Why managed services are entering a new era
Survey reveals big shifts in service delivery goals as companies seek more help with strategy, growth, and resilience.
Managed services are moving into an unfamiliar new role: the spotlight.
Long viewed as background players for back-office efficiencies, service delivery providers are now taking on more high-profile roles for companies across an expanding range of high-value functions, according to a new KPMG survey.
About 85 percent of companies have already implemented managed services in some form, per our new report. But the big emerging trend now is where buyers are utilizing those services.
Companies are looking for help in areas that would have previously been “off-limits” for service delivery just a few years ago: front- and middle-office support, core strategic areas like growth and risk management, and scaling innovations across multiple teams to help the entire organization operate with more speed and productivity.
Our new report provides a snapshot of a modern managed services industry that is increasingly essential to helping companies keep pace with rapid changes—and which is undergoing some significant changes of its own.
And opportunities to create new value are not limited to future expectations. Indeed, many respondents say they are already achieving results from an elevated new class of modern managed services providers, who are exceeding expectations in critical areas like stakeholder experiences (74 percent), access to new technology (72 percent), and improved resilience, growth, and compliance (70 percent).
Going beyond the basics
In many ways, our survey suggests that a new era of modern managed services is underway. Cost improvements and transaction management still matter. But more companies are looking for help in areas that they have traditionally handled in-house.
Consider that at least three-quarters of the respondents in our survey are expecting a high impact from managed services in areas that include:
Providers are playing an increasingly critical role in helping companies achieve goals like regulatory trust, customer retention, margin improvement, and getting new products to market faster.
With digital disruption reshaping industries, managed services can help companies reimagine how they create and deliver value—for example, with tech-enabled business processes that empower company teams to access new customers.
Technology is moving with speed and complexity that many companies can no longer handle on their own. Modern managed services can accelerate access to new technologies—and the talent needed to optimize them—with more efficient costs.
In a volatile world, managed services offer flexibility and scalability, enabling companies to adapt and thrive amid constant change.
In addition, an overwhelming number of buyers are now putting a premium on technology (93 percent) and industry expertise (87 percent), seeking providers with AI and consulting capabilities to help them navigate an era of continuous transformations.
How to get started
The service delivery model has come a long way from its transactional roots. The emerging new class of modern managed services providers is fast becoming a cornerstone of business transformation, helping organizations achieve strategic goals and move faster amid persistent change.
For many companies, the question is no longer whether to adopt modern managed services, but how to find the best provider for their needs. As a starting point, we suggest that companies consider four key evaluation steps:
1
Assess your operating model for critical processes
- Take a hard look at your existing operating model and identify the functions that are strategically critical to your business—where are complexity, talent shortages, or technology gaps holding you back?
- Focus on areas where agility, speed, and scalability are non-negotiable, such as cybersecurity, compliance, and finance.
2
Consider managed services to support ongoing transformation
- Look for modern managed services to drive continuous transformation by helping your teams understand and deploy capabilities like AI, automation, and advanced analytics.
- Identify areas where your organization needs to evolve rapidly to stay competitive—for example, leveraging new technologies, expanding into new markets, or reinventing business models.
3
Go beyond cost savings to drive strategic outcomes
- Cost efficiency remains important, but the real value of modern managed services lies in accelerating growth, driving innovation, reducing time to market, accessing new technology, and enabling data-driven decision-making.
- Establish clear business outcomes and measure success against strategic goals like revenue growth, risk reduction, and more accurate (and faster) data and insights.
4
Choose providers with extensive technology, industry, and domain excellence
- Look for providers who understand your industry and business challenges and can quickly deploy critical capabilities like AI, cloud management, and data and analytics to match your unique needs.
- Prioritize providers with a consultative approach and the ability to co-create strategies that drive long-term value and competitive advantages.
Managed services are changing. Is your company keeping pace?
Traditional outsourcing is stuck in the past. Most companies today want help with fast-moving strategic objectives like growth, access to new tech and digital capabilities, and speed to market on new products and services.
Why KPMG
KPMG Managed Services combines advanced technology, deep functional and sector expertise, and leading practices to handle knowledge-intensive processes across the business—both non-core and core—while driving your strategic priorities. Our subscription-based services are designed to offer predictable costs, any-shore delivery, and the option to flex up or down to meet fast-changing needs.
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Meet the Team
Our KPMG Managed Services professionals bring significant functional, industry, and technology experience to every engagement, including the latest AI, cloud, and enterprise data capabilities. Please reach out to learn more about how our modern managed services can help you transform your company’s operations and position your organization for long-term resilience.
