The Transformative Impact of Generative AI on IT Services, BPO, Software, and Healthcare
Technology Holdings, an award-winning global boutique investment banking firm dedicated to delivering M&A and capital-raising advisory services to technology services, software, consulting, healthcare life sciences, and business process management companies globally, recently launched its report titled “What Does GenAI REALLY Mean for IT Services, BPO, and Software Companies: A US $549 Billion Opportunity or Threat?” “As many as 91% of the respondents believe that GenAI will significantly boost employee productivity, and 82% see enhanced customer experiences through GenAI integration,” said Venkatesh Mahale, Senior Research Manager at Technology Holdings, while speaking at Cypher 2024. He added that in the BPO sector, GenAI is expected to have the biggest impact, particularly in areas such as automation and advanced analytics. Speaking about the impact of generative AI in the IT sector, Sriharsha KV, Associate Director at Technology Holdings, said, “IT services today generate approximately one-and-a-half trillion dollars in revenue, a figure expected to double in the next eight to ten years.” He added that Accenture, the number one IT services company in the world, has started disclosing GenAI revenues, and their pipeline is already at a half-billion run rate for the year. “The pipeline has scaled from a few hundred million last year to, I would say, 300 to 400%. That makes us strongly believe that GenAI is real.” He noted that data centre and chip companies are part of the upstream sectors, as they are responsible for creating the generative AI infrastructure. In contrast, IT services companies are downstream but are gaining momentum in automating building processes using GenAI. Sriharsha stated that generative AI has a notable impact on testing, debugging, DevOps, MLOps, and DataOps. M&A Trends in IT Services and BPO The panel at Cypher further discussed the growing trends in mergers and acquisitions (M&A) driven by GenAI. “2023 was a blockbuster year for funding in GenAI, with $20 to $25 billion infused into the sector,” Sriharsha said. This surge in investment has also translated into increased M&A activity, particularly in the IT services and BPO sectors. “We’ve seen numerous acquisitions focused on integrating GenAI capabilities into industry-specific operations,” he added. Sriharsha explained that in the BPO sector, GenAI is particularly disrupting contact centres. “By automating up to 70% of calls through a combination of chat, email, and voice interactions, companies can operate with fewer agents while maintaining service quality,” he said. This efficiency allows organisations to redirect resources to higher-value tasks, reshaping the way BPOs operate. Enhancing Healthcare with GenAI “India has a population of around 1.4 billion, but there is still a dearth of doctors and nurses,” said Anant Kharad, Vice President at TH Healthcare & Life Sciences. He added that generative AI has several use cases in the healthcare industry that can help solve these problems. “GenAI will analyse my medical records and try to identify the issues I faced in the past and what I’m experiencing now. It will create a summary of all that and then provide it to the nurse for review, who will handle the initial treatment for the outpatient department. The doctor can then take it from there instead of nurses going through tons of paperwork,” he explained. He said that this not only enhances patient care but also optimises healthcare workflows, allowing medical staff to focus on more complex cases. Moreover, he added that GenAI is playing a vital role in drug discovery and patient care strategies. “It is working with companies that reverse Type 2 diabetes,” Kharad shared. “It has used machine learning to analyse data from thousands of patients, creating effective treatment curricula that can be rolled out globally,” he said. The Long-Term Implications of Generative AI As companies navigate the potential disruptions brought on by generative AI, the long-term impacts on business models and service offerings cannot be overlooked. According to Kharad, the need for traditional models, like manual contact centres, is already being questioned in the BPO sector. “Testing and debugging in IT services are also being challenged,” he said, suggesting that companies must evolve or risk obsolescence. The healthcare sector, however, appears poised for positive disruption through the application of generative AI. Kharad shared specific examples of how AI can enhance efficiency, especially in diagnostics. “For instance, instead of a radiologist reading 20 reports a day, AI could enable them to process 100 reports,” he explained. This not only increases operational efficiency but also optimises resource allocation in a sector often constrained by staff shortages. Furthermore, Kharad pointed out that major players like Amazon are already using generative AI to automate prescription orders based on data inputs. “If AI can handle 90% of the workload, it will reduce costs and provide faster service for patients,” he said. Kharad further elaborated on the healthcare sector’s response to M&A trends, noting that biotech and health-tech companies are at the forefront. “Pharmaceutical companies in India are partnering with start-ups to drive innovation in drug discovery,” he said. For those interested in exploring the implications of generative AI further, Technology Holdings has launched a comprehensive report on its impact on IT services, BPOs, and software companies. The report can be accessed here.
“As many as 91% of the respondents believe that GenAI will significantly boost employee productivity, and 82% see enhanced customer experiences through GenAI integration,” said the Technology Holdings panel while speaking at Cypher 2024, India’s biggest AI conference organised by AIM Media House.
Technology Holdings, an award-winning global boutique investment bank dedicated to delivering M&A and capital-raising advisory services to technology services, software, consulting, healthcare life sciences, and business process management companies globally, recently launched its report titled “What Does GenAI REALLY Mean for IT Services, BPO, and Software Companies: A US $549 Billion Opportunity or Threat?”
["AI Healthcare", "Generative AI"]
["Go", "GenAI", "machine learning", "AI", "AI Healthcare", "ML", "MLOps", "analytics", "generative AI", "Generative AI", "DevOps", "R"]
["AI", "machine learning", "ML", "analytics", "generative AI", "GenAI", "MLOps", "R", "Go", "DevOps"]
Siddharth is a media graduate who loves to explore tech through journalism and putting forward ideas worth pondering about in the era of artificial intelligence.