ISG Launches Study to Evaluate Advanced FAO Providers Using AI Technologies

Information Services Group (ISG), a leading global technology research and advisory firm, has embarked on a comprehensive study to assess finance and accounting outsourcing (FAO) service providers. The research aims to evaluate how these providers are evolving beyond their traditional focus on cost efficiency to offer advanced capabilities, including the integration of generative AI (GenAI) and agentic AI, which are revolutionizing FAO services. The findings will be published in the ISG Provider Lens™ report, titled "Finance and Accounting Outsourcing (FAO) Services," scheduled for release in September 2025. The study is significant as it reflects a shift in the FAO landscape. Today, enterprises are not just using FAO for routine tasks but are increasingly outsourcing complex, strategic functions like financial planning and tax compliance. These services, once deemed too critical to delegate, are now being entrusted to FAO firms due to their advanced technological offerings and consultative expertise. This transformation allows businesses to enhance their agility, make smarter decisions, and focus on core competencies. Key areas of focus in the report include: Invoice to Pay (I2P): The quadrant will evaluate providers managing the entire accounts payable lifecycle, from receiving invoices to making payments. It will cover technologies such as AI and machine learning (ML) for handling exceptions and real-time analytics for compliance and decision-making. Order to Cash (O2C): This section will assess end-to-end O2C service providers responsible for functions like accounts receivable, credit risk assessment, and dispute resolution. The emphasis will be on automation, predictive analytics, and big data to improve order fulfillment and overall efficiency. Record to Report (R2R) and Tax Services: This quadrant will cover R2R and tax services that help enterprises with financial closing, reporting, and indirect tax compliance. Providers utilize AI, automation, and analytics to streamline operations and provide real-time insights, ensuring regulatory adherence and financial accuracy. Financial Planning & Analysis (FP&A): The final quadrant will evaluate FP&A service providers, focusing on budgeting, forecasting, planning, and risk management. As companies outsource more strategic financial processes, these providers play a crucial role in identifying risks and opportunities through real-time data analysis and advanced analytics. ISG has distributed surveys to 48 FAO service providers, and the research team will work closely with the firm's global advisors to compile the report. The four quadrants will reflect the services typically sought by enterprises, based on ISG's extensive client interactions and market experience. The report will also feature expanded customer experience (CX) data, measuring actual enterprise satisfaction with provider services and solutions. ISG's continuous CX research ensures that the data is up-to-date and accurate, providing a reliable basis for enterprise buyers to evaluate their current vendor relationships and consider new engagements. Enterprises contributing to the study will receive a copy of the report in return for their feedback. ISG's research methodology combines empirical, data-driven analysis with real-world observations from its advisory team. The resulting report will be a valuable resource for both enterprise buyers and ISG advisors, offering detailed market insights and recommendations. The firm's global coverage and deep expertise in technology and business services position it to deliver comprehensive evaluations that help organizations maximize the value of their technology investments. The broader implications of this study are significant. As FAO continues to evolve, the integration of AI and advanced analytics is reshaping the service landscape. Providers are no longer just tactical partners but are becoming strategic allies that can deliver substantial business benefits. Industry insiders predict that this shift will accelerate as more enterprises recognize the value of AI-driven FAO in enhancing operational efficiency and strategic decision-making. ISG, founded in 2006, has been a trusted partner to over 900 clients, including 75 of the world's top 100 enterprises. With a team of 1,600 professionals worldwide, the firm is recognized for its proprietary market data and in-depth knowledge of provider ecosystems. Their ongoing commitment to leveraging AI highlights their adaptability and the importance they place on helping clients achieve operational excellence and faster growth.