"The time has now come for us to move away from considering chatbots as being a tactical capability, to chatbots becoming a strategic enabler"
A short while ago, I was invited by a group of lecturers and professors at a prestigious business school to discuss, amongst other things, the future of work and how this related to education. How could students be prepared for the future, it was argued, when we trained them using methods more suitable to 1950 than 2050, and with technology and AI modules ‘tacked on’ to an existing syllabus rather than being core content?
What might the future of education look like? Education will move from traditional teaching to that of self-structured learning, but that’s not all. New core subjects for study will inevitably emerge, perhaps such as that of ‘Chatbot Theory’.
Creating a ‘Chatbot Theory Syllabus’
Some of us already may know what chatbots do, and some of us might even know the science that sits behind them. But to what degree do we really understand the capability and the full extent of its potential business value? The concept of ‘Chatbot Theory’ potentially seeks to position the capability in a strategic rather than tactical or technological context.
Chatbot technologies are complex, but to what extend do industry leaders really need to know the detail of those complexities, so as to be able to fully embrace them as a strategic capability? Industry leaders don’t need to know the mechanics of chatbots, any more than they need to know the intricacies of the modern car electronic system to be able to get in and drive the vehicle.
Of greater interest to business users is to understand how the use of this technology can be specifically applied in terms of industries and professions. The concept of ‘Chatbot Theory’ permits a deeper, structured, and more informed insight into this particular capability.
CX as a Point of Entry
Many currently think of the chatbot application as being principally a capability to improve customer care and the customer experience. This is correct in the sense that chatbots are already able to provide the first line of customer inquiry, often directing a user to already structured answers. After that, the chatbot can triage the user to a human advisor if they can’t self-help the answer. In financial services, chatbots can already be used to help solve simple queries such as assisting with payment processes and password resetting but these functions are relatively administrative in nature.
Chatbots start to add real value where they customize answers and solutions, such as in the case of insurance where they might help create a customized policy, or where they are able to align organizational strategy with individual customer need.
Developing Chatbot Theory - Linkage to Business Imperatives
There’s no doubt that chatbots are a part of our future - but are chatbot providers missing a trick - that of alignment of chatbot functionality to the key business imperatives of an industry?
In insurance for example, how might a chatbot satisfy what is usually described as the three key insurance imperatives: Customer experience, risk management, and operational efficiency? It’s not difficult to recognize the impact of chatbots on the CX element. Equally, the cost and accessibility of chatbots seem to recognize that their effective use will inevitably create a return on investment and deliver ‘operational efficiencies’. But how might they solve, in insurance as an example, the third key imperative which is that of ‘risk management’?
In the insurance industry, the topic of ‘risk’ means different things to different people. ‘Underwriting risk’ is one specific area, whereas the insurance premium reflects the physical or moral risk involved in offering a contract of insurance to a prospective customer. But there are wider issues to contend with such as ‘strategic risk’. In other words, that might be the amount of exposure that an insurer chooses to have against a particular category of loss. They can be an effective way of ensuring better alignment between the ‘strategic risk appetite’ of an insurance carrier and the individual customized needs of the prospective customer.
Ultimately, an insurance chatbot can be a key enabler in pulling together the key business imperatives of the insurance industry to a single, customer optimized solution. There’s no reason why other industries such as banking and utilities can’t be handled in the same way.
The future of both education and technology will necessarily result in the educational syllabus being rewritten. New subjects needing to be studied properly will start to emerge. Innovative concepts such as ‘Chatbot Theory’ will allow both existing and prospective users to look beyond just the technology, but rather to gain a better and wider insight into business applications.
Effective use of chatbots, underpinned by robust analytics, advanced analytics, and ultimately by AI provide a key capability that helps organizations meet all their strategic objectives. They will do this not by seeing how best chatbot technology only fits into the CX element of the business but by recognizing its contribution to other key business imperatives.
It’s time that we moved away from chatbots being a tactical capability to being a strategic one.
1. Artificial intelligence and psychology - The computer will see you now | Science & technology | The Economist
2. Chatbots Are Killing Customer Service. Here's Why. (forbes.com)