Mphasis rejects decline of traditional IT services, calls for AI-driven adaptation

Mphasis

While AI is reshaping IT services, Mphasis argues that the industry’s demise is exaggerated. Just last week, HCLTech and Infosys leadership said that time has run out for the traditional IT service model.

HCLTech’s Chief Executive Officer C Vijayakumar even said that some teams have already delivered twice the revenue with half the people amid the artificial intelligence (AI) disruption.

“The nuance is that changing models comes with a huge change management portfolio. Surely it'll create acceleration, and it should, but I think it's going to be a two-speed IT organisation,” Ravi Vasantraj, Global Delivery Head, Mphasis, told Moneycontrol on the sidelines of the Nasscom Technology & Leadership Forum 2025.

In business, change management refers to a process for planning, implementing, and controlling changes in systems to minimise risks.

Nonetheless, he believes IT firms will have to adapt to new models with shorter deal cycles, AI-driven automation, and a shift towards business outcomes. However, contextual understanding and client-specific strategies will continue to play a crucial role.

Even HCLTech had earlier said that it is witnessing shorter deal cycles.

Context-driven approach

Vasantraj said that customer context is the key. “So you really can't start putting this together in an economic model unless you're able to start getting the context in place. So our organisation structure is completely pivoted towards looking at customer, understanding the customer better, getting ground level things on what is the account plan for the customer?” he added.

Rather than being locked into a single AI tool or cloud platform, Mphasis is focusing on a technology-agnostic approach. The company is using platforms like Amazon Web Services, Microsoft’s Azure, Google Cloud, and open-source AI to create customised solutions, keeping in mind client needs.

“We are pretty egoless entities. Whatever works for our clients, we would do it. We are not fixed to a notion,” Vasantraj said.

Changing IT deal structures

Mphasis is seeing business cycles are getting shorter and that clients are demanding faster return on investments (RoI). This trend of shift in business cycle has gathered momentum after macroeconomic issues hit IT companies’ clients a couple of quarters back.

However, Vasantraj cautions against comparing this shift to the end of traditional IT services.

“The way we should see it is that structuring the deal and starting to look at how you start getting immediate value to the customer becomes important either in terms of monitoring or in terms of customer positioning or in terms of deal closures which means that your entire transaction life cycle gets shorter,” Vasantraj explained.

Will AI kill traditional IT jobs?

With AI automating many aspects of IT operations, many fear job losses but leaders have time and again clarified that newer jobs would be created.

Mphasis also echoed the same sentiment.

Vasantraj referred to the “Jevons Effect”, which suggests that as efficiency increases, overall demand also rises.

Applying this to the IT context, global tech debt is valued at $1.8–$2 trillion, and if modernisation becomes 60 percent cheaper with AI, demand will surge.