New tech is disrupting how enterprises consume services

The relationship between enterprises and their service providers is going through a revolution as firms figure out new ways of delivering more for less, and a new wave of disruptors emerges to drive the switch from labor arbitrage to technology arbitrage.

HFS CEO and Chief Analyst Phil Fersht called out the need for enterprises to leap to a new AI-driven S-curve of value creation at our New York summit in May (see Exhibit 1). Services firms must find ways of delivering value to enterprises with generative AI (GenAI) and machine learning (ML). This drive will result in services provided to enterprises by software (technology arbitrage) rather than people (labor arbitrage).

Exhibit 1: AI is driving an S-curve leap to new value in services

Source: HFS Research, 2024

A new wave of tech firms has arrived to put the idea into practice, offering enterprises an opportunity to have bots do much of the work traditionally performed by offshore centers and onshore consultants. Their arrival pressures service providers to respond with similar technology arbitrage offerings.

HFS Hot Techs rip up the way services get done

Here’s a brief roundup of just some of the tech firms the HFS crew has been tracking—firms that apply AI- and GenAI-powered software to rip up the way services get done. Heading the list are those HFS has already identified as Hot Tech providers.

Rhino.ai: AI meets the modernization of apps as an extensible, composable platform. HFS has named Rhino.ai to our Hot Tech cohort for 2024. Check link.

Eclypses: Plug-and-play data security that works without expensive bespoke resources. Also an HFS Hot Tech 2024 cohort member. Check link.

TrueFoundry: Won the ‘Hottest of the Hot’ award at our New York summit in May. It simplifies complex ML and LLM model deployment with built-in best practices, freeing data scientists from infrastructure concerns and delivering 10x faster code deployments. We have just published its Hot Tech profile. Check link.

Globality: Offers an autonomous sourcing and procurement platform that leverages AI to streamline and optimize procurement processes, ensuring cost savings and efficiency. It is another HFS Hot Tech member. Check link.

Bots for business processes

C3 AI: Provides a comprehensive suite of AI applications for various business processes, including supply chain management, sustainability, CRM, financial services, and energy management, helping businesses achieve digital transformation.

Customer.io: A marketing automation platform that enables businesses to create personalized email campaigns and manage customer interactions through targeted messaging.

VoxScript: Specializes in converting text into natural-sounding speech and providing text-to-speech solutions for various applications, including customer service, content creation, and accessibility.

Bots building websites and custom software applications

Builder.ai: An AI-powered platform for building custom software applications quickly and cost-effectively, enabling users to create, manage, and scale their digital products without requiring extensive technical expertise.

10Web: An AI-powered website builder that enables users to create and manage websites effortlessly, utilizing automation to optimize site performance and user experience.

Bots providing employee support

Moveworks: Offers an AI-driven employee support platform that automates the resolution of IT and HR issues, enhancing employee productivity and satisfaction.

Pi: Provides AI-powered personal assistant services, helping users manage their schedules, tasks, and communications with intelligent automation.

Pryon: Delivers enterprise knowledge search solutions using AI to enhance information retrieval, which makes it easier for employees to access and efficiently utilize their organization’s knowledge assets.

Bots doing data science

DataRobot and Alteryx: Offer platforms that enable data science and analytics without the need for data scientists and consultants, empowering users to build and deploy predictive models and analyze data seamlessly.

Akkio: Provides AI-driven business prediction tools for agencies, enabling them to leverage machine learning for better decision-making and predictive analytics without the need for extensive data science expertise.

Bots for better prompts, quality assurance, and governance

QuantPi: Blends quality assurance and governance for AI, providing tools to ensure the reliability, fairness, and compliance of AI models used in various applications.

PromptBase: Offers a marketplace for AI prompts, enabling users to buy and sell high-quality prompts designed to enhance AI performance and output in different tasks.

Bots helping procurement get with the program

Procurement departments have often been a late stumbling block in onboarding new tech vendors, particularly when the speed at which new capabilities and offerings emerge demands fast decisions. But even here, GenAI is having an impact with the arrival of autonomous sourcing. Read our research on how autonomous sourcing is going mainstream.

Purposeful (agentic) AI holds the key to the scale and pace of this disruption

The scale and pace of the GenAI-led disruption of services we are witnessing will depend on capabilities that are still emerging—specifically, agentic AI (or, as HFS has coined it, Purposeful AI), which we expect to impact enterprises in 2025 and onward (see Exhibit 2).

Exhibit 2: The third phase of AI is arriving fast—and will drive the scale of impact of services provided by software

Source: HFS Research, 2024

Agentic AI agents enable users to tell the AI what to do at a higher level of abstraction. So, rather than opening and closing a series of apps and sending a range of emails, an enterprise user could say (for example), “Onboard this new employee.” The AI then creates and prioritizes the tasks required to execute that goal and, at least semi-autonomously, executes to deliver a complex goal.

Examples of companies working toward this include Adept, Newo, Knorket, and rabbit tech.

One-click approval could be all it takes to optimize a supply chain

As Phil Fersht puts it in our co-authored article from February of this year: “If purposeful AI can navigate the complex apps ecosystem of today’s enterprise, we can imagine asking a digital assistant to onboard an employee and it automatically triggering tasks and executing device procurement, benefits briefing, training, and the like. With a click of a button, one could plan demand, forecast, and optimize the supply chain network.”

Purposeful AI will transform how we approach all business processes. But only (as we reference in Exhibit 1) if enterprises are first able to tackle skills, technical, and data debts built up over the past several decades.

The Bottom Line: Open your eyes to the tech that will deliver you more for the same (or less).

The S-curve is upon us. Enterprise leaders must open their eyes to emerging AI-powered alternatives to traditional labor arbitrage. Monitor our latest HFS Hot Tech profiles as more emerge, and lean on your service providers to help you stay current on how more services can be delivered for equivalent investment.

Most service providers are keen to support your S-curve leap and are looking for enterprise partners prepared to coinvest in shared outcomes to the benefit of both parties. How ready you are to take that leap will depend on your digital maturity—the extent to which you have tackled technical, talent, data, and skills debts.