The Services Branch moves from relocation to reinforcement
For three decades, the service industry has been developed into a strong idea: moving working from high cost to low cost. It was the backbone of our worldwide modeling model – creating value through work arbitration. This season, though not ending, is no longer where the most transformative price will be created.
We are now entering a new chapter. A focus not on where the work is done, but on how it is done.
Relocation: a proven but maturation strategy
Let’s start with where we are. The relocation model was extremely successful. Whether executed through third-party or global internal centers (GICS) services, companies have saved 20-25% by transferring work to locations such as India, the Philippines and Latin America.
This model has brought its own operational challenges-relying new communication approaches, process rigor and hybrid models of tradition at sea-but over the last 30 years, industry has absorbed these changes. Today, relocation is a mature, well -understood lever integrated into the functional fabric of almost every world business.
However, while relocation has reduced costs, it rarely changed the way the work was fundamentally done. The procedures remained largely intact – only the position of execution changed.
Reset: shift to center of gravity
With the advent of AI and the ever -increasing automation tools, we stand on the edge of a much more transformative displacement. The center of gravity in services moves from relocation to reappearance.
To be clear, relocation does not go away. Companies will continue to use world talent groups. But the differential value – the true innovation – will come from the review and redesign of the way in which work is done. AI enables us to fundamentally reshape our business functions and processes.
AI allows three layers of change
AI can be categorized by its type or intentionally behind its use. When it comes to business models and services, we find it very useful to focus on intent – what you are trying to achieve with AI. At Everest Group, we see AI affecting business services in three different ways:
- Reinforcement of record systems: Here, AI enriches existing platforms, making them more sensitive, smart and effective. This is the natural expansion of the Playbook of digital transformation.
- Increase people in commitment systems: In this model, AI serves as a tool to make people faster and more productive. We call this “ai in the loop”. It is already remodeling the knowledge of the project in marketing, funding, law and business.
- Introduction of execution systems: This third category of AI is where we deliberately use it to discover how we do business processes and what emerges from it is a new system category, which we invite execution systems in the Everest Group. This is where the transformation becomes deep. AI agents begin to replace, not only help, human work. These agents orchestrate and perform business processes in existing systems, causing a fundamental review of work, roles and value creation.
It is this third category, execution systems, which marks the axis from increasing automation. From evolution to reappearance.
Reinforcement will redefine services
Businesses will do all three categories. Most businesses have employees and partners already using chatgpt and other tools. As most tools become available, it is inevitable that employees will adopt them. And so, most businesses seek to rule and use it and encourage because we want people to be more productive and more effective.
Businesses also seek to add AIs to their own technological stack, though only by examining what sellers are offered. In addition, companies are trying to add themselves, in a specialized way, either to enhance suppliers or to their own domestic solutions.
For the next 10 years, we believe that companies will be forced to discover how they operate. Legacy processes, which had previously moved to the high seas, will be reshaped to last through layers of execution under the leadership of the Ae. In many cases, the job position will become less relevant, as the machines are cheaper and more consistent than even the most cost -effective work markets.
And as the work becomes more digitized, proximity and integration with the business will increase in importance. The re -emergence will require not only new tools but also new relationships within the business.
Why this shift will be more difficult than relocation
The relocation, for all its functional complexity, did not question the basic operational affairs of the business. The reappearance does. It requires a top -down commitment to re -think how to work, often by the very people whose roles can be transformed or replaced. This is a difficult conversation. People cannot imagine a world in which they do not have a role in it. It requires significant superior executive commitment and push to do so. It is much easier to increase current teams or integrate AI into existing technology than to redefine whole work flows. But if we want to realize the full value of AI, this is the project ahead.
We must also recognize that this is not a “Big Bang” transformation. The reinforcement will occur with the procedure, use the case in case of use, sliced in thin, manageable initiatives. This articulated approach is essential for scale and sustainability.
However, it remains a complex and deep strategic effort. Unlike the transformations of the past, the re -emergence encompasses the technical, operational, organizational and human strata of the business. It not only causes what we do, but how do we think about doing it.
The next generations of business services
We believe that this reappearance axis will take 10 to 20 years to fully mature, reflecting the timetable we saw with world tradition and relocation. But the direction is clear. The re -emergence will determine the next generations of business services. Organizations should think of this shift that is about to occur – from focusing on relocation to a focus on reinforcement. It took us 30 years to get to maturity with relocation and it certainly seems less dangerous. Organizations could do the same thing, but do it cheaper in a remote location. The re -emergence is inherently more painful because it requires us to rethink the way we make businesses.
However, AI tools improve every day. It is almost a mind how fast they improve. So this does not mean that we cannot make significant progress today, as we set these new execution systems. And this journey does not mean replacing existing wholesale systems. Sap, Oracle and Salesforce don’t go away. Instead, the execution systems guided by AI will increasingly sit down on the basic platforms, management, coordination and optimization of the project itself.
In many cases, we believe that we will ultimately achieve the replacement of 80% or more people – which is remarkable. While this level will not be achieved during the night, the journey to it has already begun.
