Coronavirus and Global Services Delivery: Real Impact or Temporary Imposition?

While it’s too early to say whether the Coronavirus will have lasting impact on the way we consume and deliver global enterprise business services, we are already seeing some changes in the way we operate.

Both enterprises and third-party providers have either totally cancelled or provided cautions about international travel, with increasing advisories on domestic travel. Meetings scheduled several months out are being postponed. BCP plans are more aggressively crafting work-from-home policies. Teams are learning to put up with still clunky telepresence technology.

But will our first modern Disease X call into question the way we’ve designed and operated enterprise business services – IT and business processes – for over 25 years? Is a travel ban just the tip of the iceberg? Will it accelerate trends such as the move to digital or increase the emphasis on home grown talent? Will our flirtation with future of work finally become real, resulting in the implementation of actual programs that change the way the enterprise operates?

Unfortunately, in the face of Coronavirus there’s no get out of jail free card for global services delivery. While implications for the IT/ITES industry are not as immediately obvious as they are for the shipping and manufacturing industries, in just a few weeks, we are already experiencing at least three (and counting) operating challenges that are impacting our ability to deliver:

1. Yesterday’s business continuity planning principles not so valid.

It’s fine to ask folks in the US or Western Europe to work remotely, but most offshore delivery is center based. In the event of a pandemic, switching work from Delhi to Chennai is likely not an option. Asking associates without suitable home office space and internet to work at home is already proving difficult, given access and security concerns.

2. Supply chain disruption impacting delivery productivity.

When the time to equip an employee with a laptop increases from 12 to 60 days, or it takes months longer to build out workspace, bench time has a negative effect on transition programs and day-to-day delivery.

3. Problem solving sub-optimal.

Although we have figured out a way to remote work, we remain heavily reliant on face-to-face interactions for strategic decision-making with both our clients and colleagues. Telepresence still doesn’t substitute.

 

What might happen longer term to the way we consume technology and business services as a result of the Coronavirus? While our collective crystal balls aren’t giving us any answers yet, here are seven potential trends to think about:

1. Redefinition of who does the work, with an emphasis on setting up agile, fluid teams with built-in redundancy. Perhaps Coronavirus will be the catalyst for new workforce management solutions.

2. Devaluation of wage arbitrage in favor of values such as proximity, access, and improved control of global “knowledge” supply chains.

3. Acceleration of the trend to make rather than buy business services. Over the past few years, enterprises have been rethinking their outsourcing strategies. Case in point: Shared Services and Outsourcing Network’s annual research indicates that in 2019, 49% of respondents were not outsourcing; this year, the number is up 5 percentage points. Will the virus exacerbate that trend?

4. Ramped up automation, especially for repeatable work that can operate on silent running principles without the need for enterprise intervention.

5. “Follow the talent” morphing into “invest in the talent.” Mirroring the nationalism inherent in our politics, we might see our approach to talent management upended. We might see enterprises start to play a longer game, investing in the development of onshore talent as opposed to implementing location strategies with readily available workforces.

6. Redefinition of “mission critical” work, moving it back onshore or to locations with similar corporate infrastructure and BCP opportunities.

7. Re-imagined third party delivery footprints, moving closer to the customer (read: on- or nearshore) with commensurate pressure on rate.

What do you think? Will Coronavirus inexorably change global business services delivery? Join the discussion on LinkedIn.

Deborah