Indian IT Industry with AI can reach 2X revenue / employee - here's how!
Siddhesh Joglekar
Marketer | Edtech | Linkedin Top Voice | Subscribe to my Education, AI & Marketing Newsletter - Insight Edge
With both me and my spouse being IT Engineers, discussions on the Indian IT industry at home are inevitable! We discussed about how AI can actually be a tailwind at a company level if harnessed well. And then, 24 hours later, I read this article where HCLTech CEO C Vijaykumar literally said the same thing -
“I strongly believe that the business model is ripe for disruption. What we saw in the last 30 years, a fairly linear scaling of IT services with people and revenue scale linearly - I think the time is already out for that model,” said Vijayakumar.
Here's the current business model and why it is ripe for disruption -
For decades, the Indian IT industry has thrived on offshore outsourcing, large workforce models, and cost arbitrage. But in 2025, as AI automation accelerates, this model is hitting a ceiling.
The challenge?
? Traditional IT services rely on headcount-based revenue growth—more projects mean more hiring.
? Global IT firms like Accenture, Deloitte, and IBM generate far higher revenue per employee by selling high-value consulting & AI-driven products.
? Indian IT firms still struggle to break out of the services mold and move toward AI-driven productization & consulting.
?? The opportunity?
AI can move Indian IT up the value chain—from body shopping to high-margin AI transformation projects, SaaS platforms, and AI-powered consulting.
Let’s break down how this transition can happen. ??
1?? From Outsourcing to AI Consulting: Monetizing AI Transformation
?? 1.1 The Problem:
? Indian IT firms have deep expertise in enterprise IT & cloud, but most clients hire them for execution, not AI-led strategy.
? Accenture & McKinsey win the high-margin AI transformation deals, while TCS, Infosys, and Wipro execute low-margin tech implementation.
?? 1.2 The AI Fix:
? AI-First Consulting: Instead of just implementing AI tools, firms need to build AI consulting arms that help clients with AI strategy, data transformation, and automation roadmaps.
? Pre-Packaged AI Solutions: Instead of custom development for every client, IT firms should develop ready-to-use AI frameworks—think AI for fraud detection, AI-powered HR analytics, AI in supply chain forecasting.
? Hyper-Specialization: IT firms should own niches—for example, an “AI in BFSI” division that consults on AI-driven financial automation.
?? Impact: Instead of billing for developer hours, firms charge for AI expertise—leading to higher-value contracts and better margins.
2?? AI-Powered SaaS: From Services to Recurring Revenue
?? 2.1 The Problem:
? Most Indian IT firms operate on project-based revenue models.
? Global competitors own scalable SaaS platforms that generate recurring, high-margin revenue.
?? 2.2 The AI Fix:
? AI-Driven Enterprise SaaS: IT firms can productize their domain expertise into SaaS products—like an AI-powered risk analytics tool for banks or an AI HR automation platform for enterprises.
? Internal AI Frameworks → External Products: Indian IT firms develop AI accelerators for internal projects—these can be spun off as commercial SaaS offerings.
? AI-Powered Managed Services: Instead of selling one-time automation solutions, firms can offer AI-managed services—continuous monitoring, AI-driven security, and automated cloud operations.
?? Example:
TCS built ignio, an AI-powered IT operations platform. Instead of just selling IT services, they sell AI-powered automation as a product.
?? Impact: IT firms own their IP, create predictable SaaS revenue streams, and reduce dependency on headcount-based growth.
Final thoughts: The old outsourcing model won’t survive in the AI-first era. Indian IT firms must transition from execution partners to AI-first innovation leaders.
The question is—who will move first?
What’s your take? Should Indian IT firms double down on AI-driven consulting & SaaS, or stay in the services game? Drop your thoughts below!
I support all endeavours to make our country future-ready. However We must be ready for any disturbance which may hinder our efforts such as a pandemic/ recession/ crisis.
Narula Institute of Technology (IT)
1 周Today's Tech. Industry is totally relied on AI. The Automation of AI is happening rapidly. In this case Our Indian IT Industry can't survive long with traditional headcount workforce. This needed to be changed. This Automation of AI Can benefit the whole industry:- 1. The Productivity Improvement of Workforce 2. Increase Revenue generate 3. Impactful contribution in IT World
System Engineer | SCCM & IT Infrastructure | Exploring AI & Prompt Engineering
1 周Thanks for the information.
CEO @ Prishusoft | Full Stack Developer | ASP.NET, Angular, Node.js, React.js | Expert in Dynamic Web Development Solutions Globally
1 周? AI-driven automation can significantly enhance productivity, allowing employees to focus on higher-value tasks rather than repetitive processes. ? Predictive analytics and AI-powered decision-making can help businesses optimize resource allocation, reducing costs while increasing efficiency. ? Upskilling and reskilling the workforce will be crucial to ensure that AI complements human expertise rather than replacing jobs. ? Adopting AI in customer service, software development, and IT operations can improve turnaround times and service quality. ? SMEs need cost-effective AI solutions to stay competitive—affordable AI implementation strategies should be a priority. ? AI-powered insights can help businesses make data-driven decisions, ultimately leading to better financial and operational outcomes. ? India has the talent and the tech infrastructure to become a global leader in AI-driven IT services—the key is rapid and strategic implementation.
MSc Microbiologist, Content Writer, Clinical Researcher, Hospital Admin, Practice Manager, Business Development, Cellular and Molecular Biologist
1 周The idea that AI can help the Indian IT industry achieve 2X revenue per employee is unrealistic due to several challenges. While AI improves efficiency by automating repetitive tasks, high-value IT services still require human expertise. Clients expect AI-driven cost reductions, not higher billing rates, limiting revenue growth. Additionally, workforce upskilling takes time, and AI adoption may lead to job displacement rather than increased earnings per employee. Infrastructure, regulatory hurdles, and pricing pressures further restrict rapid scaling. While AI will enhance productivity and profitability, doubling revenue per employee across the industry is highly unlikely.