The Emerging AI Outsourcing Trend presents Business Potential for Indian Companies

The rapid adoption of AI technology globally has presented a significant advantage for India, with AI consulting and development firms experiencing a surge in client interest in outsourcing. This recent trend bears a striking correlation to India’s tech boom in the 2000s, when the country emerged as a powerhouse in the IT industry, birthing IT giants like TCS, Infosys, Wipro which we all know of as IT Industry leaders today.

During that period, multinational giants such as Microsoft, Google, and Amazon recognized the immense potential of India’s talent pool and established their presence in the country. As history repeats itself, India is once again poised to capitalize on the technological advancements of the AI era, building on the foundation laid by the transformative tech boom of the 2000s.

Scoping the Demand for AI Tech Development

The emergence of AI technology has sparked a significant surge in client interest and inquiries in the IT industry. Indian companies are witnessing a substantial increase in client conversations and queries related to AI use cases, indicating a growing demand for AI solutions. An analytics company listed on the NSE reported a 5x increase in inbound client queries about AI use-cases. Another reputed firm reported that the daily volume of client interest has matched the number of queries they were receiving in a week before February this year. Tech giants like Accenture, Tata Consultancy Services, and Infosys, are less inclined to pursue small-scale projects in this domain, which is indicative of the kind of ticket value of AI projects they might be receiving.

Factors behind this emerging interest in AI technology

The rise of ChatGPT, a prominent AI model, has played a significant role in accelerating the adoption of AI on a global level. From startups to mid & large sized companies; everyone wants to get on the AI bandwagon and not miss out on incorporating this technology in their businesses.

This trend can be compared to the mobile app revolution of the early 2010s when businesses were actively developing apps to stay competitive. Similarly, today, companies are increasingly investing in AI solutions to leverage its transformative capabilities.

It’s worth noting that the development of AI products is not limited to just the in-house teams of organizations. Internal engineering & tech teams of many organizations are already overwhelmed with other product development work, with many choosing to outsource, seeking specialized expertise to meet their requirements.

Outsourcing enables faster progress & helps overcome budget constraints by avoiding the need for a dedicated in-house team, and provides access to specialized expertise. AI consulting firms have witnessed increased business due to faster processes and customization options.

AI use-cases driving the Demand

While AI technology is still in the development stage, many startups and mid-sized firms are eager to capitalize on its potential.

The primary use cases for AI include chatbots and virtual assistants. AI consulting firms are partnering with edtech startups to integrate conversational AI-powered tutors, transforming the way students learn. Regulated businesses such as Asset management and Wealth Management platforms want to build private AI resources for themselves, as they are skeptical to build models using open-source framework due to data privacy concerns.

AI is proving particularly valuable in customer service, as these systems can navigate internal databases and textual information to promptly address customer queries while retaining the context of the conversation. Furthermore, mining social media data, customer case notes, and surveys, allow businesses to identify end-customer pain points and design better products and services.

Unlocking India’s Business Potential

A recent report by FICCI-Access Partnership estimates that the use of AI to supplement work activities could unlock $621 billion of productive capacity in the Indian economy, equivalent to 18% of GDP in 2021. The manufacturing as well as wholesale & retail trade sectors are poised to benefit the most due to their large workforces and high labor productivity.

Conclusion

The world witnessing a surge in interest and adoption of AI, leading to an increase in AI outsourcing. Companies are recognizing the advantages of outsourcing AI projects. By capitalizing on this demand, Indian IT Companies are poised to unlock its business potential.

If you want to be part of this growth journey of the Indian IT sector, check out the Wright Innovation smallcase!

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