Managed services has undergone a quiet transformation in the enterprise world. What was once viewed primarily as a way to trim costs has become a strategic lever for scaling artificial intelligence (AI) and driving digital transformation. According to a new KPMG Managed Services Outlook Survey conducted with IDC, 99 percent of large global organizations now consider managed services a strategic focus, with nearly half placing it at the very top of their investment list .

The shift reflects a fundamental change in how companies approach AI adoption. Rather than building everything in-house or struggling with talent shortages and technical debt, progressive enterprises are using managed services as an operational backbone to accelerate innovation and move from AI pilots to real business impact.

What's Driving This Strategic Shift in Managed Services?

The research surveyed 1,224 senior leaders at large global organizations across 12 countries and 11 major industries, including banking, insurance, manufacturing, healthcare, and technology. All surveyed organizations reported annual revenues above $100 million, with the majority between $1 billion and $10 billion .

The data reveals that companies are no longer using managed services simply to reduce operational costs. Instead, they're leveraging the model to address three critical business challenges: bypassing technical debt accumulated over years of legacy system investments, filling talent gaps that make in-house AI scaling difficult, and accelerating time-to-value on AI initiatives. Beyond cost and efficiency improvements, organizations are using AI-enabled managed services to drive strategic imperatives including growth, resilience, technology innovation, and sustained transformation .

"In today's AI-driven landscape, organizations operate in an environment where speed, adaptability, and continuous innovation are prerequisites for competitiveness. Managed services provide the operational backbone that enables enterprises to adopt and scale emerging technologies," stated Bill Latshaw.

Bill Latshaw, KPMG

The survey identified the top investment priorities among enterprise leaders. AI management and cybersecurity rank as the two leading areas, followed closely by regulatory compliance. These priorities reflect a broader strategic shift toward building stakeholder trust as a business enabler, rather than viewing these investments as purely defensive measures .

How Are Companies Using Managed Services to Accelerate AI Adoption?

• Specialized Teams and Technology: Managed services providers offer access to specialized AI expertise and infrastructure that would be expensive and time-consuming for companies to build internally, enabling them to outpace competitors in AI deployment.
• Rapid Innovation Without Planning Paralysis: By partnering with managed services providers, companies can bypass lengthy planning cycles and begin generating return on investment from day one, rather than spending months or years on internal strategy and procurement.
• Bridging the Talent Gap: The model provides access to experienced teams who understand both the technology and the business context, addressing the widespread shortage of AI-skilled workers that has slowed many enterprise initiatives.
• Technical Debt Resolution: Managed services help companies modernize legacy systems and infrastructure while simultaneously implementing new AI capabilities, rather than forcing a choice between the two.

The timing of this shift is significant. As enterprises move from experimental AI pilots to production deployments, the need for operational expertise becomes critical. Managed services providers can handle the ongoing management, monitoring, and optimization of AI systems, freeing internal teams to focus on strategy and business outcomes rather than day-to-day infrastructure management.

"In the race for agentic AI, the biggest risk isn't making a mistake; it's standing still. The best managed services offer a fast path forward by combining tech expertise with a deep understanding of your business. This model is a way to bypass 'planning paralysis' and start getting ROI on day one," explained Ron Walker.

Ron Walker, Global Head of Managed Services, KPMG International

The research also reveals geographic and industry variation in adoption patterns. The survey included representation from Europe, the Middle East, and Africa (40 percent), Asia-Pacific (27 percent), and the Americas (33 percent), providing a truly global perspective on how different regions and sectors are approaching managed services as an AI acceleration tool .

What makes this trend particularly noteworthy is that it challenges the traditional outsourcing model. Managed services now stands apart from other kinds of outsourcing specifically because of AI acceleration. Rather than simply handing off routine operations to a third party, companies are partnering with providers who bring specialized AI capabilities, industry knowledge, and the ability to translate emerging technologies into competitive advantage .

For enterprises still evaluating their AI strategy, the data suggests a clear message: the companies winning the AI race aren't necessarily those with the largest internal teams or the biggest technology budgets. They're the ones moving fastest to operationalize AI at scale, and many are doing so by leveraging managed services as a strategic partner rather than a cost center. As the competitive pressure around AI intensifies, this shift from viewing managed services as a cost-reduction tactic to seeing it as a strategic engine for innovation is likely to accelerate across industries.