KPMG survey says managed services vital for AI rollout

KPMG's Managed Services Outlook Survey 2026 finds that executives increasingly see managed services as essential to AI deployment. The survey covered more than 1,200 senior executives globally.

Conducted with IDC, the study points to a shift in how companies use managed services as they move artificial intelligence from pilot projects into production. It drew responses from decision-makers across banking and capital markets, insurance, consumer goods, industrial manufacturing, life sciences, technology, media and telecommunications, energy, and natural resources, alongside interviews with 10 senior leaders in North America, Europe, and Asia Pacific.

India features prominently in the findings, with companies using managed services to address rapid digital expansion, legacy technology estates, skills shortages, and rising cyber and operational risks. As a result, managed services are moving beyond a narrow cost-control role into a broader place within digital transformation plans.

Among the headline results, 98 per cent of respondents cited AI implementation as a critical requirement, while 91 per cent said managed services are essential to delivering agentic AI. Another 87 per cent said they had already embedded managed services into their digital transformation strategies.

When choosing providers, AI ranked as the leading consideration, ahead of technology proficiency, data expertise, and strategic transformation mindset. More than half of respondents, 56 per cent, said AI management would be their top managed services investment priority over the next two years, followed by cybersecurity at 33 per cent.

The survey also found that nearly 60 per cent of companies now use managed services either across an entire business function or at scale across the organisation. Cost savings and efficiency remain key objectives, but respondents also pointed to access to new technology and faster speed to market for products and services.

India focus

For Indian companies, the report identifies managed services as a route to scaling AI in areas such as cybersecurity, IT operations, software engineering, and regulatory reporting. Organisations are trying to expand digital platforms quickly while meeting governance, resilience, and regulatory requirements.

The data suggests buyers expect broader business effects from these arrangements over the next two years. Two-thirds said they expect a significant impact on operating model transformation, business model transformation, and strategic outcomes including growth, operational resilience, and agility.

Managed services were described as a strategic priority by 99 per cent of organisations surveyed. Some functions are already widely deployed at scale, with tax cited by 40 per cent of respondents, cybersecurity by 37 per cent, and governance, risk, and compliance by 35 per cent.

Maneesha Garg, Partner and Head, Managed Services, Advisory, KPMG in India, said: "As AI becomes central to enterprise transformation, organisations in India are eager to move from pilots to production while managing legacy systems, scarce skills, and escalating cyber risk. Managed services are fast evolving from a support function into a strategic foundation for AI-led scaling and transformation. By integrating new technologies with existing platforms, strengthening data and AI governance, and bringing deep domain expertise, managed services give Indian organisations the space to accelerate value creation through a focus on mission-critical processes and build sustainable, future-ready business innovation while maintaining the resilience and discipline required to operate at scale."

Strategic shift

The findings reflect a wider change in executive expectations. While spending discipline still matters, companies increasingly want managed services to help address gaps in talent, data readiness, governance, model deployment, and cyber resilience as AI use expands.

That trend is particularly relevant in markets where companies are trying to modernise complex legacy systems while introducing newer AI tools into core operations. In that context, managed services are being framed less as outsourced support and more as a mechanism for executing change across large organisations.

The report's emphasis on agentic AI also suggests service providers may play a larger role as businesses introduce more autonomous software into day-to-day operations. Organisations appear to see external partners as a way to manage both technical integration and operational controls while internal systems and skills continue to develop.

For India, the findings indicate that the strongest demand will come from organisations seeking to combine AI adoption with tighter governance and stronger operational discipline. Managed services are now firmly positioned as an enterprise-wide strategic enabler, supporting growth, operational resilience, and continuous innovation across India's large, complex, and rapidly evolving digital ecosystems.