GenAI, Hybrid Work Change U.S. Public Sector Workplaces
MWN-AI** Summary
The U.S. public sector is undergoing a significant transformation in its workplace strategies, largely driven by the integration of generative AI (GenAI) and hybrid work models, as highlighted in the 2025 ISG Provider Lens ® Future of Work Services report by Information Services Group (ISG). Since 2024, public agencies, especially at the state, local, and education (SLED) levels, have moved from basic tech upgrades to comprehensive digital solutions that encompass IT, human resources, and facilities management.
The report emphasizes that the digital transformation phase is now in action, with GenAI moving from experimental applications to widespread implementation. Agencies are leveraging GenAI for purposes like service desk automation and predictive analytics, with expectations that autonomous digital agents will become standard by 2026. Hybrid work has also emerged as a crucial component of workplace design, with agencies creating structured frameworks to ensure experience parity for both on-site and remote employees. This focus not only enhances productivity but also encourages a balanced workplace environment.
Additionally, there's a push for experience-level agreements (XLAs) over traditional service-level agreements (SLAs) to foster improved service quality and frontline engagement. Sustainability initiatives are also on the rise, with many agencies adopting smart technologies to monitor energy and emissions. Over 45% of public sector real estate occupants plan to use energy management tools, reflecting a commitment to sustainability.
The report positions company leaders like Accenture and Infosys at the forefront of six key service quadrants, illustrating a market shift towards providers who can serve as transformation partners rather than mere service vendors. Overall, these trends indicate a promising future as public agencies refine their operational strategies to adapt to evolving workplace needs.
MWN-AI** Analysis
The U.S. public sector is undergoing a transformative shift, driven largely by the integration of generative AI (GenAI) and structured hybrid work models, as highlighted in the recent ISG Provider Lens report. Public agencies are moving beyond pilot programs, embracing GenAI for various functions such as service desk automation and immersive collaboration. This transition signifies a profound opportunity for service providers and stakeholders in the tech landscape.
As agencies prioritize hybrid work, there’s a strong focus on achieving experience parity for remote and on-site employees. This trend opens avenues for firms that specialize in smart workplace technologies and analytics, especially those offering experience-level agreements (XLAs) that enhance worker engagement and service quality. Investors should pay attention to service providers that demonstrate strong partnerships and expertise in public sector transformations, particularly those recognized in the ISG report, such as Accenture, Infosys, and NTT DATA.
Additionally, with sustainability becoming a key consideration, public agencies are increasingly adopting smart technologies like IoT and AI-powered analytics to measure energy consumption and emissions. The anticipated rise in demand for real-time energy management solutions presents an advantageous investment landscape.
Moreover, the increased interest in verticalized solutions in sectors such as education and municipal services underscores a growing need for tailored approaches. It’s crucial for investors to recognize market demands that support flexibility and collaboration in procurement processes.
In conclusion, the convergence of GenAI, hybrid work, and sustainability in the U.S. public sector offers promising opportunities for both technology developers and investors. The emphasis on integrated solutions and enhanced employee experiences is reshaping the market, paving the way for next-generation workplace transformations. Stakeholders should strategically align with providers championing these trends to maximize growth and innovation potential.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Agencies launch broad workplace strategies enabled by new technologies, broad partnerships with qualified service providers, ISG Provider Lens ® report says
The U.S. public sector is changing the way it envisions and implements digital workplace services as agencies integrate generative AI (GenAI), experience management and structured hybrid work models into their operational strategies, according to a new research report published today by Information Services Group ( ISG ) (Nasdaq: III ), a global AI-centered technology research and advisory firm.
The 2025 ISG Provider Lens ® Future of Work Services report for the U.S. public sector finds that public entities — especially state, local and education (SLED) organizations — have more fully embraced transformative workplace technologies and practices since 2024. Agencies are shifting from individual technology upgrades to integrated solutions for realizing unified workplace strategies spanning IT, human resources and facilities.
“Public sector digital workplace transformations have entered execution phase,” said Nathan Frey, ISG partner and Public Sector lead. “Hybrid work, AI augmentation and sustainability are now foundational to how many agencies plan and measure workplace success.”
Use of GenAI in the sector has matured from pilot projects to enterprise-wide integration, the report says. Organizations are rolling out GenAI at scale for functions including service desk automation, predictive analytics and immersive collaboration across distributed teams. ISG expects agentic AI to go mainstream next in the public sector, with autonomous digital agents becoming standard for handling complex tasks in service desks, HR and citizen engagement through 2026.
Hybrid work is now a defining feature of public sector workplace design, the report says. Agencies are adopting structured frameworks that promote experience parity between on-site and remote staff. After focusing on enabling hybrid work in 2024, the sector is now optimizing it through improved infrastructure and experience-based working, which lets employees do their work in the most productive location for them. Experience parity, which is intended to ensure equal access to collaboration tools and information regardless of location, has become a key performance metric supported by analytics that track satisfaction and productivity.
Agencies are also adopting experience-level agreements (XLAs) to improve frontline engagement and service quality, often replacing traditional service-level agreements (SLAs), ISG says. Through 2026, ISG expects XLAs to be included in most provider contracts with SLED organizations, with sentiment analytics and behavioral telemetry being used to measure continuous improvement over time.
As many U.S. public agencies focus on sustainability, there is growing adoption of smart workplace technologies, including IoT, digital twins and AI-based analytics, to track energy use and emissions in real time. More than 45 percent of public sector occupiers of real estate plan to use energy and emissions management tools, the report says.
“The rapid maturing of new technologies, especially GenAI, has allowed public agencies to start executing ambitious workplace improvement strategies,” said Bruce Guptill, lead author of the report. “They are looking for providers with public sector expertise and experience to become not just service vendors but transformation partners.”
The report also explores other workplace trends in the U.S. public sector, including rising demand for verticalized solutions in fields such as education and municipal services and procurement modernization to increase flexibility and collaboration.
For more insights into workplace modernization challenges facing U.S. public sector enterprises, plus ISG’s advice for addressing them, see the ISG Provider Lens ® Focal Points briefing here .
The 2025 ISG Provider Lens ® Future of Work Services report for the U.S. Public Sector evaluates 34 providers across six quadrants: Workplace Strategy and Enablement Services, Collaboration and Next-gen Experience Services, Managed End-user Technology Services, Continuous Productivity Services (including Next-gen Service Desk), Smart and Sustainable Workplace Services and AI-Augmented Workforce Services.
The report names Accenture, Infosys, NTT DATA and Unisys as Leaders in all six quadrants. It names CGI as a Leader in five quadrants and HCLTech and Kyndryl as Leaders in four quadrants each. Deloitte and Zones are named as Leaders in two quadrants each. Cognizant, DXC Technology, Red River and TCS are named as Leaders in one quadrant each.
In the area of customer experience, Microland is named the global ISG CX Star Performer for 2025 among workplace service providers. Microland earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program , the premier quality recognition for the technology and business services industry.
The 2025 ISG Provider Lens ® Future of Work (Workplace) Services report for the U.S. Public Sector is available to subscribers or for one-time purchase on this webpage .
About ISG Provider Lens ® Research
The ISG Provider Lens ® Quadrant research series is 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. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage .
About ISG
ISG (Nasdaq: III ) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20251017707128/en/
Press Contacts:
Laura Hupprich, ISG
+1 203 517 3100
laura.hupprich@isg-one.com
Julianna Sheridan, Matter Communications for ISG
+1 978-518-4520
isg@matternow.com
FAQ**
How does Information Services Group Inc. III foresee the role of generative AI evolving in digital workplace transformations within the U.S. public sector, especially by 2026?
What specific metrics are agencies expected to use to measure the effectiveness of experience parity initiatives as outlined in the ISG report by Information Services Group Inc. III?
How have partnerships with service providers enhanced the implementation of hybrid work models in public agencies according to the insights of Information Services Group Inc. III?
What are the key factors driving the increase in demand for verticalized solutions in sectors like education and municipal services, as mentioned in the Information Services Group Inc. III report?
**MWN-AI FAQ is based on asking OpenAI questions about Information Services Group Inc. (NASDAQ: III).
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