The role of the CIO is changing from performance and efficiency to include systems that give insights that can enrich the customer experience; one of these is implementing chatbots. This new technology brings not only opportunities but also challenges. Unlike previous IT projects, these new systems have not only technology and business impacts but also human and even ethical impacts.
What is a chatbot?
Chatbots (or virtual customer assistants) are a class of artificial intelligence (AI) systems that get information from the environment, learn, and take action in response to the information and objectives that are set. They act on behalf of human agents to enable users (mainly customers, but also suppliers and staff) to:
- perform tasks
- analyze and answer online queries,
- conduct real-time conversations and information exchanges with users.
They have been created to learn continuously and enable insights that can enrich the user relationship – that’s something that current customer service technology does not do. This combination of chatbots using a company’s internal data, and human service agents, will let customer service teams go further in the customer relationship and therefore improve productivity, output, and customer satisfaction.
A pessimistic view of chatbots is that they will eliminate jobs. However, a more optimistic assessment indicates that technology will free up staff from mundane interactions and allow them to do more strategic activities that build customer relationships.
- By 2021, the majority of businesses will spend more on chatbots than mobile application development – Gartner Top Strategic Predictions for 2018
- 21% of organizations are in the process of investing in chatbots – Gartner 2018 CIO Agenda
- 44% of customers would prefer to use a chatbot to conduct customer service interactions – 2016 Aspect of Consumer Experience Index
What can chatbots do?
Chatbots can assist with several common tasks and transactions:
- Request information, process transactions, and input data: help internal employees, external customers, or suppliers with performing tasks and sourcing information such as price queries, stock lookups, order status, and more at any time, from any platform.
- Guide users through a self-service process: prompt or guide users through a self-service process such as leave an application or requesting a quote and offer an interactive and convenient method to handle requests quickly, efficiently, and accurately.
- Automate specific business functions: chatbots can be ‘trained’ to perform repetitive processes proficiently.
- Make use of an AI Engine to mine data: by working with an AI engine to mine through and analyze large data sets, a bot can deliver insights, reports, alerts, predictions, and trends directly to a preferred platform.
- Emulate natural conversations on any platform: by using machine learning and natural language services chatbots can interpret human language and emulate a natural conversation on the user’s device of choice, on any user interface, platform, messaging app or chat space where it can be added as a contact, such as a company website, Facebook Messenger or WhatsApp.
Benefits of chatbots to the organization
Chatbots can operate 24/7 and address a large number of customer inquiries and reduce customer wait time by handling simple issues, quickly and at any time, while allowing customer agents to handle more complex tasks or more demanding customers. There is also a huge opportunity for organizations to differentiate themselves by making use of chatbots to service not only customers but also the staff.
A chatbot can help improve decisions by providing mobile access to business information on the fly. It retrieves information by mining through masses of data, analyzing it instantly, and responding.
Benefits of chatbots to customers
The fact that chatbots can be deployed on different platforms and chat spaces means that customers or staff can engage with chatbots on their messaging platform of choice. This provides customer benefits such as:
- Interactive self-service: for customers who want the ability to solve queries on their own, a chatbot enables or improves on existing web self-service as a quick, accurate, and convenient customer service interaction to get basic information, complete an application, source a quote, confirm a purchase or check product availability.
- An always-on, consistent and efficient customer experience, 24/7, across the globe: chatbots can assist in providing customers with a more consistent, reliable, efficient, immediately and always available service to respond to requests quickly
- Offers a choice on how to engage with your organization: by adding a chatbot as a contact on their preferred messaging platform, customers can get convenient service delivery by choosing how they would like to engage with your organization.
Challenges of chatbots
One challenge that many CIOs have with this new technology is finding the new skills to implement them. The skills deficit means that chatbots are often not implemented in the right way. Then there are often some unreasonable expectations of chatbots. Finally, many chatbot systems have difficulty integrating with existing business systems.
When it comes to implementation several analyst groups have pointed out that chatbots are unlike other projects CIOs have traditionally experienced. These include:
- soft skills are needed, not just tech ones;
- how to grow internal capabilities to expand the use of chatbots;
- how to introduce the technology across the enterprise;
- being costly without offering an immediate gain;
- major culture change is required in the organization;
- spending significant time on data quality and training;
- dealing with a new range of ethical and governance demands.
While chatbots can be very powerful they lack human qualities like commonsense and empathy, so decisions that are generated need to be carefully reviewed by humans. There is potential reputational if the systems are not monitored.
Chatbots raise the issue of how to treat the large volumes of data generated. How much should be retained? What data is valuable and how should it be distributed into other systems? Who should be responsible for those decisions?
Implementing chatbots is not just an IT initiative. For chatbots to be successful they require deep business knowledge, so there needs to be greater collaboration between business functions and IT. This means a hybrid project workforce with technical staff and business users being involved in the early stages of the project.
Chatbots and ERP
The main purpose of chatbots is to drive self-service requests using the ERP system. They need to securely provide employees, customers, and suppliers with information and alerts, or perform tasks such as price queries, stock lookups, order status, and service requests, on a diverse range of platforms.
Chatbot tools that are already built for an ERP eliminate a large portion of the challenges associated with their implementation. A chatbot should be an integral part of the system, not a separate third-party application. A third-party solution creates the problem of handling a large amount of data outside the ERP environment, with the security issues involves. By having the chatbot integrated with the ERP application, it also reduces the time to deliver a full solution.
When looking for a chatbot, you should make sure that it has the ability to self-learn. In the first few days, a chatbot will be quite immature – it won’t know the words that customers might use, or that are used in the organization. As the chatbot starts to learn the words, the service it provides will improve. The chatbot should also come with an in-built understanding of industry-specific terms, as well as in generic business language.
Chatbots: where next?
Many businesses are using chatbots to interact with their customers, drive sales, and solve user problems. But it’s worth being aware of the unique issues and challenges. When you understand these, you’ll be better positioned to address how chatbots can solve problems within your organization.