Indian IT giants embrace GenAI to boost outsourcing profits
NEW DELHI, INDIA — As a global leader in IT services outsourcing, India is on the cusp of a significant transformation with the integration of generative AI (GenAI) technologies. This advancement offers the potential to enhance profit margins in an industry traditionally characterized by razor-thin margins.
Pat Casey, CTO and EVP of DevOps at ServiceNow, highlighted the importance of this development, stating, “The outsourcing business is a huge part of the Indian economy. And that business runs on razor-thin margins and has been squeezed down for years on the margin front.”
ServiceNow’s GenAI success story
Tech services company ServiceNow has already achieved $10 million in annualized gains through cost savings and increased productivity due to GenAI.
The company’s AI-enhanced product, Now Assist, emerged as its fastest-growing offering, securing 11 deals exceeding $1 million in annual contract value in Q2. This product provides a variety of services, including virtual agent customer support, HR service delivery, and AI search.
AI’s impact on Wipro and LTIMindtree
Casey also pointed to Wipro and LTIMindtree as examples of AI’s transformative impact. At Wipro, the integration of a Virtual Agent with Microsoft Teams has resulted in a 40% reduction in service requests and a 25% decrease in support call volumes.
The virtual agent now handles 16,000 requests monthly, with a 40% monthly growth rate. Meanwhile, Mindtree has experienced a 50% reduction in IT operations costs.
StarCoder AI model revolutionizes developer productivity
ServiceNow’s StarCoder AI model, developed in collaboration with Hugging Face, is significantly enhancing developer productivity. This open-access large language model for code generation has increased developer productivity and innovation speed by 52%.
Despite its capabilities, Casey cautioned against the belief that AI-generated code could entirely replace human developers.
“It’s very much human in the loop. You need to know your code well enough to know what you want to prompt it for,” he explained.
India’s strategic role in ServiceNow’s workforce
India is crucial to ServiceNow’s global operations, with over 20% of its workforce based in the country. Hyderabad has become the company’s largest site in terms of employee headcount.
“The India team has evolved into a microcosm of ServiceNow globally,” Casey noted, emphasizing that 85% of its Indian employees are engineers and developers.
Future prospects for AI infrastructure in India
Although Casey mentioned no immediate plans for India-specific AI processing infrastructure, he acknowledged the potential for future development based on market demand. “If there’s market demand, it’s something that we would definitely look at,” he stated.
As India embraces GenAI, the country’s outsourcing industry is poised for substantial growth, potentially reshaping its economic landscape.
