AI or Die: The Old Playbook for IT & Business Services Is Dead—Here’s the New One

Those who know me know this: I’ve spent my career in IT services, consulting, and AI. I even co-founded a company in this space and grew it into a multimillion-dollar business in a short span of time. And if there’s one thing I’ve learned, it’s that disruption isn’t new in this domain—it’s the game we’ve always played. We’ve weathered the shift from on-prem to cloud, adapted to offshore delivery models, and navigated the rise of agile, DevOps, cloud, and automation. Each wave forced us to evolve, but the core business model largely stayed intact. We adapted, repackaged, and kept moving.

Here’s the hard truth this time: Generative AI isn’t just another technology trend. It’s not a new tool in the same toolbox. It’s a full-system rewrite of how value is created, delivered, and monetized. So if you’re still operating as if this is just another wave to ride, like those that came before, this is your WAKE-UP call. Generative AI is a structural shift. It’s not about doing what we’ve always done, faster or cheaper. It’s about redefining the game entirely. And it demands reinvention—or you risk being swept aside.

For decades, our industry scaled by scaling people. We built delivery centers in India for software engineering, sent support work to the Philippines, and tapped into Eastern Europe for back-office and analytics. It was a simple, effective formula: labor cost arbitrage. We sold skills. We priced in hours. And we delivered outcomes by brute force.

But Generative AI is changing the math. The unit of work is no longer a person—it’s a capability.

From Labor Arbitrage to AI-Driven Output

With AI, the same project that required ten offshore engineers can now be delivered by three developers working with AI copilots. A 50-person support center? Replace it with 15 agents supported by intelligent virtual assistants that never sleep, scale instantly, and don’t request vacation. Time zones and cost differentials don’t mean what they used to.

This doesn’t just reduce cost—it fundamentally breaks the old model. And once the economics shift, so does everything else: pricing, value, delivery, and client expectations.

If you haven’t already re-examined your model—how you deliver, what you charge for, and what outcomes your clients expect—consider this your sign. AI isn’t just a tool. It’s the new operating system for our industry.

Let’s take a closer look at where the disruption is hitting hardest—and what it means for your business.

IT Services:

The U.S. IT services market is massive—around $459 billion annually—and software development is a big chunk of it.

Generative AI is not just helping developers code faster—it’s transforming the entire SDLC. Tools like GitHub Copilot, Claude, and domain-specific LLMs are generating boilerplate code, writing test cases, accelerating debugging, and assisting with documentation. Engineers report 30–50% time savings with higher quality outcome, with some teams pushing well beyond that.

This means fewer billable hours to get the same job done. That’s not just efficiency—it’s a pricing disruptor.

And it goes further. Clients are beginning to ask the obvious question: If AI is doing part of the work, why am I still paying you by the hour?

That’s when we shift from delivering effort to delivering value.

Business Consulting Services:

The business consulting industry—$374 billion in the U.S. alone—is being reshaped in a different, but equally profound way.

AI isn’t replacing consultants. It’s replacing the grunt work they used to spend hours on. Generative AI can summarize hundreds of pages of market research, generate SWOT analyses, build draft PowerPoint decks, and even produce initial strategic recommendations from internal knowledge bases.

This doesn’t devalue the consultant—it elevates them. It allows them to focus on interpretation, influence, and outcomes instead of formatting, searching, and compiling.

And here's the kicker: AI is now not just something consultants use—it’s something clients expect them to know. Firms are building AI advisory practices, not because it’s trendy, but because every client wants to know how AI will impact their business model. The firms that advise best—and adopt internally—win.

So, What Now? The New Playbook for Service Providers

The old model—more people equals more revenue—is gone. What replaces it? A new blueprint for IT and consulting firms who want to compete in the AI-first era.

Here’s what that looks like:

1. Make AI a Native Capability: Don’t bolt it on—bake it in. Whether you build your own platform or partner with hyperscalers and startups, clients need to see AI in your delivery DNA. Offer “AI-augmented services” across every vertical, not just in a separate CoE. If you’re not helping clients accelerate with AI—and using it to deliver faster yourself—you’re already behind.
2. Shift from FTE to Value-Based Pricing: AI breaks the “hour equals value” model. So stop pricing like it’s still true. Move to outcome-based models. If AI enables your team to resolve tickets 50% faster or ship code 30% quicker, you should monetize the value—not penalize your team for being efficient. Clients will pay for impact. Not inputs.
3. Double Down on Domain Depth: As AI handles commodity work, differentiation shifts to contextual expertise. Your value is in understanding the nuance of banking regulations, healthcare workflows, or retail supply chains—and deploying AI that understands that too. Generic doesn’t win anymore. Deep wins.
4. Rethink Your Global Delivery Strategy: If AI can handle routine work, do you still need massive offshore centers doing low-level tasks? Maybe not. But you’ll still need global talent—just deployed differently. Set up AI Ops hubs offshore to manage models and pipelines. Keep complex consulting and client interactions closer to the business. Optimize globally for skill, not scale.
5. Turn Services into IP: You’ve been doing the same assessments, playbooks, and frameworks for years. With AI, that knowledge can now be packaged, embedded, and sold as reusable IP. Think dashboards, co-pilot tools, AI-augmented knowledge bases. Don’t just sell people—sell solutions.

Final Word: This Is a Rebuild, Not a Renovation

Let’s be clear—this isn’t just an upgrade to your current model. It’s a full-scale rebuild. Generative AI has permanently altered how work gets done, how it’s priced, and what clients expect from their service partners.

The firms that win in this next chapter will do so not because they “use AI”—but because they reimagine their business around it.

The rest? They’ll be optimized out of existence.

You can either adapt now—or watch the wave hit from the shoreline.

Your call.