No other crisis has changed the IT sector as much as COVID-19

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No other crisis has changed the IT sector as much as COVID-19. Not even 2008 global financial crisis. Starting from changing its working model to re-purposing service lines, IT sector is undergoing a transition, all in the matter of few weeks.

Both during financial crisis and Y2K, the sector witnessed financial setback and job losses, which lasted for couple of years.

However with COVID-19, it is different for one reason. None has brought the behavioral changes, which is likely to last, like the coronavirus pandemic did.

It started with moving from on premise work culture to WFH with TCS obviously taking the lead saying the model would be permanent.

IT/ITeS players managed to enable WFH in 2-3 weeks for close to 80-90 percent of its workforce. Firms are working with other companies to get permission to let the rest of them WFH.

Of course, the transition was not without any hitches. Productivity dipped initially before it increased. Keshav R Murugesh, global CEO, WNS Global Services, a business process management firm, said after initial hiccups, the company is operating at 80 percent of client’s required capacity and is ramping up every day.

This is more or less going to be the new normal.

R Srikrishna, CEO, Hexaware Technologies said, “In the medium term, at least for a year till vaccine is found, WFH will continue. At any point we will have 50 percent of the workforce WFH. Again, all these are subjected to regulatory approvals.”

That is just one aspect. There are visible changes in terms of real estate, businesses, employee engagement and campus life for instance.

Re-looking its business portfolio

Sridhar Vembu, CEO, Zoho, Chennai-based Software-as-a-Service firm, said in a recent media interaction that companies should re-look their business models at the back of the crisis.

For most tech businesses, US and other overseas countries account for majority of the business. According to Vembu, this should change. For in the emerging world, this would just not work.

"So the 90-10 pattern we have right now cannot continue. So it will be either 70-30 (70 being overseas) or 50-50," he added. The company will now have an increased domestic focus, he added.

For IT firms, cloud is one of the key focus areas as enterprises are now looking to migrate for business continuity. Hexaware too has now shifted its focus to touchless tech, automation and cloud.

Changing work spaces, digital engagements

“In terms of commercial real estate, it is dead for now,” commented another executive. If WFH becomes a norm, commercial real estate expense would come down for the IT sector and of course not to mention less congested roads.

However this also means the IT campuses would be missing its usual buzz.

When Wipro opened its Kochi campus to welcome 120 employees on April 27, it was a very different work space. There were security guards in protective gears and sanitisers to welcome the employees. Within the campus too, things had changed dramatically to follow social distancing.

For instance, in food courts, one table can seat only two in place of four or six earlier. Lifts can accommodate only two in place of five or six before.

With social distancing being the buzz word, employee engagements will have to move online. Srikrishna said, “In terms of employee experience, we are trying to bring in the same buzz of campus through digital world.”

“We are having town hall every weekend now. We are getting celebrity chef teaching our employees to cook certain dishes. A celebrity DJ for a live show. So our employees are more motivated than before,” he added.

But will this work on long term?

“This cannot be sustained,” admits Srikrishna. While digital engagement work, a purely digital engagement will not be sustainable for either employees or clients. “Everyone wants to get back to normalcy,” he added. However, like Srikrishna pointed out, it does give a company room to discover new ways of engaging employees.

Even for client meetings, technology alone will not be enough and personal touch will be needed. Rajesh Ganesan, Vice President, ManageEngine, a division of Zoho Corp, said that not having face-to-face meetings have put additional stress on the sales team.

While travel will be out of question for now, the company had stepped up its local sales team across India and overseas locations such as Europe, China and Australia.