Market Impact Report

Tariffs lit the fuse for bold enterprises to automate

Tariffs are back in the headlines, causing business headaches—but they’re not the root problem. They’re a symptom of a deeper issue: enterprises are operating in a world of sustained volatility.

The past five years have hurled enterprises into a relentless storm of pandemics, geopolitical tensions, snarled supply chains, inflation spikes, and shifting regulations. Trade policy isn’t a standalone headache; it’s woven deeply into a continuous cycle of disruption. Even if tariffs haven’t yet hit many enterprises head-on, the mere shadow of trade disruption has laid bare glaring vulnerabilities: stubbornly inflexible delivery models, dangerously concentrated vendor dependencies, and woefully inadequate scenario planning.

To understand how leaders navigate these dynamics, HFS Research, in collaboration with KPMG LLP (KPMG), surveyed 402 US-based senior executives across seven major industries and conducted in-depth interviews with senior executives from Global 2000 organizations. The focus was to understand both the short and long-term impacts of trade policies on services delivery and outsourcing among major enterprises. The findings revealed that while most enterprises remain reactive, a significant minority is engaged in fundamentally re-architecting how services are delivered, governed, and protected.

Key takeaways
    • Trade disruption isn’t the real threat—enterprise inertia is.
      While trade wars are the top global concern, 69% of enterprises remain frozen or focused on short-term cuts. Only 22% are proactively scenario planning. The gap between concern and preparation is widening, and some are using it to leap ahead.
    • Automation, not relocation, is the first line of defense.
      83% of enterprise leaders said they’re accelerating AI and automation initiatives to address tariff threats. Automation offers immediate insulation without the disruption of relocation.
    • Services are shifting from people to platforms.
      Traditional outsourcing (where providers scale labor to fulfill task-based delivery) is expected to decrease from 55% to 37% in two years, while platform-based models will rise from 14% to 30%. The services-as-software shift is turning delivery into a modular, geography-neutral capability.
    • Contracts must be rewritten for volatility, not just cost.
      Only 28% said their current commercial models are fit for today’s unpredictable environment. Enterprises are demanding elastic contracts that support modularity, dual-sourcing, and delivery flexibility.
    • Vendor sourcing is becoming a test of adaptability.
      55% are planning to reassess vendor concentration, and 52% are favoring partners with flexible delivery models over those offering the lowest cost. In short, procurement is evolving from a cost gatekeeper to a strategic risk buffer.

This isn’t a story about tariffs—it’s about adaptation. While 69% of enterprises remain frozen or reactive, the transformative 22% are using uncertainty to restructure and gain lasting advantages. Organizations investing in real resilience today will move forward as volatility becomes the permanent backdrop to business.

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