AI Disruption in the BPO Industry: Insights from TCS CEO K Krithivasan

In a recent interview with ET, TCS CEO K Krithivasan shared insightful predictions about the business process outsourcing (BPO) sector, highlighting its imminent disruption due to advancements in artificial intelligence (AI).

Proactive Predictions about BPO Disruption

Krithivasan noted that he foresaw BPO firms facing disruption from emerging technologies even before traditional coding industries. His foresight from two years ago emphasized the industry’s vulnerability to transformation.

“I called out two years ago that BPO is one of the industries that would get disrupted even before the traditional coding,” he said. “There are a lot of opportunities for creating AI agents or agentic AI, both of which play a significant role today.”

Transformation Through AI Technology

The BPO sector in India, known for its employee-intensive model and substantial revenue generation, is undergoing significant changes driven by AI. Automation of routine tasks has led to improved accuracy, reduced operational costs, and enhanced service quality.

As companies embrace these technologies, they are transforming their service delivery models to remain competitive in a rapidly evolving landscape.

Concerns Over Job Displacement

Despite the potential benefits, there are valid concerns regarding AI displacing many entry-level and lower-end positions within call centers. Industry insiders, however, suggest that this technological shift may also open avenues for high-value roles.

These new opportunities could be in fields like data science, AI system development, and digital marketing, balancing the scales of employment within the sector.

Strategic Acquisitions in the Industry

The conversation around BPO disruption has been invigorated by recent industry developments. French IT services major Capgemini has agreed to acquire WNS, an Indian provider of BPO technology, for $3.3 billion (approximately Rs 28,280 crore) in cash.

This acquisition marks a significant step for Capgemini as it aims to strengthen its BPO capabilities to meet growing enterprise demand for advanced and automated services.

Shifting Landscape of IT Services

In his comments, Krithivasan acknowledged the rise of smaller, agile firms leveraging AI-driven delivery models within the IT services sector. However, he is confident that TCS’s deep contextual understanding and extensive enterprise experience will continue to differentiate legacy players in the industry.

The Future of the BPO Sector

With AI at its helm, the future of the BPO sector looks promising, albeit challenging. The focus on enhancing service quality and reducing costs is crucial, yet the industry must navigate the complexities of job displacement carefully.

Balancing automation with human expertise may well define the next era of BPO services.

Conclusion

The insights shared by K Krithivasan illuminate the ongoing transformation within the BPO industry. As firms adapt to new technologies, the focus must remain on leveraging automation while creating high-value roles for the workforce to thrive. Sustainable growth in the BPO sector hinges on this delicate balance.