AI vs. IT Services: The Industry's Biggest Shake-Up Yet | a Reflect Podcast by Ed Fassio

The IT services industry is facing a revolution like never before. AI, Generative AI, and Agentic AI are transforming how software is developed, cloud infrastructure is managed, and IT support is delivered. Traditional staff augmentation, implementation, migration, and managed services are being rapidly disrupted as AI-driven automation takes center stage.

In this episode of The Reflect Podcast, we explore:
✅ How AI is reducing reliance on offshore teams and transforming IT service delivery
✅ The rise of AI-managed IT services and the shift away from traditional outsourcing
✅ The impact of AI-powered coding, DevOps, and cybersecurity automation
✅ What IT services firms must do NOW to stay competitive in an AI-first world
✅ The future of AI-native consulting, cloud automation, and autonomous IT agents

Join us as we break down insights from recent 2024-2025 industry reports, thought leadership from McKinsey, Bain, Forbes, and The Wall Street Journal, and real-world case studies of companies already navigating this transformation. Don't get left behind—adapt or risk irrelevance!

🎙️ Tune in and future-proof your IT services business with AI!

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Transcript

0:30

So, Eddie, we're we're diving into how AI's shaking up IT services. It's proper mental, honestly. I mean, the shift from armies of offshore developers to, like, AI-managed services? That's like trading in your tour bus for a spaceship. Totally next-level.Yeah, it really is wild. I saw this McKinsey report from 2024, and they're saying that AI-native IT firms are already leaving their traditional rivals in the dust. Things like automated troubleshooting and real-time cloud monitoring-AI's practically running the show now. No need for a big team anymore.Right, and I'm picturing Agentic AI as like, this super-organized tour manager, right? Handles the whole gig-sets it up, fixes any issues, and packs up the van. You let it do the boring stuff, and bam, no more stress over manual workflows.Exactly. It's kind of like having a crew that doesn't sleep. These AI systems are autonomously managing cloud infrastructure, predicting failures, even self-healing when stuff goes sideways. I mean, how are humans gonna keep up with that level of efficiency?Wait, you said self-healing? Like a guitar that tunes itself mid-solo?Ha! Yeah, kind of. Think of it as AI detecting an issue before it even becomes one. It's proactive instead of reactive. Really flips the whole dynamic of IT operations, doesn't it?Big time. But where does that leave the workforce, though? I read somewhere that it's a bit like swapping roadies for robots. Are we enhancing jobs or just nicking 'em altogether?That's the golden question. The Wall Street Journal ran a piece about this last year, March, I think. They mentioned developers are moving toward supervising AI-generated code, but roles like junior-level coders? Those might not even exist soon. It's not all doom and gloom, though. There's major demand for folks who know how to integrate and manage the AI itself.So you're saying, adapt or vanish, yeah? Sounds like the industry's got its own survival of the fittest going on. Honestly, it's as if these firms need their own AI trainer, so they can, like, level up their human skills while onboarding these digital dynamos.Exactly, and the firms that get it right are the ones investing in reskilling. Retraining developers to act as guides for these AI systems instead of doing all the grunt work themselves. Strategy's everything right now.Yeah, well, let's just hope we don't end up with AI taking over songwriting, Eddie. Imagine a world without the glorious messiness of human creativity.Right, speaking of adapting, let's zero in on software dev for a sec. AI's not just playing backup here-it's slashing development time in half. Imagine being on tour and, like, teleporting your gear from one gig to the next. Total game-changer.Yeah, you're spot on. Forbes wrote about this back in October 2023. They mentioned that automation in software prototyping is making the high-performing firms pull way ahead. AI's drafting code, running tests-it's almost like a co-creator now. Not just a tool, you know?Wait, hold up. A co-creator, you say? That's like when a producer steps in during recording, tweaks the sound just right-only this producer doesn't need coffee or sleep breaks. Wild stuff.Exactly, and the companies that are resisting this shift? They're gonna struggle. Forbes said something about how this automation is setting apart the firms that invest in AI versus the ones still stuck in the manual workflows of yesterday.Yeah, I mean, there's always that group that, like, clings to analog in a digital world, right? It's as if they're still recording albums on tape while everyone else has moved onto fancy DAWs-digital audio workstations-for you non-music folks out there.Good analogy. And just like how music fans want faster releases but with high quality, IT clients now expect rapid development cycles without compromising on performance. AI's delivering that efficiency-and let's face it, some firms are playing catch-up.Right, and playing catch-up's no good when the tour's already started, mate. So, these firms jumping into AI, they're the ones keeping up with the beat. But... does that mean the smaller players are just getting drowned out altogether?Not necessarily. Smaller firms can actually use AI to punch above their weight. It's like, instead of hiring a full band, you bring in session musicians who nail it on the first take. Efficiency doesn't just level the playing field-it can tip the scales in your favor.Alright, Eddie, here's a big one-how do IT firms keep from joining the"Ghosts of Tech Past" tour? Is it as simple as picking up some AI tools, or is there more to staying in the game?Not a chance. I mean, Bain Company broke it down last year and, honestly, it's about a fundamental shift-not just putting AI on the menu but making it the chef, the kitchen, the whole restaurant. Firms have gotta rethink everything, from workforce structure to service offerings.Right, so it's not just about keeping the lights on but ripping out the wiring and going solar, yeah? What about these AI-powered SaaS tools? Seems like there's some serious growth mojo there.Big time. Think predictive maintenance software, for starters. Companies are rolling out solutions that anticipate issues before they even happen. It's like having a roadie who knows your amp's about to blow before you even strike that power chord.Ha! Now that's a future I can get behind. And here I thought AI was only good for cranking out bad pop songs on loop. Seriously, though, anything else these firms can double down on to, like, stay in the gig?Well, Bain flagged workforce reinvention as a game changer. Instead of replacing jobs, you scale folks up to play new roles-kinda like shifting from backup guitarist to producer. Developers aren't just writing code; they're guiding AI systems to perfection.That's clever. So, it's less about fearing the AI and more about jamming with it. Reckon there's still room for the smaller studios-or firms-in this setup? Or is it all just gonna be mega-corporations headlining the AI festival?There's definitely room for the little guys, Bobby. AI levels the playing field. If anything, a small firm that leans into AI could end up outsmarting bigger players stuck in old-school workflows. They just need the right strategy.Strategy, yeah. That's the secret sauce, isn't it? Kind of like how indie bands find a niche and make it huge without the stadium-sized budget. IT firms just have to find their AI niche and run with it.Exactly. It's adapt or fade out. But hey, if we've learned anything today, it's that staying relevant takes guts and a little creative destruction. Speaking of destruction--Let me guess, you're talking about your dreams of an AI that can shred a guitar solo?Ha! Not quite, but wouldn't that be something? Anyway, on that note, I think we've rocked this AI topic enough for one session.Yeah, we've played our encore. Thanks for tuning in, everyone. Don't let the algorithms bite, and we'll catch you next time!