Satisfaction With Provider Services Edges Up, as Companies Seek More Innovation, ISG Study Shows

Providers score highest for governance and compliance worldwide, while other ratings vary by region, ISG Star of Excellence™ CX Insights Report finds

Enterprise buyers of technology and business services rate their customer experience slightly higher than a year ago, praising providers’ compliance expertise while giving low scores for innovation, according to a new report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The latest 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 overall enterprise customer experience (CX) score in the third quarter increased to 75.1 from 75.0 in the same period last year. The survey covers providers of IT outsourcing (ITO) and business process outsourcing (BPO) services, as well as hyperscalers and independent software providers.

Average CX scores rose in three of the six CX pillars covered by ISG’s survey, with the biggest improvement in “Execution and Delivery.” Across all regions, enterprises continued to rate providers highest on “Governance and Compliance” and lowest on “Innovation and Thought Leadership.”

The average CX score for “Innovation and Thought Leadership” fell 0.4 percent to 73.7, while  enterprises’ rating of its importance declined 3.8 percent to 72.3, the lowest of the six pillars. Innovation has been constrained by tight budgets at many organizations, leading to reduced investment in new initiatives, ISG says. 

Despite a decline from last year, high CX ratings for “Governance and Compliance” show that providers continue to meet these requirements as they grow in importance, particularly with the emergence of generative AI.

“Providers are helping clients address a growing number of regulations, especially around the privacy and security of GenAI, and most enterprises remain happy with their providers’ performance in this area,” said Heiko Henkes, ISG managing director and principal analyst who oversees the research program. “At the same time, companies seeking new strategies and emerging technologies want providers to offer more leadership.”

Average CX scores for “Execution and Delivery,” “People and Culture Fit” and “Business Continuity and Flexibility” increased from the same time last year, the report says. “Collaboration and Transparency” scores fell slightly.

In addition to overall CX scores, the third-quarter report focuses on CX scores by geographic region, following on from the first-quarter report, which examined CX scores by industry, and the second-quarter report, which highlighted scores by technology domain. The fourth-quarter report will provide an annual analysis.

CX Scores by Region

Enterprises in Asia Pacific (APAC) gave the highest average CX score across all pillars (78.06), followed by Americas (77.78) and Europe, Middle East and Africa (EMEA) (77.32). Companies in APAC engage in smaller contracts but make high demands of their providers for adapting to changes in the external environment and other factors, the report says. APAC enterprises recognized providers for proactively resolving issues and carrying out projects on time, rating them highest for “Governance and Compliance” and “Execution and Delivery.”

Enterprises in Central/South America gave higher scores than those in North America, ISG says. Understanding and reflecting regional nuances, including cultural requirements, is important in the Americas, which gives providers based in the region an edge. Enterprises in EMEA recognized providers for being open to constructive criticism and executing plans on time. Within that region, ISG data shows more deal activity and higher CX scores from Western Europe.

Across all regions, more BPO services than ITO services received high CX scores, the report says. In the BPO category, digital engineering services scored highest in Americas and EMEA, while contact center — customer experience services led in APAC. Among ITO services, only application development and maintenance (ADM) scored highly in all regions. Among emerging technologies, cloud native (containers/serverless architecture) services rated highest in all regions.

Provider engagements around GenAI, which has attracted exceptionally high interest and expectations this year, again received the lowest average CX score of any emerging technology.

Provider services for the business services industry earned the highest CX scores in all regions, despite a decline in the number of contracts for that industry, ISG says. In Americas and APAC, services for the public sector received the lowest ratings, while in EMEA, oil and gas services scored the lowest.

The report gives additional details about satisfaction with ITO, BPO, hyperscaler and software services across these categories and also provides insights into CX scores by business roles, including IT, line of business and non-IT horizontal business functions.

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 3Q 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, 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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