To stay competitive and relevant in the fast-changing world led by digital, India’s leading IT services companies, well-known for their cost-competitiveness, have begun leveraging more artificial intelligence (AI) initiatives as the technology has continued to gain traction.

India’s IT-BPM (information technology/business process management) industry was projected to grow at about 8 percent in FY2017 to $154 billion, according to the National Association of Software and Services Companies (NASSCOM). These companies are betting big on providing additional value to customers with disruptive technologies.

Examining the top three IT services companies in India, Tata Consultancy Services (TCS), Infosys and Wipro, we set out to answer the following questions:

  • What are the various AI initiatives leading Indian IT services companies currently employ?
  • What have been the tangible results of current AI initiatives by Indian IT services firms?
  • What is the future of AI in the Indian IT services sector?

Below, we’ll assess each of the three Indian IT services giants one by one.

Tata Consultancy Services (TCS)  

FY17 revenue: $17.58 billion       

Tata Consultancy Services (TCS), India’s largest software exporter by revenue, is heavily investing in cloud and AI-based services as key verticals like BFSI (banking, financial services and insurance) are increasingly adopting automation. TCS’s revenue from digital services, which contribute to more than a fifth of its turnover, rose 13.9 percent sequentially in the recently reported third-quarter (October-December) earnings.

In 2015, TCS venture Digitate launched a product called Ignio, terming it the “world’s first cognitive system for enterprise IT.” Ignio can rapidly identify root causes and automate routine tasks, according to Digitate.

In the 11 minute video below, Tata’s Jayanti Murty – Head of Strategic Enterprise Accounts for Ignio – explains how this white collar automation process works:

Ignio performs work on behalf of the IT operations team in an intelligent fashion thereby reducing human involvement, said Jayanti Murty, head of strategic enterprise at Digitate.   

Ignio combines the prebuilt knowledge about IT infrastructure with the necessary business context to enable better decision-making and solve many IT operations challenges. This prebuilt knowledge includes tech skills at various levels required to process work. In order to process work consistently and quickly, Ignio maintains a real-time view of the enterprise using information captured from all its sources.

Tata claims that Ignio is designed to solve key problems such as:    

  • Rapid root cause detection: Ignio can help IT identify problems in a matter of minutes by characterizing both the topologies and behaviors of systems and then identifying anomalies and following their effects upstream to get as close to the source as possible.
  • Automation of tasks: Automation reduces response times to get to resolutions faster and keep the basic systems running so that IT can focus on improving and expanding their infrastructures instead of handling routine tasks.
  • Predictive impact analysis: Ignio helps remove ambiguities and provides clear results much faster. For example, with batch processes, Ignio can model all of the batch streams and simulate changes, identifying potential issues before they are implemented.  

Infosys

FY17 revenue: $10.20 billion        

Infosys, India’s second-largest software exporter by revenue, has been investing heavily in emerging technologies ever since Vishal Sikka took over as managing director and chief executive officer in June 2014. Salil Parekh, who replaced Sikka as CEO on Jan. 2, 2018, said he would continue these digital initiatives, as long as they benefit clients. The company’s Digital business makes up more than a fourth of Infosys’s revenue.

In 2016, the company launched Mana with a goal to automate repetitive and commoditised software maintenance tasks. It is a plug-and-play platform that helps clients gain insights from their data by combining machine learning with the deep knowledge of an organization.

The company said Mana and Aikido, which uses AI-based platforms and knowledge-based IT (KBIT) services, work hand-in-hand to lower the cost of maintenance for both physical and digital assets. The system uses three primary software platforms of Infosys – the Infosys Automation Platform, the Infosys Information Platform and the Infosys Knowledge Platform.       

A number of clients have benefited from Mana. For instance, the individual productivity for a company with a large fleet of field engineers, improved by up to 50 percent by utilizing the self-learning capabilities of the platform. For a major global telecommunications firm, entry effort of agents was reduced by up to 80 percent by automating order validation and removing the need for corrective processes. For a global food and beverage manufacturer, Mana assisted sales managers in automating the sales planning processes by automatically resolving maintenance tickets of recurring issues.          

Building on the success of Mana and its robotic process automation (RPA) solution AssistEdge, Infosys in April 2017 launched its AI platform Nia. These products have already serviced more than 50 clients and catered to 150-plus projects across sectors, the company said.     

Nia converges the big data analytics, machine learning, knowledge management and cognitive automation capabilities of Mana, the RPA capabilities of AssistEdge,  the machine learning capabilities of Skytree, which the company it acquired last year, optical character recognition (OCR), natural language processing (NLP) and infrastructure management services.

Infosys said while its first-generation AI platform Mana was about IT simplification, efficiency and cost, Nia tackles complex business problems such as forecasting revenues, forecasting what products need to be built, understanding customer behavior, content of legal contracts and documents, and understanding compliance and fraud.     

In the two minute video below, Manu Thapar (CTO Engineering at Infosys) explains some of the basic applications of Nia:

From the video above – and our research in the industry – it seems clear that Nia is in an early phase, without robust traction with existing clients as of yet.

“We are very excited about the potential of Nia and will continue to invest in it,” U.B. Pravin Rao, chief operating officer, Infosys told TechEmergence. Nia, which is a horizontal platform, address all the pieces including RPA, analytics and machine learning, we are now trying to build vertical apps on top of it, he added.

Infosys claims that Nia has helped the company with some of the following business functions:

  • Improving order-to-cash process by creating a real-time risk profile to customize the collection strategy, expedite resolution of disputes, predict anomalies, prevent disputes, and enable better visibility and forecasting of cash flow to reduce days sales outstanding.
  • Predicting variability in manufacturing and material cost, while also reducing product development cycle times
  • Creating a customer genome based on internal and external data sources to help develop targeted messaging, accurately identify upselling and cross-selling opportunities, offer personalized solutions, and improve customer satisfaction

Wipro

FY17 revenue (IT services): $7.7 billion

In 2016, Wipro launched its in-house AI platform HOLMES, which helps accelerate digital transformation through algorithmic intelligence and cognitive computing capabilities. The platform uses machine learning, natural language processing, genetic and deep learning algorithms, semantic ontologies, pattern recognition and knowledge modeling technologies, helping businesses build and deploy cognitive solutions, the company said.    

Despite it’s unfortunately choppy English, the two-minute Wipro Holmes video below explains the basic value proposition of the application:

In March 2017, Wipro launched the HOLMES Cloud BOT, a “continuously learning digital consultant” that uses a gamified NLP-based chat interface to have smart chats with stakeholders. The BOT also claims to solve the complexities of collating undocumented information related to a firm’s technology application architecture, risk management and compliance. It derives insights from this data to define cloud strategy and offer optimal application choices. 

In the press release (linked above), Senior VP and Head of Global Infrastructure Services Kiran Desai says:

“We are currently seeing a convergence of technologies that is driving business value for clients. The Wipro HOLMES Cloud BOT combines cloud, AI and collaborative technologies, which we believe, are catalysts in accelerating transformation.”

Wipro claims that during FY17, it generated productivity worth over 12,000 persons across 140+ customer engagements in over 1,800 cumulative instances of HOLMES bots in IT services, in the areas of application development, application support and maintenance and infrastructure services. Employees who are involved in such projects are then retrained and “upskilled” to be redeployed to handle higher value tasks.  

The Impact of AI at India’s IT Services Firms

Potential Upside

The future of digital transformation in India’s top IT services companies seems bright with all the AI initiatives from TCS, Infosys and Wipro. These companies have also carved out separate service lines and business units to tap into the newer technologies, indicating their seriousness about digital transformation.

Bengaluru-based Infosys, for instance, has set up a new service line called “New Software and Services,” which includes AI and related initiatives. Mumbai-based TCS has set up a business unit called Digitate dedicated to its AI platform Ignio and other next-generation products. Infosys’s cross-town rival Wipro, which set up a separate unit called Holmes for Business last year, is banking on it generating additional revenue.

We see US firms taking advantage of the increased capability and attention on AI as well – with IBM, Accenture, McKinsey and other large services firms developing AI though leadership and new divisions of their own. Accenture’s CTO has even taken the time to create articles for our readers here at TechEmergence (see “Artificial Intelligence for UX – Where Bots May Beat Out Brands“).

With the massive talent shortage for AI skills, existing companies will likely rely on a ecosystem of service providers to help with training, integration, and deployment – a massive potential profit center for consultancies.

Potential Downside

The Indian IT services industry, once considered the largest job creator, has also been criticized for mass layoffs in 2017, which analysts believe is a result of AI and automation.

According to a HfS Research report, automation will impact 1.4 million global services jobs by 2021, with India being among the most affected. The country is set to lose 640,000 low-skilled positions by 2021 as a significant amount of back office processing and IT support work will likely be automated and consolidated across a smaller number of workers, the report stated.   

US IT services firms almost certainly acknowledge this growing automation threat, but are resistant to address it. Our interviews with Accenture and IBM repeatedly emphasized the concept of “augmentation” over “automation”, but one must assume that companies so heavily reliant on “billable hours” labor would never release statements that make their employees feel that their jobs are at stake.

This results in IT services firms creating lots of thought leadership largely denying the threat of automation, which we believe is indeed real. While the threat may not crush the sector as a whole, it also shouldn’t be denied by any business leaders in the IT services sectors.

The answer perhaps lies somewhere in between. As technology rapidly changes, automation is the only way to stay competitive and relevant. AI and automation will be must-have elements in any IT services company that aims to stay relevant to their customers’ changing needs. The workforce will have to be retrained or “upskilled” so that they can take up other jobs and move up the value chain.

 

Header image credit: Infosys