Syntel:  Why President and CEO quit?
By Annie the Snoop

Over the last six months, Techgoss had published a series of exclusive reports giving details of all that was happening inside BPO Syntel.  One report showed how that in the recent past Syntel was overly reliant on couple of key clients.  Techgoss had also reported on the movements of senior HR people at Syntel.

Soon after these Techgoss reports were published, Syntel started monitoring all emails and communications to outside parties to identify the leaker.

Syntel is going through a rocky phase. The evidence is right out there in your face. Just within a year of being elevated to the top post in Syntel, their head honcho Keshav Murugesh has quit. While the exact date of his resignation is not known, reliable sources have confirmed that Feb 1 was his last day. The quitting of his personal secretary of long, Reena Rodrigues, was evidence that something was definitely not right within Syntel.

Keshav Murugesh joined Syntel as CFO in 2002 from ITC Limited. He became COO in 2004 and President/CEO in 2006. The top position was allotted to him in 2009. Bharat Desai, owner and current Chairman of Syntel, has run out of choices to offer its top employees. For whom remuneration is not an issue,  a lack of challenge within the workplace can prove suicidal and finally detrimental to the company growth. For Syntel, which has witnessed a series of high profile exits within the last two years at all levels, this is the final straw. Techgoss has learnt from various company sources that a string of exits of loyalists will follow Keshav very soon. These have been in the inner circle of Keshav for the last few years and growing in remuneration if not stature.

This definitely spells bad news for Syntel. Employee morale which was at an all time low aggravated by the recent exit of Srikanth Karra(ex HR head of Syntel) will fall to an even lower position if that is possible.  Reasons of Keshav’s exit could be lack of challenge and growth due to Bharat’s firm views of being completely risk averse. Keshav is rumored to be joining a wealth management company.

Keep watching this space for more.

(Techgoss had published the following story on Nov 9, 2009)

Syntel looking for buyer
By Pulkit Sharma

Over the last three months, Techgoss had published a series of exclusive reports giving details of all that was happening inside BPO Syntel.  One report showed how that in the recent past Syntel was overly reliant on couple of key clients.  Techgoss had also reported on the movements of senior HR people at Syntel.  Soon after these Techgoss reports were published, Syntel started monitoring all emails and communications to outside parties to identify the leaker.

Easier said than done. Our spy in Syntel is still active and now tells us that the entire Syntel may soon have a new owner.  The highly regarded Chairman of Syntel, Bharat Desai, is doing the rounds in New York meeting ‘potential’ buyers for Syntel. The interested buyers list extends from North America to Europe according to the grapevine. While Mr. Desai has always been talking to potential buyers (last year he had a lot of serious discussions with key IBM and EDS executives), it looks like he is serious this time. Syntel stock nearly touched an all-time high of $50 and no one can blame Bharat for laughing all the way to the bank this time. Syntel insiders largely credit Mr. Desai for getting the company share price to this record high.

The entire Syntel has 12000 employees and is valued at $1.5 Billion.

(Techgoss had published the following on Oct 9, 2009)

BPO Syntel tracking leaks
By Pulkit Sharma

Recently, Techgoss had run a series of exclusive reports giving details of all that was happening inside BPO Syntel.  One report showed how that in the recent past Syntel was overly reliant on couple of key clients.  Techgoss had also reported on the movements of senior HR people at Syntel.

Apparently, these Techgoss reports have caused a mild flutter in the BPO. Syntel has started monitoring all emails and communications to outside parties in an attempt to identify the leaker.  A source close to the IT Department tells us they are keeping a close watch on any person who leaks via emails. (You know this monitoring is causing heart burn when it starts affecting lower level job hunters innocently applying for jobs using office computers).

But there are many positive developments in Syntel as well.  Our tipster at Syntel tells us “Syntel is getting back to its early 2005-06 BPO days when it was high on adrenalin and carried forward purely by its positive momentum. The company is now actively focused on creating a presence in Europe, hiring key managers in North America and working on exclusive brand management. It has hired heavyweights from IBM and Accenture to lead its sales presence in the European Union. Syntel has also managed to hold on to TN Sekhar, their healthcare BPO head and convinced him to stay back (Apparently, he was made an offer he could not refuse) Their revenues for the past two quarters and last 5 year’s earnings are also matching their guidance”.

Inside sources tell us that very recently, their chairman, Bharat Desai sold 5 million shares with Syntel stock hitting a lifetime high of 49$ a piece. The last time Bharat did that was in early 2007 when he sold 3.55 million shares for $98.3 million. While the share release this time will be seen as a PR exercise to dilute equity, it really makes no difference as Bharat and his wife still own close to 70% of the company stock – a fact which is seen as risky by some large corporations. The RED flag on the balance sheet however is that Syntel does not manage to generate free cash flow equal to its reported profit. A fact clearly missed by some analysts in quarterly calls and which requires explanation.

(Techgoss had published the following on Sept 11, 2009)

BPO Syntel: HR Exit?
By Pulkit Sharma

Early September, 2009 Techgoss had reported about the exit from BPO Syntel of the highly regard Global HR Head, Srikanth Karra.  We had also reported that while Syntel is a good BPO, its future may be decided by a couple of key clients tossing up on whether they want to stay or switch to other BPOs.

Now an insider has contacted techgoss to suggest that at least one another HR manager may leave soon

“
After Srikanth Karra, all the signs are that Ashfaqul Haq would be leaving Syntel BPO as the IT HR head has been placed as replacement for Srikanth. Attrition percentage at Syntel BPO has also gone up by 15% which includes mostly people above Manager position.
“

This is what the techgoss tipster feels. On the other hand a very reliable source feels that the highly regarded Ashfaqul (who has a GE connection to Srikanth Karra) is on a good wicket and will not leave.

Anyone got more detailed information? Techgoss appreciates all such tips and inside information.

(Techgoss had published this on Sept 2, 2009)

BPO Syntel: Respected HR manager walks
By Annie Paul

Late 2008,  the highly regarded Black Book of Outsourcing published by the Brown-Wilson Group rated Syntel Inc as the top-rated BPO provider to the health insurance industry.  But Syntel insiders tell techgoss that employee morale is at an all-time low within the BPO as the next few months will determine whether its main client renews their contract.

Early August, Techgoss had exclusively reported on the power plays within Syntel and how its future hinges on a few key clients.

Now a Syntel insider tells us that the joss sticks are slowly emerging in Syntel. While the highly respected Syntel CEO, Mr. Murugesh, continues to feed positive tidbits to the media about Syntel's growing focus in Europe and its strength in operational expertise, the truth about its internal operations paints a different picture. The latest Syntel senior to kick the bucket is Global HR Head, Srikanth Karra. He served his last day on August 31 and left abruptly much to the shock of many Syntellites. Srikanth joined Syntel in 2005 from GECIS where he headed the HR function for its outsourcing services. A dynamic and capable product of GE, Srikanth was instrumental in shaping Syntel's growth engine with GE's established recruitment, talent management practices and employee retention strategies.

Srikanth also pulled key HR people from GE or ex-GE to support him in implementing a new strategy and shaping Syntel's people focus. We won't need tea leaves to speculate about a lot of employees following Srikanth's footsteps. Rumored to be joining HP-EDS for their Asian operations, Syntel is now headless across key business functions like HR and BPO-New Business. Speculation is rife that this writing on the wall might indicate Keshav's exit as well. The grapevine also indicates that there are a lot of hungry predators keen to acquire the mid-cap IT company. Keep watching this space for more updates.

(Techgoss had published the following article on Aug 1, 2009)

BPO Syntel future hinges on one client
By Annie Paul

Late 2008,  the highly regarded Black Book of Outsourcing published by the Brown-Wilson Group rated Syntel Inc as the top-rated BPO provider to the health insurance industry.  But Syntel insiders tell techgoss that employee morale is at an all-time low within the BPO as the next few months will determine whether its main client renews their contract.

Techgoss had learnt that 85-90% revenues of Syntel are derived by its joint venture with US based Global Custodian. It all started with Nitin Rakesh who was 'elevated' to the Board of Director's (essentially a non decision making) position from the CEO's seat in the Joint Venture. Nitin, chiefly responsible for starting and growing the BPO joint venture, chose to resign gracefully after a few months. During this period, the BPO was also affected with attrition across unit heads that had been with the BPO outfit from scratch, leading to a heavy management vacuum affecting growth and employee morale.

Very recently, their head of BFS BPO presales as well as the Healthcare BPO chief quit due to Syntel’s lack of investment appetite to invest in acquisitions as well as growth areas. Growth has been limited to a single international BPO client added recently in the last 3 years for offshore BFS operations. Adding to the ongoing woes was the company steadily losing its other domestic BPO client contributing to the remaining 10% of revenues.

With the JV Custodian contract up for renewal in March 2010, many opine that the contract will not be extended and might end up with its competitors like Wipro and TCS who have been successful in delivering cost effective operations to capital market clients as well as in acquisition. The high attrition run rate continues, and in case of non-renewal of the contract, Syntel stands to lose nearly its entire BPO portfolio which will greatly affect the parent company’s market capitalization and global standing. There is a buzz across the entire company regarding the future of its BPO and some go as far to say that Syntel itself might be plucked by a larger organization. While the current JV head is trying to lend a resemblance of stability with creative reengineering within BPO, what lies ahead for the BPO employees is anybody’s guess

Syntel has 3000+ full time employees.