Eight out of 10 firms believe impact of coronavirus bigger than 2008 downturn: Report

BENGALURU: More than 80% of the enterprises believe the impact of the coronavirus outbreak to be bigger than the 2008 economic downturn and it can reduce up to 15% of the existing consulting services, according to a report by HfS Research.

The IT research firm’s report, which surveyed 630 respondents across IT services providers, enterprises, analysts to understand the impact of the epidemic, said majority of these industry representatives feel that this impact will continue for a period between 4-12 months.

The report highlighted that nearly one-third of the tech service providers said their clients are making fresh investments in restructuring internal operations to survive the turmoil; while nearly 38% of the service providers said their clients are focused on moving workflow solutions into a remote working environment.

“I fully expect digital areas to accelerate in this market, but this will not offset the losses of suspended traditional work. The net effect this year will be in the region of at least a 10% net decrease in expenditure,” Phil Fersht, chief executive officer, HfS Research, told ET.

He wrote in the survey report while investments are made by organisations to shift to digital and infrastructure for remote work; one-third of the service providers are concerned about the stability of the core technology services business.

The coronavirus outbreak has prompted both enterprises and the IT service vendors to spend heavily on certain emerging technology areas to maintain business continuity. While 84% of the vendors said they are spending heavily on cybersecurity; 64% of them are investing in automation of processes.