More on the Ponzi schemes on IT

I wrote a brief on Ponzi schemes http://insightful-journey.blogspot.com/2008/12/ponzi-schemes-in-it-do-we-have-ponzi.html on IT, just before the Satyam scam hit the media in December'08. Not that I was rolling a dice or had the sagacity/gumption on the Satyams case.

I would be too arrogant if I said Satyams case was not very surprising...what else will you be if you knew for sure the revenue recognition systems were doctored, the internal cost controls are negligible or altogether non-existant, the cash-flows can all be played up with help of Financial ponzis...

What was infact surprising to me is to see the former head of my alma maters sitting on the board and great valuation expert like Krishna palepu sitting on the board as independent directors...what did they think about their role when they accepted to be directors of companies...did it all make them look great on their resume...or they wanted to make some good money through the sitting fees...absolutely ridiculous....I cant believe people of intellect failing to decipher the scam going on around here...should I say they had no clue to what IT services is all about...maybe they were just sitting on board to understand how IT services companies work or dont work perhaps...maybe it helped them write a theisis or sponsor one based on some god known reasearch grants...

So here another episode of shareholders who know little abt IT taken for a ride on a Ponzi...What did they think when they invested in Satyam:

1.Cost saving thru offshoring is a route to perpetual earnings
2. Clients have infinite IT budgets and they'll come to offhsore vendors for IT services
3 Or are they after all wanting to hide their costs by siphoning out non-existant work or service to offshore vendors...

I'm sure we'll see more ponzis in our lifetime in IT....