The Imminent Age of Intelligent Digital Assistants
As digital agents increasingly represent humans, online platform providers will need to upgrade their technology infrastructure and rethink their business models.
Intelligent digital assistants (IDAs) are growing more sophisticated and powerful, and will soon be commonplace. One forecast concludes there will be 1.8 billion unique active consumer IDA users worldwide by the end of 2021. The meteoric rise of IDAs — which will reside on handheld/wearable devices — is being fueled by advances in technologies such as natural language processing (NLP), artificial intelligence (AI) and machine learning. Their advent will impact the way businesses plan and operate, as well as how consumers interact with personal and enterprise technologies.
For example, because IDAs can search for and combine information from multiple sources (websites and apps), and connect the dots between these data sources, we foresee a huge change in the way users will interact with online platforms. As our interactive graphic below indicates, IDAs — and the digital personas they will reflect — will potentially remake the product/sales journey.
IDAs such as Siriand Google Now are examples of assistants that will gradually move toward being cognitive. While they can currently compute thousands of situational parameters and deliver options best suited for a search query, future IDAs will understand human behavior in ways that enable them to provide customized responses based on the needs of an individual. By staying ahead of the IDA adoption curve, online platform providers can better address the needs of users who depend heavily on such environments for everything from shopping and hiring a taxi to renting a room.
Problems Solved by IDAs
As IDAs become mainstream, more and more interactions between users and online platforms will be assumed by the intelligent devices. This holds promise for solving key challenges that exist in today’s virtual world, such as:
Leveraging user intent in search results: Powered by strong NLP programs and intent recognition algorithms, combined with speech-to-text software, IDAs will use inferred intent and not merely words to get the right results or perform tasks.
Overcoming information overload: IDAs will discover the right data sources according to user preferences and needs, eliminating time spent locating the right information.
Performing basic tasks: IDAs can eliminate unnecessary and avoidable user touchpoints for authentication, search and payment processing.
As IDAs evolve and address these challenges, adoption is also expected to increase. Fast adoption will be propelled by two factors: increased affordability and cross-device reach, particularly as more devices connect to the IoT, such as smart wearables, homes and cars.
Online Platform Providers: Strategies for Adaptation
To accommodate the rapid pace of IDA development, online platform providers will need to reimagine their business models and make necessary changes at the user management, underlying IT architecture and partner management levels. Below we illustrate the future technology architecture required to support IDAs.
We suggest providers consider the following IDA development points:
User interactivity: Platform providers will need more natural ways to support user interactions, such as voice-enabled applications with multilingual capabilities. Text-to-speech and speech-to-text converters will be needed to form the core of the UI as these will enable human-to-machine interactions.
Cognitive layer based on analytics, machine learning and AI: These technologies will enable online platforms to make optimal use of the data captured at multiple touchpoints across the value chain. AI could be used in numerous functions, from customer care to vendor management.
API management framework: Online platforms will need to expose more of their offerings and services through a set of standardized APIs, which will both promote information transparency and bring agility to tech development.
Managing changes in the ecosystem: As IDA adoption grows, online platform providers should embrace change in interacting with the five primary participants in their ecosystem: users, IDA platforms, competitors, partners and developers. Managing each one requires a specific focus.
For example, forging a strong partnership with all major IDAs will be critical. Further, developers will need new skill sets, both in-house developers who build and maintain technology platforms and external ones who provide niche products/services. In the IDA era, we predict the dependency on UI/UX will decline significantly, and there will be an increased need for core skills that involve building scalable architectures, designing with universal APIs and working with data analytics.
The Way Forward
Although the IDA era is just beginning, it’s moving fast. By year-end 2018, 25% of customer service and support operations will integrate virtual customer assistant technology across all engagement channels. To accommodate IDA demands, online platform companies must take a holistic approach to upgrade and extend existing business technologies. An incremental approach may prove inadequate to meet the exponentially rising threat represented by IDAs.
The mantra for winning in the IDA era pivots around the following three key tenets:
Keep pace with technology change.
An extensible IT infrastructure needs to be put in place to support the accelerating requirements of IDAs. Online developers should start with key initiatives such as API-based development, focusing on conversational commerce and developing skill sets around core capabilities such as analytics, scalable infrastructures, etc.
Create trust and loyalty through partnerships and information availability.
A balance needs to be established between partnerships with vendors/sellers and those with IDA developers. While the former would help in building a strong supply side ecosystem, the latter would ensure a strong demand-side ecosystem.
Build robust security and governance.
Strong mechanisms to protect data and customer privacy require robust technology and a fair set of rules that define terms of service and relationships between IDAs and online platforms. This will require online platform providers to reevaluate their strategy, modify their platform rules and revamp their architecture to accommodate impending requirements from customers (both human users and IDAs).
Companies that do not act swiftly on the above suggestions may become less favored options for IDAs and, eventually, end up losing customers and market share to the platforms that fully embrace the IDA era.