Can You Disintermediate?
In his letter of resignation, Raju admitted to inflating his numbers by $1.4 billion and the number of people he employs by 10,000 so he could siphon more money out of the company. Now he's been caught red-handed, having stolen corporate cash and diverting it into family real estate funds.
Satyam’s clients include 30 percent of the Fortune 500 companies. Among them: GE, Cisco, State Farm, Nissan Motor Co., John Deere, General Motors, Nestlé, ArcelorMittal (the world's largest steelmaker) and Telstra Corp. (Australia's largest telephone company).
As an avowed BPO hater like Andrew Mickey, I can only hope that the money-grubbing, un-American CEOs and bean counters of the 150 Fortune 500 companies relying on Satyam are sweating bullets and will start in-sourcing PDQ.
So far, State Farm disintermediated by firing Satyam. With a cash crunch and Satyam employees deserting in droves, who’s next?
Since I'm using what Hemingway called "ten-dollar words," here’s what I am feeling about Satyam: schadenfreude (delight in another person's misfortune).
A Personal Digression
In my early years as a freelancer, I had a client whose business was serving a real estate community in South Florida. Every week, he would deliver free magazines crammed full of ads for housing developments and condos to realtors and street-corner “honor boxes.” As you can imagine, the enterprise was time sensitive.
This was long before computers, and designers had to set type for advertisers and paste illustrations by hand onto "mechanicals"—boards that were photographed by the printer and turned into booklets.
One day, a full week’s worth of mechanicals were at the printer, who promptly went bankrupt. The judge ordered the facility locked, which meant my client could not retrieve his mechanicals and go to another printer.
The printer was a necessary intermediary between the magazine publisher and his end users. My client could have invested in a simple kind of insurance—making photostats of his mechanicals, which he could take to another printer if the worst happened—but he didn't.