GenAI Recodes Indian IT Shift

GenAI is driving Indian IT firms toward value-based pricing, prioritizing efficiency and outcomes over costs

- Jas Bardia

India's legacy information technology services companies are having to ditch a decades-old business practice to avoid ceding precious turf to nimbler mid-tier rivals in this era of generative artificial intelligence (AI).

Homegrown IT services companies such as Infosys Ltd and Tata Consultancy Services Ltd typically bill clients based in part on the number of people deployed on a project. But GenAI has made it possible for IT projects to be handled by fewer people, forcing companies to turn to a value-based pricing strategy that's pegged to outcomes rather than the costs deployed in reaching the outcomes.

While Infosys and HCL Technologies Ltd are developing small language models for their clients, TCS, India's largest IT service provider, merged its cloud and AI businesses to start a business unit called Ai.Cloud in May last year.