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AI, Agents, and Ambitions: KPMG’s Ron Walker on Rebuilding the Services Stack
163 Plays16 days ago
Ron Walker, Head of Global Managed Services at KPMG, sits down with Phil Fersht to unpack how AI is reshaping services—and why enterprise leaders can’t afford to wait.
They explore the “Kodak moment” facing traditional tech firms, the critical shift from vendor to value partner, and why platform-enabled services are rewriting the outsourcing playbook. This is not your typical vendor chat—Ron gets candid about contracts, cost pressures, talent strategy, and the rise of agentic delivery models.
If you’ve ever asked, “Where is this all going?” — this episode answers it.
What You’ll Hear in 30 Minutes
• Why AI is forcing enterprises to rethink their entire services stack
• How geopolitical volatility is accelerating automation investments
• The rise of agentic delivery—and what it means for your contracts
• Why smart, curious generalists will define the next wave of talent
• The one thing every enterprise must do right now
Guest Snapshots
Ron Walker is the Global Head of Managed Services at KPMG, where he leads the firm’s vision for reinventing managed services in the AI era. With deep roots in consulting, outsourcing, and global transformation, Ron is at the forefront of building outcome-based delivery models that blend human expertise with intelligent automation.
A trusted advisor to Fortune 1000 enterprises, Ron is passionate about aligning tech, talent, and trust to meet the demands of a volatile, high-speed digital economy.
Timestamps
00:00 – Welcome and Backstory
01:05 – How Trade Volatility Is Reshaping Global Services
02:50 – 83% of Enterprises Are Accelerating AI—What That Really Means
05:16 – From Talent at Scale to AI at Scale
07:30 – Machines Now Outperform Humans—Where Does That Leave Us?
08:52 – Reinventing Contracts for an Agentic Future
10:40 – The New Economics of Outsourcing
12:33 – Why Service Providers Must Become Educators
14:57 – KPMG’s Hybrid Model: Productization + Partnership
16:40 – Redefining Talent for a Platform-Enabled World
19:03 – Vibe Coding, Agentic AI, and the Next Phase of Work
22:40 – Ron’s One Piece of Advice for Enterprise Leaders
24:13 – Will We See a New Wave of Transformational Outsourcing?
25:32 – The Big Four + Scalers: Why Collaboration Is Key
Explore More
• Ron Walker on LinkedIn: https://www.linkedin.com/in/ronwalkerkpmg/
• KPMG’s AI Thought Leadership: https://kpmg.com/xx/en/our-insights.html
• Phil Fersht on LinkedIn: https://www.linkedin.com/in/pfersht/
• More from HFS on Agentic AI: https://www.hfsresearch.com/
Recommended
Transcript
Introduction to the Podcast and Guests
00:00:12
Speaker
You're listening to From the Horse's Mouth, intrepid conversations with Phil First. Ready to meet the disruptors who are guiding us to the new great utopia by reshaping our world and pushing past corporate spin for honest conversations about the future impact of current and emerging technologies?
00:00:30
Speaker
Tune in now.
00:00:37
Speaker
from the horse's mouth. I'm your host, Phil First. And joining me today is somebody I realized I've known since 2003. So i wish we'd had pictures of us back then.
00:00:49
Speaker
His name is Ron Walker, and he is longtime transformation, outsourcing, shared services, GBS, you name it. I met Ron at a company called Equaterra.
00:01:01
Speaker
Many of you may remember the Back then, I had a little spell with them myself, and then they got acquired by KPMG in 2011, which is where Ron is today as the new head of global managed services. So welcome, Ron.
00:01:16
Speaker
and Thanks, Did I miss anything? Yeah, is it has been a while, and I was sharing with somebody is is we definitely have mutual stories that we can tell going along the way. So it's a lot of fun. We haven't been together in person and in quite a while. We've been on the phone and on videos and stuff, but I'm looking forward to seeing you guys later this year.
00:01:33
Speaker
That would be terrific. Look forward to
Impact of Trade and Tariffs on Business
00:01:35
Speaker
that very much. So let's get down to the point. Ron and I got our teams together and we ran a few weeks ago a major study that covered, I think, about 400 odd of the Fortune 1000 enterprises to really get an understanding for the current situation with the new administration,
00:01:55
Speaker
trade instability, tariffs, you name it, how's that impacting the world of sourcing and services? Is it driving more work back to the US? Is it changing attitudes around outsourcing and automation and AI, these types of things?
00:02:11
Speaker
So let's throw this over to you. We'll we'll go into some of the study data points in a minute, but Ron, from your perspective, How are tariffs and trade prices shaping client priorities today? And are they seen as temporary operational hurdles or do you think they're part of a deeper and more permanent reset?
00:02:28
Speaker
Well, I think it is significantly impacting client decisions in particular as it relates to, say, larger, more transformative opportunities. And it's not even, as we've discovered and we'll talk later, you know, it's not even so much as is what's the actual impact of tariffs It's just the threat of such.
00:02:47
Speaker
And so what we've seen is a shift from our clients to either they put on hold or they've reset their expectations of what a transformation opportunity looks like. And they've also gone from wait and see, and this is more recently, to more of a sense and respond in their approach.
00:03:02
Speaker
So it really is showing some real impact on their decision making and their ability to do so. Yeah.
Acceleration of Automation and AI Adoption
00:03:09
Speaker
And you know To that end, we found that around, I think, 83% of US-based Fortune 1000 firms are accelerating automation and AI to cope better with but these pressures. And only 22% are actively scenario planning.
00:03:27
Speaker
Now, you've got your feet on the streets here dealing with a lot of major clients, you know i on IT, non-IT executives. Is that something you're seeing personally? Yeah, absolutely. i mean, when you look at what organizations are taking, I'd say, and again, so that study is you know slightly older, right? Just a few weeks old now.
00:03:45
Speaker
I think even we're seeing acceleration of the marketplaces to organizations even in stepping up their adoption. And I think we'll talk a little bit later about Is it time to you know fully plan and scenario planning of the old shell days, you know going back 30 or 40 years is completely crazy. And when we look at scenario planning now, it's really using the tools that we're seeing that are becoming much cheaper for us to adopt and accelerate and to make some of those decisions.
00:04:11
Speaker
let's stick to this 83% number who are accelerating in automation. i mean, we're seeing so much appetite from the administration to invite investment into the country, yeah from all the big tech, from all the big chip manufacturers, from Apple, all these businesses as well.
00:04:28
Speaker
Do you think that's also having an impact on corporate decision-making to see, well, if the government is really promoting and encouraging this type of investment, we need to go down this path?
00:04:39
Speaker
Oh, I think so. And look, again, i mean, this is the biggest wave we've seen in our careers. and We've said this two or three times, I know, but this time it's real, right? Associated with bringing on AI and the adoption.
00:04:51
Speaker
But I do think that organizations are looking at this as a permanent change to how they approach things. And once again, I'll say is even if we don't see impact on services as it relates to managed services, we're organizations don't want to be held hostage to just the swings of what happens in the geopolitical landscapes of who's doing what and what trade formats that we see and, you know, the impacts of trade negotiations. So they're trying to make their overall supply chain resilient, including their internal office and external, you know, obviously external customer facing and logistics too.
Evolution of Service Principles and Technology Accessibility
00:05:24
Speaker
So, I mean, you and I can rewind back So the 22 odd years when we first met and the principles of services back then were talented scale aligned with common technology platforms.
00:05:38
Speaker
You know, fast forward to today, it's talented scale aligned to common AI platforms, right? So aren't the principles of services still the same? It's just the talent and the tech, which is the big game changer.
00:05:53
Speaker
Well, I'd say yes and no. First and foremost, the technology that we've relied upon has become so much cheaper, so much more accessible, and frankly, easier to adapt into a customized version, even though our intent is always to have a factory model, you know, trying to 80% of making it factory model, 20% customization.
00:06:14
Speaker
But the ability that when we used to think of at scale and what we used to say is like start with 100 people and move up. I mean, we could see scale down into the single digits of organizations looking at applying some sort of technology now. So I think that's the biggest difference from when we started in this industry, Phil.
00:06:32
Speaker
Versus now is just the access the accessibility of true at scale technology. And I think we'll talk a little bit later as platforms to actually enable organizations to to get what they want out of service providers like us.
00:06:45
Speaker
Back then it was, hey, we're going to move a bunch of work offshore, nearshore, shared services. So this technically frees up time from people's jobs to focus on other things.
00:06:56
Speaker
Now it's we're moving more and more work into technology and that's freeing up work to do other things. It's just, I think there's a bit more anxiety around it, right? Because moving work from people to people is different from moving from people to machines. And that's...
00:07:11
Speaker
but I mean, changing things in a magnitude that I think we could never imagined. So how is this impacting people-intensive delivery towards this platform-enabled model that we've been talking about more and more frequently?
00:07:26
Speaker
Well, I think, again, yeah and it's not just overnight, but if you even go back to the early days of when RPA was coming on board, is if you can describe a process, you can automate it and the decision-making associated with that.
00:07:39
Speaker
But when we look at what is available to us now, organizations, it is also getting into actually decision making and outcome based options. Whereas we used to put the human in the loop before.
00:07:50
Speaker
And now we're saying actually in many cases in some of our automated platforms is the human makes many more mistakes than our automated platform because they're able to pull from so many various plugins and APIs and everything else that we've associated with the AI to make those decisions faster and and better.
00:08:07
Speaker
It's a bigger concern on people and and then how they become productive. And we're in the midst of that change, right? So we still will need subject matter experts and we still need people that have been doing things because we are humans and we interact with humans and machines aren't aren't still, I think, still coming up to speed on how they can and deal with kind of our inconsistencies and how we approach them.
00:08:28
Speaker
where many of the things that most enterprises look at providing or using providers and managed services or outsourcing, a lot of that those changes and problems are going away because we can automate that.
00:08:41
Speaker
How is this changing things like
AI's Influence on Outsourcing and Contracts
00:08:44
Speaker
contracts? like For example, our study found that they're being rewritten to be more modular, flexible, easy to renegotiate. So what does that tell you about how enterprises want to structure relationships with their partners?
00:08:56
Speaker
Well, I think it's a great question. And we definitely are in that process of moving towards contracting to be a lot more aligned with business outcomes. And enterprises are realizing that we, as service providers, are part of that alliance and we're a part of being successful. So it's not that arm's length, vendor relationship, do what I say or we won't pay you. It's we are in this together and the success of both of us comes out in a better outcome and process.
00:09:24
Speaker
Now, I'd say we still have some challenges because whereas before you would see different and various executive suites fight against kind of a more progressive contracting approach, I think everybody involved says, no, no, we need to get to an outcome based, which is in the best interest of all parties involved, service price money.
00:09:42
Speaker
We need to get better outcome at a cheaper price. So just getting a line down to, say, in a you know senior procurement organization to where their metrics are actually able to track that this is successful versus getting down to the common denominator of you know price per hour.
00:09:56
Speaker
So I'm actually more hopeful than I've ever been before that we are going to get to a better contracting methodology than we've seen now. We're still stuck in, you know, particularly some of the large regulatory driven environments to where we just can't get out of that price per hour. What do I do? How do I get the contracts associated with that?
00:10:14
Speaker
But everybody recognizes in the industry that we need to move towards the more advanced contracting approach. Interesting. and And how's that changing the traditional outsourcing landscape?
00:10:28
Speaker
Because I mean, I'm seeing clients going to your traditional Indian clients So heritage providers saying, I want a 30% paid reduction because you can use AI and I also want to see how you're doing it.
00:10:41
Speaker
Right. I mean, how is that changing the dynamic in your opinion? Well, it's all over. First, I mean, we could talk about in general, the number of providers that organizations are looking at, you know, they're looking at large platform providers all the way down to the boutiques and everything in between.
00:10:57
Speaker
Yeah. By the way, that's not uncommon in the past, Phil, where they wanted to know the cheapest price at outcome-based and they still wanted to know what our hourly rate associated with that was. They want their cake and eat it too. And and we, on the service provider side, always wanted to make sure that we had at least the ability to make money if we made investments.
00:11:14
Speaker
So I would say what we're seeing is that percentage. Yeah, we are all taking leaps of fate. Anywhere from 30% to 50% cost and reduction by the end of a contract term is standard right now.
00:11:28
Speaker
And we don't know in many cases exactly how we're going to get there. But we've seen and, you know, some of our labs and what we're doing on the innovation side is is we're actually exceeding those And so I think that's part of that, back to your comment or question about contracting, is arriving at the ability for us to have a good negotiated contract to say, yes, we both need to make money. You need to have a cheaper, let us you know invest in in some of these capabilities so that we can see the upside in the long run.
00:11:56
Speaker
It's not perfect. We're still in that process of figuring it out. And some enterprises are more open and enlightened, I think, in the longer than than some of the others. But again, that's kind of the standard industry and what we've seen forever. just accelerated now.
00:12:11
Speaker
Yeah, I mean, there's so much exposure on these AI tools, particularly from board level, C-suite level now. And I see the role of the outsourcer as becoming and more of an educator, not just crank it out and do it cheaper, blah, blah, blah.
00:12:27
Speaker
How does this play into companies using... real domain specific businesses, says even someone like, you know, i know you guys do your own managed services. Do you feel that there's a real need now for specialization than ever before? Because this is a change a lot of these businesses are going through that's leaps beyond anything they've had to go through before.
00:12:50
Speaker
Well, I actually think it accelerates the need for, we'll call, you know, kind of customization down at the micro level because we're able to do that. Again, the technology is much cheaper, the access to true subject matter expertise and building it into a tool that all of our analysts who are looking at it or all of our agentic models, frankly, are using that information to make decisions.
00:13:11
Speaker
And that is the value that I think we're able to provide to our clients is having much more in-depth, specific subject matter
Delivering Value and Building Long-term Partnerships with AI
00:13:20
Speaker
expertise. And you can take it again. I use the regulatory examples because we look at large banks and large financial institutes.
00:13:26
Speaker
They're having to address hundreds of thousands of transactions in very short periods of time. And our ability to apply agentic models to that and also subject matter expertise over that.
00:13:38
Speaker
doesn't make that scalable unless you have access to multiple clients and multiple platforms, frankly. So we're seeing that accelerate the need for that. And again, it makes it inexpensive for us and compared to the past for us to offer that to clients.
00:13:53
Speaker
I mean, traditionally, consulting firms have thrived on change and complexity, right? Yeah. But now we're in an environment where there is a real need for more rapid change and rapid understanding through to steady state.
00:14:07
Speaker
Where's the money in this for you guys? Where do you see the bigger opportunity? Is it going into predictable contracts that are multi-year and you can look at it that way? Or is it, let's just get our top 20 clients from here to here and then we'll figure out what next with more of a maintenance model.
00:14:25
Speaker
Well, we've been on this track for a while, but I'd say even more so is we're looking for a true partnership with our clients. They're in their best interest or in our best interest. So yes, longer term relationships, but those relationships need to be agile and adaptive. And I do think that the AI models help us do that.
00:14:44
Speaker
So if we were addressing an issue that had just say kind of too much demand and in a period of time, we can deal with that, but then it moves into something else as we understand their business better, right? we're able to apply our knowledge and resources to help them along the way.
00:14:57
Speaker
So we really are moving towards that customization for a long-term client relationship. And that applies to both managed services and our traditional consulting, if you will. And we're all looking at, basically our clients are demanding that. I shouldn't even say we're looking for that.
00:15:11
Speaker
Our clients are demanding that we have a better understanding their business and not just kind of come in and do the transaction-based processing. They want insights. They want knowledge and they want to know how to make their business better. And that's in all of our best interests.
00:15:25
Speaker
So how do you make business specialists the best in the business? Because this stuff is so new. It's like, hey, I can go to a niche company. I could go to another consulting firm. I could go to a traditional outsourcer. Who's going to win in terms of building out that next wave of talent? Where are you going to get it from? And what type of talent do you need to be really successful in this space? Because it's not just your traditional developers and programmers, right? You're needing people who can really understand the context and the technology as well as the the business change.
00:15:58
Speaker
I'm laughing because I know you've been on this topic and it is one of those that, ah you know, I think that we are on the right track in the sense that we are reevaluating what it is that our clients need.
00:16:09
Speaker
The types of people we need. are traditionally what's in kind of the consulting environment, curious, smart, capable people that are looking at the next wave and then able to use these tools to be a lot smarter and a lot faster than we've ever seen in the history of service provider, you know, outsourcing and and managed services supply in the past.
00:16:31
Speaker
So I think these tools are going to allow the right, smart, driven people to be there. Now, they are going to be a lot less than what we've seen, where you know we've seen the massive, ah we just talked about old traditional outsourcing, where you would throw hundreds of bodies at a problem and then have them be specialized, just like the Henry Ford model.
00:16:48
Speaker
Whereas I think now we're moving towards maybe it's 10% of the people that we had in the past. Those 10% people can be deep experts in an area, but also much broadly more knowledgeable about a client's business and about our business so they can query the different sources using AI to come up with the right answer.
00:17:06
Speaker
We do need young college graduates because we can't afford to stop Bringing in people, training them, working with them through the course. It's just I don't think we're going to look at the old days to where we bring on a whole bunch of campus hires or freshers out of the business and then expect, you know, them to 10% to hang around to make the old traditional partner model past.
00:17:27
Speaker
the The one mistake we're seeing across the board here are enterprises who are just taking LLMs and Argentic tools just bolting them onto existing processes.
00:17:40
Speaker
You've got to almost rethink work. You've got to rethink the way you do it. As you said, if you can describe a process, you can automate it. If you can describe a process, you can figure out how to work it to the best advances of a business.
00:17:52
Speaker
So how are you seeing things like LLMs and Argentic? We're also looking at Vibe coding as well. How do you see this these technologies changing how we rethink work in general?
00:18:05
Speaker
Well, I think we're in the very early stages of seeing them. They're going to be a part of everyday life. I mean, if you look, vibe coding is really exciting in the sense that you can look at, you know, an everyday person being able to do some programming, which in the past, you would just need somebody that was highly energetic, a little bit sharp on that stuff and doing their own things. And in old finance days, it was an Excel macro or you all the way back to Lotus 1, 2, 3 notes. You know, you're looking at workbooks and then Excel macros, and then you get into you know,
00:18:33
Speaker
And I think bytecoding is going to be embedded the same way across the board for many of our true knowledge workers going forward. Now, it's early days and it's a lot to go on. And I think that's kind of the scary part for all of us in the executives in the business is we don't know how far. we What's the saying is we always underestimate the full impact of this technology shift.
00:18:55
Speaker
And we underestimate the full impact, but we overestimate the ability for us to adopt to it and adapt to it quickly. So I think that's where we're still in the phase. Although this seems a lot faster than what we've seen in the past, though, even the last RPA piece.
00:19:10
Speaker
And I think, you know, when we look at a Gentic and when we look at what Vibe coding can do for us, it's just going to be embedded into everything that we do in somewhere in the near future. You know, one year, three years, five years.
00:19:21
Speaker
That's what we're betting on.
Innovation Leadership by Startups and Advice for Enterprises
00:19:23
Speaker
It's a very incredible concept. to It's the first time, if you think about it, tech and business need to sit down together and actually figure out what these apps need to do and how they evolve. And I listened to a lot pods. I talked to lot of tech people about this and it's interesting.
00:19:39
Speaker
95% of startups, if you look at like Y Combinator, which is like big startup collected, 95% of them are using Vibcoding today to develop out their products.
00:19:50
Speaker
Whereas you get to the global 2000 and they're very resistant. So it feels like a lot of this is evolving in the startup communities. evolving in sort of small to medium businesses where they can say, hey, we have three people running marketing for a $100 million dollar company.
00:20:06
Speaker
but We don't need to keep adding people. We can do things in a much more nimble way. So it feels like we've got a whole new industry developing a lot of it from the startups and SMEs that's going to start to permeate the larger enterprises in the future.
00:20:23
Speaker
I couldn't agree more. And frankly, it's something that we certainly at you know KPMG are are concerned about, which is why we're putting significant effort into looking at our own overall delivery model on both the managed service side, as certainly on the consulting side, and moving much more towards a productized approach. And again, this is not unusual. The rest of the consulting and managed services industries is looking at this as well.
00:20:47
Speaker
But I think you're right, though. There's never been a time where we've seen startups actually have the ability to disrupt our business. And I think, again, we have to make that switch and that change, which is what, you know, having the relationship with clients, going back to my comment earlier, is talking about truly understanding their business.
00:21:04
Speaker
And then we at scale are able to help our clients really succeed to meet their objectives versus just throwing bodies at problems. Yeah, absolutely.
00:21:15
Speaker
So if you've got to give one piece of advice to enterprise leaders around volatility today, what would it be, Ron? Well, I'd say start.
00:21:26
Speaker
No matter what it is, if you try to ah and you know analyze and really plan what it looks like in the near future, you're not going to know. You just need to get started. and invest in a few of the right, smart, you know credible, like really energetic people to help you bring there and engage with partners like us. so that I think one of the things you talked about before was, you know what is it about us that can help? and Is it then organizations just doing their own thing or how can we help? This is where an organization like KPMG can really help you get started and bridge that transition. Because even though we're all talking about this, still the number of really competent resources in AI in general,
00:22:04
Speaker
are limited. We're going to have a period of time to where as we educate ourselves, it's going to take time to get there. So that's where we can help. But getting started is the first step. How do you see this industry evolving? um and I remember back in the 90s when you had, what was it, PwC and Anderson's taking on the BP business and the first big messy transformation deals got executed. And it was a lot of it was, let's take this work and really figure out how to do this.
00:22:33
Speaker
As you look at what's going to happen in the next three years in the global two thousand Do you think we'll get another wave of transformational outsourcing that we saw as we try and figure out the models? Or do you think it's going to take a fairly different different path?
00:22:50
Speaker
It's actually, I'm seeing it in some of the global 25 clients right now. It's not a, I think, an outsourcing first approach. It's a transformation first approach in using organizations like ours to help them get there.
00:23:03
Speaker
And it's going to be different because it's going to be more of a partnership, more of an alliance, and it's going to be an ecosystem of providers. It's not just one provider. And yeah again, as we move to much more towards a product or platform offering versus, you know, just their own bodies at things,
00:23:17
Speaker
like We'll be doing that together. And we're already seeing that. That's some of the larger transformations that we saw stalled last year are moving towards the request to say, hey, tell us, like how can we work together? What's the model to get us to the next 50% reduction? at But also, how do I engage with art my customers more directly and make them more impactful in growing our revenue? So yeah, I think it's a different transformation opportunity.
00:23:45
Speaker
yeah And do you see like big four firms like yourselves, et cetera, working a lot more closely with some of the big scale outsources to make this work for clients? Or do you think companies like yourselves will start taking on more of the actual delivery work as well?
00:24:02
Speaker
How about yes to all of that? We are all trying to figure out this new month, but we absolutely have to partner with the large scale providers that are out there. And we are. I mean, that's the alliances that are out there that, you know, we've got some incredible IP that we can share with them and vice versa between their platforms and their technology skills. That's what we're looking to do to drive real objectives in our clients. And that's probably the biggest shift I've seen, Phil, in that we all are truly looking at driving an outcome-based objective to the best interests of our clients.
00:24:34
Speaker
You always have to worry about what's the car wash, what's the manufacturing you know environment look like so you can provide service costs. But with AI and with automation that we're seeing now, we can do that a lot more effectively than we've ever been before.
00:24:48
Speaker
Yeah, there we go. There we have it. So similar principles, but different ways of scaling talent and understanding the <unk>s space of technology. So thank you very much for your time, Ron. This has been terrific. Really enjoyed working on this study with you.
00:25:03
Speaker
We'll share it, a link it to this part as well so people can download the report, which is well worth reading. And yeah, I look forward to seeing you in person, hopefully soon. Yeah, likewise, Phil. Thank you.
00:25:17
Speaker
Thanks for tuning in to From the Horse's Mouth, intrepid conversations with Phil First. Remember to follow Phil on LinkedIn and subscribe and like on YouTube, Apple Podcasts, Spotify, or your favorite platform for no-nonsense takes on the intricate dance between technology, business, and ideological systems.
00:25:36
Speaker
Got something to add to the discussion? Let's have it. Drop us a line at fromthehorsesmouth at hfsresearch.com or connect with Phil on LinkedIn.