Indian IT Firms See a Silver Lining in Covid-19 Crisis?
The COVID-19 outbreak that has already hit the global IT industry is likely to see a 5-10% decline in growth for FY21.This is bound to have an adverse effect on technology firms in India, believe analysts. Earlier this month, V Balakrishnan, former CFO, Infosys, also warned that “India’s IT industry may end up with a negative growth for FY21.” However, some of the IT companies we spoke to see a silver lining in these unprecedented times and are bracing up to face the challenge head on.
Time to redefine IT strategies
Explaining the current growth situation in the Indian IT sector, Prashanth G J, CEO at TechnoBind said, “Some sectors within IT will face the heat in the short term and hence this negative growth is indicated. But those organizations that have adapted themselves to these new times and fine-tuned their GTM to be more in line with being a problem solver for their customer base will actually thrive.”
It is time to redefine the existing methods of practice in the IT sector, starting with the physical infrastructure, believe experts. As Shibu Paul, Vice President of International Sales at Array Networks believes that IT firms should evolve from its traditional structure to a cloud centric, artificial intelligence and analytics driven business model. He gives the example of hyper-converged systems that will help enterprises achieve digital transformation while addressing the concerns of operational costs and enhanced customer experience to stay ahead of the competition.
Paul sees massive opportunities here. He believes that the advancement and opportunities presented by Cloud had already set the ball rolling for IT firms towards advanced infrastructure. Most of the companies are augmenting their digital infrastructure and ecommerce businesses. They are looking to embrace hyper-converged infrastructures as a go-to technology platform to address security and productivity concerns.
Impact on Employees
The current global crisis has had an adverse effect on employees. Vikas Bhonsle, Chief Executive Officer of Crayon Software said that while layoffs are inevitable as it is already being witnessed by large IT companies, for mid-sized firms suspension of wage hikes and variable payouts are likely to be on cards for the next couple of months.
But Prashanth is optimistic. He believes, in the short term while there may be temporary measures like furloughs or Pay-cuts or even layoffs, in the medium term it will bounce back.
Many mid-sized IT firms are even actively recruiting. As Paul added, “While most organizations will manage the cost structure by not increasing the wages we might not see a scenario of a major job loss in the IT space. In the coming months, entry and mid-level hiring will see a steady growth making Indian divisions of MNCs big recruiters in the future competing with the Indian IT firms.”
Nonetheless, the global environment is not without its own challenges. As Bhonsle said, “Data security is a major challenge to IT firms and we are seeing more escalations happening in the coming year.” He also believes that the pandemic has forced organizations across to alter how they deliver IT products and services.
Paul too sees security as a concern with more companies opting for cloud and ‘anywhere, anytime and any device ready infrastructure’. According to him, “To erase the vulnerability of the infrastructure obtaining a VPN security has become paramount in wake of the current situation,” he said. Enterprises are rapidly rolling out secure remote access platforms and zero trust architecture will be one of the key technologies to see an explosive demand.”
It is also not just about technology, with physical distance becoming a barrier there are many chances of miscommunication and for this IT companies also have to concentrate on helping their employees to hone their soft skill. “The need to enhance online collaboration to improve communication, negotiate, solve problems becomes a necessity, as much as business intelligence is the need of the hour to help companies optimize work and focus on productive trends,” he said.
Despite challenges, therefore, the IT sector can be one of the major gainers in FY21 with a better strategy in place, believe experts. For many Indian firms, the recovery process has already begun. Ecommerce and digital infrastructure spending of most organizations will further speed up the growth momentum in the coming quarters.