Margins, metrics, and mindsets: Rewiring global services for purpose and impact

The global services industry has long scaled by adding people, bigger deals, more people, and larger delivery hubs. Scale became the proxy for success, prioritizing revenue growth over real productivity gains. FTE addiction is thus eroding the value of service providers.

Today’s clients demand more. They expect automation-first, AI-enabled, outcome-driven services. Four in five leaders now expect a pivot to ‘services-as-software’, yet only one in ten feel their providers are helping them get there. Two in three are ready to switch providers for better AI execution. The message is clear: the FTE-first model is no longer sustainable.

From effort to purpose: The mindset must evolve

To chart the path forward, HFS outlines a progression: from effort through performance to purpose, with each stage moving service delivery closer to accurate value alignment:

Exhibit 1: From effort to purpose—a new operating philosophy

Sample: 600 enterprise clients (2022) and 600 enterprise clients (2023)
Source: HFS Pulse, 2022 and 2023

Despite all the talk of transformation, the global services industry remains entrenched in the effort era—measuring hours worked, tickets resolved, and contracts staffed. Today’s market demands speed, intelligence, and strategic impact.

The tools for transformation—AI, automation, and platforms—are widely available, but the mindset hasn’t kept pace. This gap holds both providers and clients back.

While executives speak the language of outcomes, too many engagements still reward volume over value and compliance over contribution.

Exhibit 2: The ‘effort trap’—How enterprise and provider gaps stall value realization

Source: HFS Research survey with 600+ IT and business leaders across Global 2000 enterprises

The move from effort to purpose demands more than ambition; it requires a synchronized transformation across the ecosystem:

• Enterprises must evolve from defining narrow scopes to enabling shared success.
• Providers must stop monetizing scale and start engineering outcomes.
• Investors and boards must realign value creation with profitable impact, not just growth optics.

The only way out of this ‘effort trap’ is to collectively pursue purpose with clarity, conviction, and operational courage.

Enterprises and providers must align across six critical dimensions to operationalize this shift. The Purpose-Driven Value Realization Framework (see Exhibit 2) defines the mindset shifts and imperatives needed. It integrates modern enablers—platformization, AI, strategic sourcing evolution, joint KPIs, and new commercial models, while preserving the core need to move beyond transactional engagement toward sustained value realization across economic, service, and risk outcomes.

Exhibit 3: The Purpose-Driven Value Realization Framework for Global Services

Source: HFS Research, 2025

Enterprises: Ditch the ‘client is king’ mentality

Enterprise buyers have traditionally engaged providers through tightly controlled, input-driven contracts, often optimizing for rate cards and staffing flexibility over results. This has fostered relationships based on cost containment, not value creation.

Today, many enterprises struggle to link statements of work (SoWs) to tangible value chains, making it difficult to track how service actions drive business outcomes. Contracting often becomes detached from benefit realization, reinforcing transactional mindsets.

To break this pattern, contracting must be directly coupled with benefit realization governance, ensuring that enterprise and provider teams are aligned on how value will be delivered, measured, and adapted over time.

Even when business leaders champion a shift toward outcomes, that ambition often gets diluted downstream—in procurement, strategic sourcing, and legacy contracting frameworks. These functions are still geared toward evaluating inputs, negotiating price points, and minimizing vendor risk, not enabling transformation.

To make the shift to purpose, enterprises must:

• Engage providers as partners, not vendors. Invite provider leadership to share how they make money in their own business.
• Redesign contracts to reward outcomes, not effort. Start with providers best positioned to transform your business.
• Involve business stakeholders early to align solutions with strategic goals. All transformational SoWs must be approved by the owners of economic, service, and risk outcomes.
• Modernize procurement to support shared value, not transactional oversight. Educate sourcing teams on gain-sharing models for transformational work.
• Dismantle ‘PowerPoint compliance’ governance. Create peer-level, co-owned forums that track benefit realization.

HFS’ research shows that enterprises prioritize transparency (60%), stability (59%), and alignment to business outcomes (55%). Delivering on these requires co-ownership of goals, open data sharing, and commercial models—giving providers the space to solve, not just serve.

Service providers: Stop counting heads and start delivering outcomes

Many providers define success by the number of FTEs deployed or the signed contract size. But that model is increasingly out of sync with the market’s needs. Enterprises need scalable impact—driven by automation, AI, and accountability, not just scalable labor.

Revenue is vanity; margin is sanity. The future belongs to providers that focus on delivering business outcomes profitably. To lead in this environment, providers must:

• Rewire their operating model around margin and impact, not volume (profitability is the new revenue).
• Shift from service delivery to solution ownership, enabled by automation
  and AI.
• Take shared accountability for outcomes—tying incentives directly to realized client gains, not effort alone.
• Map service actions clearly to client impacts — tracing interventions to outcomes such as cost reduction, faster time-to-market, or improved risk posture.
• Build their reference book to show examples of clients that have realized lower service fees and tangible outcomes.
• Go beyond the CIO’s office to engage business stakeholders—reframing services in terms of commercial impact, strategic priorities, and enterprise-wide outcomes.

This shift requires difficult decisions: embracing automation even if it reduces headcount, productizing delivery even if it changes revenue recognition, and charging for results rather than effort.

Providers that frame their value around measurable outcomes and operate for profitable, scalable impact will be the frontrunners. Those that move first will reshape client operations and trigger the domino effect of trust, expanded influence, and competitive leadership across global services.

Boards and investors: Demand margin-led deals (no more vanity metrics)

Ownership groups—private equity firms, institutional investors, and public boards—have historically prioritized large deals, FTE growth, and top-line expansion, mainly because these growth levers improved operational productivity within their providers’ businesses. However, these metrics no longer correlate to sustainable success in global services.

It’s time to redefine performance. Boards should demand:

• Book of business insight where retained profit is improving and clients are realizing lower spend in specific services.
• Growth in net new business from deploying the new model, where providers can have profit and revenue growth.
• Leadership incentives aligned to transformation, not transaction volume.

Revenue growth alone is no longer the goal. What matters is profitable, scalable value creation. Savvy investors understand that a $100 million revenue deal with a weak margin is no more valuable than an $80 million deal with strategic impact, automation leverage, and long-term stickiness. Providers should aim to scale these delivery models; those that move first will be invited to extend the model to other areas of opportunity.

The Bottom Line: Purpose over scale is the new global services mandate.

The global services market is undergoing systemic change and won’t sustain with yesterday’s mindset. Enterprises expect more than tasks completed; they expect outcomes delivered. Providers, meanwhile, must move beyond monetizing scale and shift toward engineering measurable, purpose-driven outcomes.

Both sides’ leadership must take shared responsibility for enabling each other’s success. Relationships that meet this challenge with modern delivery models and purpose-aligned solutions will differentiate both enterprises and providers. This starts at the top, requiring clarity on value chains, education on gain-sharing, and active governance to keep ‘performance to vision’ in play.

This is not a call to incrementally improve—it’s a mandate to rewire how global services create value. Margins, metrics, and mindsets must evolve because staying the same is the riskiest move.

Enterprise leaders must know how providers impact business outcomes and embed gain-sharing models across engagements. Provider leaders must own outcomes, not just delivery, engineering results, educating clients, and leading value realization.

So, what kind of leader are you?