The outsourcing model you built isn't the one you need

AI, cloud, and persistent cost and talent pressures have fundamentally changed the economics of outsourcing.

This workforce transformation does not happen in isolation. For Australian organisations, the Global Capability Centre (GCC) model provides the structural answer to the question of where you build these new capabilities.

GCCs are presented as an evolution of GBS: outcomes-centric entities that combine traditional shared services scope with COEs and “frontier capabilities” (e.g., digital, analytics, engineering and R&D), acting as an ‘equal strategic partner’ of the operating model alongside corporate functions and business units. With around three-quarters of organisations investing in or planning COEs, GCCs provide a repeatable way to concentrate specialised talent, methods, and reusable assets (data, prompts, workflows, controls) and then scale them enterprise-wide. 

For Australian organisations, the choice is less about “offshoring for cost” and more about designing a location portfolio that balances capability, scale, resilience, and time zone coverage. The study’s location strategy chapter emphasises blending mature hubs with emerging spokes and being explicit about each location’s role (scale delivery, specialised expertise, time zone coverage, or lower-value activities). In practice, this supports a model where you centralise build/run capability (e.g., digital, analytics, automation operations) where talent ecosystems are deepest—while retaining business ownership, governance, and stakeholder leadership close to the enterprise.

The automation value gap 

The industry has invested heavily, 72% of organisations now actively implement automation in GBS operations, up from 35% in 2020. But investment doesn't equal value.

While cloud and workflow automation are delivering benefits, RPA and process mining face significant challenges realising their full potential. Nearly half of GBS organisations cite poor data quality and unstandardised KPIs as their biggest obstacles to measuring value.

We see this repeatedly: organisations invest in AI, declare early pilot wins, then stall. Technology gets deployed but never scales. Benefits are assumed, not tracked. Nobody 
connects automation output back to measurable business outcomes.

AI changes what gets outsourced, and by whom 

The most significant AI ROI is in back-office functions, operations and finance, precisely where outsourcing has traditionally concentrated. AI is reshaping the boundary between what organisations should run internally and what they source externally.

That doesn't mean bringing everything in-house. Some processes should be ruthlessly simplified, automated, and run at lowest cost, whether internally or through providers. Others, particularly those involving judgment and strategic decision-making, require closer proximity to the business and partners capable of evolving alongside you.

The implication is clear: AI demands a more deliberate view of which work sits where, and with whom. The question is no longer whether to transform, but how quickly you can pivot, and how much value you're leaving on the table if you don't.

Extract value now, before you transform 

Before wholesale transformation, there's an immediate opportunity: get more from existing arrangements. 

Stand up a Value Creation Office: A cross-functional unit that quantifies baseline performance across internal and external delivery, tracks realised benefits, and  identifies opportunities for improvement. Over time, this should become a permanent strategic capability embedded in how the organisation governs its entire delivery ecosystem, not a temporary programme.  

Critically, this office should ensure contracts are designed with AI in mind. As AI reshapes what work is performed, by whom, and at what cost, contracts must accommodate that evolution, with flexibility for AI-driven delivery, provisions for gainsharing on automation benefits, and accountability for outcomes rather than inputs.    

Embed AI by design, not as an afterthought. AI should be woven into your operating model from the outset. Organisations that treat AI as a separate initiative will see pilots that don't scale. Those that design with AI at the centre, from process architecture through to contract structure, will unlock a structurally different cost base.    

Move contracting toward outcomes, but don't skip the steps in between. The direction is clear: away from activity-based models toward structures that reward business results. But pure outcome-based contracts remain difficult to define, baseline, and govern. A more practical starting point is layering outcome-oriented measures alongside existing SLAs, progressively shifting weight toward value creation as governance matures. The goal is not to abandon SLAs overnight, but to ensure they are no longer the sole lens.

The path forward

The future of outsourcing goes far beyond cost arbitrage, it is an enterprise transformation lever. But reaching that potential is not a one-time programme. It demands continuous evolution as AI capabilities, service provider landscapes, and business priorities shift. 

1. Diagnose before you decide. Understand where value is leaking before investing in new people,  process  or systems.  
2. Stand up a Value Creation Office. Track value independently and identify opportunities to delivery and drive greater value from your operating model.  
3. Embed AI into your operating model. Focus where ROI is proven. Design with AI from the start.  
4. Invest in your people. AI-enabled delivery requires new skills and a fundamentally different mindset across internal teams and provider relationships.  
5. Rethink your contracts progressively. Layer outcome-oriented measures into existing structures. Select partners based on their ability to co-evolve, not just deliver today's scope.  

The organisations that move decisively will position their GBS not as a cost centre, but as an innovation hub driving enterprise value.  

PwC works with CEOs CFOs and GBS leaders to transform outsourcing and shared services models. To benchmark your current model or explore outcome-driven outsourcing, get in touch with our team.