Digital transformation returns to the forefront

Move over, optimization. And make some room for growth.

After numerous months of modernizing, reducing costs, and experimenting with new technologies, companies are ready to see results.

That’s why leading organizations are renewing their focus on digital transformation — not just for cost optimization but also for other strategic benefits that support a growth agenda. Many are using managed services as part of their playbook.

According to the latest KPMG and HFS Research Managed Services Outlook Survey, more than 73 percent of companies seek transformational impact from managed services providers, and buyers expect this impact to more than double in importance in the next two years.

While ongoing process optimization remains essential, companies are also seeking transformational impact in the form of:?

• Strategic outcomes that drive competitive advantage. Examples could include regulator trust, customer retention, margin improvement, debt reduction, and faster speed to market for new applications.
• Business model transformation. Managed services can be a springboard for reconsidering a company's business model. For instance, a revamped, tech-enabled process could open the door to new revenue streams or help reimagine ways of connecting with customers.
• Technology innovation. Through managed services, companies can access tech that otherwise could be challenging to build or evolve internally. This innovation could range from generative AI for cyber threat detection to chatbots that can diagnose IT issues and write new code.
• Operating model transformation. Especially important in a volatile business environment, managed services can deliver nimble, cost-effective operating models that flex up or down to meet shifting priorities.

Managed services play a crucial role in helping companies achieve their growth ambitions, and in today's rapidly evolving landscape, these services must extend beyond technology to drive sustainable success.

Leading companies engage multidisciplinary providers who bring industry-specific domain expertise, advisory capabilities, and advanced tech. This allows them to move from strategy to implementation to ongoing transformation while limiting disruption and risk.

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