(Re)Building Resilience Amid Gen AI: Insights for IT Service Leaders

Undoubtedly, generative artificial intelligence (Gen AI) is the foremost technology trend of our time. Research by McKinsey suggests it could add between $2.6 trillion and $4.4 trillion per year to the global economy. In India alone, Gen AI could add up to $438 billion to the country’s GDP. Of this, IT service companies have an incredible opportunity at hand.

Generative AI could transform a wide range of productivity and customer-facing workflows for IT service companies, leading to a complete restructure of internal staffing and offshoring models. While this is certainly a paradigm shift, service providers lagging will find it challenging to catch up with their early-gen AI adopter counterparts.

How Can IT Service Companies Use Generative AI?

When we speak about generative AI, the lowest-hanging fruits seem to be software development and marketing before everything else. Indeed, GitHub found that 92% of programmers already use AI tools similar to development aids like Stack Overflow. However, service companies can unlock significant gains from Gen AI adoption if they know where to look.

1. Greater personalisation capabilities for customer success teams

I have previously discussed how customer success (CS) is critical to long-term service delivery and business outcomes for IT companies. Today, generative AI adds another dimension by enabling better data analytics and personalisation. It makes sense to use customer success metrics, especially when you have multiple sources to analyse, track and monitor double-digit KPIs and support in responding to observability data and human escalations.

Gen AI can use natural language processing (NLP) to convert and condense large-scale raw data into digestible and easy-to-action insights, like how the e-commerce giant Amazon uses this technology to extract product highlights from tens and hundreds of user reviews.

It can also tailor customer success content for different client segments, automatically generating audio-visual materials and sharing across platforms to help customers at various touchpoints.

2. A more streamlined onboarding journey

Customer onboarding has always been an essential differentiator for IT service companies, and in recent years, more companies are moving from a transition approach to a guided transformation. In this context, generative AI could play an important role, primarily through customer-facing chatbots with an integrated database at the backend.

These sophisticated virtual assistants can assemble and curate information from multiple sources like SLAs, contracts, feedback forms, policy documents, invoices, etc. Clients can benefit from a guided onboarding journey that aids in seamlessly integrating new systems with the old, thanks to this 24/7, informed and articulate assistant.

Generative AI (Gen AI) can significantly streamline the onboarding journey in several ways:

- Personalised New Hire Query Resolution: During onboarding, new employees often have several questions regarding company policies, benefits, work culture, and roles. With Gen AI in onboarding, HR teams can develop chatbots or virtual assistants capable of understanding and responding to natural language queries. These AI-powered assistants can access a vast database of information, including company policies and employee handbooks, to provide accurate and personalised answers to each new hire’s questions.

- Automated Document Intake and Verification: Integrating Gen AI in onboarding can streamline document intake and verification procedures, reducing manual efforts and minimising errors. Generative AI algorithms can automatically extract relevant information from the submitted documents and cross-verify them against pre-defined criteria.

- Tailored Learning Path: Generative AI algorithms can analyse the new hire’s prior experience and current job role and curate a tailored learning path. This path may include online courses, interactive training materials, or mentorship opportunities that align with the new employee’s skill set and career aspirations.

- Automated Onboarding: Gen AI can introduce automation in onboarding. Successfully deploying Generative AI models can simplify corporate onboarding by autonomously providing relevant information and responses.

Gen AI can help revolutionise how organisations welcome and nurture new employees, making the onboarding process hassle-free and more effective for both the HR department and new hires.

3. Faster processes and the elimination of several manual tasks

One of the most significant benefits of generative AI is that it can help control administrative creep, a genuine burden for most IT service companies. The effort for invoice processing, documentation updates, audit compliance, idea generation, marketing research and content creation cuts into most employees’ work days. It also adds to your operational costs without generating any corresponding value.

Instead, a gen AI-enabled workflow can automatically complete iterative tasks such as invoice processing, refund claim responses, and audit checks while creating humanlike deliverables for each task. It frees technicians and executives time to focus on faster resolution of issues, new offerings development, learning, and strategic operations.

Generative AI (Gen AI) transforms businesses by speeding up processes and eliminating several manual tasks. Here are some ways how:

- Automation of Routine Tasks: Gen AI can automate routine tasks, allowing employees to focus on more strategic and creative tasks. Gen AI marketing applications like Gimmefy support research, content writing, and building communication strategies for products. The product also supports ideation on new campaigns, investigates competitors’ approaches to problems, and summarises articles/blogs. Not only large amounts of text but as well as pictures go through transformation.

- Efficiency and Productivity: Gen AI can perform tasks more efficiently and accurately, increasing productivity. For instance, Gen AI can help significantly speed up phase gate decision-making (e.g., reviews, approvals, deployment artefacts, etc.) so deployments can go through faster while still maintaining the quality and integrity of the deployment process.

- Resilient Hybrid Cloud Systems: As enterprises invest their time and money into digitally transforming their business operations and moving more workloads to cloud platforms, their overall systems become hybrid by design. Gen AI can help maintain highly resilient hybrid cloud systems.

- Improved Business Processes: AI trends like ChatGPT and other generative AI tools can help improve business processes with automation by reducing the burden of repetitive and time-consuming tasks.

In conclusion, Gen AI is redefining jobs and transforming business operations by automating work processes, leading to faster processes and eliminating several manual tasks.

How Does Gen AI Impact Pricing Models?

Pricing is one of the most notable impact areas of gen AI for IT service companies. AI-assisted workflows will drive down technician costs, influencing the bottom line and trickling down to the customer to provide you with a competitive advantage. But more importantly, advanced AI algorithms like generative adversarial networks (GANs) will pave the way for applying game theory to pricing simulations and analytics. Faster, more responsive, and more accurate pricing decisions can transform pricing processes by making pricing decisions faster, more responsive, and more precise; Gen AI can support it.

Generative AI (Gen AI) has a significant impact on pricing models in other ways as well :

- Value-Driven Pricing: A great pricing model is straightforward and value-driven, meaning that pricing is transparent, easy to understand, and based on what drives value for the customer.

- Usage-Based Pricing: Some organisations, like OpenAI, offer usage-based pricing for their Gen AI products, where customers are charged based on the number of API requests made; this will impact ITES service providers who are likely to compete with new service providers leveraging OpenAI or Gen AI.

- Customer Segmentation: For Gen AI’s pricing models to improve, it would be valuable if the basis is by segmenting the customers, their application of this technology, and the value it drives for them.

- Dynamic Pricing Strategies: Gen AI has the potential to revolutionise business patterns by creating breakthrough value in areas like dynamic pricing strategies that adapt to market conditions and customer behaviours.

While Gen AI is a game-changing technology, the pricing model for these products must be transparent, value-driven, and based on the customers’ specific needs and value drivers.

In other words, service providers can simulate the rational behaviour of their customers and their competitors in response to price changes; these insights, combined with analytics, will help unlock new realms of pricing optimisation and venture into new offering segments more confidently.

Does this signal the end of outsourcing?

It is one of the risks keeping many IT service leaders up at night — will generative AI reduce offshoring needs dramatically? This tactic’s main value proposition was cost efficiency and scale with minimal disruption to the customer’s core business. We are already seeing US industrial sectors, reshoring, and onshoring have accelerated in response to supply chain disruptions and global conflicts.

The GenAI is likely to disrupt offshoring talent demand for generic IT-ITES services. The competitive advantage of talent-cost arbitrage undermines skilled IT labour in competitive situations. However, it will only reshape the nature of demand and not remove it altogether. IT service companies may need to reinvent themselves as partners and co-collaborators with their client organisations, which is why I emphasise the role of custom success and onboarding.

Ultimately, generative AI will be both an opportunity and a challenge, depending on how you use it. Service companies that act proactively and aim for the low-hanging fruits will find themselves building lasting, resilient relationships backed by genuine value addition and competitive pricing.

To learn more about how generative AI can help your business, email me at Arvind@am-pmassociates.com.