A COVID-19 forecast for the channel: painful with ‘pockets’ of opportunity
- 26 March, 2020 11:00
The COVID-19 pandemic could be IT channel’s moment of reckoning that finally distinguishes high-performing partners from their struggling rivals, a new report has suggested.
New analysis suggests that, as the coronavirus spreads exponentially across the world, leaders in the Australian and New Zealand channel will be defined by their ability to mitigate the economic fallout of the pandemic.
Only those that can demonstrate agility and flexibility in an ever-changing business climate will see the other side of 2020, but not without a degree of pain, the research claims.
This is the view taken by analyst firm Technology Business Review (TBR), which argues that all businesses, from vendors, consultancies and integrators, will remain unaffected by the virus’ effects.
“The long-term health crisis, economic disruption and social disruption are occurring at levels that were unfathomable just months ago,” said Allan Krans, practice manager and principal analyst at TBR
This disruption will affect vendors and providers of hardware, software, cloud and telecom alike. However, those directly involved in bringing and servicing these for customers will feel the biggest shock to the system.
As IT services and professional services are human-centric businesses that are largely executed through direct interaction with customers. Designed to improve employees’ efficiency or accelerate their business connectivity, providing these services required travel and personal interaction, both areas radically affected by the pandemic.
TBR predicts many of the world’s largest IT service providers will have new leadership tasked with managing these disruptions. These leaders will need to “set the tone” for a new model of business strategy, but it remains unavoidable that execution at the lower levels will become exponentially more difficult with the pandemic.
More IT projects will need to be managed remotely, while partners will need to manage client expectations through a tough economy, Krans argued.
“How well prepared they are, how well their companies have trained them, and how agile and flexible they can be in an ever-changing business climate are the factors that will distinguish high-performing IT services vendors and consultancies from struggling ones in 2020,” he added.
Yet global crises are marked throughout history for their momentous effect on society, technology and business. Vendors with pilot projects to enhance global coordination and project management have accelerated those efforts and expect to invest heavily in the infrastructure needed to perform at speed and at scale, explained TBR.
The pandemic has also sparked a shift in technology alliances and will cause a reset of expectations around large-scale systems integrations.
Amid these changing conditions, there will be “pockets” of opportunity for both vendors and partners, argued TBR, especially among artificial intelligence and automation segments.
According to Krans, these will be “catalysed” by the spread of COVID-19 and imperatives to work remotely and with minimal in-person contact. For partners involved in this space, knock-on effects should be fewer comparatively.
For some, in particular those with experience in online, remote training and upskilling, there will be opportunities to continue their own digital transformations and provide offerings around human capital training and management based on their own lessons.
Channel partners that have invested most heavily in automation and remote delivery will see the least impact on their engagements, even if clients begin to freeze or reduce spend in line with a broader economic slowdown, TBR added.
From a vendor perspective, the global economic slowdown could present potential acquisition opportunities as costs fall. Meanwhile, vendors may even be best positioned to provide consulting and IT services throughout the pandemic.
While few could have predicted the rapid and dramatic consequences of the COVID-19 pandemic, what is clear is that vendors in partners who have kept ahead of the curve in terms of automation and collaborative work environments will have a headstart in battling through the next six months.
Regardless, all long-held business strategies will need to adapt for both individuals and organisations otherwise find themselves among the chaff, not the wheat, when recovery finally begins.