Industry Markets and Trends

COVID-19 Update – Impact on Sourcing and Procurement

Navigate the current crisis with these Sourcing and Procurement recommendations for IT markets worldwide
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The coronavirus (COVID-19) pandemic is impacting the global economy at nearly every level, including sourcing and procurement. While IDC is closely monitoring and updating our market data and outlook to reflect our best understanding of what is happening in IT markets worldwide, here are our recommended steps for sourcing and procurement:

  • Before the onset of COVID-19 most (85%) of employees worked at a central branch or remote office location
    • The current crisis is changing where employees work and infrastructure to support the change is not ready for the shift.
    • Anticipate urgent requests for infrastructure related hardware and software as well as related services.
  • Remote Access, Collaboration, Virtualization and IT Service Management Technologies Play Key Role in Mitigating Impact
    • Leverage free trials, temporary licenses, special pricing and support when available and appropriate.
    • Vendors are expediting orders to meet urgent demand.
  • India Lockdown Raises Work from Home Readiness Questions
    • An estimated 80% of India workforce to be working remotely.
    • Impact on outsourcing contracts likely where sensitive financial information shared or accessed.
    • Review contracts, processes and security requirements to quantify and mitigate risk.
  • Force Majeure / Acts of God
    • Anticipate delays and non-performance from contractors and their sub-contractors / suppliers. Although it may be too late to proactively address business continuity plans and related contract requirements, it is highly recommended to review any existing plans and update as necessary.
    • Certain services may no longer be required during the crisis. Review contracts to determine recourse and maintain open communications with vendors.
    • Consider engaging contractors to assess procurement and supply-chain issues as waterfall effect will add to the complexity.
  • Work at Home Mobilization Will Require Focus on Security Vendors
    • Security vendors are offering products and services to maintain the security and integrity of sensitive data as customer employees are transitioning to home networks and devices which are not prepared to process such information.
    • Investigate vendor offerings and consider complimentary products and services being offered.
  • Health Crisis Shifts Digital Transformation Trajectory and Related Technology Investments
    • The current pandemic is causing enterprises to reprioritize their investments to focus on ensuring health of the workforce and public in general. Now is the time to review your investment plans.
    • Although China’s mandatory smartphone app usage and tracking initiative is clearly incompatible with the societal and legal norms of most countries, the impact of COVID-19 will certainly increase the reliance of video surveillance to protect the health of company employees, and, the public in general. Consider investigating technologies and vendors that will support this shift in priorities.  Develop sourcing playbook to address this need. 
  • Be on the Lookout for Unethical Behavior
    • Although the vast majority of vendor representatives will continue to behave ethically during and after the COVID-19 crisis, there have been isolated reports of individuals taking advantage of clients trying to rearchitect their license deployments in response to the changing workplace dynamics.
    • The few reported cases that have been observed were resolved by quick and aggressive escalations to vendor executive management. Do not hesitate to escalate if your enterprise has encountered such a situation.

The coronavirus (COVID-19) pandemic is impacting the global economy at nearly every level. Anticipate market challenges and keep business moving with IDC’s extensive COVID-19 research and advice.

Aaron Polikaitis

Vice President of Research, Vendor Sourcing and Management