Stop Offshoring
Friday, January 09, 2009
Ramalinga Raju, chairman of Satyam Computer Services, India's fourth largest outsourcing firm, admitted that the company's balance sheet was falsely inflated by over $1 billion. 94 percent of Satyam's assets were, in effect, fictitious. The scandal is being called the "Enron of India."
It is unknown at this point what effect the announcement will have on the future of offshoring. Gartner Invest says it's a "no brainer to say that prospective clients will go elsewhere for their business. The existing clients are the question mark."
According to Rob Enderle of the Enderle Group, "It will probably put a cloud over India for a while... It will force a lot of their large clients to pull away from them, like having a run on the bank. The fact that they were able to conceal something of this level puts a big question mark over financial controls in India."
