Managing an array of services like business software systems support and maintenance, and supporting technology for large and small global corporations has been the staff of life for Indian IT. Now, as the market shifts from traditional ERP , infrastructure and software maintenance to digital tech, it’s time to move on from the bread and butter to the jam — which calls for deep domain expertise in areas including data analytics, machine learning and automation. Chandrashekhar , president , Nasscom , says, “Globally, 60-70% business is traditional services. Digital is growing and Indian IT will need to add those skills to be ready to take on tasks.”Currently, the industry is dominated by businesses on which the sun may be ready to set. Peter Bendor-Samuel, CEO of US-based research firm Everest Group , adds, “Digital makes up 22% of the Indian services market. The remaining legacy services have shown no growth over the past 12 months.”Many new- age digital firms — including Uber, Airbnb and Facebook — are not inclined to outsource such core assets.Another worry for Indian IT is that traditional outsourcers like banks and industrial conglomerates have created subsidiaries for digital-only work, which has become core to them. For instance, Citibank has a unit Citi FinTech in New York, which, among other things, develops and manages Citi’s mobile app, wealth management, money transfer services and so on. Water-to-aviation conglomerate GE has a digital subsidiary as well. Both GE and Citi have been big outsourcers and are among the top clients of many IT services companies but they don’t ship out work from their digital subsidiaries.Deepak Malkani, leader, management consulting, PricewaterhouseCoopers India, says, “Indian services providers have to start leading thought on digital and have to pioneer adoption of changes. Until now, they have been followers.”As digital is core to companies, it is difficult to convince them that it can be done overseas. For example, another large outsourcer, Bank of America , had a $3-billion digital innovation budget in 2016 to spend on fintech, which it ran almost entirely inhouse.Digital market requires reworking the business model. It’s more capitalintensive and less dependent on labour arbitrage. “Clients are expressing strong desire to keep implementation teams (for digital) onshore and closer to their business users,” adds Bendor-Samuel. This will add to the costs of IT services companies.Another challenge for technology services providers could arise from greater emphasis on global inhouse centres (GICs), better known as captive centres. According to PwC, India has more than 1,000 such centres employing 8,00,000-plus people and they are at the forefront of using digital.To leapfrog into digital, the industry will have to acquire assets. So far, most companies have held on to their purse strings tightly rather than look at inorganic growth options to get skills, business and new markets. Some of the large companies, though, are showing a shift towards digital.The country’s largest IT services company, TCS, claims its digital business is growing at 30% a year. Cognizant CEO Francisco D’Souza mentioned in a December-ended quarter earnings call that the company will invest to scale its digital practice areas. Cognizant’s 2016 digital business was 23% of the total. In the mid-tier, Mindtree claims 40% business is digital and NIIT Technologies CEO Arvind Thakur says it has a 13% digital workforce which contributes 19% share of revenue.Malkani believes less than 10% of industry revenue is from digital. In terms of workforce deployed, about 10% of the 3.7 million workers have digital skills, according to Nasscom. Thakur adds, “Transformation to digital requires us to reorient business models. So far it has been cost arbitrage and now we have to shift gears.”The industry has been plucking lowhanging fruit for long. It’s high time it aims higher.