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

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.