Tryst With Indonesia Puts Polaris Image At Stake

Chennai: | Updated: Dec 24 2002, 05:30am hrs
Polaris Software chief executive officer (CEO) Arun Jain and his senior colleague may have been released from detention by the Indonesian police. They may even get back their passports and return to India in the near future ending their torturous visit. But the fallout of this sordid drama will stay on to haunt the company.

The major casualty of the events surrounding the detention is the very image of the company which Polaris tried to carefully cultivate in order to find a place among the peer group of IT companies in India. The news of Mr Jains arrest had to be flashed prominently in order to get the Indian government to act and put pressure on its counterparts in Indonesia. Though care was taken to project the unlawful aspect of the detention, the fact that the entire issue revolved around a failed project implementation was there for all to see. Media reports have also mentioned Polaris willingness to repay the fee paid so far by the Indonesian bank plus damages, if any, to seek their CEOs release.

Polaris Software Labs Ltd chief executive officer Arun Jain and senior vice-president Rajiv Malhotra spent their fourth day in the Indian embassy in Jakarta. The Jakarta police are yet to return their passports, and the impasse continues. The company had been expecting the police to hand over the passports on Monday. However, at the time of issuing this statement, no firm indication on the return of the passports had been received, the company said.

In the present issue or the ones before be it the Data Inc or Orbitech merger, Polaris appears to have forgotten the basic rule of look before you leap. In the case of Data Inc, Polaris signed a memorandum of understanding for acquiring the former but later pulled out leading to acrimonious exchanges and a law suit. The OrbiTech merger, which was successfully renegotiated, almost fell through at one point of time if media reports are to be believed.

These suggest that the company is susceptible to jumping into a decision without doing adequate homework.

Revenue, undoubtedly, is an essential ingredient for any corporate which is fixated on maintaining a scorching rate of growth. But attempts to force the pace often lands one into trouble.

Information technology is the only industry where India is both globally competitive and aggressive. It is this aggression which takes them to markets far and wide - some known and mostly unknown.

Lack of any industry guidelines or market intelligence on who to court as customers and whom not to should have forced Polaris to adopt one internally. That should have prevented it from entering into a contract with Bank Artha Graha which is reportedly a front organisation for the Indonesian Army.

Also, in this era of globalisation and competition, caveat emptor, unfortunately works in the opposite direction as well. It is not only the buyer of services but also the provider who must ensure everything is all right before finalising a deal.

The crisis management strategy of Polaris has also taken a hit.

Firstly, problems in implementing a project is a normal issue in any software company. But the way Mr Jain, CEO of the company, seems to have walked straight into some sort of a trap only to get arrested is surprising. It is not always that a CEO of a Rs 600 crore company (post-OrbiTech merger) negotiates personally the problems in a project that is not really big.

Both Mr Jain and Polaris would like to forget this episode in their history. And they would only be too happy if their customers, present and prospective, also do so.

But, sadly, the strict disclosure norms will ensure that the arrest drama is re-run again and again.