Posted by: Manjeet Krpalani on January 28, 2009
The Satyam scandal is still spilling blood. On Jan 19, State Farm Insurance, a major client which contributed a large chunk of the outsourcer’s last fourth quarters’ earnings, withdrew its business. Other chief information officers are standing by, ready to make the leap away from Satyam if the situation becomes too toxic.
But what’s been interesting is a proposed “Bill of Rights” by Alliance Global Services, a Conshohocken, Pennsylvania-based software services provider with a 300-man shop in Hyderabad (http://www.itbillofrights.org/). The 10 rights, range from “the rights to transparency throughout every step of an engagement” to “the right to terminate a relationship with no financial penalty in the event of any admitted fraudulent activity” to “the right to demand the existence of a truly independent board of advisors.” “The services business is very much grounded in trust,” says Alliance CEO John Castleman. The Satyam scandal violated that trust, making customers fearful about their decisions.
These standards, says Castleman, are already in contracts, but Satyam has given people pause, “and made them wonder what they should be asking vendors through the contract, not just right in the beginning.” The bill would be self-enforcing at first, and Castleman is hoping it will collect converts who will perhaps add to the existing 10 ethics commandments. It will hopefully attract the attention of industry associations like NASSCOM and other companies which put a premium on being above board.