Over the last week I have been asked a few times - are the problems at Satyam an exception or are they representative of the whole Indian outsourcing vendor sector?
My answer - a periodic review of vendors is always healthy, but most of the other larger Indian firms are set up and run differently than Satyam was.
TCS is part of the Tata family - India's largest conglomerate with assets in virtually every industry and every country in the world. In this global economy, nothing is rock-solid, but Tata comes close. Infosys has traditionally received kudos and awards for its financial reporting transparency and professional management. Cognizant is a US firm, spun out of Dun and Bradstreet, and run professionally from the start. Wipro, for practical purposes is a private firm with the CEO and family owing the majority of the stock. Some companies do not like dealing with private firms - not enough financial transparency. But that is a vastly different issue than mispresentation of financials.
Of course, there are plenty of smaller Indian outsourcing firms which are family or otherwise tighly controlled and may not have seen rigorous scrutiny from regulators or auditors. I expect this is going to be a subject of intense discussion at the annual Nasscom conference coming up in Mumbai February 11-13.
As they say sunshine is the best disinfectant there is. So this increased spotlight is healthy. But we need to be careful and not get paranoid about extrapolating Satyam's issues to the whole industry.
