Satyam responds to claims of WHO contract problems
Supplier insists it did follow Oracle instructions and has kept within budget
Satyam has responded to the claims made against it
Indian IT services firm Satyam has disputed an audit report that suggested problems with a contract with the World Health Organisation (WHO) for the development of a $55.5m (£38m) global business management system.
Satyam was selected as the system integrator for the project working under a WHO programme director. The project involved designing, developing and implementing the new ERP system based on Oracle software to revamp the whole operations of WHO in more than 150 countries.
According to audit documents, Satyam ignored the instructions of the software's manufacturer Oracle when implementing the system. Also, when the audit report was published in May 2008, Satyam was exceeding the contracted amount by $1.4m (£965,000), but the audit said this could rise further if there were more delays.
A senior European spokesman from Satyam has responded to the accusations made by the audit report carried out by the Comptroller and Auditor General of India, as well as allegations made by ensuing media reports. The WHO has also responded.
The New Delhi-based auditors could not immediately be reached for comment.
Claim against Satyam 1: The project was more than 40 per cent behind schedule when the audit report was prepared in March 2008, having been initially scheduled to be completed by September 2007.
Satyam response: The project is behind schedule and one of the key reasons was that this is a massive business transformation exercise and to get the WHO organisation ready has been a marathon effort. There have been some delays from both sides which has pushed the dates. This is plausible in any major ERP implementation.
WHO response: There have been substantial difficulties. At present we are working to resolve them but considerable work remains to be done.
Claim against Satyam 2: That Satyam ignored instructions from Oracle for implementing the system, ran user tests that validated the system without behind able to replicate a real-life situation, provided little or no training to WHO employees, and failed to adequately involve healthcare professionals who see the system as a vital tool.
Satyam Response: There is absolutely no basis to say that Oracle instructions were ignored. The training was supposed to have been delivered by WHO itself and Satyam had made the training material available to them.
Claim against Satyam 3: The contract is over budget and costs could keep rising with more delays.
Satyam Response: The contract is fixed price and so far we are within the budget.
WHO response: The contract with Satyam is a fixed-price contract and no additional costs associated with the delay have been identified to date. Any additional costs relate to WHO staff supporting the implementation. There is no evidence of any incorrect billing by Satyam to WHO, fraudulent or otherwise. The Satyam contract and the project expenditures have been subject to both internal and external audit verification.
Claim against Satyam 4: That even with the problems outlined above, Satyam is bidding for a future contract with the WTO.
Satyam Response: Yes we are bidding for some more deals in WHO as WHO is
extremely satisfied with our quality of service.
WHO response: WHO is reviewing carefully its current contractual arrangements with Satyam, and possible contingency arrangements for completion of the project work, in the event that Satyam were no longer able to perform.
The contract between the WTO and Satyam was signed in September 2005, commenced in November 2005 and went live in July 2008 . The bid process ran from February 2005 onwards because it was an open tender and there were several players who participated. The final three were IBM, Accenture and Satyam.
As an extension of the main project Satyam has won at least three other deals with the WHO.