According to consulting firm Hackett Group, nearly all Fortune 500 companies were exposed to India’s coronavirus crisis in their IT operations during the first quarter.
Businesses worldwide that rely on Indian information technology workers are facing delays or scrambling to reroute tasks to other locations as the country battles a devastating second wave of Covid-19 infections.
3Pillar Global Inc., based in Fairfax, Va., reported that 70 of 342 employees at its Noida, India, office have been infected with Covid-19 since April. Three people have died, the company reported.
“It was difficult to watch,” said Dave Sawatzky, chief delivery officer at 3Pillar. “Such a large group being struck simultaneously.”
In late March 2020, the company transitioned its entire global operations to remote work, including technology teams in India, Mexico, Costa Rica, Guatemala, and Romania.
The India office, located near Delhi, develops software and provides quality-assurance engineering services for 3Pillar, which sells tools and services for digital product and user experience design and management to communications, media, and technology companies. Mr. Sawatzky noted that in March, employees at the India office took the lead on a project for a significant client.
“Having this hit in India in April threw us for a loop,” he explained. “We became a little disoriented.”
Throughout the crisis, he added, the company prioritized the safety and well-being of its employees and their families, sending emergency oxygen and Covid-19 vaccines to the team whenever possible.
India is estimated to have 4.5 million information technology workers, the majority of whom work from home due to the pandemic.
While many companies assert that their operations in India have remained unaffected by the crisis, some corporate outsourcing consultants assert that the impact on some firms has been greater than they admit.
According to the consultants, Indian workers providing IT and other technology services to employers or corporate clients abroad face mounting obstacles, ranging from unreliable internet and cellular networks to family illnesses and cramped living quarters at home. As a result, they claim, projects have stalled and revenue has been lost.
According to Dion Hinchcliffe, vice president and principal analyst at enterprise technology consulting firm Constellation Research Inc., one US corporate client reported that up to 70% of its India-based team was absent due to the pandemic. He declined to disclose the company’s name. The majority of clients report absenteeism rates closer to 10%, he added.
“Almost everyone is impacted, both the workers and their family members,” Mr. Hinchcliffe explained.
India recorded over 4,500 deaths from Covid-19 in a single day last week, surpassing the previous global high set by the United States in January and marking the ninth time this month that the number of deaths exceeded 4,000 in a 24-hour period.
According to consulting firm Hackett Group Inc., nearly all Fortune 500 companies had some level of exposure to India’s Covid-19 crisis in their IT operations during the first quarter of the year. According to Hackett, the most frequently outsourced IT process was application maintenance.
Numerous multinational corporations hire technology professionals through India’s giant outsourcing firms, which include Tata Consultancy Services Ltd., Infosys Ltd., and Wipro Ltd., as well as smaller IT service providers.
India’s information technology and business processing industries generate over $180 billion in annual revenue, accounting for roughly a fifth of the country’s goods and services exports.
Numerous businesses partnered with their Indian service providers last year to ensure business continuity and security controls were in place, according to Jaideep Thyagarajan, a principal analyst at IT research and consulting firm Gartner Inc. According to him, the current crisis will affect only about 5% of India’s outsourcing labor force.
Charlie Giancarlo, CEO of data management and storage company Pure Storage Inc., said his company is closely monitoring developments in India but does not anticipate any “significant risk of disruption to our business.”
Mr. Giancarlo said the Mountain View, Calif.-based company designs and engineers its products in-house but outsources IT functions such as systems integration and cloud-based software to firms based in India. “We have established business continuity plans with our primary vendors that ensure global resource availability,” he added.
Distributing third-party IT support among global providers can help businesses prepare for unexpected operational disruptions, according to Jon Butler, principal at consulting firm StrategyShore LLC. He asserted that relying on a single location for critical IT services—even in the United States—is reckless.
“Things happen, and when they do, those in isolated locations are constantly seen scrambling and rarely meeting their prior commitments,” he explained.
Mr. Sawatzky stated that 3Pillar enlisted the assistance of its global offices to pick up the slack. In India, nearly all of the company’s workers who were exposed to Covid-19 have returned to work, albeit from home.
“The good news is that many people were willing to work additional hours,” he explained. “At the moment, and for the last week or so, things are much better.”