Satyam - 2009 could be a year that changed it all

SATYAMS episode woke us all up as a rude awakening. Prima facia all point to the degree of corporate governance that exists and one fears that as the 2 law suits filed against (its just a beginning) in the US, will open the Pandora’s box of loopholes in accounting practices and day to day documentation and more. Laws are bound to go stricter and so will in all probability a few more Enron’s surface in the India Incs cupboard. Bad news if that were to be in the year which in all it probability is leading to be the worst of the currents recession. So really bad news for the image and FDI…the foreign media is already speculating that to happen. What is then bound to happen will be some set of governing rules that lead to the ground level documentation rolling up to the books of accounting , maybe a form of SOX in its Indian avatar. Can’t be far from the original format as the clients are mostly US and Europe based and companies will be hard pressed to explain their current governing strutuctures today, for their current clients and more so as they reach out to grab a pie of the existing Satyams clients. Over 185 of the fortune 500 companies.

“Sox”, or the general approach focuses on extensive documentation of all processes and insists on creating standards to calibrate all new process with the core. The general impact in dealing with SOX compliance in the past is, its exposes hidden inefficiencies in the system which are both a compliance and a threat to the profitability. This is bound to put pressure on the corporations to be more process efficient ..

“ Efficiency’ then is money saved / money earned or simply is environmentally green…and that’s where corporate India needs to be heading to. An efficient DNA driven standards and scalable in its design. Connecting all the dots if we were…really efficiency is reached through standard process , automation (remember the IBM ads today) and scientific documentation.

Hope the year proves to be a quantum jump ahead …like all legacies, it will not be easy to dispense away with but a move in the right direction will prevent another 53000 people scared for their jobs, investors not having to lose their shirts and clients not stuck with a bad market and a worst vendor.