Forget opportunistic alliances, the future for services firms is integrated ecosystems

Enterprises don’t function without ecosystems constructed of smart partnerships. This is because no single business can meet the needs of its employees, customers, or partners alone. Who you work with and how you engage is an increasingly critical determinant of success—particularly in times of rapid technological change. Professional services firms have played a key role in ecosystem orchestration, but the rules of the game are changing.

The evolution to Services-as-Software requires a whole new partner ecosystem for services firms

As AI technologies continue to proliferate rapidly across the business world, how work gets done and how value is created are forcing a change where manual work previously executed by humans (aka services) is increasingly automated and essentially becomes software. HFS refers to this shift as Services-as-Software (see Exhibit 1).

Exhibit 1: The lines between services and software are blurring

Source: HFS Research, 2025

This evolution to Services-as-Software is changing how enterprises partner to drive new value and outcomes for clients and customers. Many tech partners and services firms that comfortably embedded themselves in the global 2000, driving the last 10 years of incremental progress, are unlikely to be the same firms that drive exponential progress forward without significant disruptions to their business models.

KPMG LLP, in a somewhat prescient move, announced a new Head of Ecosystems and an accompanying strategy for its US Advisory business. Premised on the belief that traditional consulting models are well on their way to being disrupted by AI and other emerging technologies, the firm must be intentional in how it develops, manages, and expands relationships to address the rapidly changing landscape and create value for clients.

Services-as-Software is shifting legacy opportunistic partnerships toward intentional ecosystems

In the world of professional services, the providers often refer to their network of tech partners as ecosystem partners, some going as far as to couch themselves as ‘ecosystem orchestrators’. The problem with this terminology is it implies that these collections of partners are both intentional and integrated and, thus, ready and proven to work together to deliver value to enterprise clients. Not exactly. Most tech ‘orchestration’ by services firms have been single-threaded software implementations, sometimes with a side of hyperscaler storage and compute in deal-specific menage-a-trois. But they are all one-offs. These are not sustained ecosystems. They are opportunistic projects or transformation deals cobbled together for the specific needs of specific enterprises.

As Services-as-Software takes hold, enterprises need true ecosystem orchestrators to help them navigate, curate, and activate value from a dynamic array of intentional and integrated partners aligned to specific domains and industries (see Exhibit 2).

Exhibit 2: As enterprises strive to drive new value in the Services-as-Software era, partnering approaches must change

Source: HFS Research, 2025

This vision is at the heart of KPMG’s appointment of Todd Lohr as its new Head of Ecosystems. Lohr is a long-time respected practitioner in the management consulting industry with extensive experience as a technology leader at the forefront of the firm’s innovation agenda. Over his career, Todd has established deep relationships across business process outsourcing, shared services, robotic process automation, cloud, and AI. His focus now is on elevating and scaling those relationships and bringing them together in an intentional and well-orchestrated manner.

KPMG’s use of ’ecosystem’ terminology is intentional. It’s not just about technology alliances which are the traditional one-to-one tech partnerships KPMG and its competitors all have. Ecosystems are integrated and intentional relationships with a number of third parties.

KPMG recognizes that the best way to help its clients embrace change and succeed in a perpetually evolving future requires the right strategic relationships. The firm needs to focus on orchestrating these relationships around specific industries and functional domains. This will necessarily cannibalize the status quo of lucrative advisory and one-to-one software implementation deals. It’s shamelessly self-serving for KPMG but smart. Too few service firms are willing to acknowledge that the march of AI-led Services-as-Software is reshaping the services industry as we know it.

According to Lohr:

We are evolving our traditional portfolios of one-to-one relationships, and now we’re building integrated ecosystems around domains, functions, and sectors to address the breadth of things enterprises need for value creation. Gone are the days when finance transformation was as simple as implementing one platform. We must curate capital markets, academia, and industry consortiums with technology and ensure they work together in useful ways.

– Todd Lohr, Head of Ecosystems, KPMG

To Lohr’s point, this is broader than technology. Ecosystems must encompass funding sources in private equity and venture capital worlds, the R&D powerhouses and talent builders in academia, and the start-up and scale-up communities driving innovation in AI.

The Bottom Line: Integrated ecosystems are key to realizing new sources of value in the Services-as-Software era.

It’s still early days and given SOX compliance rules that govern a strict balance between firms that KPMG audits and who they partner with, we’ll see how the intentional and integrated ecosystem play shapes up. But whether it be KPMG or other forward-looking firms, intentional creation and curation of integrated ecosystems is critical for enterprises to do anything more than perpetuate linear growth.

HFS defines ecosystems as networks of unrelated entities with common objectives that work together to drive new sources of value. One thing is for sure: the linear one-to-one partnerships that have characterized the last decade of digital transformation in enterprises will not drive the next wave of value creation. Transformation can no longer be ascribed to a single enterprise ISV or hyperscaler. Any claims of offering a single source for enterprise AI world domination are marketing hype.