Hello. This is Stanton Jones with what’s important in the IT and business services industry this week.
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What You Need to Know
Enterprises expect a lot from their BPO providers – and increasingly those expectations are focused on the benefits of AI-related transformation. But are enterprises actually ready to manage and govern AI-enabled BPO?
Data Watch
Background
Last year, we asked the question “will BPO bounce back in 2026?” Looking at recent BPO bookings, the answer points to yes: BPO has seen four consecutive quarters of sequential growth. That hasn’t happened in a very long time. But when we look at the data from our most recent BPO buyer behavior study, the data gives us some insights into what could impact growth in the near to mid-term.
The Details
- 67% of respondents expect their BPO providers to lead on AI adoption.
- 65% say they are willing to disrupt existing processes if AI can materially impact outcomes.
- Only 21% of respondents say they are ready to govern AI-enabled BPO.
Out of Sync
We’ve discussed this before, but it’s worth repeating that BPO is no longer just about moving labor to a lower-cost delivery model. Nor is it just about adding BPM or RPA to deliver incremental productivity gains.
The focus is shifting toward transformation, increasingly enabled by AI. But, looking back at this week’s Data Watch, it’s clear that most enterprises don’t believe they can effectively manage this level of change. Only one in five say they have the skills needed to govern AI-enabled workflows, validate AI outputs and manage outcomes instead of effort.
And that is what makes this inflection point in BPO important. Demand may be improving, but enterprise readiness is not keeping pace. Buyers want providers to lead on AI – and many are willing to redesign processes to get better outcomes – but most don’t yet appear ready to govern the operating model that comes with it.
For the right provider, the gap may be an opportunity. Providers that can provide strong governance around AI, guide clients through organizational change and connect pricing more directly to outcomes are likely to be the ones that capture the next wave of BPO growth.
About the author
Stanton Jones
Stanton helps enterprise technology leaders, IT service providers and buy- and sell-side professionals make sense of the global IT services sector. Stanton's weekly briefing - the Index Insider - is read by thousands of industry stakeholders each week.
