World’s top companies are realizing AI benefits. That’s changing the way they engage Indian IT firms

Global Industry Leaders Redefine Outsourcing Strategies in Response to AI Advancements

As artificial intelligence continues to revolutionize the technological landscape, major corporations worldwide are reevaluating their engagement with Indian IT service providers. Traditionally reliant on fixed-price contracts, many of these organizations are now exploring more flexible, resource-based agreements that better align with AI-driven efficiencies.

This transformation signals a significant shift within India’s substantial $280 billion IT services sector. Companies are increasingly prioritizing rapid project turnaround and cost optimization, driven by AI’s ability to reduce dependency on large human workforces.

Leading Fortune 500 clients are recognizing the tangible benefits of deploying AI, such as decreased labor requirements and accelerated delivery timelines. Consequently, they are contemplating transition to time-and-material agreements—contracts based on actual hours worked and resources utilized—before firmly committing to conventional fixed-price arrangements.

This evolution in outsourcing models underscores a broader trend: the strategic integration of AI is altering established norms and unlocking new approaches to global IT collaborations. As AI gains momentum, Indian tech firms and their international clients must adapt their engagement frameworks to stay competitive in this rapidly changing environment.