Outcome-Driven Solutions: The Catalyst for AI Transformation

AI Transformation is fundamentally redefining the relationship between a client and a service provider. The traditional model, which often focuses on delivering a specific product or service with a pre-defined scope and a significant capital expenditure (Capex), is becoming outdated. Today's customers, especially in the financial sector, demand more. They seek partners who provide a complete, outcome-driven solution that delivers measurable business value and minimizes risk. This core philosophy drives Tech Mahindra's approach. The company aligns its efforts with the business outcomes of its customers, rather than simply talking about IT Key Performance Indicators (KPIs). This strategic shift fundamentally changes how IT services are delivered, particularly in industries where investment is critical, like banking and financial services. A company's financing arm plays a crucial role in this new model. This approach, combined with innovative economic models, allows clients to achieve their transformation goals without the burden of heavy upfront investment. The result is a more collaborative and strategic partnership focusing on long-term growth and success. This focus on outcomes is particularly relevant in the financial sector, where multi-billion-dollar investments have been made to build asset-heavy operations. The ability to free up capital and reinvest it in further modernization is a powerful driver for change and innovation and represents a strategic AI transformation.

From Capex to Consumption-Based Models

One of the most significant changes in the services industry is the move away from large, upfront capital expenditures to flexible, consumption-based models. For customers, this is a considerable benefit. This means that they do not have to tie up billions of dollars in assets and can instead pay for what they use. Tech Mahindra facilitates this by working with a robust ecosystem of partners, including technology companies and financing partners. These partners are critical in providing the hardware and software "as a service". The financing arm, in particular, becomes a key component of the solution, taking on the ownership of the physical assets. This allows the customer to avoid the risks and costs associated with owning and managing assets that may become obsolete in a few years. Tech Mahindra can focus on what it does best as a system integrator: delivering the desired business outcome. This model has been successfully applied in a variety of industries. For example, Tech Mahindra created a "network as a service" model for a large chemical manufacturer, where the customer pays only for the service they consume, rather than having to make a significant capital investment. This not only makes large-scale transformations more accessible but also creates a more sustainable and efficient business model for all parties involved. This is a significant aspect of AI transformation that is gaining momentum across the globe.

Revolutionizing Banking and Financial Services

Banks are the backbone of any economy and have historically been leaders in technology investment. However, they face limitations on available capital. Tech Mahindra’s strategy is to help banks modernize their legacy systems to free up cash that can be reinvested in further transformation. A key area of focus is mainframes, which are a pivotal part of the success of many banks. By optimizing or modernizing these systems, Tech Mahindra can help free up unutilized capacity, allowing the bank to redirect that capital to new initiatives. Mayank cites an example of a global bank that cloudified its robotic process automation (RPA) journey using a "pay as you go" model. This approach helped the bank save money and reinvest it in critical areas like anti-money laundering. The key message is that while banks are willing to spend money, they are even more willing to reinvest when they see a clear return on their initial investment. Furthermore, Tech Mahindra works with banking platform partners like Temenos to implement solutions on the cloud in a consumption-based model, freeing up cash for infrastructure or process modernization. This is a powerful demonstration of an AI transformation strategy focused on delivering tangible business value rather than simply implementing a new technology. The company works with all types of banks, from global players to local credit unions, tailoring its approach to each customer's geographical nuances and scale. This flexibility and focus on outcome are what make their model successful.

The Future of the Services Industry

The shift towards outcome-driven, consumption-based models is a game-changer for the services industry, and Tech Mahindra is at the forefront of this movement. By focusing on the customer’s business outcomes and leveraging an innovative ecosystem of partners and financial models, the company is helping clients across sectors, especially in banking and finance, achieve their AI transformation goals. This approach allows customers to modernize their legacy systems and invest in new technologies without the burden of massive capital expenditure. The success of this strategy is rooted in a deep understanding of the customer's needs and a commitment to delivering measurable results. This new engagement model is not just about technology; it’s about creating a more collaborative and strategic partnership that benefits everyone involved. The AI transformation will continue to accelerate this trend, making it even more critical for companies to partner with providers who can deliver real value and not just a product. The future of IT services is not about selling hardware or software but about providing a service directly tied to a business outcome. Tech Mahindra is a leading example of this new paradigm. The strongest driver of transformation in any industry is the ability to free up capital and reinvest it in new initiatives. Tech Mahindra has found a way to make this a core part of its service delivery.