Is your organisation leading the field in adopting AI, or is it still on your radar? This article will give you insights into some of the benefits and challenges of recreating your customer strategy around AI.
While AI is often deployed in organisations as an efficiency tool, one of the places companies are making real gains is in enhancing the customer experience [1]. As we are learning what AI can really do, research is showing that companies adopting AI strategically, rather than only as an internal efficiency play, are getting ahead, and creating a different class of organisation that will be hard to compete with [2] as they gain market share. AI adoption is different to what we know as digital transformation: it is the ‘level up’ game changer. For example, a 2017 study by Infosys found that 98 percent of companies that incorporated AI into their digital transformation reported its role in generating additional revenue [3].
From Youtube and Netflix’s recommendations to your bank’s 24/7 virtual assistant (which may or may not yet work very well), better data enhanced by machine learning is, step by step, improving the customer’s everyday experience. Big technology companies like Google, Facebook, Amazon, Alibaba and Baidu are leading in data-driven innovation and have already embraced AI and CX. 61% of AI leaders are in technology companies. Perhaps unsurprisingly, the next level of AI adoption is in the banking and finance sector at 58% [4]. German manufacturing companies are also leading the charge, including in the automotive sector.
Porsche has invested heavily into a centralised CRM data centre that documents every interaction throughout the customer lifecycle. This allows it to understand the psyche of its customers and their expectations at every touch point. Using predictive intelligence and real-time segmentation, the automaker is able to drive more effective marketing campaigns. For example, it reaches out to people who are actually interested in buying at that moment, resulting in very high conversion rates.
The State of AI-Driven Digital Transformation, INSEAD, 2020
The recruitment sector isn’t yet in the global AI leader board, however Wayne Farrell, Executive Director at Workpac is investing in how it can enable the future of his customer experience. WorkPac is the largest privately owned recruitment company in Australia, specialising in recruiting for jobs in industries like mining, health and construction. Farrell and the WorkPac team recently collaborated with Curious Thing, an interview automation company with aims of: understanding candidates better; more efficient role screening; and helping with speed-to-market insights [5]. Using an AI interview method, WorkPac is now able to get through initial rounds of interviews with potential job candidates at speed. One of the biggest customer-side frustrations for people when applying for jobs is not hearing back quickly enough from the recruiter, or at all. The AI enabled interview process helps get a result faster, which is better for everyone.
With every good strategic change, however, the internal team needs to be convinced for it to work. Nicole Gray, a recruitment manager at WorkPac, was skeptical at first: “I am a traditional recruiter with a strong belief in face-to-face engagement. I believe you can read a candidate well when they are in front of you,” says Nicole. “But as we worked with the Curious Thing team I definitely came to see the value of the solution,” [5]. A key difference between AI methods and other software products are their growing capability to interact with us in human-like ways - a trait that is enormously beneficial, and takes some getting used to. Technology usability, organisational support and managing employee expectations are core factors for AI success. The WorkPac - Curious Thing collaboration seems to be getting these right, which is cause for celebration.
As more organisations begin or continue on their AI journey, being conscious of the challenges and how to overcome them should be top of mind. According to a comprehensive report from Ericsson’s Consumer and Industry Lab, as many as 91% of AI adopters have had challenges across: the technology, including the cost and usability of tools; the organization, including the structure and budget processes; and people/culture, including employee expectations and behavior [4]. So what does this mean for companies implementing AI?
Collaboration is king.
Working across silos to implement AI initiatives is widely reported as necessary for success [4,6]. It may also be important to up-skill teams in what it means to manage AI transformation projects. AI management is still a new space for many organisations and keeping a learning mindset across all teams will help.
Organizations that are successful manage to establish collaborations – cross-functional teams with people from IT, data scientists, data engineers, business area managers and product owners.
Senior Management Consultant, technology industry (Ericsson AI Adoption Report 2020)
Position it strategically.
Mark Bayliss, vice president of customer service and digital customer engagement at telecomms provider Optus, pitched a strategic approach to incorporating virtual customer service agents to his leadership team - positioning the change as part of a larger organisational transformation [6]. According to an article in the MIT Sloan Management Review, one person at that meeting described it this way: “The general reaction was excitement. It was in line with trends in the market,” [6]. This move proved a deep commitment to innovation by the leadership at that time. Joerg Niessing, Professor of Marketing at INSEAD, reiterates how critical it is that leaders view AI enabled transformation as a strategic imperative rather than just another trend [3], however it takes mental flexibility for boards that may not be initially open to this style of data-driven strategy to embrace it.
Most companies have boards with high average age; they grew up in another world. Companies that were born in the last 20 years think in data-driven terms, whereas incumbents need to rethink. And that is really hard.
Head of AI strategy, banking industry (Ericsson AI Adoption Report 2020)
Be eyes wide open.
AI is a technology method unlike any other and, according to the 2020 Ericsson Report on AI Adoption [4], implementing it is not the same as traditional software implementations. Organisations need to have a plan for solving challenges as they arise. The report outlines the top 10 challenges and solutions faced by 2,525 AI/analytics decision makers in the US, Germany, the UK, India and China. For some working in the space, implementation was described as a ‘long and winding road’ that feels like it may never end. However the transformation benefits outweigh these challenges as AI leaders learn the ropes and gain market and financial advantage.
Given that most challenges companies face when implementing AI or advanced analytics are in the people/culture category, it seems only logical that the solution strategies they try to employ are in the same category.
Ericsson AI Adoption Report 2020
What we have learned: CEOs that focus on the strategic use of customer AI are designing a company for the future. However implementing that strategy successfully may provide more challenges than hoped for.
Recommended further reading: How to Enhance Your Customer Experience with AI.
[2] https://www.ericsson.com/en/reports-and-papers/consumerlab/reports/creative-machines/
[3] https://knowledge.insead.edu/blog/insead-blog/the-state-of-ai-driven-digital-transformation-14921/
[4] https://www.ericsson.com/en/reports-and-papers/industrylab/reports/adopting-ai-in-organizations/
[5] https://www.curiousthing.io/customers/workpac-expand-their-tech-stack-with-curious-thing/
[6] https://sloanreview.mit.edu/article/four-challenges-to-overcome-for-ai-driven-customer-experience/
Sarah Daly is undertaking a PhD at the Queensland University of Technology investigating the role of trust in the adoption and diffusion of AI based innovation. She is also the Operations Director of CapFeather, a customer strategy and innovation consulting firm.