All about synergies

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: The road to recovery of Satyam is expected to be a bigger challenge for Tech Mahindra. In a recent media presentation the company said it is looking forward to strengthen corporate governance, enhance customers delight, regain market share and build the brand. Tech Mahindra’s Executive Vice-Chairman, Vineet Nayyar said, “The biggest challenge before Mahindra Satyam is in terms of governance, especially in matters of finance. We will look at retaining clients and growing the company.”

The company’s initial step to put about 8,500 employees on the Virtual Pool Programme is expected to help the company cut costs drastically. Tech Mahindra had initially avoided these steps and accommodated about 10,000 employees on the bench for more than two months, after it took over in April.

Tech Mahindra then brought a new identity to the Satyam brand by renaming it to Mahindra Satyam. Though it retained the brand name Satyam, experts in the industry feel that Mahindra might not retain it for a very long time. Diptarup Chakraborti, Principal Research Analyst, Gartner, says, “The key brand is Mahindra and may be in the future we may see the merged entity under the flagship of Mahindra but with a new name and identity.” Harit Shah, analyst with Angel Broking says, “The Mahindra brand is a very strong brand and it is expected to help the overall brand identity of Satyam.”

Tech Mahindra expects the merger between the two entities in the next 12 months. So, besides bringing the workforce of Tech Mahindra and Mahindra Satyam together, it will be important to merge the culture. Sanjay Kalra, CEO, Tech Mahindra, shares, “We will synergise the capabilities of Mahindra Satyam with Tech Mahindra’s proven governance practices, financial rigour as well as business discipline.”

Mahindra’s step to have CP Gurnani as the CEO of the Mahindra Satyam is being viewed as a bridge for the cultural difference between the two entities. Gurnani has been working with Tech Mahindra as President, International Operations and holds an extensive experience in building international business, monitoring start-ups, turnarounds, joint ventures and mergers and acquisitions.