While service providers continue to focus heavily on functional digital transformation, their ecosystem partners appear ready to raise the bar. According to data from the HFS Insurance Services 2025 study, 65% of partner respondents today associate delivery capabilities with traditional modernization levers—cost, efficiency, and speed. But fast forward two years and that number drops to 42%. Instead, partners increasingly emphasize end-to-end organizational alignment as the next delivery frontier. Ecosystem development, meanwhile, shows no movement, remaining stuck at a static 19%, reinforcing a persistent challenge in scaling cross-industry innovation.
Here are three key insights we derived from our partner-side analysis of delivery expectations in Exhibit 1:
- Functional transformation is declining but not irrelevant: Partners still recognize the value of modernization, especially when it unlocks measurable operational improvements. However, the sharp 23% drop over two years is telling. It reflects growing fatigue with single-function success stories and signals a desire to see transformation efforts extend deeper into the business fabric. Partners increasingly expect service providers to play a broader role in shaping strategy, integrating silos, and embedding intelligence across the enterprise. Functional transformation is no longer the end goal but the starting line.
- Organizational alignment is the new delivery battleground: Today, only 16% of partners say providers enable alignment across front, middle, and back offices. But expectations more than double to 39% in the next two years. That’s the highest relative growth across all delivery dimensions. This shift may be driven by partners feeling pressure from clients to deliver seamless, frictionless experiences that require more than strong individual processes. They need connected journeys, consistent data flows, and unified decision-making logic. These require end-to-end thinking, not just a stitched-together set of modernized functions. Service providers will be judged on optimizing claims or underwriting and aligning teams, systems, and incentives across the enterprise.
- Ecosystem delivery is stuck in neutral: Despite the hype, ecosystem enablement remains flat at 19%, with no anticipated growth over two years. This suggests that most partner ecosystems are still under-leveraged, poorly integrated, or lack structured governance for value creation. Partners often feel that providers treat ecosystems as a marketing exercise rather than an execution layer. Cross-enterprise collaboration remains elusive without shared accountability, commercial models, or plug-and-play orchestration tools. To deliver ecosystem value, service providers must make it easy for partners to collaborate, integrate, and co-innovate with insurance clients. That means shared data models, standard APIs, modular product frameworks, and flexible monetization.
Building delivery for what’s next
To meet the rising expectations of partners, service providers need to work toward evolving delivery in three critical areas:
- From modernizing operations to aligning experiences: To stay relevant, service providers are shifting from automating silos to designing connected journeys across customers, agents, and employees.
- From domain silos to connected delivery: Winning providers will break down traditional delivery lanes and connect underwriting, claims, CX, data, and compliance through intelligent workflows.
- From ecosystem stories to operational ecosystems: Service providers must productize ecosystem delivery with reusable components and shared IP to move beyond slides.
The Bottom Line: The next partnership phase is powered by alignment, not automation.
Enterprise leaders and ecosystem partners need to stop rewarding legacy delivery models. It’s time to pressure service providers to deliver alignment across value chains, demand operationalized ecosystems, not ecosystem talk, and tie incentives to shared outcomes. Anything less leaves value on the table.
