The Hindu Business Line : `Satyam will play the game differently'

Shailesh Shah is Director and Senior Vice-President, Corporate Strategy and Consulting & Enterprise Solutions, at Satyam Computers. He manages directional-strategic issues, organisation design and the creation and dissemination of an organisation-wide initiative. He is also responsible for the Consulting and Enterprise Solutions Practices at Satyam.

In an interview with eWorld, he explains Satyam's consulting-led approach to client-partnering and elaborates on the company's preparation for the future.

Could you elaborate on your recent appointment as Director and Senior Vice President-Consulting & Enterprise Solutions? What are your plans for the future?

I have been a consultant for 20 years prior to joining Satyam. We always had a sophisticated consulting arm in Satyam, but it was not clearly articulated. There will be stratification in the consulting space, which will hinge on positioning and the way certain folks are trained to partner with our clients.

Our end goal is to create an organisation that uses the virtualisation of services very effectively to solve client situations. By virtualisation, I mean to focus more on providing best cost and quality services; and to automate our services so that no human intervention is required. I want Satyam to be the best virtualiser in the world.

How has the competitive scenario among the top five Indian IT companies changed across the consulting space and other verticals? Which factors do you think will drive growth in the future?

Well, there are clear positions that companies have taken, creating specific markets. We, at Satyam have chosen to be a broad-play organisation. With a veritable engineering services division, strong BPO and IMS backbone, our repertoire of offerings cuts across geographies, verticals and solutions.

When you create a strong base in a very short span, you necessarily do not penetrate the base very well. Hence, I firmly believe that a large part of our future growth will come from how we truly become thought partners to our clients and help them solve their problems by getting deeper and wider into client situations. Many of our competitors are doing well, but I doubt any of them has a consulting arm as strong as ours.

With indications of an impending slowdown in IT spending in the US, does Satyam have a separate plan of action to cope with this? Morever, the contribution of revenues from your manufacturing vertical has come down a significant 3 percentage points. Is there cause for alarm there, an impending slowdown, signs of which are first seen in Manufacturing?

I don't think that the so-called slowdown in the US is perceptible as yet. Hence, I don't believe that Satyam or India Inc would be too concerned. The mood of companies such as IBM, HP, Accenture to use services from India Inc has not reduced yet either. However, if the threat is real, India Inc only has to gain from it, as everybody would like to reduce costs from the equation in such a scenario. I am not too concerned about slowdown as Satyam is growing much faster in Europe and the Asia-Pacific.

As far as manufacturing is concerned, there are quarters when the revenues slightly weaken. There is no cause for concern, as manufacturing will continue being a very important part of our business.

As a corporate strategist what is your game plan for Satyam for the next five years?

We will try to capitalise on growth happening globally and further enhance our global and domestic footprint. We believe in creating alternate workforces and would continue doing so in places such as Sri Lanka, Latin America and Africa. In India, we will strengthen our position in Bhubaneshwar and soon we'll be in Nagpur, Kolkata and other Tier 2 cities. Moreover, we are looking at merger and acquisition opportunities in Japan, which looks to be a very positive market. Satyam will play the game very differently from its peers, but at the moment I will keep the cards close to my chest.

What would be your strategy in a scenario in which the Rupee, as it happened in May-June this year, becomes stronger against the dollar? Does Satyam have a plan to address such a scenario?

Frankly speaking such kind of volatility always exists, especially in an organisation where 37-38 per cent of revenues come from overseas operations. We are a risk-averse organisation that believes in effective management of our foreign exchange. If the situation exists, we will manage our float on currency in a smart manner and try to balance it out.

In the September quarter, personnel costs (i.e. salaries) have grown faster (at 44 per cent) than revenues have (at 38-odd per cent) in comparison with the corresponding quarter last year. With manpower attrition being a concern for most of the industry, there is no getting away from wage hikes. How does Satyam hope to address this?

Well, it is a cause for concern, but I don't think that the situation is alarming. Attrition is one of the hard facts of this IT industry. Entry-level salaries in the last five years have increased by up to 30 per cent. We were able to bring down our rate of attrition from 18 per cent to 16 per cent in the last quarter, that shows we are in the right direction. Talent comes at a premium that has to be harnessed at any cost. We believe that wages will continue to go up, but it is inevitable.

There is significant increase in revenues from the Infrastructure Management Services (IMS) business. Could you throw some light on this development?

As Pure play AVMS today requires a stronger IMS play, Satyam is bagging larger deals in the Infrastructure Management Space. Moreover, it is the recognition that Satyam and India Inc can start providing smarter, cheaper and more effective solutions that is fuelling growth in this sphere.

adith@thehindu.co.in

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