NASSCOM recently hosted its flagship event, the Technology Leadership Forum (NTLF) 2025, with noticeably stronger attendance than in recent years. Returning to its familiar venue — the Grand Hyatt Mumbai — proved valuable. The compact setting was ideal for high-impact interactions, enabling us to engage in over 50 client meetings across a wide range of topics shaping the IT and IT-enabled services industry. Unsurprisingly, the largest share of conversations was with service providers — ranging from niche specialists to full-spectrum players, both global and India-based. Several clear themes emerged from these discussions, offering insight into the evolving priorities of the sector.
AI’s Impact on Service Delivery Is Just Beginning
AI — specifically generative AI (genAI) — couldn’t be kept out of the conversation. It has massive implications for knowledge industries, including IT and business services of all kinds. The discussions at NTLF 2025 revealed a broad spectrum of interpretations on how agentic AI will reshape the industry. IT services firms are evaluating how automation and self-directed AI agents could accelerate software delivery, potentially reducing headcount dependencies and altering traditional managed service models. Business process outsourcers (BPOs) are reimagining the concept of a “digital workforce,” where AI-driven agents could take over routine, structured workflows, shifting the focus from scale-driven efficiency to expertise-driven value. Product vendors, too, are rethinking their roadmaps, as agentic AI threatens to disrupt traditional software categories.
Despite the buzz, hard truths dominated many conversations. Job displacement, regulatory gray zones, and the ethics of AI-led decision-making were impossible to ignore. Vendors agreed: AI may unlock efficiency and cost gains, but it also forces a reckoning — with legacy business models, outdated workforce assumptions, and traditional value levers. NTLF 2025 was a mirror to the industry’s mindset: bullish on the promise of AI and agentic systems, yet clear-eyed about the complexity of real-world adoption.
BPOs Gear Up for AI, But Real Impact Is Still On The Horizon
There’s broad consensus — across clients and service providers alike — that a large-scale disruption of services and work types is inevitable. Yet, for most BPOs, the impact remains more potential than reality. Nearly every provider has invested heavily on two fronts: 1) building an AI-first BPO service portfolio; and 2) preparing their workforce to operate effectively alongside AI. However, the current state of play is still nascent. Most AI deployments are limited to foundational genAI and agentic use cases, primarily in customer service and back-office transaction processing. The transformational promise is clear — but for now, it’s still early innings.
The BPOs taking a truly strategic path to becoming AI-powered are going beyond generic solutions. They’re investing in domain- and vertical-specific AI models that are both scalable and fungible, while also designing agentic workflows that span entire service lifecycles. A consistent thread across these efforts is the emphasis on human-in-the-loop systems — which is prompting a reexamination of roles, skills, and job definitions across the BPO workforce. Fully autonomous, end-to-end workflows remain more vision than reality for now. Achieving that future will demand not just new tools, but a fundamental shift in mindset.
GCCs Take Center Stage
We have seen rising interest in global corporates to set up their global capability centers (GCCs) in India. NASSCOM’s projection of GCCs growing from over 1,700 to more than 2,100 by 2030 reflects a significant trend. We expect both the number of GCCs and the staff they deploy will, on average, increase during this period. Service providers were keen to discuss the implications of this growth on their business.
Many providers are consolidating their GCC offerings — previously scattered across business units — into a single, integrated service line. To deliver end-to-end value, they’re forging new partnerships in areas traditionally outside their scope, such as real estate, tax, legal, audit, and compliance. The service models span the full spectrum: from build-operate-transfer for greenfield GCCs to traditional outsourcing arrangements for mature centers.
The Four Forces Reshaping Tech Services in 2025 and Beyond
Service providers entered 2025 with cautious optimism. Yet, under the surface, concerns around geopolitics, currency volatility, and the dual impact of AI — both accretive and potentially dilutive — were front of mind. In our view, four major forces will shape the trajectory of the services industry this year. GenAI will lead the charge, but it won’t stand alone. Providers will need to help clients consolidate and scale their core tech stack, forge the right ecosystem partnerships and alliances to enable that transformation, and navigate a new, non-linear relationship between talent and revenue — a shift that challenges long-held operating assumptions.
