Technology services companies respond to coronavirus
With the importance of technology taking off, resilience now should pay future dividends
3 minute read
- Along with managing revenue pressures, tech services companies must address safety and logistics needs of remote workers
- Liquidity is key to sustaining operations in the event of a delayed recovery
- Future success depends on supporting employees and building a strong organizational culture
Technology services companies have had visibility into the impact of the pandemic on the diverse businesses and industries they serve. Much like their clients, these companies are potentially facing revenue pressure as they work to meet the health and safety needs and logistical challenges of a widely scattered workforce.
At the same time, technology services companies must pay particular attention to maintaining the culture that drives their success, says Alok Matapurkar, Managing Director, Technology, Media and Telecom Investment Banking for Bank of America. He answers questions about what technology services companies are doing now to prepare for better times ahead.
What are the greatest challenges technology services companies face right now?
As in most other industries, the number one priority has been to make sure employees are safe and able to work from home. Many but not all had the infrastructure in place to do that effectively. In some cases, working remotely isn’t feasible because of client concerns about proprietary or confidential data, and other security and compliance-related issues. And with employees in the United States, Europe, India, the Philippines and China, they’ve faced challenges making adjustments based on local conditions.
Revenues of companies serving the travel, tourism and hospitality sectors have been particularly hard hit. Those and other businesses are focused on maintaining sufficient liquidity to keep the business running while they await an uncertain future.
What key external and internal developments should tech services companies be reviewing?
They’re watching economic indicators for any signs that may eventually relieve uncertainty. Yet recovery could be lengthy and may not be smooth.
Against that backdrop, scenario planning — hope for the best, plan for the worst — is essential. How long will cash last if there’s an extended downturn? What are the options for bolstering liquidity? The government has come through with an unprecedented amount of support, and companies are taking advantage to the extent they can.
Companies are monitoring the percentage of employees working from home — which we’ve seen range from 60% to almost 100% — as well as tracking workforce utilization. But they’re also aware that in this crisis, such metrics may show atypical patterns in the short term.
What steps should business owners consider taking now?
Continuing to make sure employees are safe and healthy while minimizing disruptions to their operations needs to be the top priority. For employees who have to work on-site, companies are using social distancing rules and exercising a high degree of caution.
While their work is technology-driven, these are essentially people-based businesses, and the best ones maintain strong, supportive cultures. That’s not easy in a crisis in which working in the same physical location and other basic connections that bind people together are often missing. Employees may feel isolated, and insecure about their jobs. Those who still need to go in to work are risking their health and safety, and their families may be concerned. Good leaders communicate with empathy and sensitivity. They check in with their employees frequently, through virtual meetings, just to let them know they’re there.
Looking ahead, technology services companies may find opportunities in a changed, post-crisis world.
There could be an even larger emphasis on data analytics for decision-making and risk management. Working remotely, now that we know it can be done efficiently, will become more common. And companies in every sector are likely to focus on tightening operations. Those are all areas in which technology services companies can demonstrate their core competence and value proposition, helping their clients meet their priorities and challenges in a transformed business landscape.
- Technology services
- Business continuity
- Markets & economy
Alok Matapurkar, Managing Director, Technology, Media and Telecom Investment Banking, Bank of America Global Banking and Markets