CEO Pulse Review: COVID-19 Impact on Indian Tech Sector - June 2020
COVID-2019 has led to unprecedented response, both in terms of attempting to put guardrails around the magnitude, scope and scale of the pandemic, as well as the kind of risk factors that need to be considered in evaluating its impact. While any estimation in this case is highly variable, an early start in assessing the situation and its impact still helps stay aligned to future developments.
In April 2020, NASSCOM began soliciting responses from industry leaders, as part of a periodic exercise this year, through short CEO Pulse Reviews that were followed with a select set of detailed interviews. Our aim was to understand the industry's perception of the overall world economy, impact on demand, impact on their own business, short-term steps for continued business sustenance, and their overall outlook on Tech spending and outlook.
We present our findings through this brief report: CEO Pulse Review: COVID-19 Impact on Indian Tech Sector - April 2020. Our findings highlight:
- In the short term, global clients widely indicate demand reduction, and even as 80% expect some form of recovery in the medium term, full recovery is expected to be long drawn as the nature of impact remains uncertain.
- Buoyed by need for Cloud, collaborative workplace technologies, mobility, and cybersecurity, more than two thirds of Tech companies in India expect FY 2021 to be largely centered on recovery and restart, as the outlook on Tech spend is positive in the medium term.
- Digital deals likely to increase, and the outlook on tech offshoring is promising. 80%+ expect offshoring to become strategic to global firms' sourcing plans.
- As COVID-19 spread, the industry demonstrated agility in transitioning to Work-from-Home (WFH); 80% now believe that WFH will be a more integral and formal part of BAU upon recovery.
- Industry also initiated necessary short-to-medium term cost optimization moves with checks on discretionary travel and G&A reduction through restructured contracts and payments, short term new hiring halt.
- In getting ready for the new normal, the Indian Tech industry will require stronger focus on newer sources of revenue, flexible contractual terms and innovative sales models built through differentiated partnerships and dedicated commitment to becoming a trusted client partner.
As the world emerges from the pandemic, NASSCOM will again present a view of the Industry's plans, the challenges it faces, and the innovative measures embarked upon to emerge stronger and more resilient from this crisis.
Read more on everything from policy measures to startup action and everyday innovation during COVID-19 times on our dedicated Community link: COVID-19