Generative Artificial Intelligence (AI) has been a buzzword in the tech industry, but for Bharat’s largest software service providers, it’s yet to translate into substantial business volumes. Despite efforts, Bharat IT firms are trailing behind global rival Accenture in terms of the scale and revenue potential of their generative AI projects.
Current State of Affairs: As of the third quarter ending December 31, Bharat’s top 10 IT service companies collectively have approximately 450 generative AI projects and proofs of concept (PoCs) in their pipeline. However, this translates to a relatively modest estimated deal pipeline of $150-250 million. In stark contrast, Accenture alone boasts a pipeline worth $450 million, showcasing a 50% jump in Gen AI opportunities in the recent quarter.
Challenges and Disparities: While Bharat companies are investing in Gen AI initiatives, the project sizes remain relatively small, with most deals being sub-$1 million. Additionally, some projects are still in the PoC stage, with delayed revenue generation. Analysts note that Indian IT firms are seeing smaller average revenues per generative AI project compared to their global counterparts.
Company Perspectives: Tata Consultancy Services (TCS) reports around 250 Gen AI initiatives in its pipeline, emphasizing heavy investment in training its workforce in AI capabilities. Other companies like HCL Technologies and Infosys echo similar sentiments, focusing on training programs and client engagements.
Accenture’s Dominance: Accenture stands out with its significant investments in Gen AI, including a $1 billion annual allocation for workforce training and a $3 billion investment over the next three years in data and AI practices. The company’s robust pipeline, matured analytics practice, and consulting capabilities give it a competitive edge over Bharat counterparts.
Industry Observations: Experts acknowledge Accenture’s leadership in the Gen AI space, citing its early-mover advantage, talent pool, and marketing prowess. However, despite the promising pipeline, consistent revenue generation from Gen AI projects remains a challenge for all players. Many pilots may not transition into long-term production, and the revenue generated so far has been modest.
While Bharat IT firms strive to catch up with Accenture’s prowess in generative AI, the road ahead entails overcoming various hurdles, including scaling up projects, driving revenue, and demonstrating tangible business impact. As the industry navigates this transformative phase, the true winners will emerge based on their ability to adapt, innovate, and deliver value in the evolving landscape of artificial intelligence.
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