The remote-working model, combined with the economic crisis brought on by the COVID-19 pandemic, will give rise to the third wave of IT outsourcing, immensely benefiting the Indian IT companies, according to US investment bank Goldman Sachs.
“Post COVID-19, we expect a third wave of outsourcing and an increasing number of technology roles globally finding their way to India as work-from-anywhere becomes the new accepted norm,” stated the bank in a note to investors.
Every time the world grapples with a crisis of this magnitude, businesses look for outsourcing service providers. The Y2K problem triggered the first wave of IT outsourcing. The second wave began following the 2008 financial meltdown. The COVID-19 pandemic is all set to spark the third wave.
The investment bank has also raised earnings forecast for India’s top five IT companies by as much as 7%. Compared to their peers elsewhere in the world, Indian IT companies are far more ideally positioned to capitalize on the work-at-home model, largely because they can easily access the country’s large pool of technology talent.
Remote-working was possible long before the pandemic, but hardly a few Indian IT firms allowed their employees to work from home until March this year, largely due to data security issues.
As the pandemic restricted movement, they quickly transitioned almost all of their employees to a remote-working environment, making the most of the safety features offered by virtual private networks.
The new working model may help IT providers to save on rent, but they will have to invest money in providing employees with secured devices and other ICT infrastructure, the bank said.