Satyam customers may take a cost hit

Melbourne, Jan 20: Australian clients of scam-hit Satyam Computer Services face higher costs if they are forced to switch over to other outsourcers, experts here have said. According to a report in The Australian, Satyam Australia has not been able to reveal revenue numbers, and said its financial statements are under review.

"We are not able to give any comment at the moment. However, the board of directors has appointed Deloitte and KPMG as independent auditors to help restate the company''s financial reports, and the audited third quarter results will be shared soon," a spokeswoman of Satyam Australia was quoted, as saying.

Locally Satyam has blue-chip clients such as Qantas, Telstra and National Australia Bank, and some analysts expect the fraud case to have a negative effect on outsourcing and offshoring in general.

Most Satyam customers are investigating their relationship with the outsourcer. Technology analyst IDC says Satyam''s customers will probably have to pay up to 20 per cent more for outsourcing services if they decide to abandon the troubled firm and switch their outsourcing work to a competitor.

In Australia, Satyam regularly undercut its competitors by 15-20 per cent in a bid to snare work, IDC services and outsourcing program head Aprajita Sharma said. If Satyam customers 'look for an alternative provider it's going to be a straight hit of 15 per cent on their operating expenditure", Sharma said, adding "Are these customers willing to take that 15-20 per cent hit? No one else is going to."

Customers would also face up to three per cent in transition costs for handing the project over to a new outsourcer, she said. The extra charge would be on top of any penalties or exit fees built into contracts between Satyam and its customers.

ANI