverage mutual business strengths and increase revenue from the region,” Mahindra Satyam said in a filing to the BSE on Thursday.

Nair joined Tech Mahindra to establish and grow business across Europe outside of the British Telecom business. “Vikram has extensive expertise in the IT services industry in Europe. He understands the pulse of the market and has successfully led companies to grow their business in the region. We are confident that he will be able to add value to Mahindra Satyam’s presence in Europe,” Mahindra Satyam chief executive, C P Gurnani, said in a statement.

Aloke Palsikar, who worked as head of marketing for the European Region with Larsen and Toubro Infotech prior to joining Mahindra Satyam in 2003, will now head the Central European and Nordic operations and manage client relationships in Germany, Austria, Switzerland, the Nordic countries and Eastern Europe, and is based in Germany.

Besides, Suneel Unni, who has been with Mahindra Satyam in southern Europe since 2005, will head the South Europe and Benelux region for the company, while Guita Blake, who served blue-chip banking, financial services and insurance organisations like Barclays, Merrill Lynch, Deutsche Bank, HSBC and Lloyds TSB Insurance prior to joining Satyam in 2008, will head the financial services, retail and public sector business in the UK and Ireland for Mahindra Satyam.

“Roger Newman will head the manufacturing and digital convergence relationship management in the UK. He will be responsible for Satyam’s business development and relationship management for the manufacturing, energy and utilities and digital convergence verticals in the UK,” the company said.

Tuesday, September 29, 2009

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Mahindra Satyam can now bid for govt deals

IT exporter Mahindra Satyam has been exempted from providing financial statements in bids for government projects enabling the company to participate in tenders called by government units, which have one of the highest IT spends in the domestic market. A majority of these tenders require the financial statements of the bidder to be provided as prerequisite.

Mahindra Satyam’s financials are in the process of being restated after its promoter and former chairman, Ramalinga Raju, confessed to falsifying the accounts in January this year. After the scam-hit company was taken over by Tech Mahindra, the board under the chairmanship of Kiran Karnik had sought an exemption from providing its financials, so it could be eligible to bid for government projects.

Satyam has so far lost out on a Railways contract estimated at Rs 100 crore, with the opportunity to more effectively participate in future contracts worth Rs 3,000 crore. It also lost out an enterprise resource planning implementation contract from BSNL for around Rs 250 crore to rival, HCL Infosystems.

“This directive, along with the Mahindra & Mahindra balance sheet, will help us participate in tenders by government departments and PSUs. The directive says the audited financials should not be a point of contention and we (Satyam) should be considered based on our technical proficiency,” a highly placed Mahindra Satyam official told ET.

However, the company is not likely to contest those bids that it has already lost out to rivals. “Earlier, we were not even being invited for bidding — now at least we will be able to participate in them. But there may be still some government contracts where we cannot participate if there are other criteria,” the official said.

The firm is currently participating in around 15-20 bids from public sector undertakings and government departments, said Sanjay Venkatraman, who heads the India business unit at Mahindra Satyam.

“These projects range from Rs 20 crore to Rs 100 crore and are in the areas of e-governance and citizen services,” Mr Venkataraman added.

The exemption from the ministry of corporate affairs is valid only till December this year and since the restatement of accounts are expected to take up to March, Mahindra Satyam is likely to apply for the exemption to be extended till that date. The company has created a separate division under its India business unit to focus on government projects.

Mahindra Satyam lost a Railways contract estimated at Rs 100 crore, with the opportunity to more effectively participate in future contracts worth Rs 3,000 cr.

It also lost out an enterprise resource planning implementation contract from BSNL for around Rs 250 crore to HCL Infosystems.

Mahindra Satyam is currently participating in around 15-20 bids from public sector undertakings and government departments.

Friday, September 25, 2009

GE deal to stay with Mahindra Satyam for 3 yrs

The US-based conglomerate General Electric (GE) has extended its multi-million dollar contract with Mahindra Satyam for three years starting January 1, 2010, giving a boost to the IT firm, which has started winning new outsourcing deals.

Mahindra Satyam, which also counts Citigroup, GlaxoSmithKline (GSK), Cisco Systems and Nissan, among its clients, is one of the top three vendors for GE. Its contract with GE has been for over a decade now in specialised areas of development, maintenance, business intelligence and engineering services.

Around 1,500 employees will work on the GE deal. “GE recognises the support extended over the years by Mahindra Satyam, and their commitment to delivery excellence, even during trying times,” said Steve Morrison, GDC leader of GE.

GE has signed a similar contract with 11 other vendors. “The extension is a testimony to the commitment our associates have demonstrated and truly symbolises the value we have been able to add through our services,” said Arvind Malhotra, global account executive of Mahindra Satyam.

Harit Shah, IT analyst Angel Broking, sees GE’s decision to extend the contract as a vote of confidence on the new management at Mahindra Satyam. Two months ago, global pharma major GSK extended its contract with Mahindra Satyam for five years to provide SAP and other critical systems support. Satyam had been working with GSK since 2002 in providing IT services.

The US-based OC Tanner — a human resource consulting and services company — followed suit. Last week, the firm renewed its contract with Mahindra Satyam to providing application development services to the US-based company.

Over the past four months, Mahindra Satyam, earlier known as Satyam Computers, is reported to have gained over 32 new customers, including some large clients. It has around 430 clients now.

Satyam was acquired by Pune-based IT services firm Tech Mahindra in April, after the firm’s defamed founder B Ramalinga Raju confessed to perpetrating India’s biggest corporate fraud. Customer confidence took a knock after Raju’s confession. The company is now attempting to regain contracts to turnaround, even as its accounts are in the process of being re-stated.

Shares of Mahindra Satyam fell 1.7% to close at Rs 116.70 on the Bombay Stock Exchange on Thursday.

Satyam to lift freeze on promotions, selectively

Mahindra Satyam is lifting the freeze on promotions, even though they will be on a selective basis. This follows similar moves made by IT majors Cognizant, Wipro and Infosys and is indicative of an improved environment, say analysts.

Mukund Menon, head of business HR worldwide, Mahindra Satyam, told Financial Chronicle that while no pay hikes are planned this year, there will be promotions for star performers.

The Hyderabad-based firm has also decided to reinstate the variable portion of salary and other benefits for associates across all levels, effective from October 2009.

Cognizant and Wipro were among the first to give promotions to selected personnel in FY10.

According to industry trackers, multinational firms such as Accenture and IBM have also given promotions and hikes to top performers.

Infosys and TCS are also comtemplating promotions and hikes this year. These firms had earlier said that they will not give any promotions and salary hikes in FY10 considering the present market environment.

Company officials suggest that the initiative by these firms is due to the improving business scenario. Some HR analysts, however, say that it’s not just a better demand scenario that is driving companies to give promotions and hikes. Kris Lakshmikanth, CEO of Head Hunters India, says that selective increments have primarily been at the project manager and above levels even while several companies have decreased their salary package offerings at fresher levels.
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TechM, IBM, TCS in race for $400-mn Sistema deal

Tech Mahindra, IBM and TCS are vying for a $400-million (Rs 1,800 crore) IT outsourcing contract from Sistema Shyam Teleservices (SSTL), said a person familiar with the matter.

Negotiations are on with these companies for a 10-year deal, but the contract will contain a clause that will allow Sistema Shyam to exit after five years, he said, requesting anonymity. Sistema — one of the largest public diversified corporations in Russia and the CIS — has a 74% stake in the JV with the Shyam Group that offers mobile services under the ‘MTS’ brand in India. Sistema Shyam is the only CDMA player, among the new crop of telecom operators.

“A final decision on the deal is expected to be taken by the year-end,” said Rajeev Batra, chief information officer of SSTL. He confirmed that these three IT companies were in the reckoning for the contract, but did not confirm the value of the contract.

The proposed deal will not include the operator’s BPO operations, as the telco has already outsourced its customer care operations to Essar Group’s Aegis BPO.

The winning company will manage SSTL’s IT systems across the 22 telecom circles in the country. SSTL, which is scheduled to launch telephony services in Delhi next month, plans to be a pan-India operator by the third quarter of next year. While a senior Tech Mahindra executive confirmed that the talks with SSTL were on, the TCS spokesperson declined to comment. But, TCS had earlier said it was aggressively chasing deals in telecom, financial services, life sciences and retail.

IT major IBM, too, did comment on being in the race for the SSTL contract. Early this year, SSTL had tied up with IBM for designing and building its green data centres in Chennai and Gurgaon.

SSTL executives said the company was exploring an operating expenditure model for this IT outsourcing contract. This model of outsourcing is considered more cost-efficient for companies since it allows the IT partner to take the telco’s IT assets on its books. While SSTL is yet to award its IT contract, most other new operators have already done so. Etisalat DB recently awarded the contract worth $400 million to Tech Mahindra, while Datacom’s IT infrastructure management has been awarded to IBM for about $200 million.

Unitech Wireless, in which Norway’s Telenor holds a controlling stake, has outsourced its IT infrastructure management to Wipro for about $500 million.

SSTL was among the nine new companies that were given licenses early past year to launch mobile services. So far, the company has launched CDMA-based services in six circles and has about two million customers in its network.

The country has seven pan-India mobile phone operators led by Bharti Airtel, Reliance Communications (RCOM) and Vodafone Essar. A string of new players like Datacom, Loop, S Tel, Unitech Wireless and Swan are also in the process of rolling out nationwide services.

The country has close to 450 million mobile subscribers and a telecom penetration of over 41%.

Thursday, September 17, 2009

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Satyam wins 32 new clients since May

Indian IT services firm Mahindra Satyam has gained 32 new customers in the last four months, and some large clients are returning to the company, a top official said.

"Some of the large clients we had lost earlier are coming back and are reassigning new business," Atul Kunwar, the company's president of the Middle East, Europe, India and Asia Pacific regions, said on the sidelines of an industry conference.

The company, earlier know as Satyam Computer Services, currently has about 420 clients, he said, compared with 480 in January before it was left battling for survival after Satyam's founder revealed India's biggest corporate fraud.

Satyam was acquired by Tech Mahindra in an auction in April and subsequently renamed. The number of employees the company has on reserve has come down to 7,000 from 8,500 in July, Kunwar said.

"With the business improving and new deals coming in, we have slowly started taking in employees from the virtual pool."

Monday, September 14, 2009

Australia asks Satyam to pay back money

The ghost of Ramalinga Raju's shady dealings is back to haunt the Mahindras, the new owners of Satyam, yet again. This time in Australia's Victoria state where the state government is asking Mahindras to cough up, what it now claims is millions of Australian dollars they had paid last year to Satyam to set up an A$75 million IT hub in the Deakin University campus at Geelong.

The demand for a refund from the Mahindras comes on the back of Mahindra Satyam's decision to log out of the ambitious project that Raju had promised would create 2000 jobs in the port city of Geelong. After Raju inked the deal in April 2008, the Victorian state government headed by Premier John Brumby had, as sweeteners, handed over 10 hectares of land and an undisclosed sum of money to Raju.

Latest reports in Australian media quoted Victoria's IT minister John Lenders as saying that the payoff to Satyam was in millions of dollars. They also quoted Mahindra Satyam's corporate affairs president Sujit Bakshi saying that the IT company is committed to return the money within a month. Even as top Mahindra Satyam officials in Hyderabad confirmed the news, they played down the amount as being very negligible.

According to latest reports in The Geelong Advertiser and The Australian, Bakshi had in a letter to Lenders, said, "The need to concentrate on an extensive internal restructuring programme of our business precludes Mahindra Satyam from embarking on expansion projects of this kind. While Mahindra Satyam is disappointed that it cannot proceed with the centre, it reaffirms its commitment to future expansion in Victoria when circumstances allow."

Satyam's Deakin project has already resulted in a major embarrassment for the Brumby regime with government facing charges of having squandered away tax-payers money behind a scamster ever since the Satyam scam broke out in January 2009.

As news of Mahindra Satyam's pullout broke, Victorias opposition spokesperson Kim Wells termed the collapse of the project as devastating and said, "We want an explanation of what has happened to the money, how much money has been handed over, we want to know the status of the 10 hectares of land and we want to know what the Brumby government is going to do to replace these 2,000 promised jobs, especially for the young people in Geelong whose hopes have been dashed."

Thursday, September 10, 2009

Satyam to allot 1,02,566 ESOP shares

IT firm Mahindra Satyam said its board has approved the allotment of 1,02,566 equity shares under the company's stock option plans.

The board of directors of the company has allotted 1,02,566 equity shares under stock option plans, Mahindra Satyam (earlier known as Satyam Computer Services) said in a
filing to the Bombay Stock Exchange.

Earlier on July 13, the company's board had allotted 45,222 equity shares under stock option plans of the company.

Wednesday, September 9, 2009

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Satyam restores variable pay of 28,000 employees

Mahindra Satyam, the new owner of erstwhile Satyam Computer Services, has decided to restore variable pay for close to 28,000 employees across all levels from October this year, signalling recovery of the firm that was in deep financial distress after January this year.

Sweeteners such as performance-based Employee Stock Option Plans (Esops) for senior and middle-level associates, staggered cash bonus for select employees at the junior level and welfare allowances will also be reinstated by the company, once owned by the defamed founder B Ramalinga Raju. The financial outgo on account of these extra allowances will be negligible for the firm, as it had cut salaries for 7,000 associates placed on the virtual pool, said a senior official.

Satyam suspended variable pay from April this year to trim costs as revenues were under pressure after Raju admitted to fudging the IT firm’s books for several years. The remuneration package comprises of a variable and fixed component. The variable component is 10% at the entry level, 20% at the middle level and 30% at the senior management level. Half of the variable pay is a guaranteed-payment. The other half is linked to three parameters, including the performance of the company, the individual and the business unit.

“We owe our success to the unprecedented commitment to delivery excellence and support from our associates. This has been vital to our recovery. As we journey through this path towards total revival and growth, this is an expression of our gratitude to our associates,” said T Hari, chief people officer of Mahindra Satyam.

Around 35,000 employees were on the rolls when Pune-based Mahindra Satyam took over the management control. It placed around 7,000 associates on a virtual pool with a lower salary to trim costs. Employees on the virtual pool will, however, not be entitled to variable pay. Besides Satyam, other export-driven IT firms, used to a scorching pace of growth, trimmed variable pay for their employees after the economic downturn in the US.

Upaid-Satyam case hearing pushed to Jan

Tech Mahindra, owner of Satyam Computer Services (rebranded as Mahindra Satyam), got a breather from a Texas court last Friday on charges regarding the scam in the latters’ accounts under the old owners. The court has deferred hearing of the Upaid case to January 2010. The case was to be heard on Tuesday.

Upaid, a UK-based online and mobile payments services company, is seeking $1 billion by way of damages from Satyam for alleged forgery, fraud and breach of contracts.

When asked, Simon Joyce, chairman and chief executive officer, Upaid, confirmed: “Yes, September 8 was the date when the hearing was supposed to come up. But there was an adjournment in the Texas court and the new trial date would be in early January.

The decision was agreed upon by both the parties to reschedule the trial time.” Joyce declined to comment on a likely out-of-court settlement or detail reasons for the postponement.

After Tech Mahindra took over Satyam almost four months earlier, the court had given a continuance of 90 days, as the new owners required some time to adjust.

Both the parties declined to comment on the possibility of an out-of-court settlement. There have been rumours that Tech Mahindra would like to go for one and was ready to offer $10 million as settlement.

Other than the Upaid case, Tech Mahindra also has to face 13 class action lawsuits filed by US investors. Experts have pegged a figure of around $100-150 million as damages arising from these lawsuits.

Tuesday, September 8, 2009

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Tech Mahindra bags Rs 2K cr Etisalat deal

Etisalat's India mobile telecoms unit will outsource its information technology applications to India's Tech Mahindra in a deal valued at $400 million spread over 10 years, the telecoms firm said on Monday.

Etisalat DB Telecom, which plans to start mobile services in 15 Indian telecoms zones later this year, said the outsourcing deal would include implementation of its end-to-end IT applications & infrastructure, system integration and managed services.

The prime IT applications stack for Etisalat DB involves components in the BSS (Business Support System) and OSS (Operating Support System) domain.

Etisalat's official spokesperson said, “Tech Mahindra has the required domain and process expertise with a proven track record as part of Etisalat’s launch of operations in Egypt. We are confident that Tech Mahindra’s exhaustive pool of IT skills and innovative delivery models will assist us in the forthcoming roll-out of service in India and delivering the best services & customer experience in the market.”

Etisalat DB and its subsidiary have the Unified Services Access License in 15 circles, comprising Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu (including Chennai), Uttar Pradesh (East), Uttar Pradesh (West), Madhya Pradesh and Bihar.

Monday, August 31, 2009

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TechM, Wipro, IBM vie for $400-m Loop Tele deal

LOOP Telecom, where the Essar Group has a stake, has shortlisted Tech Mahindra, Wipro and IBM for an IT outsourcing contract worth around $400 million. The contract is believed to be spread across a period of 10 years and will not include Loop Mobile’s operations, said two industry officials familiar with the deal. Loop Mobile provides cellular services in Mumbai, while operations in the rest of the country is under Loop Telecom.

The outsourcing contract is for the telco’s system integration and maintenance of IT systems across 22 cellular circles. This deal does not include BPO services since most of the back-end operations are done by Essar Group’s Aegis BPO. Loop Telecom has recently launched its services, selectively in Tamil Nadu, Orissa, Kerala and Karnataka.

A Wipro spokesperson said the company was in talks with a few telcos and would not comment on specific engagements, while Tech Mahindra and IBM declined comment on the deal.

A Loop Telecom spokesperson said, “We are constantly exploring ways to enhance our business model, launch plans and operational decisions and regularly engage in dialogue with vendors to help us build a compelling proposition. Nothing has been finalised in terms of partners or the contract amount. An announcement on our IT contract will be made as and when it gets firmed up.”

Loop Telecom is believed to be exploring an operating expenditure (opex) model, under which the shortlisted players can take Loop Telecom’s IT assets on its books. “They could either rent or lease the assets back to the client,” said a person familiar with the deal. This model of outsourcing is considered more cost-effective for companies. The telecom company has already outsourced its network infrastructure to China’s ZTE and Huawei Technologies.

Loop Mobile, earlier known as BPL Mobile, has a subscriber base of 2.4 million in the Mumbai circle, for which it already has an in-house team of IT professionals.

“The request for proposal (RFP) did not mention providing IT services to Loop Mobile, but to other 22 circles. While the company has had a soft launch in four circles, it will scale it up after finalising on the IT vendor,” said
another official familiar with the contract.

The domestic market has been the focus of many IT service providers after a decline in exports from the US and Europe, apart from a host of new companies launching mobile services in India. These new entrants have kept the order book running for IT companies. Earlier, Wipro had bagged a full IT outsourcing project from Unitech Wireless worth approximately Rs 2,500 crore over a nine-year period.
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Mahindra Satyam says it's chasing 30 large deals

Information technology services provider Mahindra Satyam is pursuing around 30 “large deals” and expects some of these to materialise during the current financial year, according to a senior official of the company.

“We are vigorously pursuing 20 to 30 large deals in the life sciences, public services, transportation and engineering domains, which are showing a lot of positive business momentum. We expect to close some of them to our advantage by this fiscal end,” the official told Business Standard, while declining to share the size of the deals.

A large deal, in normal IT parlance, is anywhere between $50 million (around Rs 245 crore) and $100 million (Rs 490 crore).

The scam-hit company, now logging on to the recovery path after Tech Mahindra acquired a controlling stake in it in April, has been seeing increasing business stability since then, winning over 30 new logos (customer wins), including the five-year SAP contract with global pharmaceutical major GlaxoSmithKline, the official added.

“The company has been witnessing high traction of business from emerging markets like India, Europe, Middle East and Asia (MEA) and the Asia Pacific. These new geographies are now accounting for close to 55 per cent of our business, while the contribution from the US is hovering around 45 per cent, a positive trend which is slowly beginning to grow and drive our revenues further,” he said.

On the company’s business processing outsourcing (BPO) arm’s recent major client win in Tata Docomo for providing back-office support, he said the company had already hired 1,000 professionals for its client. “Mahindra Satyam BPO will be adding 300 people every year over the next five years to service this telecom client,” the official added.

Mahindra Satyam, which had in June announced a one-time virtual pool programme aimed at addressing idle staff costs while retaining talent, had so far recalled 1,000 employees. “We will be calling back some more,” he added.

Mahindra Satyam stock ended the trade at Rs 113.85 on the BSE on Friday, down 0.52 per cent against the previous close of Rs 114.45.

Thursday, August 27, 2009

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Satyam BPO to hire 300 employees

At a time when software firm Mahindra Satyam is rationalising its headcount, its BPO arm seems to be on a hiring spree with plans to recruit 300 employees by the next month.

The company has recently bagged a major contract from a domestic client for providing it back office support.

"To support the client we have already hired 700 employees in the last one month and will hire another 300 by the end of next month," Mahindra Satyam BPO CEO Vijay Rangineni said.

However, he declined to divulge the name of the new client or the deal size. According to sources, the new win is in the telecom space.

The total headcount of the company after the recruitment would stand at 2,900.

Though the parent firm Mahindra Satyam have a considerable presence in the domestic market, this is the first major win by Mahindra Satyam BPO in the domestic space.

Rangineni further said the company would now focus on the sizeable domestic market.

"Post the acquisition by Tech Mahindra, we now have a footprint globally and will leverage the strengths of Tech Mahindra wherever they are present," he said.

Mahindra Satyam BPO has one delivery centre each in Hyderabad, Bangalore, Chennai and Pune. The company, however, do not have a global delivery centre so far.