| Future-Proofing in Real Time: 15 Key Lessons from OWS26 | |
Future-Proofing in Real Time: 15 Key Lessons from OWS26
IAOP’s OWS26 opened with a bold vision for the future: Wi-Fi-enabled call centers on the Moon, fusion-powered cities, and robots performing complex physical labor at scale. AI, space, and energy were framed as defining frontiers of the next century by Avasant Chairman and CEO Kevin Parikh.
Yet the conversations in Chicago made clear that disruption is defining the current environment. Geopolitical shifts, regulation, trade tensions, and supply chain fragmentation are rapidly reshaping the $440 billion outsourcing industry, making real-time future-proofing an imperative.
Across sessions, speakers emphasized that outsourcing is not in decline, but is undergoing a fundamental reinvention. AI dominated the agenda, but the conversation has matured beyond hype to focus on outcomes and measurable value. With the EU AI Act now in effect, governance and responsible use of AI are mandatory.
At its core, the most profound disruption is human. OWS26 surfaced a fundamental redefinition of work – where it happens, how it is structured, and what skills will define it next.
Against this backdrop, global leaders from leading provider, buyer, and advisory firms in outsourcing, sourcing, and GBS, including executives from Google, Meta, Walgreens, Grubhub, and Clorox, gathered for three days of high-impact dialogue at IAOP’s annual gathering.
This is OWS26. And here are some of the lessons learned.
1. Outsourcing isn’t dead; it’s evolving into its next era.
Outsourcing remains a critical pillar of the global economy, but its role is shifting decisively, from a cost-efficiency lever to a driver of innovation, resilience, and transformation.
Avasant Partner Anupam Govil said, “I can’t even tell you how many times I’ve heard outsourcing is dead. ‘You know, this industry is going away. It’s going to be automated; the headcount AI is going to come and basically remove the whole requirement for an outsourcing vendor.’ But obviously, we are all still here. The industry is still alive, it’s still growing, although at a slower pace.”
Drawing on three decades of industry evolution, Govil underscored outsourcing’s enduring relevance. During COVID-19, delivery centers across India, the Philippines, and China became the backbone of business continuity, keeping essential operations running when enterprises needed it most.
2. “Economic gravity” will sustain globalization
In a compelling presentation on Futureproofing, Building Resilience in Uncertainty, Parikh introduced the concept of “economic gravity,” the notion that trade, talent, and capital will always flow toward opportunity, regardless of tariffs, geopolitical tensions, or technological upheaval.
“Economic gravity will keep us in a perpetual state of globalization because you cannot put a tariff on ideas. Geopolitical conflicts cannot destroy innovation and humanity, while optimized by AI, cannot be replaced by it,” he said.
3. AI, automation, and agentic systems are rewriting the outsourcing operating model
The outsourcing industry is undergoing one of its most significant structural shifts in decades, driven by AI, automation, and rapidly changing workforce dynamics, according to research presented by Meta.
Key trends include the rise of hyper-automation at scale, the shift from standalone AI tools to autonomous AI agents, and a broader redistribution of global talent. Together, these forces are reshaping not just service delivery, but the industry’s core operating model.
“The outsourcing industry’s entire operating system is being redefined and reshaped by AI,” said June Dozier, Director of Technology Sourcing at Meta. “This is not just a prediction, it’s already happening. The way we work, how we source, how we negotiate, and how we manage our suppliers will be fundamentally different.”
Skanda Janakiram, Partner at PWC Strategy&, emphasized that the shift is also cultural. “It’s truly going to be a cultural change for people,” he said in a session on AI in procurement. Organizations need to invest in training and rethink how they operate day-to-day. Agentic AI is here to stay, so you have to enable your workforce to adapt to it.”
4. Geopolitical volatility is reshaping sourcing strategy and delivery models
Enterprises are fundamentally redesigning sourcing and delivery models to operate in an era of sustained geopolitical uncertainty. With volatility at levels not seen in decades, organizations must pair global perspective with deep local expertise to navigate increasingly complex regulations around data and AI.
In response, geopolitical intelligence is becoming embedded in core decision-making, with emerging roles like Chief Geopolitical Officer translating global risk into strategic and contractual action. Delivery models are also shifting toward more diversified footprints, including nearshore and onshore options, to strengthen resilience.
Peter George, Partner of Baker & McKenzie, emphasized the scale of the disruption: “For almost 30 years, I’ve seen lots of ups and downs. I don’t think we’ve ever seen the type of geopolitical uncertainty that we’re living through now.”
He also noted that contracts themselves must evolve. More flexible structures, replacing traditional force majeure clauses, are needed to enable renegotiation and adaptation as conditions change.
5. The future of work will be defined by hyper-specialized talent
A decisive shift toward hyper-specialization is driving the next phase of workforce transformation. Research from Avasant found that 75 percent of organizations are already facing critical shortages of high-skill, specialized talent, forcing a rethink of how capabilities are built and deployed.
To future-proof, enterprises must move beyond broad upskilling toward deep, credentialed expertise that operates at the edge of innovation, according to Parikh.
Meta’s Dozier highlighted the emerging roles shaping this shift, including AI oversight, prompt engineering, and exception handling, while traditional BPO roles will continue to decline. In this new model, geographic labor arbitrage is being replaced by skills-based advantage.
This evolution is also reshaping procurement. New priority skills include AI orchestration, strategic planning, data-led decision-making, and advanced category management, reflecting a more analytical and technology-enabled function.
Underlying this shift is a new operating model for work itself: AI will increasingly handle routine, rules-based tasks, while humans focus on judgment, analysis, and exceptions, redefining collaboration between people and machines.
6. Contracts are shifting to outcomes
The economics of outsourcing are being fundamentally rewritten as AI reshapes service delivery. Pricing models designed for human labor no longer fit a world where value is increasingly generated by automation and hybrid human-machine systems.
Parikh of Avasant emphasized this shift, urging the industry to rethink legacy constructs: “Don’t price AI like a person,” he said, comparing AI contracts to software licensing.
The emerging model moves away from headcount-based billing toward paying for resolution, outcomes, and measurable value delivered. In parallel, hybrid pricing structures are gaining traction, blending input-based and output-based approaches depending on whether services are delivered by humans, AI, or integrated teams.
Todd Hintze, Partner of Wavestone, noted that this shift is also changing contract design itself, with shorter terms becoming more common to account for uncertainty in AI-driven service performance and pricing.
7. AI is stalling not due to technology, but execution
Despite its transformative potential, many AI initiatives are failing to scale beyond pilots. The breakdown is not happening at the technology level, but in execution and adoption.
Dozier of Meta highlighted key causes: tool-first thinking without clearly defined business problems, poor or fragmented data foundations, and insufficient change management to support adoption.
A panel discussion, AI Theater vs. AI That Scales, moderated by Mark Voytek, Chief Advisor, Thought Leadership, Founder and Managing Partner of VTECH Partners, reinforced this view.
“AI doesn’t fail at the technical level. It fails at the operating model level. The organizations still standing 18 months after a major AI initiative treated governance as an enabler, not a compliance task,” Voytek said.
A pragmatic approach to AI adoption is emerging: focus first on identifying the right use cases and the “low-hanging fruit” where automation and AI can deliver clear, measurable value.
Alice LaViolette, VP of The Clorox Company, cautioned against the growing tendency to adopt AI for its own sake.
“Where I sit in the GBS organization at Clorox, I get a lot of functional leaders who come to me and say, ‘We want to get into this new AI tool or that new AI tool.’ And they get really enamored with all the new tools out there,” she said. “I always try to anchor back to what the business problem is and how AI helps to enable that, because not every solution requires an AI solution.”
8. Global Capability Centers are becoming engines of innovation and scale
GCCs are rapidly evolving from delivery arms into strategic hubs for digital innovation, AI engineering, and advanced talent deployment.
Govil of Avasant highlighted how organizations such as JPMorgan Chase, Google India, and BMW in the U.S. are reinventing their GCC mandates to focus on innovation-led value creation rather than cost efficiency alone.
At the same time, mid-market enterprises are accelerating adoption, using GCCs to access niche capabilities and achieve faster ROI, blending cost optimization with targeted innovation to drive competitive advantage.
9. Social impact is a core business responsibility
Enterprises are increasingly being called to account for the social footprint of their global operations, particularly in how they engage with and support communities in disadvantaged regions.
In a session on Outsourcing in a Multipolar World, James Donovan, Chair of IAOP Center for Social Impact and recipient of the Dan Lang Award for Purpose-Driven Leadership, emphasized that social responsibility is now inseparable from business performance.
“As an industry, we need to be very clear about not just the value that we’re providing, but the positive impact that will lead to more resilient business models,” Donovan said. “I would invite you in some shape or fashion to add to the journey of how we can be impactful as a community. This is smart business, about being impactful, but also thinking about the future.”
10. Trust is the foundation of high-performing outsourcing relationships
In a candid session titled Breaking Bad, panelists emphasized that the strongest partnerships are built when clients negotiate in good faith, treat providers as true extensions of their organization, and empower them to own outcomes rather than micromanaging execution. Frequent, transparent communication was repeatedly cited as a non-negotiable for long-term success.
Divya Devi, Client Operations Director of Vee Healthtek, highlighted a recurring misstep among U.S. clients: assuming offshore teams are interchangeable across regions, often overlooking critical cultural and communication differences.
The panel underscored that trust must be designed in from the beginning. Strong governance structures—clear roles and responsibilities, disciplined communication at the right levels, and rigorous documentation—help prevent misalignment and erosion of trust, keeping relationships stable and performance on track.
11. Talent location strategy must move beyond competitor copying
As companies rethink where talent will come from next, the old habit of following competitors is becoming a strategic liability. The emerging approach is signal-led and forward-looking, focused on identifying dynamic, future-ready ecosystems rather than relying on static, cost-based benchmarks.
Michelle Needles, COP, EVP, and Global Head of Enterprise Solutions at Savills, emphasized that winning talent strategies are increasingly shaped by a broader set of factors, including lifestyle, culture, and urban vibrancy. These elements are now being quantified using innovative tools such as Savills’ “Matcha Index,” which blends lifestyle and cost considerations to reflect evolving talent preferences better.
“If your location map mirrors your competitors, your outcomes will too,” she said.
Rapid growth in cities like Bogotá, São Paulo, Lagos, Nairobi, and Cape Town is establishing them as emerging tech hubs, according to Savills research. These cities were largely absent from growth strategies 20 years ago but are now attracting significant investment and talent.
The session, Know Before You Go: Unlocking Value in Emerging Global Business Locations, spotlighted the talent depth, stability, and operating potential of markets including Poland, Ghana, and broader Africa.
Speakers emphasized that companies should diversify sourcing across emerging regions to reduce geopolitical exposure and strengthen resilience. A key takeaway was that perceived risk often lags behind on-the-ground reality, making informed, data-driven location decisions essential to unlocking new value pools.
12. Regulation is becoming a defining constraint on AI in healthcare
AI adoption in healthcare is accelerating, with use cases ranging from ambient scribing, where AI captures doctor-patient conversations and generates clinical notes, to AI-designed drugs advancing through clinical trials and reshaping the pace of medical research.
However, this rapid innovation is colliding with a dense and evolving regulatory landscape. Healthcare AI must navigate stringent HIPAA requirements, shifting questions of malpractice liability, and continuously changing standards for data privacy and de-identification.
Dr. Jon Handler, Senior Fellow for Innovation at OSF Healthcare, reframed AI’s growing capabilities: rather than viewing AI superiority as a threat to human value, he sees it as a catalyst for human improvement.
“If we as humans have competition for what it means to be human and we have to level ourselves up, be nicer to each other, be kinder, be smarter, and try harder every day because there’s this young upstart nipping at our ankles that is AI, then maybe that just helps us to be better human beings in the world and maybe that’s a good thing that comes out of all this,” he said.
13. AI success starts and ends with data quality
Across multiple sessions, speakers reinforced a consistent message: the value of AI is only as strong as the data that powers it.
Clean, centralized data was described as the non-negotiable foundation for any meaningful AI deployment. In the AI Theater vs. AI That Scales session, panelists noted that without it, even the most advanced tools quickly lose relevance and business utility.
“If you’re not giving AI the data it needs, you’re done,” said Alex Rochlitz, formerly of Google and founder of ScaleX, an AI platform he developed that focuses on third-party spend management and savings tracking.
Data quality ultimately determines whether AI delivers real business value or remains stuck in advisory mode. This makes master data management not a technical afterthought, but the essential first step before any AI initiative.
Another concern expressed in the presentations was the validation of data accuracy. However, the speakers in the Procurement AI noted this creates a paradox.
“You’re going to get information back so fast that the purpose of that agent or the artificial intelligence is to give you leverage, empower you,” said Dan Schuffert, COP, DVP Corporate Strategy, Sourcing and Vendor Strategy, HCSC. “If you have to go back and validate everything it gives you, it kind of defeats the purpose.”
14. Governance is becoming the foundation of responsible AI, data, and global delivery
As AI adoption accelerates and global operations grow more complex, governance is becoming central to enterprise resilience. Organizations are strengthening frameworks to ensure responsible AI use, clear accountability, and measurable impact across environmental and social dimensions.
Attorneys from Kirkland & Ellis emphasized that establishing a governance framework is critical for practical compliance with the EU AI Act. Max Harris and Emma Flett also noted that governance should be viewed as a core enabler of responsible AI deployment, not a regulatory burden or a constraint on innovation.
At the same time, the growing volume of data generated beyond traditional personal sources—from phones, wearables, security systems, IoT devices, and more—is reshaping regulation. The EU Data Act was introduced to govern how this broader ecosystem of data is accessed, shared, and reused.
“As they said a decade ago, data is the new oil, and, boy, were they right,” Flett said.
She added that the EU’s approach seeks to treat data as a valuable asset while balancing innovation with protection and fair competition.
15. IAOP has launched a new Center of Excellence: FIRE
Introduced at OWS26, the newest CoE brings together buyers, suppliers, and practitioners to share best practices in governance, outsourcing, and managing the unique challenges of the Financial Services, Insurance, and Real Estate sectors.
Panelists addressed the trends reshaping the FIRE sector, including tech-enabled managed services, AI-driven operations requiring process reengineering, intensifying regulatory scrutiny, flexible cost structures, and access to specialized global talent, all of which require companies to balance innovation with compliance while maintaining accountability for business outcomes.
The initiative is designed to address the increasing complexity of operating in highly regulated environments where organizations must manage sensitive data, ranging from financial and health records to property information, while navigating overlapping federal and state requirements, said Maura Hudson, COP, CMO of Slatt Capital and Chair Emeritus of IAOP’s Strategic Advisory Board.