Indian software services firms are predominantly process based, offering system integration and application maintenance services for their clients. However, they are realizing that this ploy may not succeed in the long run as they tend to lose the differentiation. This work attempts to understand the Indian IT industry, services, processes and outlines changes to the existing business models to make transformation to product organization a feasible option. Various strategies and organizational implications are also discussed. There are also alternatives recommended at a high level for organizations unable to change their existing structures, to implement means that enable them to maintain their differentiation intact. The core focus is around transformational challenges and mitigations for effective operationalization. This work can be enriched and extended into a complete end-to-end research work, which offers improvised ideas, practical challenges and mitigation solutions for dealing with these challenges while implementing these ideas.