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Satyam Computers Services Ltd- Introduction

Established on 24th June 1987 by B Rama Raju and B Ramalinga Raju


Started by setting up two software technology parks in Secunderabad
& Ranga Reddy in A.P.
Provided software development and consulting services to large
corporations
Converted into a Public Limited Company on 26th August 1991
Incorporated Dun & Bradstreet Satyam Software (P) Ltd. In 1994
Started operating globally through offices in USA , Japan , Australia &
Europe in 1996
Entered into a 50:50 JV agreement with Venture Global Engineering LIC,
USA in 2000.
Tie-up with Vignette Corporation of the US for the implementation of ebusiness applications
Signed an equal JV with $6.3 bn US networking company Computer
Associates Inc (CA)
Received the National HRD award - 2000 for outstanding contributions
to HRD.
Set up a joint venture with the $17 billion TRW Inc, a Fortune-100

Tech Mahindra- Introduction


An Indian IT services , networking & technology solutions and

BPO services provider firm


Founded in 1986 by Anand Mahindra in Pune , India as a part of
Mahindra Group
Has operations in more than 51 countries with 40 sales offices
and 72 delivery centres
One of the Fab 50 companies in Asia according to Forbes
A SEI- CMMi level 5 organization with operations in USA,UK, UAE,
Malaysia, Japan
Ranked #5 in India's software services (IT) firms & 111 in
Fortune India 500 list for 2012.
Initially owned by British Telecom but later on merged into
Mahindra Group
Formed a JV with Motorola Inc. under the name CanvasM in 2006
Won bid for acquiring the fraud hit Satyam Computer Services in
2008-09
Tech Mahindra bought 51% stake in Comviva in 2012

Pre Merger Scenario at Tech Mahindra & Satyam

Satyam Computers
Services Ltd.

After initial successful years of Satyam , an issue occurred in


2008
Mr. Ramalinga Raju announced $1.6 billion bid for two Maytas
companies run by his own family members
The deal was abandoned after protest from institutional
shareholders
In 2008 barred from any business with World Bank for eight
years for providing Bank staff with improper benefits
In 2009, Satyams CFO Srinivas Vadlamani confessed about
the fraud at Satyam done by Mr. Ramalinga Raju by showing
fictitious salary accounts

Tech Mahindra

A part of Mahindra group conglomerate and ranked amongst


the top 5 Indian IT firms
Operating in a diverse range of functions including Business
Support Systems, Operations Support Systems (OSS),
Network Design & Engineering, Mobility Solutions, and
Security consulting and testing
Tech Mahindras business was growing exponentially
worldwide and when it came across the fraud at Satyam , it
considered it a great opportunity for acquisition
Tech Mahindra bid for Satyam, and emerged as a top bidder
with an offer of Rs 58.90 per share for a 31% stake in the
company, beating a strong rival Larsen & Toubro.

Vertical Presence

Tech Mahindra and Mahindra Satyam: Combined Strategy


Existing Clients & Existing
Offerings
Merger Synergies
M Cube (M3)
Lost Customers

Solution Sets
Joint Offerings
Alliance &
Partnerships

Inorganic
New Logos

Customer
Innovation
Delivery
Excellence

Significant Cross-Pollination of Offerings

Tech Mahindra and Mahindra Satyam: Foundations for


Growth
End-to-End Manufacturing
Manufacturing heritage enhances value proposition
Presence of 100+ Manufacturing Accounts
Automotive, Aerospace, Chemicals &
Consumer Electronics
Strong Telecom Capabilities
Specialist focus on Telecom; Market Leader
Synergies evident in other verticals through
enterprise mobility, CRM & billing solutions
130 Active Customers
Wireline, Wireless, Cable, Satellite
Enterprise Services Expertise
Strong credentials across SAP & Oracle
CoE Focus
Vertical Solution Templates
IP Based Solutions Deep expertise in BI & Analytics
IP Solution Platform: iDecisions Investments in
Cloud offerings

Goal: Driving Growth and Profitability


Revenue
Growth
Account Mining
Wider portfolio of services to telecom
clients
Focus on growth verticals, emerging
Operating
markets
Metrics
Benefiting from cost synergies
Multi-level approach for volume-led
margin improvement
Right-sizing the talent pyramid
Leveraging scale for better utilization
CoInnovation
Continue dominance in mature practices
Accelerate new service offerings
GTM with alliances
New offerings/markets along with
customers

Types of merger/acquitions
Defining the End State
high

Absorption

Transformation

Acquired company conforms to


acquirer

Both companies find new ways to


operate

Degree of Change in
Acquired Company
Best of Both
Additive from both sides

low

Preservation

Reverse Merger

Acquired company remains


independent

Unusual case of acquired firm


leadership

low

high

Degree of Change in Acquiring Company

MERGER BENEFITS AND SYNERGIES


1. Customer Value Proposition
-. More offerings will enable the
client to have more offerings
from one client leading
-. Convenience
-. Long engagement

2. Marketing
Initiatives

- Unified go-tomarket strategy

MERGER BENEFITS AND SYNERGIES

- Leverage
expertise in
domains
- Penetration
opportunity

3. SHARED SERVICES & SHARED


INFRASTRUCTURE
- Balanced mix of revenues from different
sectors
TELECOM

MANUFACTURING
BFSI

Cloud Services
Enterprise
Mobility
Security Solutions
Managed Services
BPO

TECHNOLOGY &
MEDIA
RETAIL, T&L
HEALTHCARE &
LIFE SCIENCE
Enterprise
Solutions

MERGER BENEFITS AND SYNERGIES


4. Revenue from different geographies
decreasing the risk of impact from one
location

Revenue Split

5. Other
Benefits

4th
largest
IT
service
company

Operatio
nal
Synergie
s
Economi
es of
Scale

Benefits

Americas
Emerging Markets

Europe

Standard
ization
of
business
processe
s

Diversifi
cation
across
verticals
Sourcing
Benefits

MERGER BENEFITS AND SYNERGIES

Result of the merger:


The value creation by
the merger of the two
entities

Rev
enu
e:
US
$2.
4
bn
Workforce:
75000+

Active Clients: 350+

Countries: 54

HR issues
Tech Mahindra-23,000 employees, Satyam 45,000 employees.
Attrition Rate- 25% in the crisis year, 2009-10 and 2010-11
# of employees, 45000 in FY09 -> 27,000 in FY10
Both voluntary and non voluntary attrition
Attrition rate dropped to 13% by 2013
95% leadership role hired from inside the firm instead of hiring
from outside
2 year work ex. -> Choice to become TL or an expert
Brand name retention -> Majority of employees in both
companies supported

HR Initiatives
New structure has 30 segment
leaders but doesnt have 30 different
HR, Fin and legal policies - > all
combined
Individual leader run each of Tech M
vertical as separate company
Helps in ownership, responsibility
and success

Sales
Reboot
Campaign
Special
Induction
Programm
es

Global
leadership
cadre
New
Program
mes

New
Recognitio
n&
Reward
Schemes

Buddy
referral
program

Result proper segregation of


duties to maximize benefits
from both the companies

Major
thrust
given to
campus
recruiting

THANK YOU