Indian IT Firms’ Covid-19 Working Model Is Here To Stay

It took a global pandemic and a lockdown for India’s software services providers—that collectively employ at least four million people—to realise that remote working could be the norm.

“This (work from home) will define a new normal for a lot of industries and will create new opportunities for us to be able to do more work globally,” Abid Neemuchwala, chief executive officer of Wipro Ltd., said at a conference call last week while announcing the company’s earnings for the March quarter.

Neemuchwala’s remarks come as India enters its second phase of a lockdown that has already forced the second-most populous nation to shut its offices that can accommodate thousands of employees and adapt to work from home to curtail the spread of the novel coronavirus, which has already infected more than 17,000 people in the country.

That has compelled India’s $181-billion outsourcing industry—service provider to some of the biggest global banks and retailers to airlines—to let most of their employees work from their homes. And they’re realising that the move isn’t bad—especially when the aggregate revenue of India’s top five software services exporters is expected to contract by more than 3 percent in the March quarter.

According to Rajesh Gopinathan, chief executive officer and managing director of Tata Consultancy Services Ltd., the mode of work is here to stay.

At a post-earnings conference last week, he said the transition has helped the company leapfrog into a new model. “It’s about time. Our current operating model is currently a 20-year-legacy model,” he told in response to a query by BloombergQuint. “Is the work from home here to stay, the answer is irrevocably yes.”

India’s largest IT firm—which has asked nearly 90 percent of its 4.5 lakh employees to work from home through a secured borderless workspace—said that based on its initial findings over the past three weeks, it doesn’t need to have more than a fourth of workforce at its facilities to be 100 percent productive. “We also believe that 25 percent of the project team of any project may not be in a single location,” Chief Operating Officer N Ganapathy Subramaniam said.

TCS now calls it the 25/25 model and Gopinathan said they’re “never going back to where we were”.

Wipro’s Neemuchwala agreed. “Every employee becomes a virtual employee and whether you’re sitting 10 miles away from customers in the U.S. or you’re 10,000 miles away working from home, the experience is same.”

Cultural Change

To be sure, work from home isn’t new to the sector but it’s been deployed only on a smaller scale and for select situations. But the Covid-19 outbreak may have changed perceptions, according to DD Mishra, research director at Gartner.

So far companies have been finicky about having people work from home, Mishra told BloombergQuint over the phone. “Culture change is big barrier,” he said, adding that people who are used to seeing their employees in person need to change their mindsets.

The outbreak could spur other changes. Face-to-face meetings, for instance, won’t be mandatory anymore, with company presentations moving online, executives BloombergQuint spoke to said. “I have been of the opinion that negotiations need to be done face-to-face, but with work from home we have realised that even that has moved online,” Rahul Ambegaokar, region head of west operations at NTT Ltd. (India), told BloombergQuint over the phone.

Neemuchwala said Wipro’s seeing employees engaged in projects productively across geographies. The company is also organising daily “standups”, or meetings, with managers to check employees’ progress.

Subramaniam said that TCS’ new secure borderless workspace model has increased the company’s throughput by 25 percent.

Overcoming Misconceptions

Companies are also realising the worry that productivity dips while working from home is a misnomer. That realisation couldn’t have come at a better time for the industry, according to R Chandrasekhar, former president of Nasscom.

“With the industry entering one of its weakest periods in a long time, the work from home model could help companies save costs,” he told BloombergQuint over the phone from Hyderabad. “In work from home, with same number of seats you can have larger number of people so the average cost of infrastructure per person comes down,” he said. “There’s also a reduction in travel time for employees.”

That could reduce requirements to have physical office spaces, Ashutosh Sharma vice president and research director of Forrester Research, said. He estimates that up to a third of employees may continue to work from home post Covid-19, as it will save cost, time and add efficiency.

Road Ahead

To be sure, the decisions to enable remote working solutions were more reactive in nature.

“This is more a proof of concept for a possible change which can come later on when the organisation will be more flexible enough to adapt to new changes,” Mishra said. “Right now, Covid-19 has forced this.”

Work from home needs to evolve, Mishra said, adding that companies need to bring in more protective, proactive models in place that can prevent vulnerabilities like hacking. “This will give a lot of opportunities to cybersecurity firms to come up with solutions and it has to be rejigged to work from anywhere perspective.”

Companies would also have to deal with regulatory issues while working for select sectors that deal with sensitive data like banking and healthcare sectors. Gopinathan hoped that some conservatively structured companies would embrace the change fully.

Nasscom’s Chandrasekhar said while coronavirus has “fast-forwarded” behavioural changes towards work from home, companies, too, need to fast forward their digital infrastructure.

According to Neemuchwala, the new normal also depends on the customer’s approval to continue working from home. “It’s not a technical capability but it is also customer comfort.”