Jeet Parikh, Ahmedabad: The world has ventured into uncharted territory and most businesses, irrespective of the industry they belong to, will have to brace for a Covid19 impact. The level and degree of impact will vary and depend on the nature of a business and its geography. Business Process Outsourcing (BPO) won’t escape unscathed in the post Covid19 world but there is a silver lining as well. As businesses across the globe look at ways to cut costs, BPOs can offer them excellent opportunities.
Indian economy has been thriving on the growth of its BPO industry for the last two decades and it can easily claim to be the biggest contributor of the rising middle class in the country. The service industry not only provides jobs for the skilled youth but also earns precious foreign exchange which helps bolster the forex reserve.
This pandemic and the resultant hit on the economy has been very different from the previous slowdowns. Logistics is the biggest challenge that the BPO industry faces. Barring a few roles that require data privacy, most of the work in the industry can be done from home. The problem was the short notice at which companies had to scramble to arrange for software and logistics within their office to ensure employees could work from home. To top it, the internet bandwidth at most homes is not enough to support work.
The downside to the industry in the short term could be in terms of reduced spending by clients which would mean a loss of business or renegotiation of contracts resulting in loss of revenue. This will have a domino effect on employees with companies choosing either to furlough some teams or letting them go. This will make the employers spend conservatively thus impacting training and other employee skill development programmes.
One of the biggest risks that businesses face is the high amount of accounts receivables from badly hit economies in Europe. All these factors combined create a grim future for the near short term.
Usually during things pick up for the outsourcing industry either during or post recession but this time it will be different. The BPO industry has survived 30 days of work-from-home environment and this could mean a new trend in the way we work. Work-from-home may be the new normal and this expands the availability of talent pool available onshore. The pandemic has resulted in a surge of nationalistic feelings with the result that overseas companies may be inclined towards offering projects locally to help improve the post-pandemic employment scenario.
The world could put on a protectionist mask and a paradigm shift from the previous three decades where the world was flat, and businesses opted for a model which was more profitable irrespective of where they operated from.
What could happen next is pretty much unknown. One thing that we can hope, given that human beings have terribly short memories, is that when this is over, normalcy will return to the world. This means businesses will chase profitability and things will move towards the most efficient cost centres. The only catch is that the businesses need to survive the pandemic without a disruption in client servicing.
(Jeet Parikh is the co-founder & CEO of APT Business Services. Views are personal)