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Impact of generative AI on IT – Still in infancy stage, ICICI Securities

We hosted the management of Happiest Minds Technologies Ltd. to discuss the impact of generative artificial intelligence on IT services industry. Key takeaways:

Happiest Minds had started exploring generative AI three-four years back as a part of its annual strategy process along with other new technologies. Post the release of ChatGPT, there has been a lot of interest among clients to leverage Gen AI. However, enterprise scale use cases are still in infancy stage, as per Happiest Minds.

Generative AI is likely to have the highest impact on BPO and customer support in the near term:
BPO is the first area to be impacted by Gen AI technology as there is higher scope for automation in back-end and middle-office business processes. Customer support in the form of chat bots is another area that has massive scope for improvement with use of Gen AI vs being able to answer only pre-defined narrow set of problems currently.

Productivity improvement because of Generative AI may result in increased volume of work rather than reduction in jobs:
Productivity improvement by leveraging Generative AI can range between 10-70% depending on the complexity of the task with high productivity improvement for easier tasks (example: Creating simple four-five pages’ website using PHP). Productivity improvements because of previous technology disruptions have not led to reduction in jobs, as the employees can be upskilled and can be deployed for catering to increased scope of work. Similarly, use of Generative AI is unlikely to reduce jobs, but increase the scope of work, as per Happiest Minds management.

Key challenges in adoption of Gen AI:
Key challenges in the adoption of Gen AI at enterprise level is managing data security and governance. Currently, only two Gen AI platforms are available for software developers for testing and improving their codes – ChatGPT browser of OpenAI and GitHub (Microsoft owned company) and both these platforms code is required to be shared on these platforms.

Therefore, many clients may not be comfortable if their IT services vendors use these Gen AI solutions for code testing.

For report,


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