Business leaders have been promising reinvention of their operating models for decades. Talk of reshoring, automation, and modernizing operating models has echoed through boardrooms and strategy decks alike. But for many, action has lagged aspiration. Now, tariffs—those blunt instruments of trade policy—may finally compel businesses to move beyond talk and deliver meaningful change.
That’s because tariffs aren’t the cause of disruption. They’re the accelerant.
In new research from HFS Research, in collaboration with KPMG U.S., that surveyed 402 senior leaders from large companies across the United States, more than half of the respondents report that U.S. trade policy is already disrupting their strategic plans. But the real danger isn’t the policy shifts—it’s the illusion that enterprises can simply wait them out.
A striking 69% of leaders acknowledge they’re stuck in tactical reactions or freezing strategic investments pending “more clarity.” But CEOs can ill afford to halt strategic investments as they attempt to wait out tariffs. That’s a dangerous misread of a moment that demands proactive moves, not hesitation.
The stable world of predictable business cycles is history. Disruption today is built-in—an ever-present reality, not just an occasional glitch. In our current complex global economy, success will belong to enterprises built to thrive amid volatility, not those waiting for the turbulence to pass.
Stability is an illusion
For years, executives have been leaning on a “wait-and-see” mindset. Wait for the next administration. Wait for global conditions to stabilize. Wait for inflation to cool. It’s time to stop waiting.
Stability is an illusion. While leadership teams pause, the earth beneath them is already shifting. What’s truly at stake isn’t the potential tariffs on the horizon—it’s a fundamental transformation of how services are delivered, how technology is embedded, and how organizations build resilience into their foundations.
Only 15% of enterprise leaders say they are proactively accelerating broader business transformation efforts in response to trade policy changes. Yet 83% are ramping up automation initiatives.
This apparent contradiction reveals something important: Automation has become the default response even for companies that are otherwise paralyzed by uncertainty. While many enterprises remain stuck in this wait-and-see mode for major strategic shifts, they’re accelerating automation because it’s faster, internal, and doesn’t require regulatory approval. They’re not repatriating jobs—they’re automating and eliminating some areas of outsourcing.
Use tariffs to leapfrog, not just survive
The past three decades have been about shifting labor to lower-cost locations. While this works when efficiency is the top priority, business needs are changing in today’s economic environment. Resilience, speed, data control, and trust are dominating boardroom agendas. As a result, traditional labor arbitrage is being replaced by something more strategic: technology arbitrage. In short, we’re evolving from moving work activities from humans to humans, and now refocusing on moving more of that work to (fewer) humans with machines.
While many enterprises remain on “pause,” a growing group of first movers is taking advantage of the shift. Executives at these companies are not just reacting to tariffs or geopolitical shocks; they are very focused on all potential tariff mitigation and deferment strategies. They are also using these challenges as opportunities to redesign how work gets done. As a result, their firms are strategically realigning their operating models as it relates to the trade function, building delivery models around cloud-based platforms, modular contracts, and processes designed with automation and AI at their core. An even smaller number are using this approach to shake up their competitive landscape and build new AI native businesses or products.
Virtual reshoring
The numbers illustrate this shift clearly. A growing number of companies in our survey plan to reduce their reliance on traditional outsourcing, with utilization expected to drop from 55% to 37% within just two years. At the same time, the software-led delivery of services is expected to more than double (from 14% to 30%). This is not about bringing all the work back onshore. It is something potentially more powerful: virtual reshoring. Control and compliance come closer to home, while the execution layer remains globally distributed and increasingly digital, with service delivery steadily shifting to AI-enabled software and automated platforms.
The contrast is growing. Some companies are leapfrogging their competitors by taking bold steps now. Others are still waiting for the tariff and policy dust to settle—and these are the firms that will be left behind.
Procurement’s moment
Perhaps nowhere is the shift in how services are delivered more apparent than in procurement. Once relegated to cost control, procurement must now become a strategic nerve center. In our survey, 96% of procurement leaders report changing sourcing strategies in response to trade volatility, AI adoption, and cybersecurity threats.
Why? Because legacy sourcing models were built for a different world—one without real-time AI risks or the increased pressures from complex data residency laws and geopolitical escalations.
Cybersecurity and data sovereignty are flashing red signals. On the one hand, 64% of respondents are highly concerned about data control, 81% are increasing cybersecurity investments, and nearly all (95%) are expanding AI spending. But when it comes to executing on these red-alert priorities, many acknowledge their internal capabilities aren’t enough. As these pressures mount, managed services are shifting from cost-saving levers to modernization engines—activating AI at scale, embedding automation, enforcing controls, and accelerating speed to value.
Never waste a crisis
This is a rare moment—a convergence of pressure and possibility. Tariffs may not be the root cause of transformation, but they are the long-delayed catalyst.
The winners are those who are acting with urgency. They recognize that volatility is the new baseline for business planning. They’re designing their delivery models to thrive amid uncertainty, not merely survive it. And they’re rewiring their organizations to meet disruption head-on, with approaches that include:
- Embedding AI and automation into the infrastructure: These technologies are ahead of schedule, in many ways. The longer companies hesitate on deploying AI and automation at scale, the faster they’ll fall behind.
- Modernizing procurement: Sourcing is in the spotlight, but too many procurement teams are still buying services like it’s a decade ago, focused on cost and headcount rather than capabilities and outcomes. Operating model transformation must be matched by sourcing transformation.
- Making cybersecurity and data control the top priorities: Without trusted data and secured systems, AI is compromised, automation is fragile, and service delivery becomes a liability. Think of leading-edge cybersecurity as an ongoing stress test for your operating model.
- Addressing culture concerns directly: This is the hardest shift of all. New operating models require new roles, new mindsets, and a steadfast focus on relationships and communication with teams and partners about the changes ahead.
In the moment, it can be hard to determine whether a disruption is a short-term irritant or a long-term paradigm change. But amid today’s headlines, we believe that tariffs are accelerating broader changes that were already inevitable. The danger isn’t the policy itself—it’s inaction if leaders fail to recognize that this shift will have profound implications, regardless of whether any specific tariffs stand or fall.
Bottom line: Action or irrelevance?
Business leaders today face an urgent call to action: Stop waiting for policy clarity or global calm. This volatility isn’t temporary, it’s structural. Winning enterprises will turn today’s uncertainty into tomorrow’s advantage, embedding resilience, automation, and AI directly into their very foundations. If you’re still stuck on “pause,” you’re not just missing a moment—you’re risking your future relevance.
As the saying goes, crisis represents both danger and opportunity. Smart leaders use times of risk to create opportunity, not sit idly by while others succeed.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
