Is COVID-19 the leapfrog that technology companies needed?

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Published: April 22, 2020 2:10:53 pm

Is COVID-19 the leapfrog that technology companies needed?

The world is reeling under the impact of COVID-19 that started in China in December 2019. Like many affected countries, India is following WHO guidelines around lockdowns, social distancing, and adhering to quarantine measures. This has created an unprecedented situation where the Internet has generally become everybody’s window to the world.

In India, the country-wide shutdown has impacted industries due to demand slowdowns, supply-chain and labour constraints, operational disruptions, and liquidity crunch. In this hour of crisis, companies in the technology sector have managed to operate owing to their infrastructure, albeit with challenges of their own. COVID-19 is compelling organisations, both big and small, to explore digital transformation in the wake of the new normal.

Push for transformation

The pandemic has provided a big impetus for industries to shift from their existing state of operations. The challenge it posed for continuing business as usual needed immediate confrontation with a definitive response from the industry. The technology sector could act as a torch-bearer and demonstrate how businesses can be transformed to the entire industry.

While there are no ready remedies for businesses that require the physical presence of their workforce, technology companies are coming up with innovative solutions to create virtual businesses. With traditional ways of working becoming infeasible in the current scenario, industry leaders are looking for transformation across sectors.

Some key changes that the industry is witnessing due to the pandemic are in the areas of connected workplaces, cloud platforms, and virtual events:

Connected workplaces through telecommuting

As per a recent India-level survey in March 2020, 96 per cent of organisations have implemented work from home – a steep rise from 19 per cent just a few weeks ago. Many of the organisations have created remote working policies and operating models for running business virtually, even after the Covid-19 crisis passes. This model has numerous tangible and intangible benefits to organisations including reduced real estate and services costs, transportation costs, and increased disposable time for employees as they manage work from home. Companies may also re-evaluate the need for recovery centres to run critical operations as part of their business continuity planning. The benefits enumerated may help reduce a significant share of today’s technology companies’ operating costs. In addition, the savings could help organisations increase their operating margins and spur innovation and product development through increased R&D spends.

Cloud platforms’ adoption

Cloud-based services offer scalability, reliability, and resilience for companies across geographies. Traditional organisations lagging behind in cloud-technology adoption are now able to clearly see the value proposition as they witness a surge in SaaS (Software-as-a-Service) for remote working. Significant traction is expected in the next 3–9 months for companies to move towards IaaS (Infrastructur-as-a-Service) and PaaS (Platform-as-a-service). As an example, in response to the current crisis, a central platform has been built on the Salesforce Health Cloud to assist healthcare organisations with remote administration, containment, and patient management. The COVID-19 situation has presented itself as a great catalyst for cloud adoption and leaner business operations.

Virtual events

Industry conferences and events for professional collaboration is a US$ 1 trillion industry. With travel restrictions, many industry conference events, product launches, and company-wide events across the world have either been cancelled or postponed indefinitely. Major global events including Mobile World Congress had to be cancelled, while events such as Google Cloud Next ’20 and SAS Global Forum have turned virtual. The current situation is pushing organisations and event organisers to think about and innovate solutions to provide similar experience in virtual events as that of in-person events.

The COVID-19 pandemic is expected to be a milestone event in the digital transformation journey of global industries. The impact created by the COVID-19 disruption is likely to trigger a huge demand in technology-enabled areas such as tele-medicine (e.g., Televital India, Rijuven India), home schooling (e.g., EduKraft, Wolsey Hall Oxford), virtual banking (e.g., Digibank by DBS, Yono by SBI), on-demand entertainment (e.g., Netflix, Hotstar, Zee5) and services (e.g., Dunzo, SwiggyGo), and telecommute. An increasing number of technology companies are now poised to provide innovative solutions that can tap into the demand created. Several e-commerce firms such as Amazon, Grofers, and Zomato have stopped accepting cash on delivery. Transformation is clearly evident across organisations ranging from fast-food chains to luxury car manufacturers offering touchless experiences. Some of these practices are sure to stay even in the aftermath of the COVID-19 crisis and are likely to form the premise of the new normal.

Driven by COVID-19, the technology sector could play a pivotal role in this industry-agnostic digital transformation— a small positive amidst the pandemic gloom.

The authors are Gaurav Kaul, Partner and Akhil Pullagura, Senior Consultant, Deloitte India

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