Enterprises Rate Outsourcing Providers Higher, Citing Improved Execution and Delivery, ISG Study Shows

Q1 scores from clients in most industries have risen since last year, signaling better customer experience, ISG Star of Excellence™ CX Insights Report finds

Enterprise buyers of technology and business services are significantly happier with the services they receive from the outsourcing market than they were a year ago, a new report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, finds.

The ISG Star of Excellence™ CX Insights Report, a quarterly review that sheds light on what enterprise buyers think about their service and solution providers, shows the average enterprise customer experience (CX) score in the first quarter rose 13 percent, to 75.7. Of the six CX pillars covered by ISG’s survey, clients scored providers highest on “Execution and Delivery,” up 9 percent, to 76.7, while “Business Continuity and Flexibility” improved the most, up 10 percent, to 75.5.

Cost optimization emerged as a major focus across IT contracts, while enterprises rated the importance of “Innovation and Thought Leadership” lower by 4 percent.

“Enterprises in all industries are looking for providers that carry out projects and deliver support as promised under often rapidly changing conditions,” said Heiko Henkes, ISG director and principal analyst in charge of the study. “While most sectors rate their experience higher than a year ago, providers have not exceeded expectations in most areas, leaving room for improvement.”

Both CX and importance scores for “Governance and Compliance” declined, the report said, attributing the drop to increasing efforts among providers to comply with changing AI regulations worldwide. Such laws can create uncertainty when implementing AI-based changes in enterprise applications and are likely to cause fluctuations in CX for the foreseeable future.

In addition to overall CX scores, the first-quarter report focuses on CX scores by industries. The second-quarter report will highlight scores by technology domain, and the third-quarter report on scores by geographic region. The fourth-quarter report will provide an annual analysis.

CX Scores by Industry

CX scores varied significantly across industries. Power and utilities enterprises gave the highest average CX score, at 83.8, recognizing providers for their ability to maintain cybersecurity and comply with regulations. Across all six pillars, power and utilities clients said their CX exceeded expectations.

Scores by business services companies rose most steeply from a year ago, up 20 percent, the report says. Companies in this vertical gave especially high scores for governance and compliance, defying the overall downward trend of scores in this area. Retail enterprises raised their ratings of providers by 18 percent, emphasizing collaboration and transparency and execution and delivery, in line with overall trends.

Oil and gas companies gave the lowest average score, at 67.9, rating CX across all pillars as needing improvement. CX scores in the public sector declined the most, falling by 17 percent.

Business services and power and utilities were the only industries that recognized providers as exceeding expectations across most or all CX pillars. In other industries, scores across most pillars showed CX met expectations, and in other cases needed improvement.

The report also examines other findings by industry, including comparisons across regions and provider types for sets of related industries, such as chemicals, oil and gas and power and utilities.

CX Star Performers

Providers that earn the highest CX score for each service area covered by ISG Provider Lens™ research in a given quarter are named an ISG CX Star Performer. For the first quarter, the CX Star Performers were Accenture (Chemicals Industry), Persistent Systems (Digital Engineering), HCLTech (Mainframes), Bechtle (Microsoft), PwC (Procurement), Hexaware (Salesforce), Infosys (SAP) and KPMG (ServiceNow).

About ISG Star of Excellence™ CX Insights Research

CX scores reported in the ISG Star of Excellence™ CX Insights Report represent the weighted average of client satisfaction scores and importance scores across six dimensions: Execution and Delivery, Governance and Compliance, Collaboration and Transparency, Innovation and Thought Leadership, People and Cultural Fit, and Business Continuity and Flexibility.

Through ISG’s continuous Voice of the Customer survey research, customers are asked to rate the importance of each of the six dimensions and then rate their service provider/vendor on each, on a scale of 1-100. CX scores are also generated across industries, regions and technology domains and for each service provider/vendor.

ISG Star of Excellence™ CX Insights scores are an integral part of the provider assessments offered by ISG Provider Lens™ research, the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team.

The 1Q 2024 ISG Star of Excellence™ CX Insights Report is available as a free download from this webpage, with more detailed findings, including by provider, available by contacting ISG.

Enterprises who wish to participate in the ISG Voice of the Customer survey research can begin the process by visiting this website. Providers also can nominate their customers to participate.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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