Enterprises Give Providers Lower Scores in Q2 for Governance, Compliance, Innovation, ISG Study Shows
Companies are satisfied with execution and delivery, but seek better continuity plans and AI pricing transparency, ISG Star of Excellence™ CX Insights Report finds
Enterprise confidence in service and solution providers' governance and compliance fell in the second quarter of this year, with companies giving lower satisfaction scores for proactive issue resolution and other performance measures, according to new survey research from Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.
The ISG Star of Excellence™ CX Insights Report evaluates enterprise buyers' satisfaction with service and solution providers across six key performance areas. The second-quarter report finds only 54.8 percent of clients say they are very satisfied with providers proactively resolving governance and compliance issues, down from 57.3 percent in the previous quarter. Scores for providers' compliance with policies and regulations also fell slightly.
In other measures, the report finds that most companies rate providers highly for collaboration and transparency, but many are dissatisfied with their innovation and thought leadership.
"Most enterprises remain generally happy with the performance of their providers, who are successfully managing a wide range of critical needs and delivering well on many parameters," said Namratha Dharshan, chief business leader, ISG, and principal analyst on the study. "However, there are growing concerns. Many clients want providers to step up efforts in cybersecurity, business continuity and generating new ideas."
Approximately one-third of enterprises are only moderately satisfied with governance and compliance by both IT outsourcing (ITO) and business process outsourcing (BPO) providers, the report finds. The results suggest providers need to act as risk partners rather than simply acting as compliance managers and should offer advice tuned to specific industries and regions. With the growing use of AI and analytics, companies also seek stronger data governance capabilities.
Only 35 percent of enterprises overall are very satisfied with the innovation providers deliver, ISG says. Ratings on this measure have stagnated, with a majority of clients remaining only moderately satisfied. Clients say both ITO and BPO providers meet efficiency and cost objectives but need to focus more on forward-looking initiatives such as process transformation and identifying new analytics use cases.
As AI adoption accelerates, enterprises are closely scrutinizing the pricing of AI services. Nearly 70 percent of companies are only moderately satisfied or not satisfied at all with AI service pricing, the report says. This finding suggests providers need to offer greater price transparency.
"AI is changing both how services are delivered and how clients pay for them," said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. "Enterprises need to understand the true costs of AI services to develop sustainable long-term AI strategies."
Companies also remain concerned about providers' ability to ensure business continuity amid global disruptions and uncertainties, the research finds. Nearly half of enterprises are dissatisfied or only moderately satisfied with their providers' continuity consulting and strategies. ISG advises providers to increase clients' business resilience through automation and AI-driven contingency planning.
About half of all companies are highly satisfied with providers' execution and delivery, though ratings of timely ITO execution declined in the quarter, ISG says. Providers were rated highest on collaboration and transparency, with nearly 90 percent of enterprises reporting high satisfaction.
The report also highlights a wide range of other findings, including companies' desire for better communication about project workloads and timelines and mixed ratings on how well providers align with clients' corporate cultures.
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 Q2 2025 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 (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world's top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
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