Enterprises across the country are increasingly replacing conventional technological solutions with newer, smarter alternatives to improve efficiency and enhance customer experience. Consequently, bots, artificial conversation entities, simulation models, etc. are reshaping business processes and outcomes. The Indian IT/IT-enabled services (ITeS) and business process management (BPM) sector is also witnessing similar trends as companies in the sector adopt digital solutions to enhance their product and service offerings, expand internal capabilities and increase efficiency.
The Indian IT/ITeS and BPM sector is expected to remain at the forefront of this transition. This is supported by a Gartner report, which projects that India’s IT spending will rise by 11.2 per cent year on year to almost $160 billion in 2025. This growth will be driven by spending in software and IT services as technologies such as automation, business intelligence and cloud continue to gain momentum.
A look at the key technologies shaping the IT/ITeS and BPM sector in India…
Artificial intelligence
Artificial intelligence (AI) has gained immense popularity over the past few years. AI encompasses machine learning (ML), deep learning, natural language processing, image processing and speech recognition.
Some of the benefits associated with AI are data entry and analysis, assessment of user behaviour, predictive maintenance to reduce errors, quality assurance, and customer support and service management through the use of chat assistants. Additionally, AI opens up new avenues for innovation, reduces costs and streamlines processes. As per industry estimates, companies reported an average reduction of 37 per cent in IT infrastructure costs.
Enterprises in the IT/ITeS and BPM space are making their upcoming products and platforms “AI native”. For instance, in October 2024, Infosys launched its small language models, Infosys Topaz BankingSLM and Infosys Topaz ITOpsSLM, created using the powerful NVIDIA AI Stack. The two companies are also collaborating on NIM™ Agent Blueprints to integrate innovations such as the new Digital Human blueprint for customer service. Meanwhile, Genpact and AWS entered into a strategic partnership in December 2024 to accelerate AI adoption. In another notable development, in January 2025, HCL Technologies acquired Microsoft’s
Nuance Services Unit to leverage the latter’s AI expertise.
Cloud connectivity
The adoption of cloud-based IT solutions is witnessing significant growth in the IT/ITeS and BPM sector. Hyperscalers, system integrators, data centres and pure-play software-as-a-service (SaaS) providers are the various types of service providers in this value chain. Meanwhile, infrastructure as a service (IaaS), platform-as-a-service (PaaS), SaaS, business process services, desktop-as-a-service, disaster-recovery-as-a-service, and cloud management and security services are the different types of cloud services being deployed in the industry.
Cloud solutions enhance agility, provide cost-effective and scalable storage, empower hybrid workspaces through hassle-free collaboration and drive intellectual property-led innovation. In addition, cloud computing strengthens enterprise security with features such as multifactor authentication, firewalls and end-to-end encryption. According to a survey conducted by Thales in 2024, cloud security spending has now surpassed all other security spending categories.
Hinduja Global Solutions’ cloud-based cognitive engagement solution, HGS Agent X, has been deployed across 16 clients, delivering cost savings of around 50-55 per cent. In December 2024, HCL Technologies partnered with Google Cloud Security to provide AI-driven managed detection and response solutions to enterprises. Further, in January 2025, IBM announced its intent to acquire Applications Software Technology, an Oracle consultancy specialising in public sector cloud transformations.
Digital twins
The creation of digital twins, through the integration of real-time data from diverse sources such as IoT sensors and simulation modelling based on predefined parameters, is also gaining traction. Technologies such as cloud computing and AI further enhance the capabilities of digital twins. Further, four types of digital twins can be typically created – component, asset, system and product twins.
Digital twin technology empowers businesses to dynamically adjust these parameters within the virtual environment and respond efficiently to unforeseen conditions. Some of its other benefits include interactive process visualisation, predictive insights, enhanced innovation and improved efficiency. A 2024 McKinsey study highlights that 70 per cent of C-suite technology executives at large enterprises are already exploring and investing in digital twins. It adds that digital twins have reduced development times by up to 50 per cent, while also lowering costs.
In March 2024, Capgemini acquired Unity’s digital twin advisory arm to develop real-time 3D solutions. Similarly, in January 2025, Accenture acquired Percipient’s digital twin technology platform to help its financial services clients in Asia Pacific reinvent their core systems, foster innovation and drive growth. In August 2024, L&T Technology Services and Altair jointly announced the establishment of a digital twin centre of excellence to accelerate digital transformation.
Robotic process automation
Robotic process automation (RPA) has recently emerged as a staple technology for IT/ITeS and BPM organisations. This game changing technology uses software robots or bots to imitate human user behaviour by navigating through various applications and interacting with other systems to replicate repetitive tasks.
In addition to automating tedious tasks, RPA is being employed for software installation, system updates, real-time insights, data migration, workflow management and inventory management. These capabilities help improve service delivery, response times and customer satisfaction. It also frees up employees to focus more on sophisticated tasks. A case in point is Infosys, which automated several HR processes for its clients including shift allowance calculation, new employee background verification, generating offer letters and scheduling client training programmes. As per an Infosys case study, these initiatives led to significant benefits for its clients, including a 35 per cent reduction in average processing time during the cross-verification of potential new candidates and a 83 per cent reduction in average handling time for shift allowance calculations, with zero errors.
More recently, in February 2025, Etex and Cognizant entered into a partnership to enhance innovation through AI and automation. Meanwhile, in March 2025, Wipro secured a near $650 million deal to enhance efficiency and the customer experience for Phoenix Group policyholders using automation tools. During the same month, Tech Mahindra announced the successful implementation of an enterprise resource planning system for Coal India Limited (CIL) leveraging technologies like automation. CIL reported increased efficiency across key modules such as payroll, finance, materials management, personnel, production, sales and marketing, contributing to an overall improvement in business performance.
Overcoming the glitches
A major challenge associated with the deployment of these emerging technologies is the large amount of data required to train and operate effectively, which raises significant data privacy and security risks, especially when sensitive or personal information is involved. However, adherence to regulations such as the Digital Personal Data Protection [DPDP] Act, 2023 can serve as a safeguard. Further, incorporating features like multifactor authentication, firewalls and end-to-end encryption can also help reduce the risk of cyberattacks associated with these technologies.
High initial investment costs remain another adoption barrier. For example, Cognizant spent $229 million on its NetGen Programme. Incorporating these technologies in a phased manner can help optimise these upfront costs.
Another challenge is related to human resources. On the one hand, there is a shortage of skilled professionals with the expertise to develop and manage AI systems. On the other, there is growing concern that these next-gen technologies will replace human beings, which may result in employee resistance to technology adoption. Furthermore, skilled professionals are needed in fields such as legal, data privacy and compliance to ensure proper implementation of use cases. Clearly, the workforce must be reoriented to take on more complex roles. Addressing these gaps will require academic reforms, on-the-job training, shadowing opportunities and a strong focus on reskilling.
In terms of technology-specific challenges, digital twins demand new ways of working and a robust project management team. Companies can address this gap through a structured approach, starting with a competitive intelligence and scoping phase followed by architecture design and software stack definition, and finally a software-development-excellence phase. There are also concerns about data bias, limited traceability and failure to reproduce outcomes, which could lead to incorrect or inappropriate decisions. Further research and refinements are needed to fix this bias. Meanwhile, migrating to cloud requires that all cloud managers be aligned, even in small details such as standardised passwords. Moreover, multicloud environments present issues related to configuration errors, data governance and lack of security patches. With regard to RPA, organisations must prioritise tasks based on a cost and return-on-investment analysis.
The path forward
In sum, India’s IT/ITeS and BPM industry has come a long way from what it was about two decades ago, due to the adoption of cutting-edge solutions. Going forward, with further refinements and the the likely increase in the sector’s IT spending, the industry will remain at the forefront in terms of technological prowess.
