welcome I'm joined on a cold winter morning at the India Today Business Today studios of the World Economic Forum at Davos by India's largest software exporter, the Chief Executive and Managing Director of Tata Consultancy, K. Krithivasan. Thank you very much, sir. Good morning. Fabulous having you with us early this morning. You know, there's so much buzz and talk about artificial intelligence and the impact this is having on the Indian IT sector. So I thought this would be a great opportunity for you to take everyone watching at this time through how you've been able to leverage AI on the workflow in TCS at this moment and your outlook from here on. Fantastic.
Once again, good morning. Okay, the way we look at AI is a very defining and groundbreaking part, breaking technology, and the applications are immense, right from software engineering is only one part of it, and what you can do with this technology in creating new products, new services, improving customer experience, immense possibilities. So like you said, we approach it from two or three angles. One is how do we train all our associates to be ready for providing services in artificial intelligence to our customers. So almost 500,000 of our associates, we have trained them, we have created a sandbox where they can experiment, get their hands dirty, learn and be comfortable with this technology. Second, you know that we are a very industry-focused organization. Each of our industry groups is looking at the value chains in that industry, looking at where all generative AI could be a major advantage, either in terms of bringing more efficiency, productivity, or new products and services. So they are taking that to our customers saying that this is what we can do. The third, you asked about what do we do internally. There are some very immediate low-hanging fruits, as they call them, for instance HR applications like how do you recruit, how do you interview, and employee welfare like when they have a question on what is my leave balance or what course I should be studying or if I studied a course, how well I have done. So a lot of.
So spend some time talking to us about how recruitment is changing. You know, you're saying how we recruit, how we upscale, that's changing as a result of AI. So take us through some of the changes you've been able to make.
Internally, first is like CV scanning. Right, you have a job description. Even the job description nowadays can be written through AI, through artificial intelligence. Somebody gives a high-level information based on the requirement they have with them, so you can write a nice JD using artificial intelligence. Now you publish the job description, you get the CVs. Now again, you can scan the CVs and see where is the best match, and you can also get the artificial intelligence to tell you which are the areas you find there's a weakness, where there's a gap, what type of questions, which areas you can ask the questions. Now the person answers the questions, you are able to evaluate. But I'm not saying that anywhere we'll take the human out of the loop. I don't think we are ready to take human out of the loop. This is more like an assist and augmentation for a human being in what they are doing, in a more efficient way and probably in a more confident and assured way. It provides that assurance. So now you do the interview. Now you know how well the person fits against the job description. You decide to take them. You know what areas you have to train, how much training the person needs. So this is very very important.
So you're saying this is human plus AI. Absolutely. But the biggest concern is, and you know I attended quite a few of the AI sessions of the World Economic Forum, and they're talking about how thanks to AI technologies, the amount of time required to get something done, say the budgeting process or the software development process, gets crunched substantially. Ros n was here yesterday and she said that the amount of time required to build a particular software is down about 70% as a result of AI. That ultimately means that you will need far fewer humans than you do at the moment, and that would be a huge concern to people at TCS and everybody else watching. No, no, this is a question that's been asked by everyone, but I've also been talking to many of the leaders here.
Our current thinking is, you take every other technology advancement that's happened before. Every technology advancement increased the amount of work output that happened, and thereby increased the number of people it required. It did not reduce the number of people we deployed. But if you had 100 programmers today, we may not need the same 100 with Java programming skill set. Maybe you'll need only 20 of them. The other 80 would be involved in training the model, or in terms of orchestrating the model, or in terms of finding out what new products and services we can take to the client. So at this time, we still believe it will be net positive in terms of how many people we'll need. It's not going to be net negative. So we are not concerned about workforce shrinking or the number requirement shrinking in terms of number of people we need.
What's the advice you're giving to your resources at TCS and to those watching in terms of upskilling and acquiring the cutting edge new skills which can keep them relevant in the rapidly changing job?
Multiple things they can do. But to me, I'm a fairly conservative guy on this one. First of all, what are your core competencies? If it is programming, understand the fundamentals of programming very well. Many people, what I find nowadays, is their basics are very weak. They just want to pick up a skill set for a few days and think that they have got the capability. That doesn't cut it. So whatever your subject, if you are a programmer and computer scientist, understand that very well. Second, once you are in the area of artificial intelligence, there are multiple things. You can be a large language model creator, you can be a model trainer, you can learn to do fine tuning. There are so many techniques coming in. Then in terms of when your companies like TCS, our focus is on contextualizing these technologies and ensuring that our customers get the best value out of the technology. So understand the customer context. Where would this technology help the customer, either in terms of productivity or reducing the amount of time involved in doing a particular activity, or what new products, new services, how do you drive the top line? So you should think from the perspective of the customer how this technology can be used. So either you can increase your technical capability, or you can also look at how do you use this technology to drive more benefit to the customer. So opportunity is immense.
What's your current deal pipeline looking like at TCS and what's your outlook for the next several months?
We have not been publishing the pipeline, but we did talk about the order book. Order book has been very strong for last quarter. Pipeline is looking very strong, despite the fact that we had a strong deal book, we booked a high number of deals last quarter. Pipeline is looking very strong and outlook is, as we've been talking, quite positive.
What are the trends that you're picking up on the basis of the conversations you're having with your customers about the mood globally, in the United States, in Europe and elsewhere?
As we were chatting before, as we speak to the business industries and businessmen from North America, the US particularly, I would say quite optimistic to bullish. When you talk to them, they are very happy looking forward to some amount of deregulation happening and more business friendly measures being taken. They are looking forward to that, and there's also expectation some interest rate cut will happen over a period of time, which will also incentivize amount of capex. So North American businessmen, particularly US, are quite optimistic. UK, in fact UK also, they believe that they have hit a bottom, they should be looking up. I was talking to a couple of people from UK, UK is also quite optimistic. Europe, I think, will probably take a quarter or two to have the same amount of optimism.
There's a debate raging over H1B visas in the United States, so between deep MAGA and dark MAGA, a big divide about how to approach H1B visas. And this is a huge concern to Indian software engineers, many of whom think of H1B visa as the ultimate panacea to get out of India to work in Silicon Valley and elsewhere. How concerned are you by the political noises around H1B and how could this impact TCS in the US from a TCS business continuity perspective?
From a TCS business continuity perspective, we don't see an impact. We have roughly about 40,000 associates working in North America, out of that more than 50% are locals, and on a given year we take approximately 3,000 visas, people go from here. So our dependence on H1B is quite limited. If the number of visas issued decreases even further, we'll be able to manage. We have a very strong local pipeline, we can take people from there, we have a good training program.
Okay, but this creates a lot of uncertainty because not just do you run a company, you're a tech yourself and you understand the mindset of Indian software programmers. It creates a lot of uncertainty because they work very hard to build out a certain position for themselves, and now it's in jeopardy. So how are you dealing with that uncertainty?
