According to Kotak Institutional equities, the growth in the IT sector in India will decrease by 3 – 8% due to the global shutdown of operations caused by the pandemic COVID-19. Among those worst-hit will be the small IT/digital-service outsourcing firms who depend on short-term projects provided by overseas clients. For them business continuity would mean
This might provide short-term relief. However, in the long run, if a full-fledged recession hits the global market, there would be a deflation in demand, and it would be long before skill requirements are once again produced. So, what might proprietors of small firms consider as the first step to continuity?
The straight away answer is seeking assistance.
Like every sector, the IT industry is also looking forward to a fiscal stimulus from the Indian government. And when all is said and done, the primary focus remains on what lies ahead. What will be the new normal for the IT industry?
According to the ex-president of NASSCOM, large companies will avoid employee layoffs till they have enough monetary flexibility. Most of them are engaged in ongoing big projects and a knee-jerk reaction would only mean more losses when the economy starts recovering. Given the current scenario of work, in other words, a collective success of the Work from Home routine, business operations seek a paradigmatic shift.
With work from home emerging as the new norm, the tightening of data security ensured remotely becomes the need of the hour. Data security in the cloud is already a top priority with companies like Microsoft Azure who spend billions in dollars and deploy wizards in the field to revolutionise security controls daily. A cloud environment for business data has been accepted by many already. In the post-pandemic world, it will become the penultimate measure.
Integration & Automation
To support increasing demand for better coordination, customers will be keener on software products that provide collaborative tools and function as aggregators. A product must be built after taking into consideration all the associated ancillaries of the core operation it is designed to perform. Automatic generation of data, artificial intelligence will replace manual intervention gradually, and a business must work on these to stay relevant.
According to Forrester IT spending forecast, demand for cloud infrastructure saw a hike as soon as a worldwide lockdown was announced. Even in the face of an adversity, businesses who could invigorate customers by providing remote collaborative tools and cloud-based solutions did better than those who did not. We have seen similar results for our cloud-based accounting and invoicing software, Surf Accounts, in Ireland. The bureau businesses plan saw a massive uptake in the beginning of March, as accountants realised, they can do the work from home easier with a SAAS solution than with their desktop or server-based solutions.
A big percentage of small to mid-size IT firms in India and other developing nations depend largely on the US and the European market for sustenance. However, a global recession can jeopardize this link and bring forth existential crisis. Experts point toward business’ need to tap into the national and intra-continental market and lay more focus in acquiring long-term projects. This is not a cure and might fail to ultimately offset the economic degeneration that has been already caused. However, it might allow a business to hold on for another day and thus buy time.
Stay tuned for more discussion on tax reforms, relaxations, flexibility in lending and borrowing and the likes, which experts opine, must be adopted to sort this mess out. More topics on professionals who have the potential to weather the storm with the right approach, awaits.