On 24th March 2020, an economy driven by over a billion people came to a jittering halt, and less than a quarter of economic activities were functional. India reported a double-digit decline in the second quarter, though the growth is expected to recover moving forward, as businesses strategize to get their revenue generation back on track.
These days, if someone is asked for their opinion on the outlook of the Indian economy, usually their response is coddled in pessimism which could hold true for short-term economic projections. Despite these negative estimations, India will remain an emerging nation backed by thousands of tech startups and an opportunistic pharmaceutical industry as emerged in times of COVID-19. With all the eyes on how the economy is going to recover, the India economy could either witness a V-shape or a U shape recovery. Also, a number of nations have high hopes with India in terms of discovery and manufacturing of vaccine, which could strengthen the nation’s foundation in economic development.
The way infections are spreading in India, we might not see the peak this year, let alone the second wave. A total number of cases is reaching the 6 million mark, though the recovery rate looks pretty good– quite comforting news in times of distress with the economy going downhill, and high counts of unemployment and hunger.
To remain in the race, companies are making the best out of the current scenario. How can we forget about Ambani and Adani, the billionaires who believe in the ideology that “…growth is a way of life and we have to grow at all times”. Reliance Industries has harnessed the opportunity in consolidating its retail and telecom business.
According to IBEF, the Indian IT sector was estimated to be worth US$ 92 billion in FY19, of which approximately half is contributed by IT services while hardware manufacturing pegs about one-tenth share. In the last decade, the Indian IT industry grew with an average rate of 10% every year.
In a matter of a couple of months, the pandemic has helped in fast-forwarding the digital transformation to the next five years with millions of people working from home, the surge in e-commerce, and adoption of
automation enabling solutions in IT companies such as transition towards cloud platforms from on-premise infrastructure.
Digital Transformation – the New Segue
COVID has triggered a pernicious chain reaction yet it seems to be acting as a catalyst in digital transformation. In the Asia Pacific, India is amongst the top three nations in adoption of digital hardware yet we are lagging way behind in the implementation of automated services and software even though about half of our population uses the internet or have access to the internet. Traditionally, Indian businesses have a perception of “old is gold” making them comparatively slower in adopting cutting edge technologies. However, with Fortune 500 companies setting up their camps in India, the lookout is changing at a noteworthy pace. In order to future-proof business sustainability, companies are enhancing their strategies and their conventional “good to have” opinion is inclining towards “must-have”.
Earlier, budgetary constraints were implemented while IT funds for digital transformation. Now digital transformation in IT is becoming the need of the hour and being prioritized. For instance, TCS has made budget allocation towards process automation and supply chain management their top priority, and recently the company collaborated with Automation Anywhere, Inc. to enhance its supply chain and automation skills. Another such example is of ITC Infotech that is looking to procure SaaS (Software as a solution) to automate mundane tasks for its employees.
Digital transformation is not a step, it is a long journey with businesses modifying their platforms according to the consumer requirements and market demands. Considering the intensity of the ongoing COVID-19 pandemic, the state of the supply chain is transforming and businesses are addressing the situation in the best way possible. Though the market has witnessed an unprecedented surge in consumer demand for services, the manufacturing processes and related verticals are facing the major brunt of this pandemic.
Some of the identified steps being taken across the supply chains are:
- IT companies are boosting their digitization efforts, eliminating their existing inefficiencies, and aiming to witness significant upgrades in their revenue generation
- Manufacturers are forming an alliance with IT companies in order to diversify their supply chain network and cope with the revenue lost in the second quarter of FY2020 and expecting future surge.
- Due to labour migration, organizations operating in sectors like e-commerce are automating their facilities and fulfilment centres.
- Alongside, there some companies who are digging deeper in their existing businesses to create scope for revenue generation.
Once the pandemic is contained, we might witness some shift from digital platforms back to the traditional operations. However, enhancement of customer experience will motivate most enterprises to stick to the digital mode of operations. Yet, COVID-19 is proving to be an inflection point in India’s digital transformation. In the words of Robin Sharma, Recession is an opportunity in wolf’s clothing
Author: Sadhana Yadav
Sadhana Yadav is an Electronics and Telecommunications (E&TC) engineer and a strategy consultant with more than three years of experience in the field of market research and business operations analysis. Sadhana has extensive experience in information and communication technology (ICT) and Industrial Automation areans. She keeps up with the ongoing trends in market landscape and is currently focusing on projecting the dynamics of upcoming trends and the ongoing COVID -19 pandemic.