By Vivek Wadhwa "Carnage in Indian IT," read a headline about retrenchments in its outsourcing industry as markets stagnate and US visa restrictions erode profits. The Indian IT industry generates $150 billion in revenue but is facing an existential crisis largely of its own making because it became complacent and overconfident even as technologies and markets changed. It can survive only if it exits the business that brought it success and reinvents itself. India's outsourcing boomed during the Y2K crisis of the late '90s because there was an urgency in repairing corporate IT systems. Once chief information officers (CIOs) became comfortable with having their systems maintained across the globe, they started outsourcing large-scale projects to Indian companies, and billion-dollar contracts were announced almost every week. But with the advent of tablets and smartphones and their applications in the 2010s, users gained access to better technology than the companies' IT departments could provide.

Tech leaders found yet another reason to denounce President Trump today after federal immigration officials released seemingly stricter guidelines for the country's high-skilled H-1B worker visa program. The backlash quickly built on social media as claims circulated that the Trump administration was preparing to limit the number of visas for computer programmers. But the threat doesn't seem likely to live up to the hype. Both critics and supporters of the H-1B program say these reports are overblown. In fact, they say, panicking about the putative changes plays right into the president's hands.

With its announcement last week that it will purchase enterprise artificial intelligence (AI) and automation vendor Rage Frameworks, Genpact became the first IT and business process service provider to acquire an AI platform. The addition of Rage Frameworks, which has been applying machine learning and language processing to build intelligent automation platforms for financial services, capital markets and supply chains, "will take Genpact deeper into integrating semi and unstructured data and AI, where we see the true marriage of business processes with clever technology and self-developing algorithms," says Phil Fersht, CEO of outsourcing analyst and consulting firm HfS Research. On the surface, another acquisition of a niche automation vendor by an IT service provider might seem unremarkable. But industry watchers say this may be the tipping point where focus will shift from back-office automation to integrating and intelligently automating front- and middle-office functions. "It represents an evolution of the back-office oriented automation acquisitions that many outsourcing providers have made over the past several years," says David Borowski, director with outsourcing consultancy Pace Harmon.

I recently spoke at the Deloitte Shared Services and Outsourcing Executive Forum at Deloitte University. The audience's interest level in automation strategies was high. For the most part, Deloitte doesn't outsource directly, but only provides consulting services to its clients about outsourcing and shared services strategies, so the event and this essay seem appropriate venues to discuss the impact of "cognitive automation" technologies on the outsourcing industry. I use quotation marks around the term "cognitive automation" because though I am told that that is the preferred term these days at Deloitte, I am still getting used to it. I like the term because it suggests a broad approach that goes beyond current automation-oriented technologies and methods.