Is Satyam an isolated case or just the tip of the iceberg? An anxious Andhra Pradesh government is trying to find out if B Ramalinga Rajus revelations will open a Pandoras Box in Hyderabad. Going by Rajus explanation that he fudged the balance sheets to compete and be reckoned among IT majors,the government is wondering if other firms too resorted to such tricks since IT firms aggressively compete and bid for projects. While chief minister Y S Rajasekhara Reddy directed the chief secretary to inquire whether Maytas Infra is in a position to execute the projects awarded by the government including the Hyderabad Metro Rail,he is also learnt to have directed officials to look into the affairs of some IT firms. Dr C S Rao,IT advisor to the government,however,says Satyam is being seen as an isolated case for now. But,there is lot of talk that other IT firms too may be involved in such practices and Satyam is just the proverbial tip of the iceberg. We have to wait and see. In his enthusiasm to compete with IT majors,Raju chose the wrong way. I am certain other IT firms competed in a more professional manner, he adds. With close to 1,000 IT firms in Hyderabad,competition is cut-throat. To bag projects from foreign clients,IT firms have to showcase their facilities,staff strength and the overall financial position of the firm. It is a common practice among some IT firms to quote less than the lowest possible amount during bidding,even if it means negligible profits,just to outdo rivals if it is a prestigious project and the client has a global brand name. For instance,last December when Cisco Systems invited fresh bids before the yearly renewal of contract of a project that it had already awarded to Virtusa a year ago,TCS and Satient quoted less than Virtusa and the project was about to be shifted from Virtusa to TCS. At the last minute,however,Satyam pulled off a coup grabbing the project by quoting a figure that was not sufficient to even pay the salaries of the team executing that particular project. But Cisco is one of the top 10 clients of Satyam and,as a matter of prestige,Satyam did not want any other firm to bag their project. IT firms also routinely conduct random campus recruitments just to show staff strength. The fresh recruits are mostly kept in reserve or on the bench. In the last two years,thousands of freshers were recruited by IT firms,but they failed to honour their offer letters and the appointment letters never arrived. Those who did manage to get jobs soon realised they were only recruited as a reserve or backup and were actually not required at that point of time. Still,the firms kept on recruiting until the recession forced them to freeze fresh appointments, says an official of the Software Technology Parks of India (STPI),Hyderabad. Nikhil Irukulla,head of Pathfinder,a software and IT recruitment firm,says engineers whom he helped find jobs are making anxious calls to enquire if the companies they are presently working with will have any problems like Satyam. Everyone is nervous to know if Satyam is a standalone case and all other firms are above suspicion, he adds.
