What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-10 compared with 2022-03-11 · 62 added, 62 removed, 214 unchanged (37% of the section changed)

As used herein, unless the context otherwise requires, ISG, the registrant, is referred to in this Form 10-K annual report (“Form 10-K”) as the “Company,” “we,” “us” and “our.”

ISG (Information Services Group) (Nasdaq:

Information Services Group, Inc.

III) is a leading global technology research and advisory firm.

7 unchanged sentences

market intelligence and technology research and analysis.

Based in Stamford, Conn., ISG employs more than 1,300 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.

Based in Stamford, Connecticut, ISG employs approximately 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.

9 unchanged sentences

We are organized as a corporation under the laws of the State of Delaware.

The current mailing address of the Company’s principal executive office is:

Information Services Group, Inc., 2187 Atlantic Street, Stamford, CT 06902.

The current mailing address of the Company’s principal executive office is Information Services Group, Inc., 2187 Atlantic Street, Stamford, CT 06902.

Our telephone number is (203) 517-3100.

9 unchanged sentences

The functional domain experience of our experts and deep empirical data resources help clients better understand their strategic options.

The firm’s new operating model, ISG NEXT, launched in the third quarter of 2020, is aimed at extending our market leadership, enhancing growth opportunities, and driving significant value for all stakeholders.

The firm’s operating model, ISG NEXT, launched in the third quarter of 2020 and is aimed at extending our market leadership, enhancing growth opportunities and driving significant value for all stakeholders.

Under ISG NEXT, we are pivoting from services to solutions to address our clients’ most pressing business challenges in two areas most important to them—their continuing digital transformation and getting the most from their digital investments.

To meet these needs, we have formed two global client solution areas:

ISG Digital, focused on developing technology, transformation, sourcing and digital solutions for clients, and ISG Enterprise, focused on helping clients manage change and optimize operations in such areas as finance, HR and Procure2Pay.

Our core solutions are supported by ISG Research, with its extensive market analyses and provider evaluations;

our ISG Network and Software Advisory services, and our software platforms, including ISG GovernX®.

Our core solutions are supported by ISG Research, with its extensive market analyses and provider evaluations, our ISG Network and Software Advisory services and our software platforms, including ISG GovernX®.

We also are building more industry-specific capabilities in such areas as banking, insurance and smart manufacturing.

13 unchanged sentences

Proprietary Data Assets and Market Intelligence.

We have assembled a comprehensive and unique set of data, analytics and market intelligence built over more than thirty years of data collection and analysis, providing insight into the comparative cost and quality of a variety of operational alternatives.

We have assembled a comprehensive and unique set of data, analytics and market intelligence built over more than 30 years of data collection and analysis, providing insight into the comparative cost and quality of a variety of operational alternatives.

Global Reach.

8 unchanged sentences

In addition, we will seek to continue to expand our products and services and the geographic markets we serve opportunistically as global competition spurs demand for cost savings and value creation.

● Preserve Our Financial Positions.

In its pursuit of the firm’s growth initiatives, we are committed to maintaining a strong financial position with flexibility and liquidity.

We believe that maintaining a financial profile that supports an investment grade credit rating is important to this long-term strategy.

The priorities for uses of available cash include payment of dividends, funding growth, repurchases of shares and debt reduction.

In addition, we expect strong cash flow generation and a strong balance sheet to support the current financial strategy.

Strengthen Our Industry Expertise.

We have strengthened our market-facing organization to drive increased revenue around 22 global industries:

Automotive, Aerospace & Defense, Banking, Chemicals, Consumer Goods, Energy & Utilities, Financial Services, Government, Health Care, Insurance, Life Sciences, Manufacturing, Media & Entertainment, Metals & Mining, Pharma/Biotech/Medical Devices, Private Equity & M&A, Public Sector & Education, Retail, Technology & Service Providers, Telecommunications, Transportation & Logistics, Travel & Hospitality.

Aggressively Expand Our Market Focus.

1 unchanged sentence

These are all areas in which we are investing additional focus to drive increased revenues and expanded relationships with clients.

Further Develop Digital Cloud Competency.

There is a nexus of distinct, yet complementary, technology trends that are creating a perfect storm of disruption for some companies.

Continue to Develop Digital Cloud Competency.

There is a nexus of distinct, yet complementary, technology trends that are creating a perfect storm of disruption in the market.

Among the most significant technology trends are the speed with which products get to market, large-scale digitization, the efficiency of the cloud and the immediacy with which new disruptors can become omnipresent.

1 unchanged sentence

Increasingly, clients are taking a more agile approach, working incrementally on continuous transformation to meet rapidly changing technology and business conditions.

Our offerings around cost management have never been more important as enterprises seek funds to invest into programs aimed at realizing their digital ambitions.

We think the pandemic will accelerate client demand for, and investment in, the digital transformation services ISG provides.

Our offerings around cost optimization have never been more important as enterprises seek funds to invest in programs aimed at realizing their digital ambitions.

The pandemic continues to accelerate client demand for, and investment in, the digital transformation services ISG provides.

ISG plans to expand resources and intellectual property (“IP”) around digitization and the cloud.

Digitization is the ‘softwarization’ of business.

Processes that were once executed over analog channels (such as phone and ‘real life’) increasingly happen via software.

Processes that were once executed over analog channels (such as phone and ‘real life’) increasingly occur in a digital model.

Also, digitization has elevated the profile of software.

1 unchanged sentence

Our purpose in the digital marketplace is to be a trusted advisor, guiding our clients through digital transformation toward practical innovation of their business models, leveraging strategic partners, emerging technology and thought leadership.

Our digital services now span a volume of offerings and have become embedded as part of even our traditional transaction services.

Our digital services now span a volume of offerings and have become embedded as part of our traditional transaction services.

Advancements continue to be made to ‘digitize’ further our traditional services.

19 unchanged sentences

Automation is increasingly enabling automated 24/7/365 execution of business processes at a fraction of the cost of human equivalents, as well as the dramatic improvements in process execution and cost models.

ISG Automation offers clients a full portfolio of services, including automation assessments and strategy, proof-of-concept deployments, implementation and integration of software bots, establishment of centers of excellence to scale automation, as well as training and managed services.

ISG Automation offers clients a full portfolio of services, including automation assessments and strategy, proof-of-concept deployments, implementation and integration of software bots and establishment of centers of excellence to scale automation, as well as training and managed services.

● Expand Emerging Services .

The focus will be on creating repeatable methods used to drive growth of emerging services including ISG Automation, HR Technology & Transformations;

The focus will be on creating repeatable methods used to drive growth of emerging services, including ISG Automation;

HR Technology & Transformations;

Providers-as-a-Business;

10 unchanged sentences

Automation is fundamentally reshaping the world of Information Technology Outsourcing (“ITO”) and Business Process Outsourcing (“BPO”).

Our solutions will work to optimize repetitive processes

using ‘bots’ instead of human labor.

Our solutions will work to optimize repetitive processes using ‘bots’ instead of human labor.

ISG Automation will continue to be marketed by industry (e.g., claims processing for insurance) and by back-office functions (e.g., accounting).

25 unchanged sentences

Total worldwide spending on cloud computing is expected to surpass $1.0 trillion in 2024, while likely to sustain a double-digit compound annual growth rate (CAGR) of nearly 16 percent.

Enterprises have migrated approximately 25 percent of their applications to the cloud, with the remaining 75 percent covering large back-office functions that are complex and challenging to move to the cloud, especially in multicloud environments.

ISG is developing a set of core offerings that will enable hyperscalers to accelerate time to value by shifting enterprise workloads more quickly to the cloud.

4 unchanged sentences

ISG has hired a global leader to grow this business, building on our experience in Engineering Product Lifecycle Management and Digital Thread.

Over the past five years, enterprise business models have been shifting from selling products as a one-time transaction to becoming more software-oriented to drive more features and functionality;

shifting focus to aftermarket solutions to generate recurring revenues via services (servitization);

and enhancing customer experience to increase customer acquisition and retention rates.

Over the past five years, enterprise business models have been shifting from selling products as a one-time transaction to becoming more software-oriented to drive more features and functionality, shifting focus to aftermarket solutions to generate recurring revenues via services (servitization) and enhancing customer experience to increase customer acquisition and retention rates.

As companies are reimagining their products and services, Digital Engineering is growing rapidly due to the increasing data and software content of products and processes.

Our aim is to become an independent governance and end-to-end transformation partner including the sourcing of engineering system integrators

and engineering platforms like SIEMENS & Dassault throughout each client’s digital engineering transformation journey, serving multiple industries with an initial focus on manufacturing.

Our aim is to become an independent governance and end-to-end transformation partner including the sourcing of engineering system integrators and engineering platforms like SIEMENS and Dassault throughout each client’s digital engineering transformation journey, serving multiple industries with an initial focus on manufacturing.

Cybersecurity:

In 2021, ISG doubled the size of its global cybersecurity business and sees significant growth opportunities ahead.

Driven by a growing awareness of risks and threats, cybersecurity has become a strategic topic at the board level.

The overall market for cybersecurity services and solutions is expected to grow by about $98 billion from 2021 to 2025, to reach $239 billion, with services accounting for roughly 60 percent of the total.

The rise of niche providers, converging operating models and a significant focus on Operational Technology, Internet of Things (IoT) and Critical Infrastructure Protection (CIP) are providing growing opportunities for ISG in this space.

We will continue to leverage our sourcing expertise and expand further into cybersecurity consulting and next-gen Cyber Security Management System (CSMS) platforms, positioning ourselves as the best agnostic cybersecurity advisory firm in the market.

In 2022, ISG saw more than a 50% increase in the size of its global cybersecurity business and continues to see significant growth opportunities ahead.

The acceleration in attacks across all industry groups has resulted in increased regulatory pressures and expanded attention at the board level, increasing the overall market outlook for cybersecurity services and solutions which is now projected to reach $262 billion by 2027.

Continued adoption of Digital Transformation programs and heavy IT/IoT/OT integration and emerging legislation in the Manufacturing and Energy/Utilities sectors, coupled with similar programs and advancements in the wearables market in Life Sciences, are driving growth for ISG in this space.

We will continue to leverage our heritage in strategy and sourcing while tightening the relationship between our Network Advisory, Cybersecurity, Data Analytics and Automation businesses to address emerging tech and the Secure Intelligent Connected Enterprise (SICE), expand into the emerging Cyber Risk Quantification and Human Intelligence markets and grow our consulting capabilities to maintain our position as the best agnostic cybersecurity advisory firm in the market.

Training-as-a-Service (TaaS):

2 unchanged sentences

These organizations are typically looking for longer-term training support to address the needs of an evolving workforce.

ISG TaaS uses an agile approach with rapid content development tools to accelerate training content throughput.

ISG TaaS uses an agile approach with rapid content development tools to accelerate training content throughout.

Services include training advisory, analysis, strategy, development, delivery support and learning assessment.

22 unchanged sentences

We operate in over 20 countries and across numerous industries.

Our private sector clients operate primarily in the manufacturing, banking and financial services, insurance, health sciences, energy & utilities and consumer services industries.

Our private sector clients operate primarily in the manufacturing, banking and financial services, insurance, health sciences, energy and utilities and consumer services industries.

Our private sector clients are primarily large businesses ranked in the Forbes Global 2000 companies annually.

3 unchanged sentences

A significant number of independent sourcing and advisory firms offer similar services.

In our view, however, these firms generally lack the benchmarking data, scale and diversity of expertise that we possess.

In addition, most research firms do not possess the data repository of recent, comparable transactions and benchmarking data.

Management consultants bring strategic service capabilities to the sourcing and advisory market.

However, they generally lack the depth of experience that sourcing, data and advisory firms such as ISG possess.

In addition, management consultants do not possess the sourcing and technology implementation expertise nor the benchmarking data capabilities that are critical to implementing and managing successful transformational projects for businesses and governments.

Other service providers often lack the depth of experience, competitive benchmarking data and independence critical to playing the role of “trusted advisor” to clients.

We believe we set ourselves apart with our data repository of recent, comparable transactions and benchmarking data, our depth of experience and our sourcing and technology implementation expertise, all of which are critical to implementing and managing successful transformation projects for business and governments.

As of December 31, 2022, we employed 1,599 people worldwide.

8 unchanged sentences

Employees at ISG are anchored in our core values, which include trust, integrity, respect, diversity, passion, entrepreneurship, balance and mentorship.

Our more than 1,300 employees, located in over 20 countries with almost one-third in the United States, perform a variety of different roles.

Our approximately 1,600 employees, located in over 20 countries with more than one-fourth in the United States, perform a variety of different roles.

We are participants in the competitive research and advisory industries.

12 unchanged sentences

Some of the key offerings here include:

● ISG Cares , our enhanced volunteering program which, among other things, provide employees paid time off to attend to charitable pursuits.

● ISG Cares , our enhanced volunteering program, which, among other things, provides employees paid time off to attend to charitable pursuits.

● ISG Academy , our global learning and development program.

● ISG Aspire , which is a global mentoring program.

● ISG Aspire , our global mentoring program.

● ISG iRefer , which allows the firm to attract talent through employee referrals, which earn referral bonuses.

2 unchanged sentences

These programs, and others under ISG WorkLife, provide employees with the opportunity to pursue these activities.

These allow us to attract and retain productive employees and enhance diverse perspectives.

Corporate Social Responsibility

ISG has a history of various programs, policies and activities which would be considered in the category of corporate social responsibility.

In 2020, the firm decided to consolidate these efforts and establish an employee governing body to focus on continued enhancement of these efforts.

While the firm already has some robust practices in these areas, we will continue to improve on them and ensure our appropriate development.

Our CSR programs include the IDEA (Inclusion, Diversity, Equity and Awareness) team, the Women In Digital industry program, the ISG Cares volunteering program, and the ISG Environmental team, which seeks to reduce our carbon footprint, reduce waste and pivot to green energy.

This allows us to attract and retain productive employees and enhance diverse perspectives.

Environmental Social and Governance (ESG, formerly referred to as CSR)

The ISG Environmental Social and Governance program was developed with corporate commitment and accountability on a global level.

The program has oversight and executive support to drive real, positive change in alignment with our value and policies, ultimately enabling us to maximize impact and value.

Our ISG Go Green program speaks to the Environmental pillar of ESG.

This program seeks to reduce our carbon footprint via awareness and education initiatives that share green practices for ISG employees in both virtual and physical offices.

Additionally, ISG is developing measurable carbon reduction best practices that align with our goals for sustainable business operations.

Since 2021, we have offset the carbon generated by ISG employee travel and continue to seek ways to pivot to green energy for our physical locations.

Our environmental work is centered around three core concepts:

compliance with eco-friendly laws and best practices, prevention of waste, pollution and carbon emissions and continuous, measurable improvement.

The IDEA (Inclusion, Diversity, Equity and Awareness) program is the foundation for our Social pillar.

Beyond our core Diversity, Equity and Inclusion (DEI) activities, ISG has sub-groups that devote focus to uplifting women in digital, maintaining equitable recruitment, building our supplier diversity and volunteering through our global ISG Cares team.

At ISG, we do not just accept difference — we celebrate it, and we thrive on it for the benefit of our employees, our clients and our communities.

We commit to building a team that represents a variety of backgrounds, perspectives and skills.

ISG is proud to be an equal opportunity workplace, and we are committed to creating an inclusive environment for all employees.

Our work in the social pillar is based on ISG values of trust, integrity, respect and diversity, made tangible in our business practices, modern slavery statement and fair labor policies.

For the Governance pillar, ISG has a well-established set of policies, governing bodies and independent validation measures.

ISG is governed on a day-to-day basis by our internal international executive board, which meets weekly.

ISG also receives governance and support from an external board of directors.

We maintain procedures, policies and codes of conduct around ethical business practices, whistleblowing, suppliers, data protection, information security, privacy, confidentiality, employee comportment and travel.

With regard to cybersecurity, we regularly provide training, reporting and scans in compliance with our ISO-27001 certifications and best practices.

Every year, our employees attest to reviewing our global policies via digital signature.

ISG’s success depends on the knowledge and productivity of its employees.

To that end, the firm invests a significant amount of time and money into providing development opportunities.

Our ISG Academy is robust in offering learning in such topics specific to the employee’s industry and functional areas, leadership and people management, certifications, software and technical skills among others.

Our ISG Academy is robust in offering learning in such topics specific to the employee’s industry and functional areas, leadership and people management, certifications and software and technical skills, among others.

In 2022, most learning was virtual;

our employees completed more than 16,800 courses, including viewing 162,000 video programs, and devoting a total of more than 31,000 hours to learning and development.

While we hope to reinstate some in-person learning when safe in the near future, virtual learning is essential to our efforts.

COVID-19 Response

With the onset of the COVID-19 pandemic, ISG acted swiftly.

We immediately articulated our principles which were:

Ensure all our ISG colleagues and their families are safe.

Serve our clients with minimal disruption and be available during these challenging times to assist, support and advise them.

Preserve the fundamental financial performance of the firm to support our payroll, investments, and stockholders.

We addressed the principles in that order, and we believe faster than many other companies.

We began to bring employees back home from clients and settled in for what we thought would be a few weeks of disruption but ultimately lasted longer than anyone expected.

We addressed the issues and remained resilient in ensuring employee safety, focused on client needs and preserved our firm’s financial strength.

there were over 700 digital certified professionals that participated in various sessions, devoting a total of more than 30,000 hours to learning and development.

Available Information

2 unchanged sentences

It should not be relied upon for investment purposes, nor is it incorporated by reference into this Form 10-K or any other filings.

We make available through our Internet website under the heading “Investor Relations,” our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K after we electronically file any such materials with the Securities and Exchange Commission.

We make available through our Internet website under the link titled “Investors” our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments or exhibits thereto, after we electronically file any such materials with the Securities and Exchange

Commission (the “SEC”).

Copies of our key corporate governance documents, including our Code of Ethics and Business Conduct for Directors, Officers and Employees, Corporate Governance Guidelines and charters for our Audit Committee, our Nominating and Corporate Governance Committee and our Compensation Committee are also on our website.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business