Tata Consultancy Services launches dedicated AI unit to drive growth as outsourcing faces disruption

Tata Consultancy Services Launches Dedicated AI Operations Unit

Tata Consultancy Services (TCS), India’s largest IT services company, has established a new unit focused solely on AI operations. Amit Kapur, a 20-year veteran of the company and former head of TCS’ UK and Ireland business, will lead this unit starting September. The move aims to consolidate TCS’s existing AI capabilities and boost its AI-based solution offerings.

TCS is the first Indian IT firm to create a dedicated AI business unit, following a similar step taken by a major US competitor earlier this year. This signals a strategic shift as Indian IT companies seek to strengthen their position in AI amid changing market dynamics.

Indian IT’s Distinct Approach to AI Growth

Unlike many global tech firms that have prioritized acquisitions to grow their AI portfolios in 2024, Indian companies like TCS are leaning towards organizational restructuring and partnerships. Indian IT firms have engaged in around 46 AI-focused partnerships this year, primarily with global hyperscalers and startups. This contrasts with the acquisition-heavy strategies seen at firms like Accenture and IBM.

This partnership-driven approach reflects the different financial positions and market strategies of Indian IT companies. Despite fewer acquisitions, Indian firms continue to grow and differentiate their AI offerings through collaboration. TCS’s choice to promote Amit Kapur internally also highlights a preference for leveraging existing expertise rather than hiring externally.

Strategic Timing Amid Industry Challenges

The formation of TCS’s AI unit comes shortly after the company announced job cuts, indicating a defensive posture as AI reshapes traditional outsourcing models. India’s $283 billion outsourcing industry faces pressure from AI automation, which threatens to reduce demand for manual processes that have long been revenue drivers.

Client spending has been subdued due to global economic uncertainties, pushing IT firms to seek new avenues for growth. Industry experts note that AI-led transformation is increasingly seen as the main lever to drive expansion amid a slow macroeconomic environment. This urgency is reflected broadly, with 93% of Indian companies planning to increase AI investments in 2025 and 89% launching multiple AI pilot projects in 2024.

By consolidating its AI capabilities into one dedicated unit, TCS aims to better package and market AI services to clients, responding to their growing demand for these solutions.

What This Means for Operations Professionals

• Focus on AI Integration: Operations teams should prepare for increased AI adoption in processes, requiring updated skills and awareness of AI tools.
• Collaboration Over Acquisition: Expect AI growth to come more from partnerships and internal development rather than large acquisitions, influencing vendor and technology choices.
• Adaptation to Change: As AI disrupts outsourcing models, operations leaders must guide teams through transitions, balancing automation benefits with workforce impacts.

For operations professionals looking to build AI skills aligned with industry trends, exploring targeted AI courses and certifications can provide practical knowledge. Resources like Complete AI Training’s latest AI courses offer accessible paths to stay current with AI-driven transformations.