GenAI and managed services

Investment in generative AI is a top priority for 72 percent of CEOs, as they look to optimize operations, spur innovation, strengthen competitiveness, and improve cyber detection and response¹.

But they also have concerns about it, including cost, required technical skills, regulatory compliance, and data privacy. Some also fear being left behind by competitors as technology advances at lightning speed.

To stay ahead of the GenAI curve, progressive execs are considering alternative sourcing models, such as managed services, as a cost-effective way to access it.

Indeed, according to the KPMG and HFS Research Managed Services Outlook 2023-2024, the top criteria for choosing a provider include data & analytics, tech platforms, and related capabilities. Some companies choose to use a provider’s sophisticated technology and expertise versus building their own.

There are many ways that leading managed services providers are helping companies embrace GenAI. Here are two:

1. Data management and cloud
   GenAI is only as good as the data it uses, so any related initiative should include governance around data quality and sourcing. It's also becoming essential to shift data to the cloud, where it can be integrated with SaaS applications, used for real-time analysis, and established as a single source of truth.
   Managed services providers are supporting these efforts through ongoing SaaS optimization, which can include the integration of data from multiple sources. Nearly 40 percent of business leaders use managed services for data integrations as part of SaaS support, according to the KPMG and HFS Research Cloud Adoption Survey 2023.
   In addition, leading providers are using GenAI to enhance these optimization services. For example, GenAI can help:
   • Analyze code and recommend ways to improve business processes
   • Predict the organizational impact from software updates
   • Prepare detailed documentation and user guides for process changes
   • Assist with troubleshooting of SaaS functionality
      
2. Enhanced cybersecurity
   Nearly a third of CEOs feel unprepared for a cyberattack, due to the increasing number and sophistication of attacks, along with a shortage of qualified personnel². In response, many are engaging managed services providers, who bring the required technical and business skills, plus strong credentials in risk and regulatory compliance. The best providers have also started incorporating GenAI into their capabilities, with improvements such as:
   • Enhanced log monitoring for detecting anomalies
   • Automated code reviews to identify vulnerabilities
   • Faster development of custom programs and scripts
   • Enhanced storytelling in application testing reports
   • Enhanced recommendations for penetration-test findings

An ongoing journey

Strategic adoption of GenAI has the potential to accelerate innovation and increase competitiveness. But as with other evolving technologies, it requires ongoing governance and adaptation as part of the transformation journey.

Managed services can help.

Learn more about KPMG Managed Services.
For an archive of my past blogs, please visit Going Beyond: Managed Services.

^1-2 KPMG 2023 U.S. CEO Outlook