IT services firms have started setting up dedicated teams to chase new revenue streams. This is due to consumption patterns of various services going through a paradigm shift, in the wake of the ongoing crisis.
Though any study is yet to quantify opportunities emerging from the new demand, industry observers said the high level of virtualisation across most sectors has led to increased demand for various IT services.
“We are definitely looking at it (new areas of demand). We have formed cross-functional teams comprising digital and industry 4.0 (one of the practices of ITC Infotech) to reach out to clients in the manufacturing vertical. Therefore, we have checked our capabilities with respect to the Covid crisis, and are approaching clients with a new offering,” said Debjyoti Paul, president (digital), ITC Infotech.
Bengaluru-headquartered Mindtree has formed a special team to monitor avenues of new revenue streams. In a recent interview, CEO Debashis Chatterjee had told Business Standard: “There is a team working on how to generate new revenue streams. I can’t give more details now, but will share some information in the first quarter (Q1FY21).”
Not only mid-tier firms but also IT majors are actively taking feedback from their sales teams in the US, Europe, and other regions regarding the emerging demand opportunities.
For instance, UB Pravin Rao — chief operating officer of Infosys — said that though the IT firm had not formed a separate team for cashing in on the emerging opportunities, the management was taking feedback from the sales team on the ground.
“Virtualisation of all segments have increased demand for Cloud services. Segments like edtech and medtech are seeing multiple rise in users, leading to increased demand for support services from IT firms,” said Pareekh Jain, an outsourcing advisor and founder of Pareekh Consulting.
“Even traditional sectors such as automobile and other segments in manufacturing, are spending on digital experience to reach out to end-users as we have seen recently by many automakers.”
Industry watchers also said that besides medtech, Covid-19 had led to increased health surveillance, through various digital means. Many tasks related to containing the spread of the virus were done through the help of digital services.
Many IT majors, including TCS, Cognizant, and ITC Infotech have started providing simulation services to health care clients, for developing a drug against the virus. “Telecom is another vertical where demand is on an upswing, and recent investment in 5G by some of the leading Indian players show that,” said Jain of Pareekh Consulting.
Though demand has started emerging from new areas, experts said it wouldn’t be enough to compensate for the loss likely to come from the most-affected verticals such as travel and hospitality, retail, and manufacturing. “We have started seeing some demand from new segments, but the volume will not be enough to compensate for the loss in revenue due to Covid-19,” said an executive of a mid-tier firm.