Technology services companies prepare for the road ahead
With the importance of technology taking off, resilience now should pay future dividends
3 minute read
- While continuing to manage revenue pressures, tech services companies must also address safety and logistics needs of remote and on-site workers
- Liquidity is key to sustaining operations during what could be a protracted recovery
- Future success depends on building a strong organizational culture while continuing to support all employees
From the beginning of the pandemic, technology services companies have had visibility into its impact on the diverse businesses and industries they serve. Much like their clients, these companies have faced revenue pressure as they work to meet the health and safety needs and logistical challenges of a widely scattered workforce.
Now, more than ever, 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 continues to be making sure employees are safe whether they are working at home or on-site. Many but not all have had the infrastructure in place to support a remote workforce. In some cases, working remotely hasn’t been 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, these companies have faced challenges making adjustments based on local conditions.
Revenues of companies serving the travel, tourism and hospitality sectors were particularly hard hit. Those and other businesses remain 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?
From the start, there have been economic indicators for any signs that may relieve uncertainty, and conditions have improved as the year progressed. Yet while recovery has begun to take hold for some companies, the path for many others could be lengthy and may not be smooth.
Against that backdrop, scenario planning — hope for the best, plan for the worst — continues to be essential. How long will cash last if recovery in particular sectors comes slowly? What are the options for bolstering liquidity? Early in the pandemic, the government came through with an unprecedented amount of support, and companies have taken advantage to the extent they can. But much of that support has been exhausted, and additional fiscal stimulus remains uncertain.
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 as the crisis has played out, 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 had to work on-site, companies have used social distancing rules and exercised a high degree of caution. That also applies as some remote workers may return to company offices.
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 have often been missing. Employees may feel isolated, and insecure about their jobs. Worries about risking their health and safety continue to affect employees who need to go in to work , 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.
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, is becoming 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