Article from: The Australian
NAB today decided to cancel the second phase of a massive outsourcing project contracted to Satyam Computer Services of India.
NAB announced the decision to cancel the Satyam contract at Melbourne’s Telstra Dome today, sources said, conducting separate briefings for its staff and the contracted employees of India’s beleaguered IT services firm.
National Australia Bank would not comment at time of publication.
The termination of the ITO Wave 2 is likely to see working visas revoked for the 100 Satyam staff.
The bank already retrenched about 50 employees, primarily contractors, as part of the early stages of ITO Wave 2, and had previously scheduled another round of redundancies in March.
The bank said it would not sever the ITO Wave 1 outsourcing arrangement with Satyam, which is offering support and maintenance of key technology functions.
However, it is understood that NAB executives were considering how to stop dealing with Satyam altogether, to either bring the technology functions back in-house, or outsource them to another firm.
While it would take between three to five months to bring the components back onshore, NAB will need to find the internal resources to support the work as it has already retrenched and made redundant hundreds of permanent and contractor staff that were responsible for the functions.
The second tranche of technology outsourcing includes the management of Siebel, payments and account services applications.
The Australian recently reported that NAB encountered a number of problems transitioning technology functions to Satyam in the early stages of the outsourcing program’s life.
At the meeting today, the bank did not outline back-up proposals following the decision to drop Satyam. NAB chief information officer Michelle Tredenick has previously told staff the bank had several contingency plans to deal with situation.
NAB’s ITO strategy - spearheaded by Ms Tredenick - is part of the bank’s upgrade of its technology systems and processes, which also includes spending $1 billion over five years to replace its core banking systems.
Satyam’s chairman and founder B. Ramalinga Raju and other senior executives were arrested after Mr Raju admitted inflating the company’s books by more than $US1 billion ($1.55 billion). Two partners from the company's auditing firm, PricewaterhouseCoopers, have also been arrested.
At the meeting today, the bank did not outline back-up proposals following the decision to drop Satyam. NAB chief information officer Michelle Tredenick has previously told staff the bank had several contingency plans to deal with situation.
NAB’s ITO strategy - spearheaded by Ms Tredenick - is part of the bank’s upgrade of its technology systems and processes, which also includes spending $1 billion over five years to replace its core banking systems.
Satyam’s chairman and founder B. Ramalinga Raju and other senior executives were arrested after Mr Raju admitted inflating the company’s books by more than $US1 billion ($1.55 billion). Two partners from the company's auditing firm, PricewaterhouseCoopers, have also been arrested.
3 comments:
NAB's decision to pull out or put on hold work with Satyam is indeed an unfortunate one. This is like punishing 53000 employees for the work for the crimes of a single person. The clients especially NAB need to understand that Raju is different from the other employees. It is these employees and not Raju who have helped take the organization to such great heights. I think, we now need to delink Raju from Satyam and focus on the recovery of Satyam.
NAB has not “dropped” Satyam, nor are they “set to cut ties”. Indeed, Satyam’s four
year relationship with NAB is as strong as ever, and Satyam remains one of six
Strategic IT Partners to NAB.
NAB and Satyam have decided to put on hold only the transitioning of the ITO ADM Wave 2 , which had started two months ago.
MUMBAI (AP) — Satyam Computer Services, the computer outsourcing company, has appointed a chief executive and secured $130 million in bank loans in the wake of a $1 billion fraud scandal, the company’s board said Thursday.
The board named A. S. Murthy, who has worked at the company since 1994, as chief executive. Mr. Murthy currently serves as senior vice president in charge of global software delivery and leadership training.
“In our interactions over the past few weeks, we are convinced that Satyam needs an internal leader to steer it at this critical juncture,” a director, Deepak Parekh, said in a statement.
Satyam, one of India’s largest outsourcing companies, has struggled since its founder, B. Ramalinga Raju, admitted on Jan. 7 to falsifying the company’s books for years.
Mr. Raju, along with two other top Satyam executives, and two auditors from Price Waterhouse, the India unit of Price WaterhouseCoopers, have been arrested.
“I have no misgivings about the enormity of the task in front of us, but together with my colleagues, I am confident we can accomplish the impossible,” Mr. Murthy said.
He said that he could not make immediate further comment because of continuing investigations.
The promised bank loans will help the cash-starved company meet working capital needs, and the board said Thursday that February salaries would be paid on time.
Satyam has appointed Wachtell, Lipton, Rosen & Katz, a New York law firm, to address a spate of class-action lawsuits filed in the United States, where its shares are also traded.
The board said it had brought on two additional advisers: Homi Khusrokhan, who has served as managing director of Tata Chemicals, Tata Tea, Glaxo Laboratories India and Wellcome India; and Partho Datta, a chartered accountant who will focus on restating the company’s scrambled third-quarter results.
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