As generative AI took over the technology industry over the last six to eight months, it is now expected to generate economic value worth $2.6-$4.4 trillion annually, and around 75 percent of this will come from tech service companies’ functions like software engineering, customer operations, product and R&D, and sales and marketing, according to a report by Nasscom and Mckinsey & Company.
While potential impact on client industries will vary, high-tech, banking, and retail with hyper-personalized customer support in banking and retail, revolutionized coding, and testing in high-tech is expected to benefit the most.
With the emergence of over 100 generative AI use cases, leading technology services providers like TCS, Infosys, Accenture, Wipro, HCLTech are likely to see an additional 15-20 percent growth over the next five years, driven by new/reimagined offerings like responsible AI consulting, generative AI chatbot, and legal contract management.
The report also highlighted that there will be a 30 percent improvement in delivery productivity is projected within the next 2 to 3 years, with services like application development and BPM expected to witness a significant impact.
Sangeeta Gupta, Senior Vice President, and Chief Strategy Officer at nasscom, said: “With the full scope of its (generative AI’s) potential still emerging, continuous monitoring and reassessment of opportunities become vital to maintain a competitive edge.”
She added, “Providers are constantly reevaluating their approaches based on new insights, many are intensifying their investments in areas like technology, talent, risk management, and even mergers and acquisitions with generative AI startups.”
“Generative AI has emerged as a discontinuity that has the potential to reshape the trajectory of technology service providers. It holds the promise of a step change in productivity and unlocking multiple new revenue pools for providers. Early movers are positioned to emerge as frontrunners in this dynamic industry’,” said Ankur Puri, Partner, McKinsey & Company.
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