The COVID-19 outbreak isn’t just a massive pandemic that the world worries about; it’s an extreme risk situation for global economics as well. Market intelligence predicts businesses across the globe to be uncertain as China and other major countries affected struggle to cope with the epidemic.
With the Coronavirus pandemic wreaking a global crisis and disrupting manufacturing cycles as well as supply chains, industries are finding ways to mitigate the impact of the crisis. We analyzed the impact of the COVID-19 virus on enterprises globally to provide recommendations for BCP risk mitigation strategies for IT and ER&D Services. The impact assessment is based on the following parameters:
- Shift in enterprise spending patterns
- Industry fiscal health
- Globalization index of IT, Engineering, Support workforce
- Supply chain disruption
- Digital readiness of industry and workforce
Reduction in air travel orders and heavy disruption of supply-chain will stall/delay the new product development initiatives. Boeing and Safran have temporarily closed their production facilities in China that will have a major impact on manufacturing-led engineering services. In the medium-term, delay of planned engineering programs and manufacturing closures may impact the future growth of aerospace engineering services.
The automotive industry has been impacted the most by COVID-19 globally and this will have a domino effect on global production. Both OEMs and Tier-Is are plagued by supply-chain disruption resulting in a heavy delay in production. Companies are not expected to onboard any major manufacturing or engineering projects over the medium term until the pandemic fades.
China’s deeply entrenched roots in the smartphone and display industry is expected to impact the consumer electronics industry significantly. Top smartphone manufacturers such as Apple, Huawei are being impacted because of COVID-19. Samsung, Google, and Sony had reduced dependence on China as they relocated smartphone factories to global locations such as India and Vietnam.
Demand for healthcare services will continue to increase in the wake of combating COVID-19. There will be a staggering demand for online health consulting/telemedicine platforms. Healthcare providers may face a shortage of supplies and staff during an emergency. From a business perspective, hiring of temporary staff and overtime duty is expected to place financial constraints on healthcare providers.
Enterprise software has been relatively unscathed so far. The industry’s globalization levels and digital readiness to enable remote work has helped sustain operations during the crisis. Collaboration tools and Cloud-based applications have gained a lot of traction during the pandemic situation as most enterprises moved their workloads to remote and cloud applications.
Apart from the healthcare and enterprise software sectors, all major companies are forecasting a significant downturn. To sustain in this environment, IT and engineering service providers need to market research with sales intelligence tools and realign their IT and Engineering service portfolio. Here are a few recommendations:
- Targeting enterprises and GCoEs in regions/countries unaffected by COVID-19
- Cloud, security, and data-migration based service opportunities are expected to be fruitful
- Healthcare, Pharma, and Enterprise software enterprises are expected to be steady enough to kickstart new product development initiatives