AI drives BPO industry transformation, says TCS CEO
MUMBAI, INDIA — The business process outsourcing (BPO) industry is undergoing rapid transformation as AI automates routine tasks and reshapes service delivery models, warns Tata Consultancy Services (TCS) Chief Executive Officer (CEO) K Krithivasan.
AI disruption forces BPO reinvention
Krithivasan announced this move two years ago, predicting that AI agents will penetrate the BPO industry more quickly than traditional IT services.
“I called out two years ago that BPO is one of the industries that would get disrupted even before the traditional coding. Because there are a lot of opportunities for creating AI agents or agentic AI. Both of them have a very strong role today. You would see that business evolving faster (than others),” he told Economic Times in an interview.
Such a tendency is supported by the new acquisition of Capgemini and WNS, with $3.3 billion in merging BPO services by the former and the AI capabilities of the latter in order to offer more advanced automated services.
While AI may displace low-end jobs, it will also create high-paying positions in data science, AI development, and online marketing.
The most prominent companies in the industry, such as TCS, insist that their industry experience and the ability to understand context will help large players to compete with scrappy AI-enhanced startups.
The move is already increasing accuracy, reducing expenses, and improving the quality of services in the industry.
Consolidation and new delivery models reshape market
The Capgemini and WNS transaction is part of a trend toward consolidation, as traditional IT companies expand their BPO services to include AI and automation.
This action indicates a trend in the industry, as the old labor arbitrage model is being replaced by tech-enhanced, outcome-based services.
Young AI-born companies are emerging with flexible delivery sets, but Krithivasan emphasizes that established players like TCS still hold a significant advantage due to their extensive industry knowledge.
Due to AI, the BPO industry is undergoing changes, but firms need to balance the impact of automation with human support to remain competitive in a fast-paced market.
TCS, Capgemini, and WNS recently ranked #8, #5, and #22, respectively, in the OA500 2025, an objective index of the world’s top 500 outsourcing companies.
