Data Analytics

HFS: AI Generative Services to Unlock New Value for Global 2000 Firms

AI-led Generative Business Services: The Future of GBS reveals shift from cost-cutting to both cost-cutting and value creation, urging companies to deploy AI-based solutions and new operating models.

  • Attracting top talent is #1 challenge facing GBS leaders.
  • GenAI, machine learning, and hybrid multi-cloud solutions are the top three technologies gaining momentum in GBS.
  • The focus on enterprise data flows is expected to grow to 34%, with an increased emphasis on creating a connected and frictionless enterprise.
  • GBS is shifting from KPIs to KPOs (key performance outcomes) with the top three GBS outcomes in the future being customer satisfaction (49%), revenue growth (39%), and transformation of existing processes (36%).
  • As GBS evolves, third-party providers will act as ecosystem orchestrators, integrating technologies, processes, people, and data to drive efficiency and foster innovation.

HFS Research, a leading global research and analysis firm, has released a new report titled AI-led Generative Business Services: The Future of GBS, developed in collaboration with Capgemini, a global business and technology transformation company. The report predicts a major shift from traditional cost-focused models to AI-powered Generative Business Services, positioning AI and data analytics at the core of innovation and strategic growth for enterprises.

GBS—long the go-to for cost reduction and operational efficiency—now faces significant demand and talent challenges. Current GBS strategies often misalign with the priorities of CEOs and board members, who are on top of cost-cutting and increasingly focused on revenue growth, margin improvement, and digital modernization. At the same time, AI and data analytics provide unprecedented opportunities to transform data into a strategic asset, unlocking new value and competitive advantages. However, attracting and retaining the talent required to drive this innovation is becoming a critical hurdle for businesses looking to modernize their GBS approach.

The study surveyed 510 GBS leaders and their stakeholders (evenly distributed between C-level, senior-level and middle management) at companies with revenues between $1B and $50B+ (90% from North America and Europe).

The report focuses on seven tenets to transform Generative Business Services:

  • Scope: Shift from functional silos to enterprise-wide data flows for a seamless, connected business that drives digital transformation.
  • Success Measures: Move from KPIs to KPOs, focusing on customer satisfaction, revenue growth, and process transformation.
  • Technology: Use generative AI, machine learning, and multi-cloud solutions to create competitive advantage, not just support operations.
  • Data: Turn data into a revenue-generating asset by driving strategic decisions and uncovering new value streams.
  • Skills: Focus on acquiring in-demand skills over traditional cost-cutting, prioritizing innovation-driving talent with strong communication and negotiation abilities.
  • Third-Party Providers: Evolve providers from vendors to orchestrators, integrating new skills, technologies, and capabilities for GBS transformation.
  • Commercial Models: Shift from headcount-based engagements to flexible, outcome-driven models that align with business objectives and deliver measurable results.

Oliver Pfeil, CEO of Business Services at Capgemini and member of the Group Executive Committee says, “To address talent issues, GBS leaders should think about their position in the enterprise and consider how they can become the transformation catalyst to move GBS from a cost center to a value generator. It’s also important to know the story and the vision shared with employees and how ecosystem partners can also be embedded into that. Elevating GBS to a more strategic level is a big reskilling and change-management exercise, but it will help organizations to embark on a new journey that will ultimately payoff in terms of increased value and excelled competitiveness.”

Phil Fersht, CEO and Chief Analyst, HFS Research, says, “The report makes it loud and clear: we must seize our GenAI moment and reinvent ourselves and our GBS organizations. AI-powered GBS is the future, set to unlock massive value for global enterprises. This goes far beyond simply automating routine tasks. It’s about enhancing decision-making, predicting trends, and providing the strategic insights that give businesses a competitive edge. The companies that seize this moment will dominate the future, but I fear for those that stand still.”

Saurabh Gupta, President, Research and Advisory Services for HFS Research, adds, “The traditional GBS model is outdated and irrelevant for ambitious enterprises. It fails to deliver value beyond back-office support and doesn’t provide exciting career tracks. With the advent of GenAI, the current GBS model struggles to create viable career opportunities for top talent. GBS must align with enterprise growth, not just cost savings and efficiency, to remain viable. It needs to transform by rethinking its branding, measured value, and aspirations.”

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