Outsourcing has long been viewed as a cost-saving tactic, but today’s environment is pushing CIOs and digital leaders to rethink that approach. The pace of digital change, the arrival of generative AI, and the need for greater ownership of technology supply chains are reshaping how enterprises view outsourcing.
Amrinder Singh, President and Head of EMEA and APAC at Hexaware, believes outsourcing is moving into the boardroom as a driver of business strategy.
In an interview with Digital Journal, Singh explores why now is the right moment to reevaluate outsourcing, which technologies are driving change, and the critical questions CIOs should be asking.
Digital Journal: What makes this the right moment for IT executives to reevaluate their outsourcing approach? Does today’s outsourcing environment signal a need for IT and digital leaders to update their strategies?
Amrinder Singh: Outsourcing strategies have been evolving for decades, and we believe they are now reaching a point of maturity. For too long, outsourcing sat on the accountant’s ledger as a cost-saving tactic. Today, it is finally moving into the boardroom as a driver of business strategy.
The pace of digital change, the arrival of generative AI, and the need for organizations to take greater ownership of their technology supply chains are reshaping the way enterprises view outsourcing. Transactional, seat-based models and traditional captives are giving way to more strategic, outcome-driven approaches.
Historically, outsourcing was built on scale. Global providers rewarded the largest clients – those spending tens or hundreds of millions – with access to the best talent. However, this obsession with “quantity over quality” produced sub-optimal results. Dashboards glowed green while business users complained about a lack of value. SLAs measured ticket closures and uptime, not revenue impact, customer delight, or time-to-market. Meanwhile, global capability centres (GCCs) offered control but often lacked discipline, innovation, or outcome focus.
The problem was structural as much as contractual. Multi-year, monolithic agreements entrenched incumbents and discouraged innovation, while metrics masked what was actually important. GCCs, while promising direct control, often operated as “vanilla captives” without the incentives to experiment boldly or deliver measurable impact. The result: duties performed, but opportunities missed.
DJ: Which emerging technologies and risks, like AI or cybersecurity challenges, are prompting organizations to rethink outsourcing?
Singh: Several factors are fuelling a shift toward a significantly different approach to outsourcing: cloud has gone mainstream, automation and AI are more than proofs of concept, and technology supply chains are becoming truly global. Buyers are moving from cost avoidance to value creation, and boards are demanding measurable business outcomes.
Contracts are becoming modular, flexible, and outcome-based. Providers are being judged on business KPIs – revenue impact, customer experience, feature velocity, and organizational health – rather than raw headcount or hours billed. This next era is defined by true partnership, one where risk and reward are shared rather than litigated. Data governance and IP clarity are first principles, not afterthoughts. Delivery is platform-led, not just people-led. Automation is reusable, observability is built in, and AI platforms compress learning cycles to reduce reinvention.
Dedicated AI and platform centres of excellence ensure experiments are rigorous and innovation is continuous, preventing valuable data from languishing in silos.
DJ: What critical or unexpected issues should CIOs and digital leaders be examining as they evaluate outsourcing strategies?
Singh: Some questions that CIOs and digital leaders should be considering when it comes to outsourcing strategies include:
- Is IT considered a strategic asset, a reliable utility, or a function that is holding the business back, and how can partner capabilities be used to enhance organizational ability in the future?
- Are my business stakeholders getting maximum value through our current GCC/outsourcing model in terms of quality, speed, business impact, and user experience?
- How much more is IT really able to deliver now versus three years back? And what is the ambition three years from now?”
DJ: Is there anything else you would like to add?
Singh: From an economic perspective, the convergence of generative AI and the accelerated adoption of GCCs will drive a structural transformation of the IT services sector over the next three to five years. This shift will significantly boost productivity, strengthen competitive advantage, and compress marginal delivery costs.
