Predictions that artificial intelligence would reduce the role of IT services firms are increasingly being challenged by the industry’s own evolution, with engineering services company L&T Technology Services (LTTS) arguing that enterprise AI adoption is instead creating a new layer of implementation and deployment work.
The view comes at a time when AI companies themselves are expanding into services-led models even as earlier expectations suggested enterprises would increasingly rely on ready-to-use AI tools with minimal external support.
“At the India AI Summit, we remember the attitude being that IT services firms were no longer required because of plug-and-play AI tools. Last week, two prominent AI firms have set up service delivery organisations ironically,” Amit Chadha, managing director and chief executive officer at LTTS, told Fe on Wednesday.
FDE Pivot
For LTTS, the shift is translating into a push towards what it calls Forward Deployed Engineers (FDE), teams that work closely with customers on implementation and integration. The company on Wednesday launched an AI Centre of Excellence (CoE) in Munich, which it said would help drive AI adoption across areas including engineering design, energy, data engineering, AI infrastructure, AI chips and application deployment.
The Munich centre will focus on sectors such as automotive, industrial, aerospace and medical technologies. Chadha said the company has nearly 1,000 employees in Europe, of which around 500 are based in Germany, and intends to build FDE teams around the new centre.
“We realise that a lot of work will have to be done locally,” he said.
Reversing the Ratio
According to Chadha, enterprise AI deployments currently require a greater physical presence close to customers before delivery models mature and become scalable. He said around 60% of implementation work presently needs to be done on-site while the remaining 40% can be handled offshore. Over time, he expects that ratio to reverse as systems stabilise and processes become repeatable.
He also sought to temper expectations around the FDE model, which has increasingly become a discussion point in AI services. “There’s no magic wand. It will be a team effort,” he said, adding that enterprise transformation involves multiple systems spanning engineering, manufacturing and enterprise functions.
The company had earlier this year shifted to a new framework called Engineering Intelligence and identified areas such as industrial AI, physical AI and device AI as new growth opportunities. Chadha said sectors including mobility, industrial AI, energy and sustainability are witnessing increasing traction, adding that LTTS’ pipeline for large deals had strengthened over the last quarter.