The IT industry has been India’s crown jewel in our country’s economic growth story for the past two decades. The industry has provided global recognition for Indian youth’s technology and entrepreneurial capabilities and immensely contributed in improving India’s international image and stature. The IT industry not only earns 190+ billion in annual revenues but also has generated millions of direct and indirect jobs. The industry has played a pivotal role in realizing the Indian middle-class dream of prosperity and aspirational careers.
The Indian IT industry had faced several challenges since its evolution starting from the dotcom bubble burst, global financial recession and then increased protectionism and anti-outsourcing waves; however, every time the industry had come out stronger by adopting creative counter strategies. It is no exaggeration to say that several of global companies depend on Indian IT to run their critical operations and transformational projects. The latest Coronavirus crisis has taken the industry by surprise and is probably the biggest ever challenge being faced by Indian IT. The speed with which this crisis has hit the industry is unprecedented and it has severely tested business continuity plans and disaster recovery strategies. As customers scrambled for contingency plans, Indian IT companies have done a spectacular job by rapidly enabling work from home for their employees. This timely action not only ensured safety for employees but ensured business continuity for majority of customers.
As the world recovers from the Corona crisis over the next few weeks, customers will soon start reviewing their IT spends and outsourcing strategies. Due to uncertain economic situation and recession concerns, customers are expected cut down on their IT budgets and slow down new initiatives. Further, they may de-risk outsourcing dependency as part of their future contingency plans and look for backup and alternate business models for offshore countries such as India.
Some of the predicted implications of the Corona impact on the Indian IT industry and potential opportunities are discussed below.
- Work from anywhere but with assured security: Customers may no longer resist ‘Work from Home’ for offshore as they have seen how seamlessly it has worked in India during the recent Corona crisis. They may however demand for increased security controls on such remote working model to prevent data breach and cyber security threats. This flexible remote working model should offer Indian companies a strong lever to tap into right talent globally without location constraints.
- Increased investments on collaboration tools and technologies: As virtual and remote working becomes a new reality, customers and IT companies are expected to invest significantly in the latest collaboration tools and embracing of new technologies such as 5G networks. This should provide an effective and productive delivery model for Indian IT companies to provide almost real time experience for customers.
- New projects in cloud and digitization areas: Customers may accelerate their journey towards cloud and digital adoption to minimize human touch points. This should create huge business opportunities for Indian IT companies.
- More investments on robotics and automation: Customers may initiate plans to invest heavily on automating their back office and IT operations to reduce dependency on manual interventions. This may have some negative impact on commodity business for Indian IT companies however they can focus on grabbing new automation projects to offset the impact.
- Push for increased onshore and local presence: Customers may insist on increasing the local onsite presence to balance the risk of any future disruptions. Indian IT companies may have to invest on opening new local geography delivery centers. This may create burden on margins, however in order to preserve the current business and assure customers on business continuity, Indian IT companies may have to quickly adopt this new business strategy.
- Consolidation of vendors and potential for new partnerships: Customers opt for consolidation of vendors as the Corona crisis exposed limitations of smaller vendors in providing business continuity. Indian IT companies with their stellar track record will be the major beneficiary of any of such as consolidation initiatives. Our IT companies should also be open to striking new partnerships and alliances with local firms to maximize probability of winning such consolidation deals.
The Indian IT industry is built on strong fundamentals and has all the required resilience to absorb the shocks of the Corona crisis. Hence, any setbacks due to the current situation is going to be temporary and the industry should be able to come back on track rather quickly. The value and benefits provided by Indian IT across the globe have been immense and it will continue to play the same key role in a post-Corona phase. The IT industry need to continue to be agile, constantly engage with customers and proactively develop innovative strategies to not only tide over the crisis but to excel stronger.
(The writer is an Indian American IT professional.)