The Mixed Fortunes Of Our IT Services Sector

An expected boom in global IT demand has indeed materialized. Now the sector’s challenge would be to optimize the use of its workforce and deliver under constraints placed by covid.

Beyond the field of medicine, information technology (IT) was the first Indian sector whose business prospects visibly brightened under the impact of last year’s covid outbreak. Not only did corporate reliance on IT turn tropospheric—where most clouds reside—under lockdown conditions, many companies spotted gaps in their digital systems, even as a scramble to contain fixed expenses and raise operational efficiency pushed them to digitize the last of their analogue processes. As new needs arose globally, demand for IT services from cost-competitive suppliers in India was expected to boom. And so it did. Order books swelled and our IT sector embarked on a hiring spree of sorts. Tata Consultancy Services (TCS), Infosys and Wipro, our Big Three IT service companies, took on 72,000 new recruits in 2020-21, 44% more than the previous year. If businesses were abuzz last year with talk of either pivoting to a digital paradigm or perishing, a revival of economic growth this year in markets like the US has enlarged IT outlays and kept the post-covid momentum of bagging contracts going. India has been a big beneficiary, according to Infosys’s chief operating officer Pravin Rao. “There is tremendous demand for talent,” he said last week. Clearly, there is plenty that our software professionals are being called upon to do. However, market demand could be less of a constraint on revenue expansion than the internal ability to deliver.

Source: Mint

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