BPO firms outpace IT peers in AI adoption

BPOs say client spending cuts on non-essentials don't hit core operations

- Jas Bardia

Pure-play business process service providers, including Firstsource Solutions Ltd, Genpact Ltd, WNS (Holdings) Ltd, and ExlService Holdings Inc., are expected to be better at navigating GenAI and macroeconomic uncertainty, according to management and analysts.

This is partly due to the nature of BPO companies' work, which does not depend on clients' non-essential expenditure to earn revenue.

At least one expert said BPO companies could make use of the AI-led transformation. "BPO firms are very well placed to exploit AI models as they are all about the process and data. The struggle the IT-centric firms have is that they are too restricted to IT-only relationships, when the core driver of GenAI and agentic is coming from the business functions," said Phil Fersht, chief executive, HFS Research, a US-based global research and advisory firm.