Executives Turn to Managed Services as Essential for AI Deployment
More than 90 percent of executives view managed services as critical to rolling out agentic AI systems, according to survey findings released by KPMG and IDC.
The research drew responses from over 1,200 senior leaders at large organizations across North America, Europe and Asia Pacific, with most companies reporting annual revenue between $1 billion and $10 billion.
Strategic Priority, Not Cost-Cutting
Managed services have shifted from their traditional role as a cost-saving tool to becoming central to transformation strategies. Eighty-seven percent of respondents said they had already integrated managed services into their digital transformation plans.
Ninety-nine percent of organizations now treat managed services as a strategic priority, with two-thirds expecting significant operating, business and strategic impact within 24 months.
What Executives Want From Providers
When selecting a managed services provider, executives ranked AI expertise as the most important factor. Technology capability, data expertise and strategic transformation mindset followed.
Over the next two years, 56 percent of buyers plan to prioritize AI management in their managed services spending. Cybersecurity ranked second at 33 percent, reflecting concerns about risks tied to AI adoption.
Speed Over Building Internally
Many large organizations operate hybrid environments mixing on-premises systems with cloud platforms, creating complexity that slows AI projects. Managed services providers help companies move faster by handling systems integration, data management, governance and deployment.
Rather than building AI systems entirely in-house, companies increasingly use external specialists to embed AI into existing operations. Examples include AI agents for cybersecurity, IT diagnostics, software coding and regulatory reporting.
Companies face capability gaps in governance, talent, data readiness and model deployment. Managed services address these shortfalls without requiring years of internal hiring and infrastructure work.
Innovation, Not Just Operations
The survey shows a significant shift in how executives view outsourced technology support. While operational efficiency still matters, technology innovation has become the primary expected benefit.
This marks a departure from earlier outsourcing models, which focused mainly on cost reduction and routine task management. Today's leaders see managed services as a way to stay competitive when internal resources and legacy systems constrain AI adoption.
For more on AI strategy at the executive level, see AI for Executives & Strategy.
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