ISG Report Reveals Rising Customer Experience Ratings; Innovation Lags Behind

Providers Excel in Governance and Compliance, But Innovation Ratings Drop

In a recent survey, technology and business services buyers report a slight improvement in customer experience compared to last year. This finding comes from the ISG Star of Excellence™ CX Insights Report, published by Information Services Group (ISG) III, a well-respected global technology research and advisory firm.

The report highlights that the average overall enterprise customer experience (CX) score rose to 75.1 in Q3, a small increase from 75.0 in the same quarter last year. The survey focuses on various service providers, including those offering IT outsourcing (ITO), business process outsourcing (BPO), hyperscale solutions, and independent software services.

Three of the six CX pillars assessed by ISG saw score improvements, with “Execution and Delivery” showing the most significant gains. However, providers continue to receive the highest scores for “Governance and Compliance,” while “Innovation and Thought Leadership” remain the weakest areas.

Specifically, the average CX score for “Innovation and Thought Leadership” dropped by 0.4 percent to 73.7. Furthermore, the importance enterprises place on innovation has also decreased by 3.8 percent to 72.3. Many organizations are navigating tight budgets, which ISG suggests has led to less investment in new innovative projects.

Nevertheless, high scores for “Governance and Compliance” imply that providers are still meeting critical requirements, especially as rising regulations around generative AI take center stage.

“Providers are helping clients navigate a growing number of regulations, particularly related to the privacy and security of GenAI,” explained Heiko Henkes, ISG managing director and principal analyst. “While satisfaction remains high in this area, companies want their providers to show more leadership in new technologies and strategies.”

Other pillars like “Execution and Delivery,” “People and Culture Fit,” and “Business Continuity and Flexibility” provided positive trends from last year, although “Collaboration and Transparency” experienced slight reductions in scores.

The third-quarter report also examines CX scores by region, following earlier reports that analyzed scores by industry and technology domains. The fourth-quarter report will provide an annual summary of these scores.

Regional Performance in Customer Experience

In terms of regional performance, enterprises in the Asia Pacific (APAC) region recorded the highest average CX score of 78.06, followed closely by the Americas at 77.78 and Europe, the Middle East and Africa (EMEA) at 77.32. APAC firms typically engage in smaller contracts but expect a high level of responsiveness from their providers, especially regarding issues and timely project execution.

Interestingly, companies in Central and South America scored their providers higher than those in North America. In EMEA, feedback highlighted a preference for providers who are open to constructive criticism and can execute plans promptly. In this region, Western Europe displayed more deal activity and received better CX scores compared to other areas.

The report notes that BPO services outperformed ITO services across the board in terms of CX scores. Digital engineering services led the way in the Americas and EMEA for BPO, while APAC companies rated contact center and customer experience services the highest. Notably, application development and maintenance services were the only ITO category with consistently high scores across regions. Cloud-native services also garnered high ratings in every area.

Despite immense interest in GenAI, provider engagements associated with this technology recorded the lowest average CX score among emerging services.

For business services, provider services consistently achieved the highest CX ratings across all regions, despite a drop in contract numbers. Meanwhile, services related to the public sector and oil and gas received the lowest scores depending on the region.

This report delves deeper into satisfaction levels with ITO, BPO, hyperscale, and software services across various categories. It also includes insights into CX scores categorized by business roles such as IT, line of business, and broader business functions.

About ISG Star of Excellence™ CX Insights Research

ISG’s CX scores reflect the weighted averages of client satisfaction and the importance clients assign to six dimensions: Execution and Delivery, Governance and Compliance, Collaboration and Transparency, Innovation and Thought Leadership, People and Cultural Fit, and Business Continuity and Flexibility.

The ongoing Voice of the Customer survey allows clients to rate the significance of each dimension and assess their service providers on a 1-100 scale. These CX scores are also compiled by industry, region, and specific technology domains for each service provider/vendor.

ISG Star of Excellence™ CX Insights scores play a vital role in assessing providers through ISG Provider Lens™ research, which uniquely combines data-driven analysis and market research with insights from ISG’s advisory team.

The Q3 2024 ISG Star of Excellence™ CX Insights Report is available for free download on the ISG website. More detailed findings, including information by provider, can be requested by contacting ISG directly.

Interested enterprises can start the participation process in the ISG Voice of the Customer survey on the ISG website. Providers may also nominate their clients to contribute.

About ISG

ISG (Information Services Group) III is a recognized global technology research and advisory firm. Trusted by over 900 clients, including more than 75 of the world’s top 100 companies, ISG aims to assist businesses and the public sector in achieving operational improvements and accelerated growth. Their expertise includes digital transformation in AI, cloud services, and data analytics, along with sourcing advisory and risk management. Founded in 2006 and headquartered in Stamford, Connecticut, ISG employs over 1,600 professionals worldwide, known for their extensive industry knowledge and innovative approaches. For further insights, please visit www.isg-one.com.

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