July 21, 2020

The Impact of COVID-19 on IT Services

Ecommerce TechnologyAll over the world, the effects of the COVID-19 pandemic have been felt across various sectors. The IT services sector has not been short of such impacts, including disruptions in supply chains, slowdowns in new customer acquisitions, and reductions in revenue. It seems that the cumulative effects of COVID-19 will be ongoing in the foreseeable future.

However, amidst the shocks and declines in business operations, the IT services industry is also particularly well-suited to see some benefits and opportunities blossoming up as the nature of work changes during the pandemic. In this article, we briefly discuss some of the effects of COVID-19 on IT services.

COVID-19’s Impact on IT Services

Perhaps one of the sectors most affected by COVID-19, and often in positive ways, is IT services. Ever since the first lockdowns started taking effect, there has been an unprecedented acceleration in remote working and a focus on evaluating and de-risking end-to-end value chains.

The forecast suggests that IT spending will see a continued rise due to heightened demand for cloud infrastructure services, and potential investments on specialized software. It is also forecasted that there will be an increase in demand for communications equipment and telecommunication services as organizations and companies encourage employees to work from home. Not to mention, the huge demand created by schools moving online for teaching and conducting courses.

An Accelerated Shift Towards Remote Working Scenarios

As work- and study-from-home gains more and more traction in the face of contagion risks, we expect to see this trend towards a higher demand for IT services in the foreseeable future. Many also suspect that given how the COVID-19 pandemic has accelerated remote working opportunities, office culture and the dynamics of work may change significantly and permanently in the future. The effects of such a pragmatic shift cannot be ascertained as of right now. Whether it will occur or not is also up for debate.

However, one thing is for sure; the pandemic has precipitated the world’s increasing reliance on IT and tech, a move which would otherwise have been gradual. Before the pandemic, most organizations did not have a tech stack for an effective and reliable business continuity plan (BCP). Owing to the massive shift towards remote working scenarios, IT departments will play a greater role in future BCPs. It will require the help and consultation of IT service providers for procuring devices and establishing a robust, adaptable and secure network, cloud infrastructure, disaster recovery systems, and cyber-security, etc.

The Need for Rapid Access to Data and Automation

In view of this situation, there will be an accelerated demand for ever-faster access to data and automation. This is sure to hinge significantly on 5G network deployments and the adoption of 5G-enabled equipment. To satiate this demand, IT and tech companies will need to work towards speeding up and streamlining the adoption of 5G as more and more organizations have started to adapt towards remote working.

Apart from facilitating geographically distanced operations, 5G will also allow for a more rapid and robust shift towards automation as companies increasingly start to employ workers for high-skilled, supervisory jobs while decreasing reliance on low-skilled, manual work. The warehousing and logistics sector presents an example in this regard.

Greater Reliance on Cloud Infrastructure

In the face of supply chain disruptions and loss of revenue, many companies are looking for ways to enhance their supply and value chains, increase profit margins, and provide customer satisfaction. Cloud computing and networking have already started to have a beneficial impact on SMEs and giant corporations alike. Brick-and-mortar retailers have seen a shift towards Retail-as-a-Service (RaaS) models with the help of cloud computing and smarter checkout procedures.

The COVID-19 pandemic has shown that the ways of old may not be suitable for the days to come. This includes the use of expensive, proprietary IT software. Increasingly, companies and organizations have begun the migration to cloud-based systems, which cost substantially lesser and often involve the pay-as-you-go method. Such services can enable sectors such as retail to see a host of benefits. These include quick and wide-ranging inventory management capability, the use of AI to track consumer behavior and spending habits, faster checkout procedures, and increased visibility and networking capacity with vendors, clients, and other services.

Cloud computing will undoubtedly see a wide surge in growth, and IT service providers will need to cater to a large clientele. The high demand for cloud infrastructure will see another sharp period of growth once the technology becomes more popular, and clients are better informed about it. The current pandemic scenario provides ample opportunities for IT service providers to encourage and help their clientele towards developing cloud infrastructure. Because of the several benefits as well as low costs involved in cloud setups, we can expect to see this area grow even after the pandemic ends.

The Road Ahead

Despite the shocks and negative impacts of the pandemic, the IT industry is expected to see a massive market boom from $131 billion in 2020 to $295 billion by 2025. We have mentioned some of the reasons for this huge growth in the interim period. The increased demand for software, including video conferencing, cloud computing, and industrial and logistical tools, will drive much of this growth.

In the meantime, tech leaders will need to focus on managing and mitigating crises such as the pandemic. This will include evaluating value chains and minimizing the effect of disruptions in future events, driving technology adoption and innovation, buffering volatility and risks by analyzing demand and supply-side shocks, and administering work tools for business processes and back-office functions for a digitally-enabled future. The impact of COVID-19 on IT services has been diverse and arguably positive. How quickly and efficiently the industry adapts and taps into opportunities depends on the foresight and quick actions of leaders in the IT services sector.

by Bobby J Davidson

We love our company and we love what we do.  Check out the ‘Why Percento‘ page to learn more: Love of Technology and Business!  As the President of Percento Technologies International, I provide day-to-day leadership to the company’s senior management and I am personally involved in the strategy, business development and sales activities of the firm.

The company was founded in 1999 with the purpose of providing a one call source for organizations in need of Enterprise IT Consulting and Management.  We also provide a line of products in the boutique Cloud Server space with a touch of high-end website strategy consulting and design services.   We personalizes the IT Service experience with a team approach, working with clients from diverse sectors of industry, including energy services, financial, legal, entertainment, healthcare, hospitality, retail and general and/or corporate business.  percentotech.com/contact