The Hindu Business Line : `Multi-source for reliable backup'

Instances of service providers failing to meet contractual obligations must have happened earlier. But the Satyam episode has thrown up serious questions such as: what would happen to clients who depend on such firms for vital applications and services? Can someone step in immediately to fill in the void if need be? Can such companies pool in or allocate resources in case of emergencies?

Dr Ganesh Natarajan, Chairman of Nasscom and Deputy Chairman and Chief Executive Officer of Zensar Technologies, responds to some of these queries.

The crisis in Satyam brought some pertinent questions to the fore. With IT becoming all-pervasive, what will happen to clients (such as banks, credit card companies and aviation companies), if the service provider sinks into a crisis?

Mission critical applications must be supported by excellent partners and no amount of due diligince is too much to ensure that business continuity will be assured. Doing multi-sourcing to ensure there is always a reliable backup who can take over with minimum discontinuity is also a good idea.

What are the options clients have?

Severe penalty clauses for missed service level agreements (SLAs) and adequate internal or third party backups.

What are the procedures involved in terminating a contract and going in for another?

It depends on the exit clause put into a contract and this needs to be thought through before handing over the crown jewels to any vendor. My own company has been involved twice in hasty takeovers, one from another Indian and one from a global vendor and if planning is not done properly at the time of the contract, migration can prove to be a torturous affair.

Will that result in additional financial burden on clients?

Every insurance is an additional investment but sometimes the cost of not taking precautions can be far higher than the investment in contingency planning.

K.V. Kurmanath