Why Companies Are Turning to Agentic AI Virtual Workforces

Play Audio Version

A recent feature in Computer Weekly explored the growth of Agentic AI and how it is causing a wave of fear and uncertainty inside many organizations. Computer Weekly suggested that this is because it is seen as one more major disruption to established corporate principles – after outsourcing, managed services, and the cloud have all changed the way that most business operate in the past.

There was a very interesting statement in the article that I think is worth drawing attention to:

“There will be a diminishing correlation between business growth and workforce growth at IT services firms. Traditionally, more people were required as more business was won, but AI is changing this. While mass redundancies are unlikely, as AI is expected to boost business, workforce growth is likely to reduce.”

This is a very important statement.

Most IT service companies have their growth and revenue metrics closely linked to how many people they employ. The more data scientists or engineers employed by an IT company, the more revenue the company is generating.

This applies across most industries. A company with a factory employing 1,000 people will approximately double their revenue if they open another factory with another 1,000 people. In most companies, there is a connection between how many people are employed and how much the company is making.

This is not an exact or precise connection. Not everyone is in a role that generates revenue for the business, but when you are talking about hundreds or thousands of people, then a connection is usually visible. But as Computer Weekly is observing, AI is now creating the opportunity to create a workforce that is no longer visible as employees. Companies can grow without the need to significantly increase their workforce.

McKinsey has published research suggesting that we should start seeing a much stronger focus on productivity growth because of AI. In the past decade, spending on IT has grown by around 8%, but labor productivity has only grown by around 1.7%… this is where change is expected.

This data and all these observations are pointing to a much stronger focus on the productivity of each human employee because it is far more likely that their role can now be augmented by software agents. These Agentic AI workers may only be software, but they are taking the automation principles we learned about with robotic process automation (RPA) and turbo-charging them.

A simple way to explain this is to think of each person as the leader of their own team. Instead of being limited by the number of hours in each day, an individual employee can assign tasks to the agentic workforce and then allow them to process the tasks and report back. There is no additional headcount, but there is additional productivity – each person can perform the work of several people.

This change will not take place overnight. People need to understand the possibilities and how to manage a virtual team, but this is getting easier. Natural language can now be used to issue instructions. There is no longer a requirement to learn a programming language to query data. An Agentic agent can be asked to look at a dataset and to find any trends or unusual patterns without the human “leader” specifying exactly what they are looking for.

This reinforces what McKinsey and Computer Weekly are observing and reporting on. Investment in IT should soon start generating a much stronger level of growth in productivity and the headcount inside a business will no longer be a clear indicator of value or potential for that business.

This is one of the most fundamental shifts in the way that companies generate value for their customers and owners. Virtual teams that can boost productivity have only traditionally existed in science-fiction. Now there are genuine case studies that can be analyzed and explored to help create ideas for your own business.

AI is not limited to customer service chatbots. This is a revolution in how everyone in your business needs to interact with data and virtual team members. This is the future for your enterprise – for every enterprise.

IBA Group has an experienced practice focused on data management, data analytics, and AI. Check the website here for case studies and examples of projects that have been designed and delivered in addition to ideas, insights, and project suggestions.

Follow IBA Group on LinkedIn for regular updates and comment. For more information on technology strategy and how tech connects to real business solutions please click here