India coronavirus shutdown hits outsourcing groups

The nationwide shutdown in India due to the coronavirus has prompted some of the world’s largest outsourcing companies to fight to maintain services for global customers.

Indian IT companies provide back-office operations to many of the world’s largest companies, from banks to manufacturers and pharmaceuticals. The largest of them, Tata Consultancy Services, for example, counts Citibank among its customers, while its rival Infosys provides services to Pfizer.

The spread of Covid-19 in India prompted Prime Minister Narendra Modi to announce last week that the country would begin a 21-day closure with a strict curfew and only essential services running. A number of more than 900 confirmed cases in the country involved employees of outsourcing companies in cities like Bangalore and Pune.

As a result, IT companies had to quickly move desktops to employees’ homes and upgrade the networks so they could continue working remotely. They also had to push for waivers so that they could continue to send certain employees to offices to perform essential functions, such as maintaining customer cybersecurity systems.

Tata Consultancy Services, which generates $ 20 billion in annual revenue, said about 85% of its 400,000 employees in India and around the world are now working from home, up from 40% a week earlier. Infosys said that around 70% of its 200,000 employees work from home worldwide.

“It is the crown jewel of the Indian economy,” said R Chandrasekhar, former president of the Nasscom industry association and former government IT chief. Although there have been smaller scale disruptions before, “it’s a completely different ball game and companies are now trying to adapt.”

Collectively, the industry employs around 4 million euros and generates revenues of $ 180 billion a year.

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The shutdown in India and other outsourcing hotspots such as the Philippines has been a challenge for companies in Europe and North America who depend on these companies to manage internal systems or manage call centers .

Some Western companies have indicated their intention to reduce their dependence on outsourcing: Virgin Media announced last week that it would hire 500 call center workers in the United Kingdom.

Pankaj Kapoor, an analyst at JM Financial in Mumbai, said that most IT companies managed despite the difficulty. “Did it increase the risk?” Absolutely. Are the customers satisfied? Definitely not. But I guess those are the times when the choice was to stop work or do it with that risk. “

TCS stated that it had set up networks so that its employees could work safely from their home and that they were forced to sign confidentiality agreements for an additional layer of protection.

“Organizations have trusted TCS to manage their technology and continue to trust us to help them overcome this situation,” said the company.

Infosys said it is taking action, including making broadband broadband at employees’ homes if necessary. “We are also rapidly and dramatically expanding our technology landscape to support robust and secure remote collaboration on a large scale,” he said.

But Nasscom, the industry group, has suggested that adaptability may have its limits. In a recent letter, he advised members to explore the applicability of force majeure customer contract clauses.

“I am confident that we will be able to rebuild the industry to its former glory and more, once the crisis is behind us,” wrote current president Debjani Ghosh.

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