There is no post-COVID word at present as Vaccines are not out: Debjani Ghosh, NASSCOM
When it comes to very essential services that require employees in the campus, like financial services and running of the banks, where security is required and you can't take the work out from the secured premise because of security reasons, will only run on the ground. We have already moved more than 90% of our employees to work from home and we plan to continue that.
Debjani Ghosh, President, NASSCOM, speaks about the steps taken to deal with the situation and its financial implication on IT industry among others during an interview with Swati Khandelwal, Zee Business.
Q: Lockdown has been extended till May 3, 2020. So, let us know about the steps that you are taking to deal with the situation and how it will impact your business?
A: First of all, more than 90% of our employees are already working from home. When the lockdown was announced for the first time, we decided on employee safety and as much as possible we will make our employees work from home. When it comes to very essential services that require employees in the campus, like financial services and running of the banks, where security is required and you can't take the work out from the secured premise because of security reasons, will only run on the ground. We have already moved more than 90% of our employees to work from home and we plan to continue that. If you would have seen services are provided to international clients, etc and everyone has called out the agility with which the Indian IT services has moved and ensured this huge transformation. Don't forget that we are 4 million-plus industry - which means we are very-very large industry - and have enabled this transition flawlessly despite tons of challenges on ground. The Ministry of Home Affairs has issued directives that say that IT services can start going back to work 50%, of course, subject to state approvals and we have to work. But we are not looking at doing that and we are looking at phase exit approach, where phase-I is around 15-20% and no more than that and it depends on every state and what they agree. But, we want to take it slow because as we take people back to work, we have to take adequate measures to ensure that people are safe and there are enough social distancing norms, mandate protocols and technology protocols in place. It will allow us to ensure that all the people who are coming back to work are safe. Besides, I keep saying that there is no post-COVID word for now as the virus is not going anywhere until the vaccine comes out. So, we will have to learn how to co-exist the virus and live with them with what are the safety measures that should be taken care of.
Q: Let's talk about the financial implications that the industry is facing at present due to COVID-19. How do you see the demand side for IT projects from the US and Europe in the next 2-3 quarters? Do you think that it is challenging, if yes, what is the way out from it on the business side?
A: Our industry is global and our fortune is tied to the global economy. So, we will have to wait and see how this plays out because this is just India, it is the whole world and we have to see how it plays out in the US, Germany, the UK and others across the world to determine what will be the impact on our sector finally. So, I think it is still little early to take a final call but you will see that everyone is trying to figure this out and I think by the end of this month we will have a better picture of when can the recoveries will start and what will this mean for our revenues and business. As the global economy goes down even if it is for 2020 assuming that it will pick up in 2021, it will definitely impact our segment and industry. But IT is not one homogenous segment, there are a lot of different sectors like the IT industry. And the most vulnerable sectors are our small and medium businesses because for them keeping in mind that in a technology company, SME company 70% of the cost is people cost or higher. So, it becomes extremely difficult to survive or maintain your business continuity, if your people are not productive. If the business goes away and people are not productive, I think that's where we are most worried and we have made an appeal to the government for financial relief for the small tech businesses so that they can navigate through this crisis without losing jobs and without laying off people etc. For the larger company, there are vulnerable sectors like BPM, which works on shapes and we can't do shapes under the work from home and that's why productivity comes down significantly. For the larger companies what we urgently need is relaxations of policies that will allow us to optimise cost and stay competitive. We have given a big list to the government and are hoping to get some quick decisions on the same.
Q: What can be the focus areas for the industry currently to grow business, conserve capital and to rationalise cost?
A: IT industry is about people, it is a peoples industry and we have to ensure that people are safe and that is the priority. This is a good time to invest in people because skill requirement has changed drastically, so as the skill requirement changes invest in building those skills and this is a great time to do that. This is also a good time to look at the segmented approach of the market, while there are segments like travel and others which are being impacted and there also segments where the use of IP is going up significantly like healthcare, education and logistics among others. So, we will have to have a segmented approach to understand what is going down and what is going up. And, we have a lot of business to go after these new opportunities that will come up. So broadly we will be thinking through safeguarding your people, invest in your people and stay close to your customers as this is when they need you the most so be close to your customers and stay connected with them. Have a segmented approach to the market while there are segments that are going down, segments will also be going up, so build up your portfolio accordingly and continue to develop the technology infrastructure and skills that you have because we are going to enter a hyper-digital world.
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Q: IT is a people-intensive industry. So, what is your view on talks like freezing on hiring, salary cuts, and job concerns of people?
A: These are real concerns and again it is about demand, if demand goes down then the industry will definitely have to look at what it can do to ensure that it continues to stay competitive. One of the thing that our industry is trying to do is ensure that we minimize the risk of labour as much as possible because globally right now we do expect the demand to go down and it is completely linked to the demand and nothing else. We will have to see how the demand plays out before the recovery happens. But at the same time, losing people in the IT industry is the most difficult decisions because we invest a lot in skilling our people. Even in a hard time, it is very difficult for us to lose people because we are losing skills and it is extremely important to understand the importance of skills in this sector. So, you will see companies taking measures like salary cuts especially at the top so that they can continue to keep people on the payrolls. We are also requesting the government for some approvals on some of the labour laws so that we can continue to keep people even to those who are not productive because the demand for their work has gone down on our payrolls.
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