#BusinessVsCovid19 - has Covid-19 accelerated the digitalization efforts in Germany?

A forecast by leading research agency Forrester has indicated that global tech market spendings will slow down. Well, that is no new news, however, there is some evidence to support the sections of the report which indicates that tech consulting and tech outsourcing will outrun the growth in other sectors of the tech market. That is very much what is also evident from this interview with the CEO of a growing IT services company based in Berlin.

Forrester Report: Projections of spendings on key technology sectors

Before going ahead with the interview here is a short roundup of the analysis currently being shared by multiple agencies on technology sector -

- Many IT service companies are unable to access client bases from their employees´ home offices due to security reasons
- Cost cutting after the lockdowns get removed might lead to many IT projects being put on hold, delayed or scaled down to minimum necessities
- There is large scale shift to cloud services and the outlook for them seems to be better.

I have known Eva (name changed on request) for quite some time as she had been building her IT services company in Berlin from scratch over the last couple of years. She has an anthropological research background and I got chances to collaborate with her over user research projects. She seemed unusually calm compared to other business owners that I had been talking to. I wondered why while starting out with the interview :

Leverist.de - What is the immediate impact of the Covid-19 virus-related restrictions on your company?
Eva: The pandemic is indeed shaking things up. We are currently not sure about the long term implications. One has no time to lose and we have to reposition very quickly. So we are preparing for two possible scenarios. The worst and best case outcomes. We are financially tightening up our laces and revising our budgets for lower incomes. At the same time, there is a trend we can gradually see that digital products are going to be more in demand. So we might end up having more contracts. We had some talks with our growth consultants and we see this crisis as an opportunity to also adapt and grow.

leverist.de What are the steps you are taking at your company?
Eva:
We were lucky. Just the months leading to the crisis, I was observing the developments and treading cautiously. We had an office lease renewal coming up but I decided to not renew the contract and within a few weeks, we were completely working from office due to the restrictions. So as a result right now our overhead costs are really low. That is why you see me not highly stressed. We took some immediate steps :

  • We observed the reaction from the market and our customers. We realized that we do not fall under a high-risk category of business in terms of impact. We keep a close watch of the business outlooks. Our invoices are getting paid.
  • We started dealing with the clients whose houses were burning. We provided them consulting and support wherever they needed to deal with the crises
  • We prepared a package of services which we started offering to our clients
  • We are adjusting our business plans and preparing for the next hiring phase.

Leverist.de - What kind of effects do you see on the business outlook of your clients?
Eva:
We can put the current demands of our services into a few buckets

  • Immediate digitalization - businesses that were in the process of taking part in business online now want the projects to finish quicker. For example - building a business website, online shop - these will help people to immediately go online and start generating income from home.
  • Critical processes - some companies which need process-related digitization are fast-tracking these projects so that their employees can start working on them
  • Ongoing digitalization customers - the customers who are working on long term digitalization projects are slowing down their progress to focus on immediate business adaptation needs
  • We have some proprietary software which we are selling to some already existing clients

Leverist.de: What kinds of trends are emerging out of the current crises in the business community?
Eva:

  • Rapid Response projects: Businesses are working on the first wave of digitalization, many of them using online collaboration tools for the first time. Some do not know how to use video conferencing software, how to use collaborative documentation like google docs or even how to buy the right tools. We are helping them set up software needed immediately for virtual collaboration. I project that after the first round of rapid response types of projects we will see demand for deep digitalization projects. I also see that
  • More trust in digitalization: Many projects which were being questioned previously are now being sanctioned more proactively. The European Union is also indicating greater funding and focus on digitalization efforts. So we project a push towards the focus of the digitalization of the more complex processes.


Eva is the CEO of a growing IT services and custom software company based in Berlin and is currently adapting to the effects the Covid-19 virus has on the business of software services.

Cover image : John Schnobrich on Unsplash

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