DETROIT -- Satyam Computer Services Ltd. is the second Indian company to land business as part of General Motors' $15 billion 2006 information technology outsourcing plan.
Satyam learned Feb. 2 that it would be a subcontractor on GM information technology work, landing contracts with Hewlett-Packard Co. and Capgemini.
The automaker awarded contracts to six IT vendors that GM calls "system integrators." HP, with a contract worth more than $700 million, was second only to EDS Corp. in terms of the dollar value of its contract.
Capgemini secured a contract from GM worth $500 million. All six system integrators will hire scores of smaller companies, such as Satyam, to help them meet GM's information technology needs around the world.
Dream come true
Just one day after the GM announcement, Satyam further cemented its footprint in the Detroit area, opening its $2 million Automotive Center of Excellence in the Detroit suburb of Southfield, Mich. It will use the center to showcase how it can custom-develop software for automakers and suppliers.
"This is a day that our dream is coming true to have our footprint in Detroit, the automotive capital," says Subu Subramanian, senior vice president of Satyam's manufacturing and automotive businesses.
Satyam will do about $150 million in work for GM as subcontractor for HP and Capgemini and in direct work with GM during the next five years, Subramanian says.
GM awarded contracts worth half of about $15 billion that the automaker will dole out this year in five-year contracts. GM says that it actually will spend less than $15 billion because it expects the process to save money. GM won't divulge anticipated savings.
On GM's 2006 program, Satyam's strategy from the outset was to partner with the key system integrators, Subramanian says.
"We identified a few areas where it makes sense for us and we could really create value," he says. "We were able to win in all the areas we decided to bid. We also expect to grow the business we're doing directly with GM."
India's big push
Satyam's new Southfield center illustrates its push for automotive business. In addition to its initial $2 million investment, Satyam will spend another $5 million to $7 million annually on center operations.
"Visitors will be able to see our expertise and capabilities without having to travel all the way to India," Subramanian says.
"The center will help us connect to the industry better in terms of the trends and pains, the hot buttons and the opportunities and challenges."
The center has 50 employees, but that number is expected to grow, he says. The company also has a center of excellence in Chennai, India. Subramanian says two others are planned for Japan and Europe.
Wipro lands key spot
While Satyam will be a subcontractor, Wipro Ltd., the second-largest Indian IT outsourcing company, will work directly with GM to integrate the automaker's systems around the world. As one of the six system integrators, Wipro landed a $27 million contract directly with GM.
N.S. Bala, senior vice president of Wipro's manufacturing business, says that the Indian company will maintain, develop and deploy new IT systems and software tools globally for GM. It also will do some work in partnership with EDS, Bala says.
"We've been working with GM for four years now, and almost all the work has been bidding on individual projects in the development area," Bala says.
"This new contract puts us in a Tier 1 position, a comfortable position for landing future work with GM."
Wipro has a software development center in Windsor, Ontario, just across the Detroit River from GM's world headquarters in Detroit.
You may e-mail Ralph Kisiel at [email protected]