Can They Reinvent Before Their Clients Do?

For decades, firms such as Accenture, Capgemini, Cognizant, TCS and Infosys have built their business by supplying the people and skills companies need to run and modernise technology. The approach has been simple: win long contracts, build delivery teams and expand into adjacent services, applications, cloud, security and data.

That model is now under pressure. Artificial intelligence is not just another capability to bolt on. It affects nearly every service these firms sell and changes what clients will pay for: speed, quality and measurable outcomes rather than time and headcount.

If providers don’t adapt, their revenue model is at risk. Many of their large clients spend hundreds of millions a year with vendors. Those clients are already demanding clearer proof that their money delivers business results, not just labour.

Where the pressure lands first

Expect the first, obvious impacts in the areas that have been labour-heavy:

• Application work. Tools that help write and test code speed delivery. That changes how teams are organised and reduces repetitive work.
• Operations and infrastructure. Automated monitoring and self-healing systems mean fewer routine tickets and less need for large support rosters.
• Security. Automated tools reduce the flood of alerts. Human teams will spend more time validating and responding to real incidents rather than scanning noise.
• Shared services (finance, HR, contact centres). Virtual assistants and automation handle routine requests and transactions, shrinking the run-the-business headcount.
• Analytics. The value moves from producing reports to maintaining reliable models and delivering decision-ready insight.

All of these changes attack the same thing: billable hours. The more work that becomes predictable or automated, the less defensible a labour-heavy model becomes.

Why established firms will struggle

This is not an awareness problem. Most big providers have launched AI programmes and signed partnerships with cloud and chip vendors. The challenge is commercial.

These firms carry large, long-dated contracts and staffing commitments. Switching to delivery that uses more automation and fewer people erodes short-term revenue and makes forecasting harder. Reskilling thousands of people is expensive and slow. Governance, data ownership and legal exposure complicate the picture further. In short: it’s one thing to say you’ll change; it’s another to accept the near-term financial pain required to make the change permanent.

The downside of doing nothing

If a provider moves slowly the consequences are simple: margin pressure, lost clients and eventual consolidation. Faster competitors or specialist AI firms will take share. Over time, the market will sort itself, those who adapt will buy capability, and those who don’t will be sold or sidelined.

For buyers, the reverse risk is strategic decline. Sticking with a partner that cannot deliver productivity improvements or protect your data and processes leaves your business paying for yesterday’s model.

What winners will do – practical moves

Survival will come down to clear commercial choices. The firms that prosper will take five practical steps.

1. Change the pricing mix. Shift fees away from hours and tie a portion to outcomes: faster delivery, fewer defects, or measurable cost savings. This forces vendors to share the commercial upside and downside.
2. Stop giving tools away for free. If a vendor has built software or automation that genuinely saves time or money, it should be priced and contracted for. Clients will pay when the benefit is clear, and vendors should stop undermining their own value by treating these tools as giveaways.
3. Turn safety and compliance into a service. Clients will pay for clarity on data ownership, audit trails, and rollback plans. Governance and assurance should be built into every deal as a service in its own right, not buried as overhead.
4. Manage the workforce transition like a financial problem. Budget for retraining, redeployment and, where necessary, orderly exits. Put those costs on the P&L and plan cash flow accordingly. Treating it as a financial reality avoids surprises later.
5. Use M&A and partnerships carefully. Buy niche skills or specialist firms where it’s faster than building in-house. Form alliances with big tech players for scale, but don’t let them take over the client relationship. The trust of the client must remain with the service provider.

These are business choices that will cost margin in the short term but protect relevance and pricing power over the medium term.

What CFOs and procurement should demand  

If you control the purse strings, change the way you buy. Don’t leave momentum to the vendor.

• Tie part of payment to productivity. For example: achieve X% reduction in cycle time or Y% reduction in manual effort and a portion of the fee is payable.
• Require data clarity. Insist on written rules for training data, derived assets and who owns what.
• Ask for reskilling plans with budgets. Get timelines and measurable targets, not PR statements.
• Force transition terms. Exit pricing, handover support and interim pricing options if you choose to move work in-house or to another provider.

These contract levers make vendors put commercial skin in the game.

A short CFO dashboard to track

 Revenue per billed head – shows productivity shifts.

• Share of revenue not tied to hours billed – shows progress in moving away from the old model.
• Share of contracts with outcome clauses – shows commercial progress.
• Reskilling hours per employee – shows investment in people.
• Churn among top accounts – early warning on client dissatisfaction.

Numbers force conversations. Put them in the monthly finance/IT governance pack and act on the trends.

Final words

Every technology wave changes the services market. This one will be faster and touch more parts of the business. For IT services leaders the choice is plain: accept short-term disruption and change your model now, or risk steady decline. For buyers, the message is equally direct: demand proof, require clarity on data and governance, and price for outcomes.

If you run vendor strategy or control the budget, now is not the time for polite conversations. Make hard decisions, reallocate capital, rewrite contracts, and hold vendors to measurable delivery. The executives who do this will protect margins and speed outcomes. The rest will have to explain why they didn’t move sooner.

About the Author

Ben Dodds is a senior finance leader with CFO and executive leadership experience, helping complex organisations accelerate growth, improve profitability, and deliver enterprise-wide transformation. In senior roles at Tabcorp, DXC Technology, and Hewlett Packard, Ben has shaped finance into a strategic business partner, driving commercial performance, optimising cost structures, and enabling better decision-making.

Ben is known for building leadership teams that deliver results, creating clarity in complexity, and working directly with executive teams to unlock sustainable performance. He shares his perspectives on financial leadership and transformation as a contributor to CFO Magazine A/NZ.

Follow Ben on LinkedIn: https://www.linkedIn.com/in/benrdodds