NAB suspends Satyam work

NAB suspends Satyam work

Summary: National Australia Bank has decided to suspend future work with Indian outsourcer Satyam.


National Australia Bank has decided to suspend future work with Indian outsourcer Satyam.

"Until the longer term future of Satyam becomes clearer, NAB has also decided to suspend all work currently in the early stages of transition to Satyam," an NAB spokesperson said today. NAB advised its IT employees of the outcome this morning, following an ongoing internal review of its dealings with Satyam.

The decision is expected to affect around 90 Satyam staff, around half of which were located in India, according to the bank. NAB spokespeople had previously told that the bank had the equivalent of about 500 staff in India.

The work that was being done by Satyam will now be carried out by NAB's technology team, the spokesperson said.

NAB's ties with Satyam, however, won't be totally severed; application development and maintenance work that had been contracted to Satyam during 2007 and 2008 will remain with the outsourcer.

In a move to cut technology costs, the bank in 2007 outsourced testing, maintenance, SAP software development to both Infosys and Satyam.

"Satyam continues to meet service level commitments and contractual obligations, and systems and technology are performing at correct levels," said the spokesperson.

Despite the headaches caused to the bank's technology strategy by Satyam's financial woes, NAB intends to stick with its strategy to push more technology work offshore.

"As the longer term future of Satyam becomes clearer in the coming months, NAB will consider whether to continue to transition this work to Satyam or another offshore partner," they said.

Other key Australian clients of Satyam include Qantas and Suncorp.

Topics: Outsourcing, Banking, Travel Tech, India

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • What is NAB thinking?

    I am sure NAB has its own reasons to do what it is doing. But how on earth does it think that Satyam will repair itself with clients like NAB putting work on hold. While the numbers in this report seems small and i am sure Satyam and its Board of Directors have plan B for them, I think this is the time, such clients should stick around and contribute to the rebuilding.

    NAB's current decision is deifnately not good. I think NAB should reconsider its decision and continute towards Satyam's growth.
  • Accenture Waiting in the Wings

    Don't worry...Accenture is waiting in the wings. Accenture senior guys have been all over NAB executives since Satyam's troubles came to light. Accenture loves this situation because they will be able to charge even more. NAB should talk to some guys at CBA. Accenture came in promising the everything is a variation, everything is over budget and Accenture is not held accountable for any of the problems with the SAP rollout because one of their ex-partners is on the Board and convinces the Board to keep expanding Accenture's role and writing bigger and bigger cheques. But Accenture sure sounds good when they are in selling mode.
  • Rebuilding of Satyam is thier problem, not NAB's

    Why should NAB cotribute to the rbuilding of Satyam. Satyam brought this upon themselves and have already contributed to the removal of too many local jobs.
  • You must be joking.

    Obviously NAB should care nothing about the issue of trust. Surely Satyam will only lie about their own accounting and nothing else, right?

    Once you've lost that trust, you're stuffed. Chances are NAB will switch to Tata or something similar.
  • Exactly what they are thinking

    NAB are cutting cost all over the place, which means getting rid of Australians who already now how they work - and I am sure exactly what they are thinking is "how on earth [will] Satyam will repair itself "

    Makes giving them more work at best a high risk proposition, at worst the sort of thing their shareholders would lynch them for. I am a little suprised they aren't going further and pulling work back in house.
  • Accenture Putting on the Hard Sell

    A big German from Accenture named Benny has been pressuring NAB middle and upper management to hand over everything to Accenture. Does Accenture have ex-partners on the Board at NAB like they do at CommBank? Michelle and the rest of the NAB team should have a close look at Accenture's track record offshoring to India. Not exactly impressive. And talk to Commbank about their budget (already blown out and off schedule). Talk to Telstra about how well their Siebel implementation went. Talk to Accenture clients in the UK. I am not advocating one provider over the other but I have seen Accenture's heavy-handed sales tactics this week and I am not impressed.
  • Off shore outsourcing

    Frankly NAB should be investing in shoring up
    employment opportunities within Australia , retaining total control of its IT environs and not handing a potential financial disaster to overseas agencies who once time elapses will steadily increase the pricing structure to a point where it is greater than supporting home grown and loyal staff.

    If we cannot take an interest in investing in ourselves how on earth do the rest of the world ever get to see that Australia is talented and relevant on a global scale. Outsourcing pretty much ensures lack of opportunity for Australians and hands the competitive edge to our competitors , shame NAB , shame .

    IT Director
  • Accenture

    Not too flash with the Big Australian I hear as well