What Is the Effect of Covid-19 Corona Virus on Outsourcing Companies in India?

By Daya Mukherjee Jul 21, 2020
What Is the Effect of Covid-19 Corona Virus on Outsourcing Companies in India?

People across the world can think of few things other than Covid-19 presently. The Coronavirus disease has had a severe impact on both domestic as well as international businesses across countries. Moreover, Covid-19 has only continued to grow in the world and claim more lives. IT Companies have asked their employees to work from home and collaborate with them via video conferencing and other collaboration tools. Work-from-Home authorizations have literally been extended considering how the pandemic has traumatized people and countries globally, making it nearly impossible to work in an office space an imposing the need for social distancing. As far as India is concerned, it is being said that the country’s IT Sector has been impacted by $185 billion with growth in the first two quarters of the next fiscal being as low as 4 to 4.5 percent.

There are several ways in which the effect of coronavirus on outsourcing companies is being felt. For that matter, every outsourcing company has something to share related to this. Given below are the many ways in which the impact of coronavirus on outsourcing companies is being felt and how the pandemic has disabled the industry with its attack.

  1. Reduced Productivity and Performance: The virus has impacted productivity on both a group as well as individual scale. In most cases, employers have had to adjust to sales and bonus targets. Monitoring day-to-day productivity has become very tedious with most companies having imposed a work-from-home scenario. Some of the worst hit are workers from the small and medium enterprise segment in India. Since most of them are unable to utilize the remote working facility, companies have either waived those employees or cut down their production.
  2. Disrupted Global Supply Chain: IT Companies are having difficulties in managing through disruptions to their supply chains. Every second outsourcing company in India is working through alternative sourcing strategies, having had to face difficulties in identifying alternative supply scenarios. From a long-term perspective, making recovery in a supply chain takes longer than usual as it does not only affect India but the global supply in general. Every outsourcing company has felt this pinch in one way or another.
  3. Office and Facility Closures: Considering the safety of its people, the Government of India has imposed a nationwide lockdown. Closure periods have been active for the longest time and the Government has done its best to demotivate people to travel back from their hometowns to where they work during this critical period. Because of the lockdown, most offices across the country are closed and the subsequent events have either affected businesses from an economic point of view or in terms of human resources.
  4. SMEs Experiencing a Cash Flow Crisis: Most of the SMEs have reported significant pressure on their cash levels as per the latest financial reports. Such has been the impact of coronavirus on outsourcing companies that their working capital has taken a massive hit and the situation has made it mandatory for them to secure finance in some form or the other.
  5. Companies Not Fully Ready to Work Remotely: Companies across India and worldwide have been exposed in a certain way thanks to the effect of coronavirus on outsourcing companies in general. It has become very clear that not all companies are ready for the work-from-home model and have found wanting when it comes to having necessary collaboration tools and interpersonal training. More than half of all technology companies in India have shown to have inadequate technology and resources for employees to work from home. Moreover, Non-IT Companies or small businesses also seem very helpless due to old systems, poor network connectivity and UPS back-up. Two-thirds of employees have shown to lack access to business tools such as skype and zoom etc.

This is the effect that Covid-19 has had on IT companies across India. The pandemic has not only affected human lives in general but also has made it highly difficult for companies to get on with business in general and look forward to higher revenue streams. Lesser cash flow, reduced productivity and office closures are some of the glaring handicaps that have come to fore thanks to this pandemic.

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