IT firms better placed to help clients leverage AI benefits: Wipro chairman

Wipro Chairman Rishad Premji said IT services firms can use their deep understanding of clients' processes and systems to unlock efficiency, innovation and AI-led growth

IT services companies have a decades-long understanding of their clients’ businesses and are better placed to implement artificial intelligence’s (AI’s) advantages for them, said Wipro chairman Rishad Premji on Wednesday.

 

Weak demand and geopolitical crises are pinching IT companies, which have reported annual growth of less than 5 percent for the last three years and may do the same this year. Alongside, AI is compressing their legacy revenue as they have to pass on the savings generated to clients.

 

AI will not only improve efficiency but also create new opportunities for innovation and growth, Premji said. Demand for data and IT modernisation will prompt companies to move beyond pilots and embed AI in their processes, Premji said.

 

“This transformation journey will happen over time with new operating models and people and AI working together,” he said at Wipro’s 80th annual general meeting. “There will be new pools of growth. Organisations must reimagine processes and workflow, enterprise architecture, and data modernisation.”

 

Wipro used AI to reduce its monthly financial closing cycle to eight hours from 24.

 

Indian IT service providers will be challenged by AI-native firms over the next three years — a trend that could erode their revenue base unless they remain competitive and protect their recurring businesses, a report by S&P Global Ratings said earlier this week.

 

Premji said the IT industry was cautious last year and its clients continued to focus on cost optimisation deals even though they invested in AI capabilities to change platforms and talent pools.

 

Cost optimisation deals are large but take a considerable amount of time to materialise and ramp up after signing, he said. They put pressure on operating margins as traditional and new players compete for the same share of the pie. Smaller AI-native deals are quicker to fructify, provide a recurring rolling revenue and come with fatter margins.

 

Srini Pallia, chief executive officer and managing director of Wipro, said enterprise AI is not just about large language models but understanding where constraints exist, how processes work, and integrating domain, data security and change management. AI is also driving a shift in commercial model: From effort-based pricing to consumption-, transaction-, and business-outcome-based models.

 

Wipro Ventures has committed $500 million to invest in startups across AI, data, and security while it continues to expand its AI ecosystem through partnerships, acquisitions and innovation initiatives.