Impact of COVID-19 on outsourcing and productivity

  • April 20, 2020
  • Scott

COVID-19 has turned so much upside down over the last month (or 3 months depending on where you live), it seems to be touching every part of society and business.

A recent article in The Telegraph addresses how it is now affecting the corporate world with respect to outsourcing: “Lockdown in India forcing the corporate world to rethink outsourced jobs

When India’s prime minister ordered a lockdown, a nation of 1.3 billion was plunged into chaos. At just four hours’ notice, Asia’s third-largest economy came to a shuddering halt.

The shock waves were felt thousands of miles away in some of the world’s biggest companies, which heavily rely on outsourced staff in India to provide back-office operations.

Many major institutions, including clients of BP3, are now being impacted by this shut-down, and it’s impact on their productivity. Many operations in India were not set up with working-from-home in mind (not to mention, this is also a gap in the operations in many Western countries).

The authors believe that the shut down is forcing corporations to rethink their outsourcing operations there, in the same way that corporations are rethinking having all of their production / manufacturing capability in China. The challenge is that re-shoring this work to the UK or US is hard: because these countries have their own shelter-in-place ordinances at the moment.

“It’s the perfect storm. You have increased demand occurring at a time of severely reduced capaity, ” McIntee says.

In the same article, Phil Fersht of HfS Research predicts that there will be less focus on large delivery centers in India, and more focus on automation, working from home, and the use of other locations in Eastern Europe.

The shift also puts pressure on securing remote work – VPNs, access controls, and processes and automations to support that work happening in disparate locations.

This is the challenge that all of us face, to varying degrees.  Our focus on process and automation informs us that the changes that are happening around us are exposing seams in our processes that require rethinking processes.  We need to automate pieces of those processes, or invest in automation rather than offshoring those processes.  Everything should be on the table. I expect as the economy turns the corner – hopefully soon – we’ll all be investing in shoring up the gaps that were exposed by this crisis.

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