Enterprise Satisfaction With AI, Automation Services Lags Despite Growing Number of Deals, ISG Study Shows

Overall customer satisfaction with providers down slightly from last year, ISG Star of Excellence™ CX Insights Report finds

Outsourcing deals involving AI and automation are on the rise, even as enterprises rate their customer experience (CX) in those technology domains lower than in others, 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 AI and automation are leading the charge for providers in winning new outsourcing deals in 2024. Many companies consider AI and automation important tools for improved efficiency and cost savings. However, based on average CX scores in the second quarter, clients were less satisfied with engagements that involved those technologies. Generative AI (GenAI), which has generated exceptionally high interest and expectations this year, received the lowest average CX score of any emerging technology.

Overall satisfaction with providers in the second quarter, as measured by the average enterprise CX score across all technologies, industries, and regions, declined by more than 3 percent from a year earlier, to an average score of 71.5 on a scale of 1-100.

"In the wake of global technology outages this year, customer experience is more important than ever to enterprises when choosing outsourcing partners," said Heiko Henkes, ISG director and principal analyst in charge of the study. "To succeed under these conditions, providers need to understand the wide range of factors that can influence a client's satisfaction at each stage of an engagement."

In addition to overall CX scores, the second-quarter report focuses on CX scores by technology domain, following on from the first-quarter report, which examined CX scores by industry. Future reports will spotlight CX scores by geographic region (third quarter) and wrap up the year with an annual analysis (fourth quarter).

CX Scores by Technology Domain

The report examines CX scores across four broad categories of technology-based provider services: Business Process Outsourcing (BPO), IT Outsourcing (ITO), Ecosystem (covering specific vendors) and Emerging Technology. Customer satisfaction, the report notes, may be influenced by how common a technology is, the complexity of implementing it, the benefits it delivers, the availability of talent to support it, and how proactive vendors are about introducing it.

Enterprises gave providers the highest average score for BPO services, at 72.9, the report shows. Marketing Technology received the highest score within the BPO segment, with rapidly changing consumer needs driving more companies to demand tools to differentiate themselves. Supply chain services scored lowest, as ongoing disruptions and macroeconomic challenges sowed dissatisfaction with supply chains.

"While BPO engagements are trending down, enterprises continue to give above-average CX scores to some technology-supported services where the number of deals has declined," Henkes said. "Providers are meeting enterprises' needs in areas that are crucial to their customers' success."

Average CX scores for ITO were slightly lower at 71.6, indicating that providers must improve clients' experience when delivering technology services, ISG says. Application development and maintenance (ADM) engagements earned the highest average score for ITO services as enterprises rely on ADM to achieve cost-effective digital transformations. The lowest ITO scores were for mainframe services, where talent shortages and a limited number of providers have plagued these aging technologies.

Enterprises gave a lower average score (70.7) in the Ecosystem segment, covering solutions and services related to major vendors' technologies. Microsoft ecosystem providers scored highest in this segment, partly thanks to the company's wide deployment of its Copilot AI agent across multiple industries. The lowest scores were in the VMware ecosystem, where the acquisition of the company and changes to its pricing plans have led to customer discontent.

Emerging Technology received the lowest average CX score (70.1) despite some enterprises rapidly adopting AI and automation solutions for improved efficiency and cost savings. GenAI was rated lowest in the segment at 68.46. Companies reported better experiences with cloud-native tools, including containers and serverless architectures, which earned the highest score in the segment (73.7).

The report also examines satisfaction with ITO and BPO services by region and key industries.

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 2Q 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.

Additional perspective on the second quarter of 2024 will be presented on the 2024 Star of Excellence™ CX Awards & Program Update webinar on August 29.

Enterprises that 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 and automation, 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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