IT revisits on-site roles, but with a talent and cost twist

Demand for AI-savvy, client-facing engineers is reshaping traditional offshore strategies

- Jas Bardia

India’s information technology (IT) services companies are facing a shift in client expectations as artificial intelligence (AI) reshapes business models. From the world’s largest banks to retail majors, customers now increasingly prefer engineers who combine AI expertise with sales and consulting skills to drive end-to-end deployment of the new technology, even as this shift raises costs for the country’s largest tech services firms.

Homegrown IT services companies have traditionally worked with a simple business model. Under this, a third of their engineers were typically stationed in client locations such as in the US and Europe and commanded higher pay packages, whereas the remainder functioned remotely from cheaper locations such as India.

Over the past few years, tech services firms have steadily shifted employees to remote locations away from their clients’ offices to reduce salary bills and increase profitability.

However, rise of AI-enabled automation tools is prompting a rethink of the earlier model. Firms are now asking IT vendors’ employees to relocate and work from offices and are empowering them to take decisions relating to engineering, consulting, and sales in a bid to reduce the time taken for tech transformation.