How Should We Use Digital and AI To Reduce Costs and Drive Efficiency?

Number one, a lot of companies, a lot of our listeners who are familiar with manufacturing, trans-world, I know the terminology is called garbage in, garbage out. Essentially, whatever input that you put in into the production process, that affects the quality of the output. And AI obviously is a product of our information age, but the manufacturing analogy still stands. So the quality of the information that you put in into the AI algorithms affects the quality of the information, the output that you're getting out of AI output.

Welcome back, everyone, to the CX Pulse podcast. I'm your host, Amelia Rose Earhart. On today's show, we're happy to be welcoming back one of our favorite returning guests. We have Omer Minkara.

And Omer is the VP and Principal Analyst at Aberdeen. Omer, welcome back to the show. Pleasure to be back. And thanks for having me again, Amelia.

You know, you've been so busy. You've got some new studies to share with us today. But before we dive into your new research, Remind our audience and our listeners a little bit about your career and what you focus on at Aberdeen. My focus area is all about customers.

So how brands, companies in B2B, B2C, and really mixed model organizations interact with their customers and really find out what are some of the trends driving some of these interactions. So AI obviously is the latest focus and buzz in this space, but there's also a lot of other trends, as you know, in this space. So I'm really capturing, monitoring, and speaking quite often about all of those CX trends. And Aberdeen, for those of our guests who may not be fully aware, is a market research organization that does fact-based, vendor-agnostic research on IT best practices and trends.

And we always love hearing your research and findings because all of us are customers when it comes down to it. So learning the actual data and research behind your findings, I always find it particularly interesting. So can you share with us today, you just finished a brand new study on CX trends. How don't you walk us through a little bit of the high-level findings and also tell us what seems to be some of the most pressing concerns and action items for CX leaders that you've uncovered through this study?

So we've surveyed 610 businesses, businesses around the world, companies across different industries. It was very much centered around what's happening in the world of CX. And one of the questions we asked, we asked many questions. but one of them was, what's keeping the CX leaders up at night?

And the responses were loud and clear. And by the way, we asked this as a multi-choice question because there could be multiple things that are going on that are affecting businesses. So the number one challenge companies reported back to us in the survey was unpredictable, uncertain economic environments. So the unpredictability of cascading into business activities seems to be a big challenge.

Second top challenge that came again, very loud and clear, and there was a tie with the third one, actually is the rising cost of business, that is inflation. Again, that tie was with supply chain disruption. So although we talked a lot about supply chain disruption shortly after COVID, there's a bit of lingering effects related to that. So the unpredictable economic environment, supply chain disruptions, inflation, all of that seemed to be rounding up the top three.

If you look at top five, and I do that deliberately, and it'll become very clear in a second, fourth top challenge is finding and retaining human talent. And in the age of AI, humans are becoming ever more important because they have an even more important role. The fifth top challenge is all about technology, lack of technology tools. I went through the top five list because the top four challenges, everything that we've gone through inflation, unpredictable economy, supply chain disruptions, lack of available talent.

Those are all external things that companies don't have a direct control on. So there's really not a whole lot of things that CX leaders have a direct control on that affects their environment and what they could do. And again Amelia you asked us a little bit about what driving the CX leaders today What did we find out from the survey The other thing that we also asked the participants of the study was what are some of the priorities for CX leaders? What are they looking to do in terms of strategies?

So cost reduction efficiency came out as one of the top objectives. Now, I think that's very important to iterate here because we did not see cost reduction and efficiency gains came out as the number one goal since the heights of Great Recession. 2010. So it's been some time and you can really see the unpredictable economic environment that I talked about a minute ago cascading into corporate strategy.

Interestingly, that was almost equally tied with improving customer satisfaction when we asked about the top strategic initiatives. So again, CX leaders are not just focusing on creating happier customers today. They're really trying to watch out for their bottom line in a way that is cost sensitive, but also efficiency centric. A lot of words, but hopefully that really shines some light into the priorities of CX leaders today.

Yeah, you know, it really does. And I love how you phrased the question, what's keeping you up at night? Because that's going to really ask them to respond from that gut level of what are the true stressors, not just giving the appropriate answer of what maybe other organizations are focusing on. It seems like you've got some real honest answers about the true worries and focus of what needs to be prioritized.

So we're excited to hear some of your recommendations of what organizations should be focusing on as we continue through. So why don't you walk us through a little bit how CX leaders are addressing these priorities? What are the priorities specifically? Because, of course, there's a lot of buzz around AI.

It's fair to guess that that was one of the main priorities from your research, right? Yes, absolutely. And like you said, there's a lot of buzz around AI. And it's for a good reason.

There's a lot of headlines around it. But there's also some ROI attached to it. So before I kind of touch on that ROI angle, one of the questions we also asked in the study where participants told us we're trying to cut costs, we're trying to drive efficiency, we're trying to improve customer satisfaction. We asked them, how are you planning to do that?

What mechanisms are you putting in place? So when we looked at the top strategic initiatives, the number one strategic initiative for companies was, guess what, investing in CX technologies. So AI is definitely prominent. So I'll touch on what some of the other technologies are.

But again, when we look at those challenges, the priorities, companies are turning to technology as a way to drive some change, make a difference towards a positive direction. Some of the other areas that businesses have told us that they're focusing on include empowering their employees and also continuous hyper-personalization. Again, Gen AI, AI overall is really turbocharging personalization efforts. And that's one of the reasons why I think we're seeing technology combined with personalization and employee empowerment.

And again, Amelia, like you said, AI, no doubt, is very much on the top of the list for planned technology investments. It was, in fact, ranking as the number one planned technology for investments. But it was not alone. If you look at the top five trend that we talked about early on, if we apply that for the top five, planned technologies in order, that is customer analytics, automation, contact center, and customer self-service.

Those are the other top four technologies that businesses are looking to invest in besides AI. And again, if you look at all these technologies together, what do they do? They help businesses drive intelligence, timely, customer interactions across all channels and business departments. Yeah, it sounds like that integration of all five is what's really, truly important here.

And pay attention to the shifting role of AI is something that you also focus on because the whole conversation around AI seems to be shifting. I remember one of our prior episodes here on the CX Pulse podcast about AI and its business value. many business leaders are now looking beyond ROI and they're seeking how they can use AI. So what do you suggest that CX leaders do to start when incorporating AI into their activities Great question So I guess a couple of things Number one a lot of companies a lot of our listeners who are familiar with manufacturing transworld, I know the terminology is called garbage in, garbage out.

Essentially, whatever input that you put in into the production process, that affects the quality of the output. And AI, obviously, is a product of our information age. but the manufacturing analogy still stands. So the quality of the information that you put in into the AI algorithms affects the quality of the information, the output that you're getting out of AI algorithms.

So data quality is paramount. A lot of businesses today still have fragmented customer data. It may be outdated. It may be disparate.

So strategy number one to get the most accurate and timely results out of AI is to ensure data hygiene, quality, consistent data. Second area that I highly suggest focusing on, and I think that's becoming a gradual focus area for a lot more enterprises today, is ethics, ethical AI. That is, when you're using AI, minimizing or eliminating biases that may be inadvertently built into the algorithms, but also in a way that allows using AI in a fair and equitable way to help customers, but also empower employees.

And then thirdly, my suggestion, again, is to, when we look beyond the ROI use case to get the most out of AI, consider using purpose-built AI built into platforms. We talked about Contact Center as one of the top five technology tools. So you can use sort of broader generic AI tools. I'm not going to name them today in our session today, but it's not purpose-built.

You have to finagle your way around it. You have to build internal expertise. Whereas if you're using a platform, a solution, enterprise solution platform that has AI built in, the functionality that you may otherwise be trying to build on your own is already built in. It's always improvised over time.

So that minimizes the effort and time for your team and actually allows you to focus on delivering and achieving ROI right from the get-go by using a purpose-built AI within a plan. Yeah, it sounds like what I'm hearing you say is not all AI is created equally, right? There are different levels of the quality that you're going to get. And that quality is how you get the better results in the long term.

So, Omer, in what areas have you seen the use of AI impact CX results? A number of areas, actually. Again, a quick flashback. We surveyed over 600 businesses and cross-industry, multiple organizations of different sizes.

and we looked at data across different perspectives to see what kind of impact are companies seeing out of using AI versus non-users. So there's different categories. The first category was around CX benefits. So we looked at customer satisfaction, customer effort.

And what we found was businesses that do use AI, they're observing about 40 to 50% greater lift in customer satisfaction year over year. So that's phenomenal because as we remember from our previous dialogue in today and previous conversations in the series, CSAT is always the North Star for CX leaders. The other area where we've seen an improvement was financials. So we've seen companies cut down costs, which is the number one goal, as we discussed in today's episode, and cut costs by a drastic margin.

Companies are telling us that they're reducing costs year over year by four times more compared to businesses that do not have AI. Again, from a financial perspective, companies are also telling us that they're seeing a revenue growth to the tune of three times more versus organizations that do not have AI. And then on the employee side, right? I mean, those are staggering numbers to see the cost cuts and the revenue growth.

On the employee side, again, another wow factor to me was for all the talk around how AI may be helping dwindle the workforces we not necessarily seeing an employee shrinkage in terms of productivity or engagement In fact it quite the contrary When companies are using AI they seeing an employee engagement rate increase of three times versus companies that do not have AI Same thing for productivity, only even better. Seven times growth in productivity. So net-net, back to your question, Amelia, benefits vary across different categories, but they're all much to the favor of AI users in the area of CX, financial, and employee productivity and engagement-related results.

Yeah, boy, with numbers like that, I think that's really going to pique our listeners' interest to be checking out your study because those are numbers that really cannot be ignored when you're seeing that type of growth, that much savings, that much improvement. Omer, if there's one single thing that you would suggest prioritizing for audience members going through AI and digital journey, what would that be? You know, the first thing that I would highly suggest is don't get caught up in hype, right?

So one of the things that I see a lot of organizations struggle with is they get caught up in hype and they say, oh my gosh, AI is taking off. I have to do all things, all AI, all the time. And it's daunting. It's not easy when you're trying to tackle everything.

So one bite at a time. So So prioritize what area of your business, in the area of CX as an example, what activities you're trying to incorporate AI. My suggestion, turn to voice of a customer. Listen to your customers and see what are the gaps that you need to improve upon right away.

Listen to your employees. Hear out their feedback. So one bite at a time, don't get caught up with hype and have a deployment plan and a roadmap. After you implement the first use case, follow on with the second use case.

Have an ROI plan. learn and execute. The second area that I would highly suggest focusing on is full automation as a stance is obviously a dream for a lot of companies to minimize cost, but humans are not going away. For complex interactions, human element is here to stay, at least in my opinion.

For emotionally charged, complex issues, humans will want to talk to humans. And it's not just a service, sales, marketing, likewise. We're going to see a lot of efficiency gains out of AI. there's going to be a lot of time saved.

And frankly, labor costs savings as well by way of AI. But that doesn't mean that humans are going away. Human creativity, empathy is here to stay. So rely on AI as a way to augment your employees as opposed to replace your employees.

Yeah, such good info. Omer, I know a lot of folks are going to be interested in this. I have to ask, are you immediately diving into a next survey after this? I'm sure we'll have you back on the show again in the future, but you seem to stay busy.

Yes, absolutely. I do actually have a survey that we're working on now on contact centers. So we talked about CX. We're going to be kind of double-clicking into the contact center world and see how AI and also some of the other adjacent technologies are used by contact center leaders today to continue driving better efficiency and happy customers.

Well, we look forward to hearing the outcome of that survey as well. Omer, before we wrap up, why don't you let folks know where they can get in touch and maybe read up on some of your findings? Yeah, better do that. So our website is www.

aberdeen.com. And we also have a community of IT leaders that you can join, spiceworks.com.

That's where all our latest and greatest research is available. And again, at any point in time for any questions from our audience members, please refer to each other in any of these forums. I'm happy to keep the conversation going. And again, thanks for having me, Amelia.

Oh, wonderful conversation today. Thank you so much for being here, Omer. Thank you for joining us on the CX Pulse podcast. Thank you so much for joining us on the CX Pulse podcast.

Stay tuned for upcoming episodes. If you enjoyed today's episode, please subscribe and leave a five-star review. This podcast is brought to you by NICE, the world's leading cloud CX platform. Go to NICE.

com to learn more about our innovative and comprehensive end-to-end CX solutions. That's NICE.com.