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AI Will Change the Service Game, Eventually

AI Will Change the Service Game, Eventually

4/24/2020
By Donna Fluss

View this document on the publisher’s website.

Volatility is the only given in the business world, and the biggest challenge. If people could accurately predict technological innovation, business trends, tax law changes, regulatory shifts, evolving global trade flows, wars, natural disasters, global health crises (like the coronavirus pandemic), or even just the changing mind-set of the world’s consumers and workforce, they could position their companies for success. The pace and impact of change in the past 10 years has been revolutionary, even if the immediate future is uncertain. Nevertheless, DMG believes that artificial intelligence will be (or already is) the primary driver of the next business revolution.

Enterprises are struggling to predict the future and the changes they will need to make to remain viable, relevant, and competitive, as much of the world in which they conduct business is transformed. This is what the digital transformation movement is about at the visionary level; at a tactical level, the changes are much more granular and sometimes almost unbelievably overdue. For example, how can it be that many of the largest financial services companies in the world are still dependent on computer systems that were built between 1960 and 1980 and for which there are few available maintenance resources?

The workforce has changed so much in the past 50 years. Baby Boomers are quickly giving way to Millennials, who see things very differently from their parents and grandparents. Millennials are now the largest group of employees, and their priority is work-life balance. The most important perks for a Boomer were money and title; Millennials won’t turn these down but will trade them for the right work experiences. In general, many U.S.-based Millennials believe that Boomers have worked too hard and been too capitalistic, and they feel that more collectivist societies have it right. Only time will tell if this is true—and the current shutdown of the global economy makes any scenario impossible to predict with confidence—but the one thing that is certain is that change is always on the horizon.

SERVICE TAKES CENTER STAGE

Enterprises are highly dependent on their service organizations, whether they are called customer service, contact centers, technical support, field service and support, or other names. In the 45 years between 1970 and 2015, this service function was considered primarily a “cost” to be borne. During the past 10 years, executives have been talking about the strategic importance of their service organizations. But enterprise leadership’s priorities are reflected in their willingness to invest in departments, functions, and initiatives. Making a change in senior management’s perception of service has been an arduous process.

The service world has seen many “movements” come and go that aimed to bring attention and investments to their function. We had quality circles in the 1970s and 1980s that gave way to the customer relationship management (CRM) movement of the 1990s to 2010. Now, the talk is about the customer journey, which seems to finally get it right, at least conceptually, as this strategy addresses the importance of all enterprise functions working together to deliver an outstanding customer experience at every touchpoint. The customer service department and/or contact center is the focus for an enterprise’s customers, but it is only one cog in the bigger machine. And while this is an old analogy, it’s a perfect expression of how executives have viewed their customer service departments and contact centers for many decades.

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BIG CHANGE IS COMING

This is all going to change in the next 10 years. The underlying drivers are Millennials and Generation Zers who do not understand and are not willing to put up what they perceive to be poor service, as Boomers did in the past. The current generation of consumers, employees, and partners are highly technical and mobile and prefer self-service. Speaking with or communicating with an organization via chat, SMS, or another messaging application is a last resort that is used when time is short or an issue is highly sensitive (which means that calls are not going to disappear entirely).

While enterprises are still paying a lot of attention to the Net Promoter Score (NPS) as a measurement of customer satisfaction, their customers are laughing at them and shifting their allegiance to companies that allow them to do business when and how they want, whatever this happens to mean to them. Relationships are still of some value when it comes to certain types of transactions or interactions, or at least some think so. But as time goes by, customer preferences are more about “What have you done for me today?” If this can happen in the world of medicine—and no one can question that this is the direction the healthcare systems and insurance companies are pushing in U.S. medicine—it surely applies to telecom, financial services, retailing, manufacturing, energy, travel and entertainment, and more. Even education is being viewed as a commodity service, as reflected by the growing number of online courses and degrees. And for that matter, if a student cannot quantify the benefit of having a degree from a top-rated university instead of a much less costly state school, why incur debt that will take them more than 20 years to pay off, if they’re lucky?

Companies that continue to view and deliver customer service as they did in prior decades are going to find themselves at a major disadvantage going forward. Service will be too costly, complex, and ineffective for them, and they will start to lose business to more innovative companies that better understand the needs of their customers. We’ve been saying this for years, but it’s finally going to happen, and the reason is an emerging grouping of technologies called artificial intelligence.

AI is in its infancy, despite all of the claims in the market. It’s been around in various forms for years, but the AI tools available today are substantially better than those from the 1980s. The improvements are not just a matter of the tools but also the processing power and speed and massive data repositories, particularly those in the cloud. The past five years have seen many game changers that were instrumental in improving AI technology, including the decreasing cost of processors (computers) and storage; Big Data aggregation and the development of tools to manage this information; and the growing prominence of the cloud.

At press time, the coronavirus pandemic had severely disrupted the global economy, and it’s difficult to predict how long the damage will last and how steep the resulting recession will be. But markets will recover eventually, and as AI and new automation technologies enter the marketplace, they are going to drive many changes in customer service departments and contact centers, as well as many other departments throughout enterprises. Although change will happen slowly (as has always been the case with contact centers), it nevertheless will go faster than it has before and impact all aspects of service in the enterprise. When these innovations and improvements are combined with digital transformation initiatives and the push to improve the customer journey, the result will be widespread enhancements that improve the customer and agent experience while reducing costs. And companies will finally know who their customers are and what they want so they can deliver a personalized customer experience regardless of when or where they reach out. This is a journey upon which all companies should embark, and in many cases, it will be their service organizations that lead the way. What a change!

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