Coke contract and employees move from Satyam to HP

Satyam has lost soft drink maker Coca-Cola’s ERP contract to the world’s second largest technology services provider HP, according to sources close to the development. While reports of the troubled software firm losing clients are not new, what is new this time is that the company has now lost a contract with attachment- employees.

Apart from bagging the ERP contract from Coca-Cola, HP has also issued offer letters to Satyam employees who were working with the client. Some of these employees will be joining HP next month. It is believed that Satyam had at least 100 employees working on the Coca-Cola project in its Chennai offshore development centre. Most of them were experts in the area of SAP consulting and implementation.

When contacted, Coca-Cola did not wish to comment, HP did not respond. A Satyam spokesperson said, “We do not comment on speculative reports and especially matters which are pertaining to our customer relationships.”

But, senior employees working with Satyam and HP confirmed the development and said the contract transfer had happened in the last few weeks. Its been known for quite a few months now that Coca-Cola has been transferring its technology services contract from Satyam to other vendors. It was recently reported that Coke had selected Capgemini to implement finance and accounting functions.

“Satyam has traditionally partnered with bigger technology firms for sub-contracted work to get big customer accounts. It has also done sub-contracting work for Capgemini and HP, so there is some uncertainty about how these projects will get executed,” said an industry official who did not wish to be named.

While the overall size of Coca-Cola’s contract is $100 million for a period of seven years, industry sources said the ERP piece alone would have fetched Satyam $3.5-$4 million annually. Coca-Cola outsourced the ERP or enterprise resource planning function to manage its distribution globally. Among the IT majors in India, Satyam was considered to be the leader in ERP, a vertical from which it used to earn at least half of its revenues.

But, the expertise that it has built for years is not helping the beleaguered keep all its clients intact, after the firm’s founder Ramalinga Raju confessed to falsifying accounts and perpetrating a Rs 7,000 crore fraud in January this year. The company is currently in the process of selling a majority stake that will help the company regain some confidence among its clients and employees.