Enterprises Turn to Service Contracts and New Technology to Enhance Customer Experience, Reports ISG Provider Lens™
According to a report released today by Information Services Group (ISG) III, businesses around the globe are increasingly outsourcing contact center roles to reduce costs and adopt new technologies, despite a dip in the total value of service contracts.
The 2024 ISG Provider Lens™ global Contact Center — Customer Experience Services report indicates that the annual contract value for customer service business process outsourcing (BPO) dropped from $1.2 billion in the first half of 2023 to $0.8 billion in the first half of 2024. In contrast, the number of contracts rose. This reflects broader BPO trends as demand gradually stabilizes to pre-pandemic levels, following a surge in 2022 and early 2023.
“While cost-saving is the main reason for outsourcing, companies seek more than just lower expenses,” stated Wayne Butterfield, ISG partner in digital solutions. “They are looking for providers that can integrate new technologies to enhance both customer and employee experiences.”
The report highlights how rapidly evolving customer service technology, largely due to advances in cloud computing and AI, is leading businesses to merge their internal IT systems with those of BPO providers. Companies are recognizing the need for solutions that blend technology, skilled professionals, and efficient processes.
ISG notes that the transition from traditional on-premises contact centers to cloud-based systems is swift and extensive. This shift is fueled by the demands of remote employees and customers who prefer multiple digital communication channels. Businesses are also promptly employing analytics tools to better acquire and retain customers.
The contact center sector is among the top adopters of generative AI (GenAI), with numerous applications already in use or undergoing testing. GenAI offers notable advantages including faster query resolution, higher first-contact issue resolution rates, reduced errors, and increased satisfaction for customers and employees. Currently, the most frequent application of GenAI is in support bots for agents, with companies exploring more sophisticated uses like customer self-service bots and real-time language translation.
“Businesses are eager to look into and invest in GenAI,” remarked Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “It’s setting higher expectations for productivity and efficiency.”
As firms implement various AI technologies, many seek strategic consulting to enhance these tools and boost their return on investment. The report suggests that enterprises can improve contact center operations by using frameworks and tools tailored to align with industry best practices and assess their current capabilities.
The report also investigates additional trends impacting contact centers, such as the increased focus on integrated workforce management and personalized training programs for agents.
For more detailed insights into the challenges enterprises face regarding customer interaction, including overcoming departmental barriers and adopting a multi-faceted approach for diverse audiences, view the ISG Provider Lens™ Focal Points briefing here.
The 2024 ISG Provider Lens™ global Contact Center — Customer Experience Services report assesses 32 providers across three quadrants: Digital Operations, Intelligent Agent Experience, and Intelligent CX (AI & Analytics).
Leading the way in all three quadrants are Foundever, Genpact, HGS, Sutherland, Teleperformance, Transcom, and WNS. Atento, Cognizant, Movate, and TTEC are recognized as leaders in two quadrants each, while Concentrix, Conduent, and Tech Mahindra achieved leadership in one quadrant each.
Additionally, Firstsource, Hexaware, IGT Solutions, and Startek are denoted as Rising Stars in one quadrant each, representing “promising portfolios” and “high future potential,” according to ISG’s criteria.
In the customer experience arena, HCLTech has been named the global ISG CX Star Performer for 2024 among contact center providers. It achieved the highest satisfaction ratings in ISG’s Voice of the Customer survey, a part of the ISG Star of Excellence™ program—a recognized quality benchmark in the technology and business services sector.
Customized report versions are available from Foundever, HGS, Movate, and WNS.
The full report is accessible to subscribers or available for a one-time purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only one of its kind that merges data-driven research and market analysis with the practical experiences and insights of ISG’s global advisory team. This resource equips enterprises with detailed information and market analysis to help them choose suitable sourcing partners while ISG advisors use these insights to reinforce their market expertise and guide enterprise clients. The current research encompasses providers operating globally, including regions like Europe, the U.S., Canada, Mexico, Brazil, the U.K., France, and more, with plans to expand into additional markets soon. For further details about ISG Provider Lens research, please visit this webpage.
About ISG
ISG (Information Services Group) III is a prominent global technology research and advisory firm. Trusted by over 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is dedicated to helping organizations, public entities, as well as service and technology providers achieve operational excellence and drive growth. The firm specializes in digital transformation services that encompass AI, cloud computing, and data analytics; sourcing advice; managed governance and risk services; and change management among others. Established in 2006 and headquartered in Stamford, Connecticut, ISG employs over 1,600 skilled professionals across 20 countries, recognized for their innovative thinking and deep industry knowledge. For more information, visit www.isg-one.com.
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