Generative AI Revolutionizes Technology Services: Insights from WNS CEO
The rapid evolution of generative artificial intelligence (GenAI) is reshaping the technology services landscape, compelling companies to adapt or risk obsolescence. Keshav Murugesh, the CEO of WNS, a prominent business process management (BPM) firm, recently shared insights on how this transformation is influencing the industry. His comments come in the wake of Capgemini‘s announcement in July regarding its acquisition of WNS for $3.3 billion, a move that underscores the growing importance of integrating technology and operations.
The Capgemini-WNS Merger: A Strategic Shift
Capgemini, a French technology and consulting giant, is set to finalize its acquisition of WNS by the end of October. This merger is not merely a financial transaction; it represents a strategic alignment aimed at creating a comprehensive suite of services that spans both technology and operations. Murugesh emphasized that the integration process has already begun, with both companies working closely to define a shared vision.
“The goal is to create one of the most comprehensive offerings across tech and operations globally,” Murugesh stated in an interview. This ambition reflects a broader trend in the industry where the lines between IT services and BPM are increasingly blurred.
Unpacking the Growth Potential
Murugesh highlighted the significant growth opportunities that lie ahead. He noted that while the traditional BPM market has only penetrated about 25-30%, there remains a vast 70% of untapped potential. In contrast, the IT services sector is already 75% penetrated. The merger aims to leverage this disparity by combining consulting, cloud technology, application development, and GenAI into what Murugesh refers to as “intelligent operations.”
This integrated approach allows WNS and Capgemini to offer end-to-end solutions to clients, potentially transforming how businesses operate. Murugesh explained, “If today you are spending $2 billion, we can smartly deliver all of this end-to-end, take the risk, monetize you to some extent, and deliver this at 30%, 40%, 50% less.”
Changing Client Expectations
As the industry evolves, so too do client expectations. Murugesh pointed out a significant shift from traditional pricing models based on input metrics-such as billable hours or headcount-to a more holistic approach that considers the total cost of ownership. This new model emphasizes the overall impact and business value delivered, including cost savings and efficiency improvements.
This shift is indicative of a broader trend in the technology services sector, where clients are increasingly seeking value-driven partnerships rather than transactional relationships. The ability to demonstrate tangible results will be crucial for service providers in this new landscape.
WNS’s Early Adoption of GenAI
WNS is already witnessing the monetization of GenAI, even as many competitors remain in the early stages of experimentation. Murugesh revealed that approximately 5% of the company’s revenue currently stems from GenAI-led projects, a figure that underscores WNS’s proactive approach to integrating this technology into its offerings.
“We’ve gone past the ‘pilot stage’,” he asserted, indicating that WNS is not just dabbling in GenAI but actively leveraging it to drive revenue. This forward-thinking strategy has allowed the company to decouple revenue growth from headcount growth, a rarity in the industry. Murugesh noted that nearly 30% of WNS’s revenue now comes from non-full-time employee contracts, showcasing the firm’s adaptability in a changing market.
Resilience Amidst Technological Disruption
The conversation around GenAI often raises concerns about job displacement within the IT sector. Murugesh acknowledged these fears but offered a more optimistic perspective. “It may in the short term cannibalize, but in the long term, it will build trust with our clients and allow us to keep growing in new areas that they have not outsourced or partnered in before,” he explained.
This sentiment echoes a broader narrative in the technology sector, where innovation is frequently met with apprehension. Historical precedents, such as the advent of automation in manufacturing, illustrate that while initial disruptions may lead to job losses, they often pave the way for new opportunities and roles that did not previously exist.
A Legacy of Growth
WNS has a track record of maintaining growth even during challenging times. Over the past 15 years, the company has consistently delivered productivity improvements with each technological advancement, achieving double-digit growth without resorting to workforce reductions. Murugesh emphasized that even during the COVID-19 pandemic, WNS did not downsize its workforce, a testament to its resilience and strategic foresight.
This commitment to growth and innovation positions WNS favorably in an increasingly competitive landscape. As the company prepares for its integration with Capgemini, it is poised to capitalize on the synergies created by the merger, further enhancing its service offerings.
Conclusion
The intersection of generative AI and business process management is redefining the technology services industry. As companies like WNS and Capgemini navigate this transformative landscape, they are not only adapting to changing client expectations but also setting new standards for service delivery. The merger represents a significant step toward creating a more integrated and efficient approach to technology and operations, one that could reshape the future of the industry. As Murugesh aptly noted, the journey ahead is not just about survival; it’s about thriving in a world where technology and business processes are inextricably linked.
