News that Tech Mahindra will eventually merge Satyam with itself proves the company’s commitment to a deal that hasn’t been seen by everybody as the “game changer” as it was once described by Anand Mahindra, vice-chairman of the Mahindra group.
As the company moves towards that objective, here are four things it needs to do:
1. Authenticate and publicize Satyam’s financial statements for the past five years, at least.
2. Restructure Satyam because, clearly, the old structure was opaque enough to ensure that even unit heads didn’t know whether they were making money or not.
3. Realize that the impending merger will create a company that will be among the top five Indian software service firms by revenue, and work out how to manage scale and complexity.
4. Come up with a differentiation strategy for the merged entity. A focus on telecom and reliance on a large customer may be alright for a company the size of Tech Mahindra. It won’t work for a top-tier software firm.