AI, automation drive 2024 outsourcing growth despite CX challenges: ISG
CONNECTICUT, UNITED STATES — Artificial intelligence (AI) and automation are spearheading new outsourcing deals this year, according to the latest ISG Star of Excellence CX Insights Report.
Despite a slight decline in overall customer satisfaction, these technologies are increasingly viewed as crucial for boosting efficiency and cutting costs.
The report, released by Information Services Group (ISG), underscores a growing trend among enterprises to harness AI and automation, even as they voice concerns about the customer experience (CX) tied to these technologies.
Challenges in customer experience
ISG report indicates that while AI and automation are pivotal in securing new deals, they also correlate with lower customer satisfaction scores.
Generative AI (GenAI), in particular, received the lowest average CX score among emerging technologies. Overall satisfaction with providers fell by over 3 percent from the previous year, with an average score of 71.5 out of 100.
This highlights a gap between the high interest in AI and the execution and delivery of these services.
Emphasizing customer experience
“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.
The report stresses the necessity for providers to comprehend the diverse factors influencing client satisfaction throughout the engagement process. This understanding is vital for providers aiming to thrive in the competitive outsourcing landscape.
Technology domain performance
The report also categorized CX scores across four main technology domains: Business Process Outsourcing (BPO), IT Outsourcing (ITO), Ecosystem services, and Emerging Technology.
BPO services received the highest average score of 72.9, driven by the demand for marketing technology to meet rapidly changing consumer needs. Conversely, supply chain services scored lowest due to ongoing disruptions and macroeconomic challenges.
The ITO segment received an average CX score of 71.6, with application development and maintenance (ADM) services scoring the highest, reflecting their role in cost-effective digital transformations. However, mainframe services lagged due to talent shortages and limited provider options.
Ecosystem services (70.7), particularly those related to Microsoft, scored well, whereas VMware-related services faced customer dissatisfaction due to recent company changes.
Emerging Technology had the lowest average customer satisfaction score of 70.1, even though many companies are quickly adopting AI and automation to boost efficiency and reduce costs. Generative AI (GenAI) received the lowest rating in this category, with a score of 68.46. In contrast, companies reported more positive experiences with cloud-native tools like containers and serverless architectures, which achieved the highest score in this segment at 73.7.
Future outlook and trends
As enterprises continue to adopt AI and automation, providers must prioritize enhancing the customer experience to maintain competitiveness.
The ISG report suggests that future insights will focus on geographic and industry-specific CX scores, providing a comprehensive view of the evolving outsourcing landscape. Additionally, trends such as AI-powered automation, cloud-based computing, and robotic process automation (RPA) are expected to shape the outsourcing industry further, driving efficiency and innovation.
