Enterprises Seek More Innovation, AI Value from Service Providers, ISG Study Shows — ISG - June 2, 2025
By Staff Reports - June 2nd, 2025
Companies say providers are identifying use cases for AI and analytics, but many are concerned about cost of services, ISG Star of Excellence™ CX Insights Report finds
Enterprises say they want service providers to be more innovative and better at advancing strategic goals, while giving them mixed reviews on AI projects, according to new survey research from Information Services Group (ISG) (Nasdaq: III), a global AI-centered 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, is the first to use a new, concise format that highlights key survey findings in all major pillars of provider performance. It finds that companies give providers high marks in most areas, especially compliance with policies and regulations. However, many see room for improvement in helping companies capture opportunities and address difficult business conditions.
“As enterprises adopt AI while navigating ongoing economic changes, they rely on skilled strategic partners more than ever,” said Namratha Dharshan, chief business leader, ISG, and principal analyst on the study. “Providers need to strengthen some of their capabilities to meet clients’ expectations.”
Nearly 65 percent of enterprises are dissatisfied or only moderately satisfied with providers finding ways to innovate in IT outsourcing (ITO) services, the report says. Only one-third were highly satisfied with ITO providers’ help in widely deploying emerging technologies. Business process outsourcing (BPO) services were rated only slightly better. Fewer than half of enterprises overall said providers have been pivotal partners in expansion strategies, such as entering new markets or generating additional revenue.
The report highlights clients’ ratings of AI services, which are increasingly important to many enterprises but need improvement in some areas. On the bright side, most companies believe their ITO and BPO providers are ethical and responsible in their use of AI: More than 90 percent are highly or moderately satisfied in this area. Most also say their providers have done a good job identifying processes and operations in which to apply AI.
However, less than half are highly satisfied with AI services overall, and they are concerned about how much they pay for those services, ISG says. A majority of enterprises are dissatisfied with providers’ ability to hire the resources to deliver AI and analytics services. Nearly half are less than highly satisfied with provider communication about workloads and timelines for AI and analytics projects. Amid these concerns, more than two-thirds are dissatisfied or moderately satisfied with the cost of AI services.
“Enterprises see AI as a way to reduce costs, yet the services they use to integrate and scale AI solutions are significant cost centers,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “The long-term growth of AI will depend on resolving this paradox.”
In the face of rapid economic and geopolitical change, companies also want providers to be more strategic and flexible business partners, the report says. About 47 percent of enterprises using ITO services are dissatisfied or moderately satisfied with their providers’ ability to adapt to changes in demand due to external economic and global factors.
The report also highlights a wide range of other findings, including concerns about providers’ consistent execution and delivery, quality of BPO work and handling of project milestones and handoffs.