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In December 2019, COVID-19 emerged in Wuhan, China, and has similar symptoms as in the case of pneumonia. According to WHO, the total number of cases has surpassed 823 626 Worldwide now. The widespread has touched and affected the lives of people in 206 countries, areas, territories like the USA, Italy, Iran, S.Korea, Spain, Japan, Switzerland, the UK, India, to name just a few of them.

With the epidemiological outbreak of COVID-19 declared by WHO as “Pandemic”, the COVID-19 situation has led to adverse ramifications on the corporate sector worldwide. The novel coronavirus is still wreaking havoc in all the industries globally. The business and lives of people have been impacted dramatically due to the life-threatening effects of the coronavirus. Considering the far-reaching ramifications, the information technology (IT) sector has been impacted to a great extent. Below, there are several effects that COVID-19 has made the IT industry and IT service provider with its attack.

Decreased productivity and performance

The virus is likely to impact productivity on a group and individual scale. Employers may need to adjust sales and/or bonus targets in some situations to account for unforeseen circumstances and consult their sales plans to determine the parameters. Handling day-to-day productivity and the performance-related issue is tied to the outbreak in the current scenario.

Since some of them cannot work from home or utilize the remote working facility, the companies have waived those employees and cut down their production. This way, it’s having a huge impact on the production and performance of their businesses.

Fallout disrupts global supply chains

Understanding how global manufacturers or let’s say, IT industry is managing through disruptions to their supply chains will help all businesses structure their own responses. As we can see, impacts in many companies across many industries are inevitable. As per today’s circumstances, the cost of supplies from China may increase, stemming from overtime and expedited freight costs, as well as from paying premiums to buy up supply and hold capacity. 

However, the possibility of this situation being prolonged beyond a month or two cannot be ruled out. In the long term, the recovery of the supply chain will take a longer time, which will affect not only China and India, but also the global supply.

Facility and office closures

The Coronavirus is a grave challenge to all nations. Our first priority is always the safety of our people. Some governments have imposed even longer closure periods to reduce the motivation for people to travel back from their hometowns to where they work during this critical period.

Cash flow crisis for SMEs

Around 30% of SMEs have reported significant pressures on their cash levels as per the financial report. It’s a very big lockdown to businesses paying for supplies earlier than anticipated because of Coronavirus-related stockpiling and fears of deeper disruptions to transport links.

This has a detrimental effect on a company’s working capital and they will not survive more if they were unable to secure some finance.

Not ready for a fully remote workforce

Many IT service providers think they are capable of allowing their employees to work remotely and adapt to the work-from-home culture fully. But now that work from home function has become a mandate for many, they have found a lack of collaboration tools and interpersonal training.

A report by Gartner, a leading IT service management company, says that 54% of the companies in India do not have enough technology and resources for employees to work to home. And India’s (IT) industry has been minimally impacted by $185 billion. As per the official report, it’s also expected to be a hit of 0.3-0.5% on the GDP in the next fiscal year and growth in the first two-quarters of the next fiscal could be as low as 4-4.5%.

The non-IT companies or small businesses seem helpless due to old systems, poor network connectivity, and UPS backup. More than two-thirds of employees lack access to business tools like Skype, Zoom, etc.

Now is the time for IT and BPO operations to consider: Have your operations been impacted due to a situation where your outsourcing partner is unable to deliver services fully? How has your outsourcing partner reacted and fulfilled its obligations? Were they and their teams able to perform activities remotely from other locations? Has it slowed down the response or impacted the cost of delivery? It’s time to re-assess your contractual and delivery relationship with service providers.


Every industry is economically hurting already from the COVID-19 pandemic. Now is the time for enterprise software providers, especially IT outsourcing companies to go the extra mile for their customers across all industries and help them recover and grow again. Strengthening customers in their time of need by freely providing remote collaboration tools, secure endpoint solutions, cloud-based storage, and CRM systems is an investment in the community that every software company needs to make it through this pandemic too.

Cre: COVID-19’s Impact On Tech Spending This Year – Forbes; What is the effect of COVID-19 corona virus on Outsourcing Companies in India – The one technologies; The Coronavirus Impact: How COVID-19 has affected Tech and Software Industry worldwide – Seasia.

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