Corrections sheltered from Satyam storm

Optimation has put in place risk and management plans should troubled Indian partner Satyam not be able to carry on with a major project at the Department of Corrections.

Satyam, India’s fourth-biggest IT company, has been rocked by a fraud scandal.

According to its financial returns lodged with the Companies Office, Satyam had New Zealand revenues of $3.1 million for the year ended 31 March 2008, down from $3.7 million in 2007.

Optimation, which signed a six-year partnership agreement with Satyam two years ago, is engaged by Corrections to upgrade the Integrated Offender Management System.

“We’re doing it phase by phase, which mitigates some of the risk,” says Optimation CEO Rhoda Holmes. “There is money to fund Satyam at least till the end of March.

“We’re keeping an eye on it. We have close access to Satyam and are judging the situation daily.”

Optimation began upgrading Corrections’ SAP installation from version 5 to version 6 in December. The upgrade is scheduled to be completed by the end of June. Industry sources say that part of the project will cost around $6 million.

“We’ve got detailed risk and management plans should Satyam not be able to carry on,” Holmes says.

“There are really good contracts in place, with a balance between onshore and offshore staff.”

She says Corrections has a separate maintenance and support contract with Optimation.

Satyam is much bigger in Australia than here, with 1,700 employees. One customer there, NAB, is reported to be reviewing its relationship with Satyam.

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