• According to a study with McKinsey, worldwide, Generative Al is estimated to yield an annual economic value of USD 2.6 to USD 4.4trillion. Most of this value is likely to emerge from a few functions and industries that form the core of the Indian technology services industry.
  • Indian tech companies have traditionally excelled in providing IT and business process management services. With the advent of Generative Al, they are now expanding their portfolios to include Al-driven analytics, intelligent automation, and personalized customer interactions. These companies are not just adopting Al; they are redefining their service offerings, creating more value for their clients, and setting new industry standards.

Potential Areas of Opportunity for the Industry

  1. Expansion in the Addressable Market: Generative Al is poised to drive considerable market expansion in the next 5 years. This expansion includes new services and offerings that align with the evolving needs of the industry.
  2. Delivery Excellence: The efficiency of service delivery processes is set to improve significantly. For example, in application development and BPM services, a 20 to 30 per cent productivity improvement is anticipated. This gradual improvement will begin with a 10 to 15 per cent gain in the first 12to 18 months, potentially reaching 20 to 30 per cent in 2 to 3 years.
  3. Sales Excellence: Generative Al will streamline the entire sales lifecycle, from lead generation to sales strategy formulation. This technology, especially applications running on Large Language Models backed by proprietary datasets, will optimise the sales process, increasing productivity, and reducing sales costs as a percentage of revenue.
  4. Productivity Gains: In internal enabling processes like finance, legal, and HR, Generative Al can automate time-consuming tasks such as summarisation, workflow generation, and report preparation. Combined with sales productivity improvements, this could lead to a 40 per cent increase in SG&A productivity.

India’s Unique Position in the Al Landscape

Distinctively, India’s approach to digital transformation, grounded in principles of inclusivity and security, has set a global standard in the technological paradigm. Unlike conventional top-down innovation models, India has adopted a grassroots-first approach, ensuring economic growth and digital inclusion at every level. This strategy has positioned us uniquely in the global digital economy—not just as participants but as leaders in creating a truly inclusive, human-centric digital landscape, achieved at an unprecedented scale.

Addressing Al Security and Ethical Considerations

  • As AI systems become more advanced and widespread, ensuring their security and ethical use is paramount. The Indian tech industry is proactively addressing these challenges by investing in secure Al development practices, robust data protection measures, and ethical guidelines. Companies are collaborating with academia, government, and industry partners to create standards and frameworks that ensure Al is used responsibly.

Human-Centric Al: A Core Focus

  • Generative Al demands a fundamental shift towards a human-centred approach, prioritizing transparency and human oversight. Algorithms must be thoroughly tested for unintended consequences and biases before deployment. Scrutinising data for implicit biases is crucial to preventing harm and distortion in outcomes. This perspective is vital to ensuring Al’s ethical use for humanity’s benefit.
  • Building Al safely from the outset is essential. This involves embedding safety measures throughout the Al development lifecycle, ensuring resilient systems that are safeguarded against potential risks. It demands a collective effort from researchers, developers, policymakers, and the public to ensure Al serves humanity’s best interests.

Way forward and Conclusion

  • The Al technology landscape is rapidly changing, and its full potential remains largely untapped in the short term. This uncertainty necessitates a cautious yet proactive approach from providers. We must remain vigilant, consistently assess, and adapt to the ongoing developments in this field.
  • This juncture represents a significant inflection point for the industry. It offers a divergence of paths, presenting unique opportunities that could either reshape the value proposition of technology services or simply act as another wave accelerating Al adoption within the sector.
  • In either scenario, those who strategically embrace and integrate Generative Al early are likely to position themselves as front-runners in this dynamic and evolving industry. The journey ahead for India’s tech services sector is not just about technological adaptation but also about leading the way in innovation and setting a global precedent in the effective and ethical use of Generative Al.



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Courtesy: Yojana