“Satyam is like a product assembly unit”



This farmer’s son, who initially kicked off his business with a spinning
mill before turning into a real estate baron, is now a truly global
entrepreneur. From a humble beginning in 1987 as a small software house, today,
his company-Satyam Computer Services-provides services in over 45 countries
across six continents and in verticals as diverse as the BFSI, telecom,
manufacturing, healthcare, transportation and retail sectors. While the year
2003-04 saw the company grow 26% to Rs 2,542 crore, it also saw it enter the
league of extraordinary recruiters, increasing headcount by 45%. Interestingly,
the man-B Ramalinga Raju-still considers himself to be a learner. In a
tête-à-tête with Shubhendu Parth and Sunitha Natti of CyberMedia News, the
founder and chairman of the company talked about how Satyam actually evolved and
the strategies that helped shape it. Excerpts:

What is the philosophy that has been fuelling Satyam’s growth?
Since its inception in the late 1980s, we were very clear about one thing-that
knowledge and technology drive this industry. We took every possible step to
ensure growth as an organization in knowledge and still remain on the cutting
edge of technology. One of the don’ts we had agreed upon quite early was not
to operate in the Indian markets and so lost some business to competition. Also,
we chose not to invest in buildings or mainframes. Instead, we focused on
investing in communication, to gain an understanding of the market. We were the
first to have 64 Kbps link in India in 1991-that was a significant milestone
for the industry as well. Thus we could prove to our customers that remote
delivery of services was possible only because of the availability of such
bandwidth.

How has Satyam evolved over time?
We follow a five-orbit process. The late 1980s and early 1990s was the
period of first orbit, where we garnered global market understanding, besides
identifying growth opportunities and the importance of communication. The second
orbit was about perfecting the offshore model, which has to be reliable in its
virtual form and capable of delivery similar to the onsite model. The third
orbit saw Satyam bring in lot of quality focus. 

B Ramalinga Raju
founder & chairman, Satyam

The phase saw Satyam become the first company in the world to get ISO 9000
certification. It also saw us achieve SEI CMM Level 5. We have taken the quality
initiative by collaborating with the Carnegie Mellon University for development
of the eSCM standard for the BPO sector that was announced recently. The fourth
orbit was all about globalization. We not only reached out to the world by
establishing development centers abroad, but also decided to move beyond
offshoring and outsourcing to the "RightSourcing Model". Finally, the
present fifth orbit saw us focus more on industry-wise sectors. This enabled us
in understanding customers’ business better and hence we are now able to add
value and do what it takes to delight them. That’s also precisely the reason
why we changed our slogan from "Our people make difference" to the
current "What business demands".

Can you elaborate on the "RightSourcing Model"?
Satyam was one of the first companies to have adopted an offshoring model, back
in 1991, wherein we shifted from providing onsite services to providing services
from a remote environment. Depending upon the clients’ need we can serve them
either onsite or from an offshore location-within India or in China. We can
deliver offsite services through our development centers located in the same
country. Besides, we can also take the near-shore delivery route through our
development centers across the world, e.g., serving the US-based clients from
Canada or meeting Japanese clients’ needs from China. This model not only
gives a cost-effective access to services but also competencies that are
otherwise difficult for customers to access.

Though TCS, Wipro, Infosys and Satyam are talked about in almost equal
terms when referring to the Indian IT industry, Satyam still seems to be
relatively smaller amongst them all. How well has the corporate strategy worked?
Our strategies have paid off very well and it has really helped us in
aligning whatever we do with global players. Today, we are no longer competing
with any Indian companies. Our strategy helped us emerge as a global player
where not only our services are at par with the global players, we also
benchmark each and every process against the best of the players in that
category. Today we have 80 processes and 250 service offerings, both external
and internal services. For example, if it’s about our HR and recruitment
process, we benchmark it against the best HR consultancy and recruitment firms
and not against the practices of an IT company.

How has it benefited Satyam?
Our business framework and strategies revolve around the customer-internal
or external. By benchmarking ourselves against the global players, not only have
we been able to understand customers’ needs better, we have also been able to
demonstrate capabilities to marry business with technology. One cannot be inward
looking and hence we put ourselves in the customers’ shoes to anticipate
things. Benchmarking our internal processes, HR, for example, has helped us
access the supply of talents, thereby reducing time to fill the gap. Thanks to
our processes, we have been proactive in identifying the business needs as well
as the knowledge component and management strengths required to achieve these.
With time we have developed a framework of mature leadership to create value for
customers. Another simple way of judging the benefits we have availed is through
our big-ticket clients. Our strategy has helped us establish relationship with
105 Fortune 500 companies, whose collective revenue is around $4 trillion.

Today, delivering complex projects in an assured manner is what makes the
difference. Our model makes sure that the entire lifecycle of a product or the
service is owned by a leader who can work across verticals and departments to
ensure proper delivery. We follow a system that further disintegrates the
processes of creativity and delivery, and then benchmarks them. To accomplish
this, we follow what we call a TDC model-thinking, doing and communicating.

From orbit one to orbit five, Satyam seems to have undergone a
metamorphosis. Where does the company stand now?
The principle of business has undergone a sea change with our becoming big-the
transition is essential for a healthy growth. As one grows in numbers and size,
all processes including communication have to be institutionalized. A big
company like ours is like a product assembly unit, where different components
should combine to work collectively and at the end the clock should tick. While
each process was a complete circle with the corporate in the center, today the
corporate is a support function while the entire processes revolve around the
customer in the center.

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