How is the IT sector’s outsourcing model changing with AI coming in?
By Anupam Chaturvedi, Head of ZEISS Digital Partners, ZEISS India
For over three decades, India’s IT services industry has been synonymous with global outsourcing. Built on scale, process discipline, and cost efficiency, it became a cornerstone of enterprise digitalization worldwide. Today, artificial intelligence is reshaping that model quietly, steadily, and irreversibly. This is not a cyclical change. It is a structural one.
The shift from workforce scale to productivity scale
The traditional outsourcing model was straightforward: break work into tasks, standardising delivery, and scaling through large offshore teams.
Growth was linear, more people meant more revenue. Metrics such as headcount, utilisation, and blended rates dominated both boardroom discussions and contracts.
AI disrupts this logic. When software can write code, generate test cases, resolve incidents, and automate operations, output no longer grows in proportion to team size. Productivity becomes non-linear. A small, highly skilled team equipped with AI can deliver outcomes...
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