COVID-19 impact: Technology services rewired

Fortune President and CEO Alan Murray made a powerful observation about responding to the COVID-19 crisis. After a meeting with 40 top CEOs, one takeaway he pointed to was that responding to a crisis is “not about perfection,” which permits more innovation1. As COVID-19 sweeps the world, businesses are increasingly depending on their digital channels for customer engagement and delivery. The technology service industry is no exception. We too are being forced to come up with new solutions. Many of these solutions appear imperfect at the moment, but technology service providers are innovating fast to get to the perfect answers.

The technology services industry is being challenged like never because business continuity today rides on the tools that technology provides and on proven models of Global Delivery and Agile Distributed Delivery. These models are being strained now and the industry is being pushed into a 100% remote delivery model. Today, the urgency across technology service providers (and other businesses) is to device enterprise collaboration models and back them with the right set of tools, infrastructure and training.

In a survey conducted by Feedback Consulting of ITC Infotech customers, the top three concerns around program delivery were clear. Businesses were worried about the quality of delivery, team productivity and communication effectiveness (see Figure 1). If your business showing signs of similar anxieties, you are not alone.

Services quality & productivity of teams top areas to focus on communication & availability of team  also criticalFigure 1

Winning in the turns

Let’s examine the major shifts that are underway (summed up in Figure 2):

Winning in the turnsFigure 2

  • The digital workplace is set to become a reality! Pre-Covid-19, Work from Home (WFH) was largely viewed as a tool for employee engagement. Post-COVID-19, the WFH trend is set to accelerate with a slew of collaboration tools and virtual team rooms. The trend will leave behind a 10 to 20X increase in digitally enabled meetings, conferences and stand ups long after the threat from COVID-19 has retreated!
  • The problem of productivity decay! Productivity linked to collocation and proximity models are under pressure. Newer distributed and remote working models are emerging. They are imperfect at the moment, but soon innovations and experimentation will ensure there is little or no impact on productivity. COVID-19 will fire the emergence of digital delivery models (such as the delivery of a new PLM upgrade executed in a 100% remote model) supplemented by digital assistants and bots that augment the physical workforce, providing a productivity boost for every job role and persona. The number of automated/ RPA-based bots per employee will become the new metric to assess the recovery, resilience and effectiveness curve of a business.
  • Business turbulence is here to stay! Technology services firms have traditionally competed on efficiency and cost optimization through proven quality assurance and innovative models such as Global Delivery and Strategic Global Sourcing. Over the last few years, the mantra has been around new delivery models characterized by agility and responsiveness. Given the turbulence we are witnessing, the need for agility and responsiveness will get amplified further. Rigid and hardened processes will be considered anathema.
  • Fast tracking of demand side changes! A natural corollary to living with turbulence will be the shift from large contracts and multi-year transformation programs to smaller engagements that deliver value within a short span (typically around 12 months). Pragmatic, quick-win engagements led by a clear business focus will dominate the post COVID-19 era, forcing a major re-alignment in sales behavior.
  • Accelerated shift to newer value props! Digital has been driving a re-examination of the traditional value propositions around cost arbitrage, reliability and assurance of service quality and efficiency. Newer value propositions around quick turnaround time (TAT), agile iterative solution approaches, flexibility in contracting and focus on business value delivery are emerging. These trends will be further amplified by the imperatives of COVID-19.
  • Older delivery approaches will die out! In the past two decades, technology service companies have built delivery assurance through templatized processes and cookie cutter solutions. These drove high process standardization, repetitiveness and predictability of outcomes. Today’s reality demands a move towards bespoke solutions that are client specific, contracting models that are differentiated and digital delivery models based on non-touch non-proximity of service delivery. This also ties up with the increasing shifts towards a digital workforce and a digital workplace.

A blue ocean is emerging

Every now and then, the technology services industry has been reshaped by global events and new disruptions. It has always responded with innovation. COVID-19 promises to be a black swan event that likewise throws up new service models and service innovations.

Given the demand for WFH tools, infrastructure and training that service providers are witnessing, a new reality is emerging. The constraints of today are driving the innovations of tomorrow for technology providers with the onerous responsibility of ensuring business continuity.

Keep an eye out for newer digital delivery models, think about how your technology providers can help build a digital workforce to supplement employee productivity (especially in times of crisis) and how you can create a digital “workplace” that keeps employees safe without compromising productivity.

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