Impact of Artificial Intelligence on Organizational Performance with Reference to the IT Industry in Bangalore

Abstract

The integration of Artificial Intelligence (AI) into the IT industry has emerged as a critical driver of organizational performance, particularly in high-tech ecosystems like Bangalore. This study investigates the extent to which AI technologies such as machine learning, natural language processing (NLP), predictive analytics, and intelligent automation enhance key performance indicators (KPIs) across IT firms of varying sizes. Drawing on secondary data and empirical insights, the research explores how AI applications across core functions including software development, human resources, customer service, and strategic decision-making affect operational efficiency, innovation capability, customer satisfaction, and profitability. The study further examines the mediating role of digital transformation and employee adaptability in realizing the full potential of AI adoption. Additionally, organizational culture, leadership commitment, IT infrastructure, and talent availability are evaluated as moderating variables that influence the effectiveness of AI strategies. A comparative analysis is conducted between startups, mid-sized firms, and large enterprises in Bangalore to understand the scalability and depth of AI integration. Key findings highlight that AI-enabled firms report significantly reduced processing times, improved accuracy, and enhanced agility in responding to market demands. However, the benefits are contingent upon strategic alignment, technological readiness, and the ability to reskill the workforce. The research offers actionable recommendations for IT firms to optimize AI adoption while identifying policy-level interventions to foster an innovation-conducive environment. This study contributes to the growing body of knowledge on AI-driven transformation and provides a holistic framework for sustainable, performance-oriented AI implementation in the Indian IT sector.