Outsourcing firms in India race to keep services going despite shutdown due to coronavirus pandemic

NEW DELHI • The nationwide shutdown in India because of the coronavirus pandemic has left some of the world's biggest outsourcing firms racing to maintain services for their global clients.

India's information technology firms provide back-office operations for many of the world's big corporations, from banks to manufacturers and pharmaceuticals.

Tata Consultancy Services, the largest IT firm in India, counts Citibank among its clients, for example, while rival Infosys provides services for Pfizer.

The spread of Covid-19 in India led Prime Minister Narendra Modi to announce last week that the country would enter a 21-day shutdown with a strict curfew and only essential services running.

A number of the country's more than 900 confirmed cases were among employees at outsourcing firms in cities including Bangalore and Pune.

As a result, IT companies have had to swiftly shift desktops into employees' homes and upgrade networks so that they can continue working remotely.

They have also had to lobby for exemptions so that they can still send some workers to offices to perform critical functions such as maintaining clients' cyber-security systems.

Tata Consultancy, which has US$20 billion (S$28.5 billion) in annual revenues, said about 85 per cent of its 400,000 employees in India and elsewhere in the world are now working from home, up from 40 per cent a week earlier.

Infosys said some 70 per cent of its 200,000-strong global workforce are working from home.

"This is the crown jewel of the Indian economy," said former government IT official R. Chandrasekhar, now president of industry association Nasscom. While there has been smaller-scale disruption before, "this is a completely different ball game and companies are now trying to adapt".

The industry employs about four million people and earns revenues of US$180 billion a year.

The shutdown in India and other outsourcing hot spots such as the Philippines has been a challenge for companies in Europe and North America that depend on these businesses to manage internal systems or run call centres.

Some Western companies have indicated that they intend to reduce their dependence on outsourcing: Virgin Media announced last week that it would hire 500 call centre staff in Britain.

JM Financial analyst Pankaj Kapoor said most IT companies were managing despite the difficulty, adding: "Has it increased the risk? Definitely. Are clients happy? Definitely not. But I guess... the choice was to suspend the work, or get it done with this risk."

Tata said it had networks in place for its employees to be able to work securely from home, and had required them to sign non-disclosure agreements for an additional layer of protection. "Organisations have trusted (Tata Consultancy Services) to manage their technology and continue to place their confidence in us to help them tide over this situation," the company said.

Infosys said it is taking steps including facilitating high-speed broadband at its employees' homes if necessary. "We are also significantly and rapidly amplifying our technology landscape to support robust and secure remote collaboration at scale," it added.

But Nasscom suggested the ability to adapt may have its limits. In a recent letter, it advised members to explore the applicability of force majeure clauses in client contracts.

"I am confident we can rebuild the industry to its past glory and more, once the crisis is behind us," wrote current president Debjani Ghosh.

FINANCIAL TIMES

A version of this article appeared in the print edition of The Straits Times on March 31, 2020, with the headline 'Outsourcing firms in India race to keep services going'. Print Edition | Subscribe