They've shown courage to chart winning path
A few hours after the deal was announced, one was swept aside by the mountain of analysis and debates. However, as most of analysts concurred that Tech Mahindra will have a tough ahead in acquiring Satyam, what with its tainted reputation, class action suits, loss of client confidence et al, what all of us ignored was Tech Mahindra’s hunger to get into the big league.
Tech Mahindra’s business was focused exclusively on the telco sector with an uncomfortable majority of business coming from one client, British Telecom. Over-dependence on any one client can be a recipe for disaster, especially in times of a crisis like these.
Try as they would, it would have been impossible for a company like Tech M to get into the big league with its present business model. It was very clear from the bid, which was 26% higher than the nearest competitor, that Tech M wanted Satyam and wanted it bad. An acquisition of Satyam allows them just such an opportunity. Also, it would have been impossible for any one to have got a company of Satyam’s size and employee base at such a “low” price, never mind what the financial analysts say. Could Satyam have been bought at Rs 58 a share, a year back?
The above argument does not gloss over the hurdles that Tech M would genuinely face in times to come. The first challenge that would encounter is a huge set of anxious clients who would want to know how a company that is focused on a particular vertical can service a multi-discipline set-up. There would definitely be few clients who would jump ship and it will take all of the new management’s expertise and energy to retain as many as they can. Employee morale both at Satyam and Tech M might have become shaky.
Management would need to assure and encourage them to continue to give their best, in times of unprecedented global problems, a task easier said than done.
Lastly, the enormous difficulties they would face in integrating the company into Tech Mahindra would give even a meditating saint a nightmare. Despite all this hurdles, what makes me believe in Tech M successfully navigating these rough seas is the fact that they are clear about their purpose of acquisition. Tech Mahindra has shown courage, vision and desire to chart a winning path.
A few hours after the deal was announced, one was swept aside by the mountain of analysis and debates. However, as most of analysts concurred that Tech Mahindra will have a tough ahead in acquiring Satyam, what with its tainted reputation, class action suits, loss of client confidence et al, what all of us ignored was Tech Mahindra’s hunger to get into the big league.
Tech Mahindra’s business was focused exclusively on the telco sector with an uncomfortable majority of business coming from one client, British Telecom. Over-dependence on any one client can be a recipe for disaster, especially in times of a crisis like these.
Try as they would, it would have been impossible for a company like Tech M to get into the big league with its present business model. It was very clear from the bid, which was 26% higher than the nearest competitor, that Tech M wanted Satyam and wanted it bad. An acquisition of Satyam allows them just such an opportunity. Also, it would have been impossible for any one to have got a company of Satyam’s size and employee base at such a “low” price, never mind what the financial analysts say. Could Satyam have been bought at Rs 58 a share, a year back?
The above argument does not gloss over the hurdles that Tech M would genuinely face in times to come. The first challenge that would encounter is a huge set of anxious clients who would want to know how a company that is focused on a particular vertical can service a multi-discipline set-up. There would definitely be few clients who would jump ship and it will take all of the new management’s expertise and energy to retain as many as they can. Employee morale both at Satyam and Tech M might have become shaky.
Management would need to assure and encourage them to continue to give their best, in times of unprecedented global problems, a task easier said than done.
Lastly, the enormous difficulties they would face in integrating the company into Tech Mahindra would give even a meditating saint a nightmare. Despite all this hurdles, what makes me believe in Tech M successfully navigating these rough seas is the fact that they are clear about their purpose of acquisition. Tech Mahindra has shown courage, vision and desire to chart a winning path.
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