Despite the lowest topline growth ever, per-employee productivity and profitability remain relatively intact
Monday, August 25, 2003
Chairman
B Ramalinga Raju
Startup-Year
1987
Products
& Services
Software services
Employees
9,759
Development Centers
18
Address
Satyam Technology Center, Bahadurpally, Hyderabad 500043
Tel
27843222
Fax
23097515
Website
www.satyam.com
B Ramalinga Raju Chairman
B Rama Raju
Managing director
Kalyan Rao K
President
Murty AS
Director & senior V-P
Ram Mynampati
President
Srinivas V
Director, senior V-P & CFO
Small hirer in a year when competition was making record employee additions
Adopted a new tagline in what appears to be the beginning of a brand makeover
Vinod Dham on board as additional director
Per-employee productivity improved
Significant infrastructure investments recently, including a new center opened in Singapore
Brand makeover long overdue. If not dealt with quickly, it will be a handicap in the medium term
Slow to scale up. That might become an issue as local and MNC services firms begin to scale up
Hyderabad-based Satyam has been among the Big Five of the Indian software
services export sector for years. Yet somehow, over the last few years, it has
hovered around the periphery of one’s vision—forever looking set to appear
centerstage like TCS, Infosys and Wipro, but never quite managing it. It isn’t
because of the numbers. In fiscal 2000 and 2001, it grew at around 80%. In
fiscal 2002, it grew at 42%—well above its closest competitors and the
industry average. But somehow, it never looked like it was capitalizing on those
numbers. Fiscal 2003 was even more of a mixed year. Topline growth was worst
ever at 16.8%. It was also below the industry average and well below
competitors. Net profits fell 6% from Rs 490 crore to Rs 460 crore. But here’s
the catch—per-employee profitability didn’t fall as much as it did at most
competitors (only -6%, compared to -28% at Wipro Tech and -23% at HCL Tech), and
it was the only of the Top 5 where per-employee productivity actually increased
4% to Rs 20.5 lakh.
Some of this happened because of really slow hiring in a year when everyone
else was making record hires. And some because the profile of its clients
improved. As chairman B Ramalinga Raju told shareholders: "(This) has been
the best year in the history of the company in terms of enhancement in the
quality of customers." For example, of the 100 new customers added, 23 were
Fortune 500 companies and big deals included development of the World Bank’s
intranet site, which was ranked among the 10 best intranet sites worldwide by a
Web consultancy organization; a large project for the Washington Healthcare
Authority; and a dedicated development center for NCR Corporation.
Meanwhile, there was some movement on the status of its subsidiaries. Among
other things, the company formally inaugurated its BPO subsidiary Nipuna; took
its China initiative further by registering a wholly-owned subsidiary in
Shanghai; reduced its stake in Sify from 52.51% to 37.15%; and decided to close
down Vision Compass.
The challenge going forward—to build on customer quality, enhance domain
competencies and, finally, do something about its branding. It did adopt a new
tagline this year—"What Business Demands". But an image makeover
demands more than just a new slogan.
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