Mid-sized IT Firms Overhaul Sales Strategies Amid AI Disruption
Companies are shifting to commission-based incentives to drive growth in a competitive market.
1Strategic Sales Model Shifts
Mid-sized IT services firms with annual revenues between $1 billion and $5 billion are aggressively revamping their sales playbooks. As artificial intelligence transforms client demand, these companies are moving away from traditional quota-based systems. The goal is to incentivize sales teams to aggressively pursue new business in a tightening market.
2Hexaware Adopts Commission Focus
Hexaware Technologies has transitioned its hunting team to a commission-based model, removing previous performance thresholds. President Shantanu Baruah stated the company wants salespeople to earn significant rewards directly linked to revenue generated. This approach aims to maximize motivation by ensuring every dollar brought into the company earns a commission payout.
3Targeting AI-Native Service Deals
LTM Ltd is implementing specialized incentive structures specifically for AI-native service contracts. CEO Venu Lambu noted this change management exercise encourages staff to pivot from legacy offerings toward modern AI solutions. By differentiating commission rates, the firm aims to steer its sales force toward high-growth areas that align with current client needs.
4Expanding Through Advisory Channels
Coforge Ltd is diversifying its contract acquisition strategy by leveraging external deal advisors. Traditionally reliant on sole-sourced deals, the firm now utilizes consultants to reach prospective clients and secure new opportunities. Executive John Speight confirmed that advisory costs are categorized under sales and marketing expenses rather than traditional marketing budgets.
5Financial Performance and Context
Hexaware reported $412 million in revenue for the July-September quarter, marking a 2% sequential increase. Meanwhile, LTM recorded $4.76 billion in revenue but saw order intake drop 25% to $1.26 billion. Conversely, Coforge achieved a 51% rise in order intake, reaching $1.04 billion, highlighting varied success across the mid-sized IT sector.
6Retention and Talent Dynamics
Industry experts suggest that attractive commission structures serve as a tool for both talent acquisition and retention. Peter Bendor-Samuel of Everest Group noted that top sales talent is a premium in a moribund market. Furthermore, Namratha Dharshan of ISG emphasized that these systems help maintain key account personnel relationships essential for business.
7Competitive Pressure from Giants
While mid-sized firms are transparent about their structural changes, larger industry peers like Tata Consultancy Services and Infosys remain less vocal. These giants are also investing in sales processes but have not disclosed specific details regarding their internal incentive modifications. The mid-sized sector is clearly acting to defend its market share.
8Future Market Outlook
The shift toward performance-linked pay reflects a broader industry trend where winning new business is increasingly difficult. As AI continues to dictate technology spending, firms that successfully align their sales incentives with emerging service demands will likely gain a competitive edge. Future growth depends on effectively navigating these evolving client expectations.
Original article: mint - industry — Mid-sized IT Firms Overhaul Sales Strategies Amid AI Disruption