Top 6 Challenges in the IT industry



Information Technology a buzz word and boon for us, the generation of 21st century. It is a developing field which has changed our lives and acted as a pioneer to drive globalization. But as we enjoy the perks of the digital era there are few challenges too. Are you aware of them? Let’s talk about the challenges in the IT industry.

challenges in information technology industry


Progress has never been a bargain. You’ve got to pay for it. Sometimes I think there’s a man behind a counter who says, ‘All right, you can have a telephone; but you’ll have to give up privacy, the charm of distance. You may conquer the air, but the birds will lose their wonder, and the clouds will smell of gasoline!’

– Henry Drummond, a character in the book ‘Inherit the Wind’ written by Jerome Lawrence

STATISTICS – What numbers have to say?

  • The global IT industry forecasted to reach $5.2 trillion in 2020 which is almost 3.7% growth rate. Also, it is expected to reach a value of $8 trillion by 2022.
  • Largest contributor in this industry is the US which represents 32% of the total, or approximately $1.7 trillion for 2020.


  • In India, the IT industry contribute 7.9% of the GDP
  • $177 billion in revenue and more than $135 billion in exports is generated by IT industry in India for FY 2018 – 19.


  • The industry has also created 4 million direct and 12 million indirect jobs in India.

DESCRIPTION – Let’s take a Deep Dive

International Foundation for Information Technology (IF4IT) defines  IT industry as an industry which is responsible and accountable for the technology used for planning, design, construction, testing, distribution, support and operations of software, computers and computer-related systems that exist for the purpose of Data, Information and Knowledge management and processing. The sectors like hardware, software and services, telecom and new automated technologies which belong to the umbrella of the internet of things (IoT) comes under the IT industry.



How is this Information Technology used to drive our day to day life?

1: Improved Communication: One can get in touch with a person sitting thousands of miles away by just one click.

2: Improved Home Entertainment: Alexa, Siri, Netflix are the outcome of advancement in Information Technology.

3: Improved Housing and Lifestyle: Home security solutions, smart light and remote access to CCTV’s installed at home are some innovations which have changed housing and lifestyle experience.


Some of the major players in the global information technology market are Microsoft, Accenture, Oracle SAP, Amazon, and IBM.


Despite the remarkable gains, the industry is facing some threats like cybersecurity. COVID 19 the global pandemic has called for the need to work from home. However, managing the remote workplace infrastructure is another new challenge for the industry. Apart from this, factors like The US-China trade war, the UK exit from the EU are also responsible for the slow growth of the IT industry.


Let’s look at the challenges one by one in detail.

1. Cyber Security Threats

There have been more than a 50% increase in data breaches in the last four years. The losses suffered by the industry because of these data breaches are reported to be $200,000 on an average across the business.


Example: Melissa

David Smith – the person who was accused of cyber-attack, he posted a document claiming to have credentials to several websites in American online chat group but the true content was the Melissa virus. Melissa was spread across the global email servers. Because of the virus companies like Microsoft, Intel, and Lockheed Martin were forced to shut down their email services which caused over $80 million USD damages.

Common types of cyber-attacks: Fishing, Ddos, Spyware, Ransomware, Malware including viruses like Trojans, Worms, Key loggers.



2. Talent Shortage

“Increasingly businesses are in the need of people with combinations of skill that have not previously been aligned, like analysts with coding abilities, or paramedics who understand statistics.” “They are looking for super-specialized skillsets. They are not looking for traditional people”

–  Usha Mirchandani (Managing Director at JPMorgan Chase & Co., New York

Retention of employees is one of the biggest challenges for the IT industry. Software companies recruit people, train them but in the end, they witness their resignation once they are enough experienced in the job. Organizations investment into employees to integrate them into the workflow.


There is a huge gap in the skills the work demand and the skills job applicants have. Our education system still needs to be revamped. And that affects the industries that seek highly skilled employees. Unemployment is high in our country, but the fact is that many companies are not able to find talent to fill the positions.


The biggest reason behind this is the students or people are not updated with the changing technological advancement. Due to automation, the demand for specialized skills increased and this has resulted in the loss of jobs for the unskilled labour. Quality of education is not adjusted according to the changing landscape


Millions of job will be open in a few years but there is not enough talent in the market to cater to these job openings. Technology is changing dynamically in the industry but the learning rate of people is not up to the mark.




3. Cloud Computing

All organizations in the IT industry are using the cloud for a wide variety to perform tasks like data backup, disaster recovery, email, virtual desktops, software development and testing. Rather than buying or owning physical data centres and servers one can access services such as computing power, storage and databases from the cloud provider.

However, there are numbers of issues and concerns associated with cloud-like cost, service provider reliability, downtime, data overload, password, security issues and last but most important is data privacy.




4. Remote Workplace

Working remotely can present unique challenges due to the lack of manager or teammates to consult or to provide immediate responses or sources. Infrastructure is the prime need to undertake such tasks, but to have such an infrastructure large investments are flown in acquiring assets that can support, govern and handle the heavy data loads. However, there are threats to these arrangements too, hacking and preventing the theft of data needs powerful firewalls and software. This is the added cost to the IT industry.




5. Risks of outsourcing

More companies are opting for outsourcing due to talent shortage or cost reduction. But outsourcing has created some challenges like security threats, legal complications, cultural and time zone issues.

Example: J.P. Morgan and IBM

J.P. Morgan cancelled its seven-year, $5 billion IT contract with IBM which was the worst debacle for IBM in 2004 as J.P. Morgan opted to bring its own IT talent back and it caused IBM loss of billions of dollars.



6. Government rules of different countries

US companies hire highly skilled employees from other countries to work in their companies for special assignments. These employees were given H1-B visa but the trump administration changed the policy of H1-B visas which caused a negative impact on the organizations which are dependent on the US market. New procedures set by the US government to acquire H1-B made it difficult for companies to prove that the employee/workers who were travelling on an H1-B visa are supposed to serve a purpose in the project and not travelling for personal benefits or hidden gains.


Challenges provide scope for improvement. The more an industry face it, the more it flourishes. In this rapidly changing business environment, the companies which cope up with the changing technology will hold their place in the market for a long time.

“Take challenges as an opportunity for new learnings” – Boshi Haree

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Author – Snehal Namade

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One Comment

  1. Quite descriptive and informative article. Given facts provide a better clarity and understanding of the topic.
    Nice work.

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