Tag: ITS

Harnessing Digital Workplace Investments for 2025 | Webinar

ON-DEMAND Webinar

Harnessing Digital Workplace Investments for 2025

For many enterprises, the previously cautious investment environment of 2024, caused by economic pressures, recessionary sentiments, and geopolitical uncertainties, is now shifting towards a more aggressive and strategic focus for 2025. Digital workplace transformation initiatives, spearheaded by innovations such as generative AI, Copilots, and the metaverse, are poised for a rapid uptake by service buyers. The ongoing demonstrations of these technologies’ industry-specific advantages, clearer proof of ROI, improved regulations and compliance, and successful scalability and integration, as well as the deployment of pent-up investment funds, are the key drivers for this change.

Bolstered by industry expertise and deep analyst insights, this thorough webinar hosted by Yugal Joshi, Partner, Prabhneet Kaur, Senior Analyst, and Udit Singh, Vice President, deep-dived into how this focus shift will drive substantial investments in the digital workplace. Covering key themes, such as generative AI, Copilots, employee experience, and the metaverse, our Everest Group experts outlined the strategies needed to capitalize on this new momentum.

Viewers gained actionable insights for upcoming investment opportunities, learning how to navigate challenges and increase competitiveness using the latest Everest Group research. Digital workplace service buyers and providers gained useful knowledge on how to craft effective digital workplace investment strategies for 2025.

What questions did the webinar answer for the participants?

  • What factors will drive investments in digital workplace transformations in 2025?
  • What should the enterprise strategy be for deriving maximum benefit from Copilots?
  • How can organizations effectively enable employees in adopting generative AI and its use cases?
  • How can you maintain a holistic employee experience amid ongoing disruptions?

Who should attend?

  • CIOs
  • CTOs
  • Digital Workplace Heads
  • Heads of Outsourcing
  • Procurement Heads
  • Senior marketing executives
  • Analyst Relations heads
  • Senior sales executives
  • IT Infrastructure Heads
Joshi Yugal 1
Partner
Kaur Prabhneet
Senior Analyst
Singh Udit
Vice President

The Evolution of Next-gen Customer Engagement Platforms | LinkedIn Live

LINKEDIN LIVE

The Evolution of Next-gen Customer Engagement Platforms

Watch this event on LinkedIn which was delivered on Thursday, September 26, 2024 

In this collaborative LinkedIn Live session, our experts discussed the shifts occurring within life sciences enterprises as they navigate the evolving CRM ecosystem. 🔬

The Veeva-Salesforce split presents a unique opportunity to transition from traditional CRM systems to next-gen customer engagement platforms, revolutionizing the entire commercial technology stack. 🚀

Watch this LinkedIn Live session and engage with us as we explore leading-edge technologies and their evolving capabilities, shedding light on the massive opportunities for technology and service providers.

Drawing from three comprehensive assessments, we’ll focus on the advancements in next-gen platforms poised to deliver personalized customer experiences.

During this collaborative LinkedIn Live session, we discussed:

✅ What are the high-priority modules across CRM/CX platforms that enterprises are interested in? 🎯
✅ Which functions within the life sciences commercial segment are more mature vs. others in terms of next-gen technology adoption? 💡
✅ What is the market sentiment around the Veeva-Salesforce split? 🔍
✅ What are some of the emerging segments within this ecosystem?

Ambati Durga
Practice Director
Everest Group
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Practice Director
Everest Group
Satija Chunky 1
Vice President
Everest Group
Aniruddha edited

Unleashing the Power of Advanced AI Engines: Transforming Business Operations for the Future | Blog

The digital age has transformed the way businesses operate, raising the bar for efficiency and innovation. They are now expected to be more agile and responsive than ever. As a result, integrating Artificial Intelligence (AI) in business operations has become a necessity for businesses aiming to stay competitive in the market.

Advanced AI engines are reshaping both front and back-office processes for enterprises by driving efficiency, accuracy, and scalability at new levels. In this blog, we explore how these cutting-edge AI engines are transforming business operations.

Reach out to discuss this topic in depth.

Unleashing the potential: how advanced AI is reshaping business operations

From rigid rules to cognitive flexibility

Use of AI for business operations has evolved beyond early AI systems that were limited by predefined algorithms and effective only for basic tasks, often failing when faced with complex queries. Advanced AI engines are at the core of the next generation of business operations. AI systems today are designed to learn, adapt, and improve over time, ushering in a new era of cognitive flexibility that elevates customer interactions across every touchpoint.

These AI engines are becoming integral to business operations, automating mundane tasks, providing deep insightsand unifying disparate operational silos. They help identify inefficiencies and drive end-to-end automation, enabling organizations to operate with greater efficiency and agility in an ever-evolving market

Foundations of advanced AI engines

Three pillars form the foundation of advanced AI engines:

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Generative AI (gen AI), built on the robust foundations of advanced AI engines, is revolutionizing business operations by automating complex tasks, enhancing decision-making, and enabling hyper-personalization. AI-driven tools are helping streamline workflows, optimize supply chains, and improve data analysis, leading to greater efficiency and cost savings.

These solutions also elevate customer experiences through personalized interactions, advanced self-service options, and consistent, context-aware engagement across all touchpoints. By bridging the gap between front office and back-office, AI solutions also enable quicker, more seamless, and richer experience for the customers. By adopting gen AI, enterprises can gain a competitive edge by streamlining customer service processes, anticipating customer needs, and delivering tailored experiences that drive customer acquisition, loyalty, and retention.

Human-AI collaboration: enhancing, not replacing

Contrary to dystopian predictions, AI isn’t here to replace human agents—it’s here to supercharge them. This collaboration between AI and humans enhances overall efficiency and customer satisfaction with AI efficiently managing lower complexity and repetitive queries, freeing up human agents to focus on intricate problem-solving that requires empathy and nuanced understanding, while leveraging insights from AI engines for a better experience.

This synergy between AI and human workers not only enhances operational efficiency but also drives innovation, allowing businesses to stay competitive in an increasingly digital world.

Front office evolution: delivering smarter, faster customer engagement

Front office operations, the heart of customer interaction, have traditionally been resource-intensive, often requiring significant human input. Advanced AI engines are now revolutionizing these operations, creating smarter, faster, and more personalized customer experiences:

  • Smarter customer interactions: AI engines empower front office teams with real-time data and actionable insights, enabling them to engage with customers more effectively. This allows for enhanced customer satisfaction and loyalty as interactions become more personalized, context-aware, and relevant
  • Automation at scale: Integration of AI systems enable seamless automation of tasks such as scheduling, responding to queries, and follow-ups, now freeing up human agents to tackle more complex issues. AI-driven chatbots efficiently manage a high volume of inquiries, ensuring customers receive quick, accurate responses while enhancing the overall experience
  • Proactive customer engagement: With predictive analytics, advanced AI engines can anticipate customer needs and behaviors, allowing businesses to engage proactively. Whether it’s offering personalized recommendations, addressing potential issues before they escalate, or optimizing marketing efforts, AI helps businesses boost customer lifetime value and drive revenue growth

Back-office revolution: streamlining operations for maximum efficiency

Advanced AI engines are also revolutionizing back-office operations streamlining critical processes, driving operational excellence, and enabling businesses to focus on strategic growth:

  • Automation and efficiency: AI is automating repetitive and routine tasks including data entry, invoice processing, and inventory management. Gen AI technologies are expected to deliver significant benefits across business operations. When successfully implemented, they could lead to 15-25% cost savings across operations within 18-36 months. Additionally, agent training time is projected to decrease by 20-30%, as these technologies continuously learn from past interactions, providing agents with targeted training tailored to specific areas for development. The result is a leaner, more efficient operation that can adapt quickly to changing demands
  • Intelligent decision-making: Advanced AI engines analyze vast amounts of data in real-time, providing insights that inform better decision-making. In finance, AI forecasts cash flow, detects fraud, and optimizes investments. In HR, AI streamlines talent acquisition by matching candidates with roles that best fit their skills. This data-driven approach enables businesses to make quick, informed decisions, gaining a competitive edge
  • Optimized supply chain: AI is revolutionizing supply chain management by enhancing demand forecasting, inventory control, and logistics planning. By analyzing historical data and market trends, AI ensures optimal inventory levels and efficient logistics, reducing costs and improving delivery times

The AI-driven future: innovation, efficiency, and growth

As businesses increasingly adopt advanced AI engines, their transformative impact on both front and back-office operations is set to accelerate. These tools are doing more than just automating routine tasks—they’re unlocking new business models and driving innovation. Integrating AI into operations is allowing enterprises to unlock unprecedented efficiency, creativity, and growth.

By enhancing customer engagement and streamlining processes, AI empowers businesses to operate smarter, faster, and leaner. The real question isn’t whether to adopt AI—it’s how quickly businesses can harness its potential to lead the future.

If you found this blog interesting, check out our recent blog focusing on Revolutionizing Customer Journeys: Creating a Unified Customer Experience through AI).

If you have questions or want to discuss these topics in more depth, please contact Jagrit Kasera or Sharang Sharma.

IT and BPO Outsourcing: Commercial Trend Evolution | Webinar

ON-DEMAND WEBINAR

IT and BPO Outsourcing: Commercial Trend Evolution

For the IT and BPO outsourcing industry, the past eight quarters have seen declining growth rates, with business resilience tested, providers challenged, and buyer expectations evolving during this period of significant change.

However, there may be room for hope, with the market poised to see a reversal in this trend. In this webinar, our pricing experts revealed key commercial trends they have witnessed throughout outsourcing deals made in H1 2024. Discussing specifically the trends in the pricing of software and cloud platforms, our expert panel outlined the potential implications of this year’s trends for buyers.

Attendees came away with an essential understanding of where buyers can optimize their spend and where portfolios may be losing value, as well as potential solutions providers can offer in light of current trends.

What questions did the webinar answer for the participants?

  • How has the demand for outsourcing services evolved in 2024?
  • What are the top learnings and open questions around pricing model changes, generative AI, SaaS pricing, and their impact on commercials in IT and BPO deals
  • What is the future outlook for pricing?

Who should attend?

  • CIOs
  • CTOs
  • CDOs
  • IT strategy leaders and executives
  • BPO department leaders
  • GBS leaders managing IT and BPO outsourcing contracts
  • Pricing leaders
  • Solutioning leaders
  • Pre-sales leaders
  • Large pursuits leaders
Biswas Abhishek
Practice Director
Gehani Rahul
Partner
Maheshwari Udit
Practice Director
Ujjain Shitika
Practice Director

What Recent Generative AI Updates and Announcements Signal for Some Industries | Blog

Generative AI is rapidly transforming industries as it evolves. Read on to learn how generative AI developments are impacting functions, including personalized learning, content creation, and web search, and surfacing the need for responsible AI practices. Reach out to us to discuss this topic.

Generative AI is fast transforming various aspects of the technology landscape. Major updates and launches announced in the OpenAI Spring Update, Google I/O, and Microsoft Build event this year, show how rapidly this technology is evolving. At present, the artificial intelligence (AI) market is marked by technology companies looking to rapidly develop IP and shape eco-systems and standards and by providers and enterprises looking to evolve their business models to absorb generative AI.

Generative AI’s current functionalities and its rapidly evolving capabilities offer much in terms of potential benefits but also come with their fair share of uncertainties. Figure 1 gives an overview of the areas of generative AI impact that we will dive into.

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Hyper personalized learning may be upon us

Generative AI promises to personalize learning and make it interactive. It can empower teachers through AI assistants to offer more engaging and accessible learning. Examples of such context-aware AI innovations include OpenAI’s GPT-4o, Google’s LearnLM, and Microsoft’s Khanmigo. GPT-4o offers personalized and adaptive learning, identifying students’ strengths and weaknesses and providing solutions in their preferred learning styles, with multilingual support.

Recent generative AI updates have highlighted advancements in educational tools and platforms, showcasing new features and functionalities designed to enhance personalized learning experiences. Going forward, educators will likely be able to use generative AI tools to customize learning plans for students and understand their learning challenges through data and insights. Perhaps what is even more remarkable is the self-learning potential that generative AI offers. In a world where educators are largely overwhelmed, generative AI may be the force multiplier the education industry has been crying out for.

Generative AI-enabled learning tracks can help organizations thread the needle between scaling L&D initiatives and contextualizing them to different stakeholder needs. Generative AI may have the potential to not only provide 1-1 tutoring on emerging skillsets across a variety of languages but may also be leveraged to ideate and design the curriculum. At a time when the half-life of talent is becoming shorter, generative AI may be the answer to ensuring organizational L&D stays relevant and nimble.

Content creation may soon become commoditized

While generative AI has a wide-ranging impact across the media and entertainment value chain, content generation is where the impact is most acutely felt (see figure 2).Slide3 1

One of generative AI’s most striking use cases has been the creation of hyper-realistic content that seems indistinguishable from artist or studio creations. Recent generative AI updates and advances like GPT-4o have made content generation easier. These technologies can recognize tone, multiple speakers, background noises and produce outputs with embedded emotion such as laughter and songs. Innovations like OpenAI’s Sora or Google’s Veo empower creators and professionals to generate high-quality videos across different cinematic and visual styles without requiring extensive filmmaking expertise.

Advances in content generation have sparked fears about the ongoing relevance and demand for creative roles. Stories like that of Hollywood filmmaker Tyler Perry putting the brakes on a planned US$800 million expansion of his Atlanta studio upon seeing Open AI Sora’s video generation capabilities do little to allay such concerns. While current concerns about AI taking over creative work are understandable, it is more likely that going forward, we will simply see creatives engaged in higher-order work while AI solves for more time-consuming tasks. Content may become more synthetic, i.e., generated as opposed to filmed, produced faster, and more personalized. We may even start tiptoeing towards real-time content generation.

Hyper-realistic generated content also opens the door for deepfakes. False images, videos, and sound clips mimicking public figures or enterprises can lead to public unrest and material damage. With multiple elections being held around the world this year, deepfakes can have a meaningful impact on political discourse. This has understandably led to increased government scrutiny toward generative AI companies. Beyond politics, deepfakes are increasingly being used to commit fraud. Related to this, an employee at a multi-national organization was duped into paying out millions of dollars to those the employee believed to be key stakeholders at the company.

Generated content also poses some interesting intellectual property (IP) questions. Who has rights to the IP of generated content? Is it the person who prompted the output? Is it the technology company whose algorithms are being used to generate the content? Do the individuals or organizations whose data was used to train the algorithm also have some stake in what the model produces? Apart from adherence to IP laws, those using generative AI to create content will also have to be mindful of possible algorithmic biases manifesting in the generated content. Increasing efforts around responsible AI and transparency are needed to ensure biases in training data don’t get reinforced through the usage of generated content to train/tune other models.

Web search is changing

Generative AI is expected to have a massive impact on how web search takes place, and by extension, how online advertising plays out. Consequently, digital advertising, particularly SEO and SEM, are key areas being disrupted by generative AI (see figure 3).

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The move from coursing through books at the library to typing out keywords in a search bar was one of the biggest shifts in how people looked for information. Similarly, the impending transition from typing out keywords to simply asking in natural language promises to be the next big shift.

Generative AI updates have introduced new features in search engines and voice assistants, transforming how users interact with these tools. Advertisers increasingly express concerns about bot traffic eating away at their ad dollars. How would they feel about bots being the norm? Imagine if search fundamentally shifts to an audio-visual interface, with those searching for information rarely scanning the website themselves. How might this affect existing advertising models? Here are some possibilities – advertisers may realize that the customer is no longer on the website and needs to be engaged elsewhere. This can lead to a shift in the advertising mix, with more audio ads being rolled into searched information. SERP1 ads may also become more expensive due to their proximity to the search interface. For publishers, the shift may be from using ads to monetize content to directly monetizing the content itself based on how it is consumed to answer questions. Ad exchanges may evolve to become a network for generative AI bots to find content at a given price point. While these are indeed speculations, what is clear is that we are on the brink of a fundamental shift in information search and, by extension, digital marketing. All stakeholders within advertising may have to reassess their role in the broader ecosystem – be it advertisers, publishers, or ad exchanges.

For now, the impact of generative AI on everyday information search is limited. We are starting to see the integration of generative AI tools into existing search engines. For example, Google has integrated generative AI into its search tool. Through this feature, Google can interpret complex visual questions, provide explanations, suggest next steps, and offer resources using an AI overview. Voice assistants like Siri are also getting an overhaul. Apple’s partnership with Open AI promises to provide Siri with generative AI capabilities. The search space had one undisputed king for a long time – generative AI looks to be one of those seismic events that has the potential to reshape this hierarchy.

AI needs to be responsible

Generative AI promises to have a wide-ranging impact across multiple sectors. Given the massive impact that generative AI can have, tech companies need to balance innovation with safety. Responsible AI (RAI) is fast becoming an area of focus for enterprises looking to invest in and scale generative AI. Figure 4 illustrates some key considerations that will shape emerging RAI policies.

All Gen AI Future Disruptions graphics

Enterprises will increasingly look to collaborate with service providers and technology companies that prioritize data security and have effective governance setups to ensure responsible usage of AI. Implementing ethical guardrails is essential to unlocking the full potential of generative AI and ensuring its responsible usage. As user expectations and government oversight rise alongside AI’s evolution, companies that embrace RAI will be the ones leading the charge in this exciting new era.

If you have questions about this blog or would like to discuss recent developments in the generative AI space, please reach out to Abhishek Sengupta or Oishi Mazumder.

Watch the webinar, Gen AI and the Future of Cybersecurity: Advanced Strategies for Cyber Defense, for insights into new developments, emerging applications, challenges, and opportunities presented by generative AI in cybersecurity.

Leveraging AI for CX | LinkedIn Live

LINKEDIN LIVE

Leveraging AI for CX

Watch this event on LinkedIn which was delivered live on Wednesday, June 5 2024

To meet evolving customer expectations, businesses are seeking to develop artificial intelligence (AI) tools to enhance their customer experiences. From personalizing experiences to providing in-depth analytics, the potential for AI to transform CX and its management is profound. 🚀

Watch this LinkedIn Live discussion with Everest Group’s Nishan Krishan, Practice Director, and Ashish Sehdev, Vice President, to learn about how to utilize AI and its latest iteration, generative AI, for anticipating CX needs, creating adaptive strategies, and developing unforgettable CX. 💡

During this engaging LinkedIn Live, we discussed:

✅ The use cases enabled by AI in CX 🤖
✅ The RoI and productivity gains enabled by AI in CX
✅ Generative AI and its disruptive potential for CX

Krishan Nisha gray square 1
Practice Director
Everest Group
Sehdev Ashish gray square
Vice President
Everest Group
Kumar Santhosh
Aniruddha edited

What’s Driving Investments in RCM: A Look at Hotspots in Healthcare | LinkedIn Live

LinkedIn Live

What’s Driving Investments in RCM: A Look at Hotspots in Healthcare

Watch this event on LinkedIn which was delivered live on Wednesday, May 29, 2024

The Revenue Cycle Management (RCM) sector is undergoing seismic change. With rapid digitization and an evolving future landscape, PE funding and overall M&A activity is dramatically increasing. 🔍

Watch this LinkedIn Live conversation with Everest Group analysts Priya Sahni, Practice Director, and Ankur Verma, Vice President, to learn about the changes happening in outsourcing patterns within RCM, as well as the trends to watch out for in the coming months.

📚 Attendees will get a complimentary copy of Everest Group’s RCM report.

During this LinkedIn Live, we discussed:

  • What are the key business, technology, and sourcing trends within RCM?
  • What’s really driving the PE investments in this space? 
  • What can we expect from rising M&A in RCM business?

Meet the Presenters

Sahni Priya
Practice Director
Everest Group
Verma Ankur
Vice President
Everest Group

Decoding the EU AI Act: What it Means for Financial Services Firms | Blog

How will the EU AI Act impact the financial services sector, and how should enterprises and service providers structure their compliance activities? Read on to learn about what this new legislation means for financial services firms looking to implement AI tools, or get in touch to understand the direct impact on your specific business.

In recent years, the rapid advancements in artificial intelligence — in particular, generative AI — have revolutionized various sectors, including financial services. Technology giants such as Microsoft, Google, Amazon, and Meta have heavily invested in developing AI models and tools. However, this unprecedented growth has also raised concerns about the potential risks associated with the unchecked use of AI, prompting the need for regulations to ensure the responsible development and deployment of these powerful technologies.

Recognizing the urgency of the situation, the European Union has taken a proactive step by introducing the AI Act, a pioneering piece of legislation that aims to establish a comprehensive framework for the development and use of trustworthy AI systems. The Act adopts a risk-based approach, categorizing AI systems into four distinct levels:

  • Unacceptable risk – Systems deemed a serious threat, such as predictive policing, real-time biometric identification systems, and social scoring and ranking are banned
  • High-risk – Systems with potential to harm people or fundamental rights, such as AI-powered credit assessments, require strict adherence to new rules regarding risk management, data training, transparency, cybersecurity, and testing. These systems need to register with a central EU database before distribution
  • Limited risk – Systems posing minimal risk, such as chatbots, need to comply with “limited transparency obligations,” such as labeling AI-generated content
  • Low or minimal risk – While not mandated, the Act encourages providers to follow a code of conduct similar to high-risk systems for market conformity

The AI Act and financial services

The financial services industry heavily relies on AI, from personalized banking experiences to fraud detection. The high-risk applications especially require financial institutions to prioritize the following:

  • Continuous risk management – Focus on health, safety, and rights throughout the AI lifecycle, including regular updates, documentation, and stakeholder engagement
  • Comprehensible documentation – Maintain clear, up-to-date technical documentation for high-risk systems, including characteristics, algorithms, data processes, risk management plans, and automatic event logging
  • Human oversight and transparency – Maintain human oversight throughout the AI lifecycle and ensure clear and understandable explanations of AI decisions
  • Rigorous governance – Implement robust governance practices to prevent discrimination and ensure compliance with data protection laws
  • Fundamental rights impact assessment – Conduct thorough assessments to identify and mitigate potential risks to fundamental rights
  • Data quality and bias detection – Ensure training and testing datasets are representative, accurate, and free of bias to prevent adverse impacts
  • System performance and security – Ensure consistent performance, accuracy, robustness, and cybersecurity throughout the lifecycle of high-risk AI systems

To align with the EU AI Act, enterprises must take a structured approach. First, they should develop a comprehensive compliance framework to manage AI risks, ensure adherence to the Act, and implement risk mitigation strategies. Next, they need to take inventory of existing AI assets like models, tools, and systems, classifying each into the four risk categories outlined by the Act. Crucially, a cross-functional team should be formed to oversee AI risk management, drive compliance efforts, and execute mitigation plans across the organization. By taking these steps, enterprises can future-proof their AI initiatives while upholding the standards set forth by the landmark regulation.

Final Everest Group Decoding the EU AI Act What it means for financial services
Opportunities for service providers

  • AI governance expertise – Service providers can offer expertise in building and implementing AI governance frameworks that comply with the EU AI Act. This includes developing policies, procedures, and tools for responsible AI development and deployment
  • Data management solutions – Service providers can assist financial institutions in managing their data effectively for AI purposes. This includes data cleaning, labeling, and ensuring data quality and compliance
  • Large Language Model operations (LLMops) – As financial institutions explore the use of Large Language Models (LLMs), service providers can provide expertise in LLMOps, which encompasses the processes for deploying, managing, and monitoring LLMs
  • Use case classification & risk management – Service providers can help financial institutions classify their AI use cases according to the EU AI Act’s risk framework, and develop appropriate risk management strategies
  • Quality Management System (QMS) – Implement a robust QMS to ensure the AI systems consistently meet the Act’s requirements and other emerging regulatory standards

The road ahead

As the AI Act progresses through the legislative process, financial institutions and service providers must proactively prepare for the upcoming changes. This includes conducting AI asset inventories, classifying AI systems based on risk levels, assigning responsibility for compliance, and establishing robust frameworks for AI risk management. Service providers will play a crucial role in supporting financial institutions in their compliance efforts.

To learn more about the EU AI Act and how to achieve compliance with the regulations, contact Ronak Doshi, [email protected], Kriti Seth, [email protected] and Laqshay Gupta, [email protected]. Understand how we can assist in managing AI implementation and compliance, or download our report on revolutionizing BFSI workflows using Gen AI.

Everest Group Talent Demand Growth Index | India IT Services | Blog

Welcome to our monthly India IT services talent demand index. We are excited to bring you this comprehensive analysis, powered by Talent Genius™, our AI-powered insights platform purpose-built to guide IT and Business Process Services location and workforce decisions. To gain a deeper understanding of the capabilities of Talent Genius and learn how to book a demo, watch this quick 2-minute video, Introducing Talent Genius™.

Monthly India IT services talent demand tracker

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Here is our in-depth analyses of the India IT services industry demand:

June 2024

The Indian IT services market saw a further decline of 5% compared to the month of May. Job postings decreased by 4% in Q2 2024 compared to Q1 2024, and on a year-on-year basis, the market dropped by a notable 24%. Additionally, GBS center setup activity also significantly declined in Q2 compared to Q1.

At the city level, among tier-1 cities, Mumbai, which experienced the highest decline last month, saw the highest growth of 8% this month. Conversely, Bangalore faced the steepest decline of 16%. Among tier-2 cities, Thiruvananthapuram saw a 21% increase in IT services job postings. At a quarter-to-quarter comparison level (Q2 2024 vs. Q1 2024), most of the Indian cities have seen a double digit decline in IT talent demand.

At the industry level, retail saw a significant increase of 34% in June. The cyclical commodities industry continued its momentum with 14% growth. However, the BFSI and technology and communications sectors experienced the highest declines, at 16% and 11% respectively.

May 2024

In May 2024, the Indian IT services market saw an additional 11% decline compared to the previous month. This trend is anticipated to be temporary, largely influenced by the ongoing nationwide elections.

Hiring has declined across all experience levels, except for executives with 16-20 years of experience. Entry-level hiring has been particularly affected and experienced a decline of 17%. While traditional roles such as developers and help desk engineers continued to witness a decline in demand, niche roles such as AI/ML engineers, data scientists, and UI/UX architects showed positive hiring trends.

At the city level, Chennai was the sole Indian city to observe an increase in talent demand. Among tier-1 cities, Mumbai saw the steepest decline at 17%, followed by Bangalore and Delhi NCR with declines of 12% and 11% respectively. Among tier-2 cities, Ahmedabad saw the largest decline at 33%.

In terms of sectors, the hospitality and tourism sector, which had seen the highest growth in talent demand in April, experienced the highest decline in May 2024 at 14%. This was followed by service providers, consumer packaged goods, and professional services sectors. Cyclical commodity was the only sector that saw a growth in this month.

April 2024

After experiencing robust growth of 23% in March 2024, the Indian IT services market saw a slight 3% dip in talent demand in April. However, on a year-on-year basis, the market has grown by 39%.

At the city level, among tier-1 cities, Kolkata experienced the highest growth at 17%, while Pune and Mumbai saw moderate growth of 5% and 3%, respectively. In contrast, Hyderabad and Chennai witnessed declines of 16% and 12%, respectively. Among tier-2 cities, Jaipur and Ahmedabad showed the highest growth at 8% and 7%, respectively, whereas Coimbatore and Thiruvananthapuram both saw a 10% decline.

The hospitality and tourism sector experienced the highest talent demand growth in April, increasing by 16% compared to March, fueled by a surge of tourists during summer breaks. Conversely, healthcare and retail saw declines of 12% and 10%, respectively. On a year-on-year basis, all sectors saw growth in demand, with transportation and logistics, and business and professional services recording the highest increases at 85% and 68%, respectively.

AI/ML and Data science remain highly sought-after skills, propelled by a growing emphasis on technological advancements and the integration of AI expertise.

March 2024

Following a 14% decline in job postings for IT services in February, the industry regained momentum, showing a 23% month-on-month increase in job postings. At a year-on-year level, talent demand grew by 20%.

Some of the most in-demand roles include artificial intelligence engineer, machine learning engineer, virtual reality engineer, and UI/UX architect, showcasing sustained demand in the India IT market for niche roles. Demand growth for specialized roles has been consistently higher than traditional IT roles, especially since the latter half of 2023, driven by the gen AI revolution.

At a city level, all the major cities experienced double-digit growth in March, except Mumbai, where the demand increased by only 3%. Tier-2/3 cities continue to consistently experience higher demand growth than tier-1 cities, pointing to increased leverage of tier-2/3 markets for IT services.

From a sourcing perspective, both service providers and enterprises experienced an increase in demand. Enterprises recorded a solid 29% increase (compared to service provider’s 9%), reflecting the strong inclination and propensity toward insourcing.

All sectors, except transportation and logistics, saw heightened demand for IT talent, with technology, communications, and retail experiencing the most traction.

February 2024

Following robust growth in January, the Indian IT services market experienced a 14% decline in February. Talent demand for IT services this month declined 23% compared to the same period last year and 50% from February 2022.

Most cities saw a decrease in demand except for Thiruvananthapuram. After showing the highest increase in January, Jaipur had the sharpest decline of 25%. Among tier-1 cities, Mumbai saw the steepest drop at 20%.

All sectors, except transportation and logistics and cyclical commodities, witnessed a decrease in talent demand, with retail, hospitality, and tourism showing the most significant declines.

Looking at role rankings, demand for artificial intelligence engineers, machine learning engineers, analytics consultants, and UI/UX architects climbed compared to the previous month, indicating continuing interest in niche roles.

January 2024

The demand for IT services in India surged by 31% month-on-month, following a 25% decline in December 2023. However, demand increased 11% year-on-year.

Roles such as artificial intelligence engineer, machine learning engineer, security engineer, and UI/UX architects experienced significant increases in demand in January 2024 compared to the prior year, primarily driven by the heightened need for niche roles in India.

All major tier-1 and tier-2/3 cities saw an uptick in monthly job postings, with Hyderabad leading with a 40% growth rate. Among tier-2/3 cities, Jaipur experienced the highest demand growth, with a 34% increase in job postings.

Demand for IT services rose across all industry segments. Healthcare and BFSI showed the most strength, with a 40% increase from December 2023.

December 2023

Demand for IT services in India hit a 17-month low due to declining spending and clients postponing projects. As a result, most Indian IT service providers are reexamining revenue and hiring forecasts. The overall demand across service providers decreased by 28% from last month and 11% from the previous year.

Many service providers slowed hiring, realizing they posted jobs too early and hired ahead of the demand. Service providers are now focusing on improving employee utilization rates and do not anticipate the job requirements returning to the original levels anytime soon. Demand for IT services also declined by a notable 20 percent across enterprises from November.

Overall, the second half was slower than the first half, with demand falling by 7% for service providers and 4% for enterprises. Service providers were impacted more as enterprises cut discretionary spending and insourced some work.

At the city level, demand for employees declined consistently across tier 1, 2, and 3 cities. After peaking in November, the workforce requirements in Hyderabad and Chennai fell significantly by 32% this month.

Demand hit its lowest point of the year across all segments. Despite relatively stable employment over the last few months, retail and healthcare had the biggest drop at 35%. While it is uncertain if this is the bottom, a full recovery is not expected in the near future.

November 2023 update

IT services demand in India increased by 9% month-on-month and 5% year-on-year. Demand for IT application data management (ADM) grew 9.5%, and IT infrastructure increased 5 percent compared to the prior month. However, the surge is expected to be temporary because macroeconomic conditions pushed IT project timelines ahead for most companies.

Talent demand increased more in tier 2/3 cities than tier 1 cities, indicating that enterprises are increasingly confident in hiring outside tier 1 cities to gain a labor cost arbitrage advantage.

The number of available positions increased in all tier 1 cities, except Kolkata, where the job postings fell for the second consecutive month. Since the prior month, job openings increased 18% in Hyderabad and 14% in Chennai, representing the highest month-on-month increase.

Among tier 2/3 cities, Jaipur recorded one of the highest month-on-month increases in open positions at 34%. All the other cities experienced increased monthly postings – except for Chandigarh and Thiruvananthapuram.

IT services demand increased across all industry segments, with service providers and manufacturing demonstrating the most strength, up 5% from October.

Demand fluctuates more for service providers than other enterprises. As clients cut back on outsourcing spending, the talent need from service providers is expected to decrease in the coming months.

October 2023 update

The demand for IT services in India declined by 9% from last month but increased by 5% year-on-year, with significant variation over the past few months. Despite the shifts, demand remains near the same level as May 2023, when IT services demand increased after being at its 12-month lowest the prior month.

Tier 2/3 cities continued to be more attractive for companies seeking employees. Hyderabad and Kolkata had the biggest monthly drop in talent demand among tier 1 cities at 15% and 12%, respectively. Employee talent needs remained the most stable in Pune, with only a 5% drop compared to the previous month.

Although demand for most roles declined, help desk engineer, data analyst, and business analyst roles continued to increase by about 5% monthly. Only the retail segment maintained net positive month-on-month growth rates at about 7%. Cyclical commodities and service providers declined the most by 12% and 7% month-on-month.

Over the past few months, India IT talent demand has been volatile across roles, cities, and industries. Talent demand is expected to continue to fluctuate as major Indian IT service providers lose contracts and enterprises explore more insourcing opportunities.

September 2023 update

The demand for IT services in India jumped by 19% on a month-on-month basis after declining for two consecutive months. The year-on-year increase of 22% pointed to a significant uptick in hiring activities this month, rebounding from the slowness over the previous few months.

On a month-to-month basis, demand again surged in tier 2/3 cities compared to tier 1 cities. The increased reliance on tier 2/3 cities suggests a growing client preference for cost-effective IT service delivery locations.

Among tier 1 locations, Hyderabad and Kolkata bounced back the strongest with 36% and 35% growth in demand on a month-on-month basis. All locations in the three top tiers showed increased IT services demand – except for Pune, which dropped slightly.

Every major industry segment, except for banking, financial services, and insurance (BFSI), returned with increased demand. Service providers led the chart with a 22% increase in job demand compared to last month. However, BFSI declined 23% from the prior month.

August 2023 update

The demand for IT services declined for two consecutive months after recording a 14-month high in June 2023. Demand fell by 16% month-on-month and 32% on a year-on-year basis. At a segment level, IT ADM and IT infrastructure declined from July.

This trend could be a result of a quick fix by employers to adjust for the hiring surge in the second quarter of 2023. If the pattern continues, employee attrition will rise. However, the demand will likely pick up in the next few months as the end of the year nears.

Tier 1 cities continue to experience a higher decline in demand than tier 2/3 cities on a month-on-month basis, indicating the preference by enterprises to leverage low-cost talent from tier 2/3 cities.

At a city level, Kolkata witnessed the sharpest decline in demand at 47% and had an all-time low in the last 20 months. Among leading tier 2/3 cities, Kochi and Thiruvananthapuram showed the least decline in month-on-month demand.

The surge in demand by industry sectors halted, with consumer packaged goods registering the greatest decline since July. Business and professional services also reversed the growth trend.

A slightly higher decline in month-on-month demand across service providers that has continued for several months now clearly indicates increased insourcing by enterprises.

July 2023 update

While the month-on-month view showed a 9% drop in the IT services talent demand trend in India, demand grew 17% over the prior three months and by 32% year-on-year.

Tier 1 cities witnessed a relatively higher decline than tier 2/3 cities month-on-month, showcasing the increased leverage of tier 2/3 Indian cities. This trend is consistent across most tier 1 and tier 2/3 cities. Jaipur and Coimbatore are the only exceptions across tier 2/3 cities, showing 10% and 3% growth, respectively. Among tier 1 cities, Mumbai and Kolkata witnessed the highest decline, while Pune recorded the lowest decline of approximately 2%.

Service providers witnessed the highest decline of all industry verticals for IT services demand over the past year. Business and professional services and consumer packaged goods saw a slight uptick in demand.

June 2023 update

The demand for IT services in India showed further recovery and grew by 15% compared to May 2023. For the first time in the last six months, demand also showed growth on a year-on-year basis (21% growth compared to June 2023). At a segment level, both IT ADM and IT infrastructure segments witnessed 14-month high demand levels in June 2023, with IT infra talent demand growing 40% on a year-on-year basis.

The growth trend, which started in May, is solidifying and was consistent across all cities, though the extent of recovery varied. Chennai saw a modest recovery, whereas Mumbai saw a significant spike in demand. We believe the demand surge in Mumbai may not be entirely due to net new demand but could be due to talent management/attrition challenges arising from the hybrid/in-office model and the need to back-fill resources.

The demand from service providers continues to grow, and we believe there is more focus on hiring laterals this year compared to the previous year, which saw a significant uptick in campus hiring. This increase could also be due to multiple large deals that are at play in the market and providers hiring in anticipation of winning large business in the medium term.

May 2023 update 

The demand for IT services in India showed a recovery in the month of May, growing by 34% compared to the previous month and staying flat compared to 2022. This spike compared to March and April could be attributed to buyers placing demand ahead of the summer in key onshore geographies, which tend to be slower from a business perspective. The increase in demand was consistent across both tier-1 and tier-2/3 cities; however, the recovery was much steeper for tier-1 cities (growing 14% YoY) compared to tier-2/3 cities (shrinking by 20% on a YoY basis). Among the tier-1 cities, all showed an uptick in demand; however, Pune set a demand record of a 17-month high. The service provider segment, while it showed recovery compared to the previous month, on a YoY basis, registered a 7% decline in demand. On similar lines, BFSI and technology & communications verticals continue to show a declining demand trend on a YoY basis. 

April 2023 update

The demand for IT services in India further shrunk by 17% in April, reaching a 16-month low, and declined by 29% on a year-on-year basis. The impact of the anticipated global economic slowdown is clearly visible in the latest demand trends. 

The declining trend is consistent across both tier-1 and tier-2/3 cities. Among tier-1 cities, Chennai, followed by Delhi-NCR, witnessed the highest decline. Tier-2 cities saw an even higher decline on a year-on-year basis at 32%. At this point, the demand for IT services talent in India is almost 50% of the demand in January 2022. However, this trend needs to be observed over a slightly longer period. If this trend continues for a few more months, the already reduced attrition numbers are likely to come down further. 

Being the first month of the new fiscal year for many leading India-heritage service providers, this indicates a not so good start to the year 2023-24, and declining talent demand is deeply correlated to reduced business growth.

March 2023 update

After five consecutive months of demand growth/stability, the demand for IT services in India dropped significantly (21%) in March and by 36% on a year-on-year basis. The declining trend in March was consistent across all tier-1 cities, though Mumbai witnessed the lowest decline among all tier-1 cities. 

The demand in tier-2/3 cities also reduced by 26% on a year-on-year basis. This overall declining trend is expected as Q1 2022 witnessed a significantly higher demand due to attrition and talent wars faced by the industry, and with the current economic environment, most companies are not in an expansion mode.  

Stay tuned for regular monthly updates as we monitor the landscape of the India IT services industry demand market. We’ll continue to provide the latest insights and trends, so you stay well-informed on locations and workforce developments.

Services Industry Growth is Bottoming Out, but How Much Does It Matter? | Blog

The latest Forces & Foresight™ research by Everest Group highlights the beginning of a turnaround in the services industry’s growth. However, the significance of this recovery is unexciting, as balancing forces exist that both impede and support industry growth. How a service provider aligns with the right set of forces will become key to competitive success. Read on to learn about the necessitating strategic foresight and tailored approaches for industry players to thrive in the post-downturn landscape.

In my last blog, Driving Factors for IT Services Recovery in 2024: Insights from Everest Group’s Forces & Foresight™ Research, I highlighted three forces fueling our services industry growth turnaround foresight. We are seeing more points of evidence validating those. Let’s revisit these forces and their progression:

  1. Stabilizing base – We spoke about seeing a pause in deteriorating demand trends. The turnaround in growth (see Exhibit 1) and forward-looking views of service providers validate this thesis
  1. Fixing revenue leakage – We noted signs of stabilization in leakage, such as bookings not commensurate with revenue. While the differential still exists, we are seeing more confidence in service providers. Almost all the growth guidance estimates are dependent on the booked business translating to revenue over the next 12 months
  1. Pockets of additional growth – As previously highlighted, cybersecurity, ER&D, and data and analytics continue to thrive. For instance, cyber security players like Zscaler have surpassed expectations, leading to upward revenue projections

Slide1 1

Turnaround is a given, but does it really matter so much?

As we outline our growth outlook in the next Forces & Foresight edition, we roll forward our forecasts to the next 12 months (ending March 2025). From this analysis, we have narrowed down two convictions:

  1. The IT services industry will see a turnaround in growth
  2. In the absence of an extraordinary event, we expect the magnitude and speed of this turnaround to be “unexciting” (unlike comebacks in previous downturns)

 

The reason for this unexciting recovery is that the magnitudes of industry forces, supporting and impeding the industry growth, are roughly equal, as portrayed in Exhibit 2.

Exhibit 2

Forces impeding services industry growth Forces supporting services industry growth
Over-influence of macro sentiments on services spend

Spend cautiousness will impact quick and big pickup in major segments like BFSI despite any signs of turnaround

Enterprise confidence levels are still far from promising pickup in discretionary spend

Elongated durations of large contracts don’t allow for high ACV contributions

 

North America is showing recovery, driven by a notable turnaround in Hi-Tech spend resilience in the public sector and energy

Less matured geos are playing a strong role in the industry growth contribution

The new wave of productivity demand is providing better avenues vs. strict cost-cutting on volume and pricing

Newer revenue streams are playing out (e.g., net expansion in GIC-generated revenue)

Our inference from the balance of these forces is that, while the positives will outdo the negatives, the latter are sticky and emerge from a somewhat changing psychology of demand – a topic we are consciously tracking. This stickiness negates a euphoric pickup in services industry growth, which was observed in previous downturns (we presented these in our previous blog).

As we mentioned, the industry will be an interesting mix of performance of segments and providers based on their portfolios and part of trajectories. Simply put, segments and providers that could be at a higher risk of longer recovery cycles are the ones with heavier exposures to (a) discretionary revenue, (b) negative geo-specific dynamics, and (c) non-flexible delivery and commercial models.

Things are not so straightforward

The devil lies in details. Every segment has its own set of near-term palpable possibilities as well as challenges. Take the example of banking, financial services, and insurance (BFSI). On the one hand, it is the most severely impacted segment (Exhibit 3), with the future seemingly still tied to economic events like rate cuts. On the other hand, we are seeing signs of tech spend pickups by banks. For example, tech and comms spend by major banks is on the rise, and small deals are picking up in BFSI, as evidenced by small service providers’ performances in this segment. See Exhibits 4 and 5.

In our Forces and Foresight research, we are conducting a detailed analysis on each of the major geo and vertical segments with the aim of uncovering the not-so-obvious aspects that contribute significantly to their forward-looking direction of growth. We are also linking those to segment and industry-wide forecasts.

Slide2 1

Slide3 1

Slide4

Implications for market participants

One would need to work harder to earn their position coming out of this downturn, as industry forces will be less kind than in previous downturns.

A (somewhat) naïve implication for service providers would be to put focus on high-growth potential areas of services. We call it naïve because portfolio changes and decisions can’t be made overnight, leave apart the actual portfolio change. Coming out of this downturn, a well-defined playbook will be instrumental in navigating these changes. A simplistic model could include steps such as:

  1. Classification of parts of portfolios (verticals, capabilities, geos, customer size, and type of deals) by demand recovery cycles
  2. Sales focus on the quick recovery segments and immediate results-generating areas (like GICs)
  3. Having account-specific playbooks – mining vs. new accounts
  4. Investment focus on longer-term (but promising) recovery areas

 

Such playbooks have been the reason why every downturn creates a distinct separation between the new set of winners and the rest of the industry. And with the unique set of challenges associated with this downturn, the winners will need to work much harder than before. Learn more about Forces & Foresight™, or reach out to Prashant Shukla to discuss further at [email protected].

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