The service provider industry built its success on a simple proposition: deliver the same services at lower costs through labour arbitrage and operational efficiency. This model powered decades of growth. Today, that model is obsolete.
Vipul Mehta traces this evolution: "The service provider landscape is experiencing both remarkable opportunities and threats as AI capabilities mature. On the opportunity side, generative AI has enabled capabilities that were technically impossible just few years ago. These new possibilities create top-line growth through service offerings while simultaneously driving operational efficiencies across organisations."
Ankur Saxena from Evalueserve doesn't mince words: "The service provider landscape is undergoing a fundamental transformation. The primary shift we're seeing is related to the democratisation of productivity and efficiency tools. Previously, service providers built their reputations on process optimisation and bridging knowledge gaps for clients. Now, with AI, the barriers to entry have significantly reduced."
This isn't about adding AI to existing services. It's about reimagining what service providers offer and how they create value. Traditional metrics give way to new measures focused on business outcomes.
Vinti Mathur from Genpact provides evidence: "AI automation and insights significantly reduce operational costs while improving the quality of the output." She emphasises that cost reduction is just the beginning: "Earlier, there used to be a lot of overstaffing being done to have a little bit of buffer into everything. But with the new models and the AI automation we are now starting to optimise that quite a lot."
Geoffrey Doran from EXL describes this in practice: "Our approach has evolved beyond traditional outsourcing to coupling services with transformative technology. For instance, rather than simply deploying 500 people in a call centre, we now focus on optimising that workforce through technology integration. We might propose reducing the headcount over our engagement to 200 by implementing AI solutions that enhance service quality while maintaining operational excellence and reducing cost-to-serve."
Industry leaders describe incorporating "AI initiatives like route optimisation and chatbot" into service catalogues as core components of the value proposition. These aren't technology features; they're new ways of delivering superior outcomes.
This shift from cost to value manifests in several ways:
Outcome-based engagements. Instead of selling time or transactions, providers tie compensation to business outcomes achieved. AI makes this possible by providing precision and scale for predictable results.
Innovation partnerships. Clients view service providers as innovation partners, not vendors. They expect continuous improvement and insight powered by AI capabilities.
Intelligence generation. Value extends beyond completing tasks to providing insights that help clients make better decisions. AI transforms providers into intelligence partners who spot patterns humans might miss.
Risk and compliance enhancement. In regulated industries, AI-first providers offer enhanced accuracy and compliance, turning regulatory burden into competitive advantage.
Speed and adaptability. Where traditional models optimised for cost, AI-first models optimise for speed and adaptability. The ability to scale instantly becomes a core value proposition.
This shift from cost to value manifests in several ways:
Outcome-based engagements. Instead of selling time or transactions, providers tie compensation to business outcomes achieved. AI makes this possible by providing precision and scale for predictable results.
Innovation partnerships. Clients view service providers as innovation partners, not vendors. They expect continuous improvement and insight powered by AI capabilities.
Intelligence generation. Value extends beyond completing tasks to providing insights that help clients make better decisions. AI transforms providers into intelligence partners who spot patterns humans might miss.
Risk and compliance enhancement. In regulated industries, AI-first providers offer enhanced accuracy and compliance, turning regulatory burden into competitive advantage.
Speed and adaptability. Where traditional models optimised for cost, AI-first models optimise for speed and adaptability. The ability to scale instantly becomes a core value proposition.
Khanh Tran from Vistra provides detailed insight: "Our commercial model has undergone transformation. The traditional FTE-based model created a challenging trade-off , while increasing headcount raised revenue, it risked client dissatisfaction when businesses expanded. With automation, we've shifted away from the FTE-based model towards value-based pricing. We now base commercial arrangements on factors like client revenue and operational units rather than headcount."
Critical patterns emerge from our research:
Pricing models evolve.
Fixed price contracts based on headcount give way to value-based pricing tied to outcomes.
Sales conversations change.
Instead of competing on cost, providers must articulate value in business impact terms.
Talent requirements shift.
The workforce pyramid flattens as AI handles routine tasks. Providers need fewer entry-level processors and more advisors working alongside AI.
Compensation intensifies.
Differentiation comes from effectively combining human expertise with AI capabilities, not labour cost advantages.
Client relationships deepen.
Transactional vendor relationships evolve into partnerships with deeper access to client operations and data.
Vipul Mehta warns about competitive dynamics: "We're witnessing a surge of new startups that are completely reimagining traditional business processes. This influx of competition means incumbents must be exceptionally adaptable and nimble to remain competitive."
This compressed timeline appears consistently, suggesting industry consensus that the window for change is narrowing. Providers who fail to evolve their value propositions risk being left behind.
About Enate
Enate is the leading SaaS solution for business services. Enate orchestrates work from start to finish, giving clients the visibility and control needed to deliver better services. From email management and data analysis to intelligent document processing, Enate also offers a host of touch-button AI features designed to slash the time spent on manual work. Trusted by global service teams, Enate ensures smooth, consistent operations that help clients perform at their best.