CHATBOTS: What they are and how they can improve your daily life

A chatbot, at its most basic, is a computer program that mimics and interprets human interaction (spoken or typed), enabling users to converse with digital gadgets as if they were speaking to real people. Chatbots can be as basic as one-line programs that respond to straightforward questions, or they can be as complex as digital assistants that learn and develop over time to provide ever more individualized service as they acquire and process more data.

Unknowingly or not, you have undoubtedly communicated with a chatbot. A window may appear on your screen while you are conducting product research at your computer and ask if you need any assistance. Or perhaps you use your smartphone to chat for a ride while you're on your way to a performance. Or perhaps you've used voice commands to place a coffee order at a nearby café and heard a response letting you know when it would be available and how much it will cost. These are all illustrations of situations in which you might run into a chatbot.

How do chatbots work?

Chatbots process data to provide answers to requests of various kinds and are powered by AI, automated rules, natural-language processing (NLP), and machine learning (ML).

The two primary categories of chatbots are:

Task-oriented (declarative) chatbots are specialized applications that concentrate on carrying out a single task. They provide automated yet conversational responses to user enquiries by using rules, NLP, and very little ML. Think of strong, interactive FAQs when picturing interactions with these chatbots, which are extremely specialized, structured, and best suited for support and service activities. Task-oriented chatbots can manage frequent inquiries, such as inquiries regarding business hours or straightforward transactions without a lot of variables. Although they employ NLP to enable conversational user experiences, their powers are somewhat limited. These are the chatbots that are currently most often utilized.

Data-driven and predictive (conversational) chatbots are also known as virtual assistants or digital assistants, and they are far more advanced, interactive, and individualized than task-focused chatbots. These chatbots use machine learning (ML), natural language understanding (NLU), and natural language processing (NLP) to learn as they go. Personalization based on user profiles and previous user behavior is made possible by the application of predictive intelligence and analytics. A user's preferences can be over time learned by a digital assistant, which can also make suggestions and even foresee needs. They have the ability to start dialogues in addition to tracking data and intent. Consumer-focused, data-driven, and predictive chatbots include Apple's Siri and Amazon's Alexa.

Advanced digital assistants can also link multiple single-purpose chatbots together, gather data from each one separately, and then integrate this data to carry out a task while maintaining context—keeping the chatbot from getting "confused."

The value chatbots bring to businesses and customers

Chatbots increase operational effectiveness and save costs for businesses while providing convenience and extra services to both internal staff and external clients. They lessen the need for human engagement while enabling businesses to quickly address a wide range of client inquiries and difficulties.

A chatbot allows a firm to scale, personalize, and be proactive all at once—a key differentiation. For instance, a company can only serve a certain number of customers at once while using only human labor. Human-powered firms are constrained in their capacity for proactive and individualized outreach since they must concentrate on standardized models in order to be cost-effective.

Chatbots, in contrast, let businesses interact personally with an endless number of customers and may be scaled up or down based on demand and business needs. A company may serve millions of customers at once by deploying chatbots to offer human-like, individualized, proactive service.

According to consumer research, messaging apps are quickly taking over as people's go-to means of contacting companies to do specific kinds of business. Chatbots enable a degree of service and convenience through messaging systems that, in many circumstances, goes beyond what humans can offer. For instance, compared to traditional call centers, banking chatbots save customers an average of four minutes every query. The same capabilities that boost productivity and cut costs for organizations can benefit customers by enhancing their shopping experiences. It is a win-win situation.

Why were chatbots created?

Society is becoming a "mobile-first" society as a result of digitization. Chatbots are becoming more and more crucial in this mobility-driven shift as messaging applications gain in popularity. Intelligent conversational chatbots are redefining how companies and customers engage. They are frequently user interfaces for mobile applications.

Businesses can interact personally with customers with chatbots without incurring the cost of hiring human agents. For instance, a lot of the queries or problems that clients have have simple solutions. For this reason, businesses produce FAQs and troubleshooting manuals. In place of traditional FAQs or guides, chatbots offer a more personalized option. They can even triage questions and refer customers with complex problems to real people. As a time and money saver for businesses and a convenience for customers, chatbots have gained popularity.

How chatbots have evolved

It is possible that Alan Turing's idea of intelligent robots from the 1950s is where the chatbot got its start. Since then, advances in artificial intelligence—the technology underpinning chatbots—have led to the development of superintelligent supercomputers like IBM Watson.

The phone tree, which guided consumers who called in on a sometimes tedious and irritating path of selecting one option after another to wound their way through an automated customer care model, was the first chatbot. This concept evolved into pop-up, live, onscreen discussions as a result of technological advancements and the increasing sophistication of AI, ML, and NLP. The process of evolution has continued.

With the help of today's digital assistants, businesses can expand AI to offer far more practical and efficient interactions with customers—right from their digital devices.

Common chatbot uses

Chatbots are widely employed to enhance the self-service and automated internal staff operations offered by IT service management. Common activities like password updates, system status, outage notifications, and knowledge management may easily be automated with an intelligent chatbot and made available round-the-clock while extending access to widely used voice and text-based conversational interfaces.

To manage incoming interactions and steer clients to the right resource, chatbots are most frequently utilized in customer contact centers on the business side. They are widely employed for internal functions as well, such as the onboarding of new employees and assisting all staff with regular tasks like booking vacations, receiving training, ordering computers and office supplies, as well as other self-service tasks that don't require human assistance.

Chatbots are providing a range of customer services for consumers, including ordering event tickets, booking and checking into hotels, and comparing goods and services. Additionally, chatbots are frequently utilized in the banking, retail, and food and beverage industries to handle standard consumer tasks. Chatbots can also do a variety of public sector tasks, including filing requests for city services, answering questions about utilities, and resolving billing difficulties.

Why AI and data matter when it comes to chatbots

The AI and data that power chatbots contain both their advantages and disadvantages.

AI points to consider: AI excels at automating tedious and repetitive tasks. The majority of the time, a chatbot performs well when AI is used for these kinds of jobs. A chatbot may struggle if a request is made of it that goes beyond what it can handle or makes the work more difficult, which is bad for both businesses and customers. Chatbots may not always be able to respond to or handle certain inquiries or problems, such as complex service problems with numerous variables.

Developers can get around these restrictions by including a backup in their chatbot application that directs users to a different source (like a live agent) or asks them to submit a different query or problem. Some chatbots can switch fluidly between being a chatbot, a live agent, and back again. Chatbots and digital assistants will become more ingrained in our daily lives as AI technology and implementation advance.

Data considerations: Data is accessed from a variety of sources by all chatbots. The data will be a chatbot enabler as long as it is of high quality and the chatbot is designed properly. The functionality of the chatbot will be constrained, though, if the data quality is subpar. Even if the data quality is high, the chatbot may behave poorly or, at the very least, unpredictably if the ML training wasn't done correctly or was unsupervised.

In other words, the AI and data you incorporate into your chatbot will determine how effective it is.

Are chatbots bad?

The word "chatbot" is sometimes used incorrectly. Despite the fact that the terms chatbot and bot are commonly used synonymously, a bot is merely an automated program that can be utilized for good or bad. Due to a history of hackers utilizing automated programs to compromise, takeover, and generally wreck havoc in the digital environment, the word "bot" has a bad reputation.

Thus, it is important to distinguish between bots and chatbots. In general, there is no history of chatbots being utilized for malicious purposes. Conversational tools known as chatbots effectively carry out repetitive chores. They aid people in doing those duties quickly so they may concentrate on high-level, strategic, and interesting activities that call for human qualities that cannot be copied by robots.

Want to create a chatbot? It’s easier than you might think.

Anyone can construct a chatbot thanks to a large variety of tools that are readily available. Some of these tools are intended for consumer usage, while others are intended for commercial use (such as internal operations).

A messaging platform or service is needed to distribute a chatbot, similar to how a mobile application is delivered. Beyond that, you don't need to be an expert or even a developer to build one thanks to all the tools that are readily available for doing so. These tools should allow a product manager or business user to construct a chatbot in as little as an hour.

The future of chatbots

Where is the future of chatbot development going? Like other AI tools, chatbots will be utilized to improve human capacities and free people up to be more inventive and creative while spending more time on strategic rather than tactical tasks.

Businesses, employees, and customers will likely soon benefit from improved chatbot capabilities like quicker recommendations and predictions, as well as simple access to high-definition video conferencing from within a discussion, when AI is combined with the development of 5G technology. These and more scenarios are currently under investigation and will develop swiftly as internet connectivity, AI, NLP, and ML improve. In the future, everyone will be able to carry a personal assistant that is completely functional in their pocket, making life and work in our world more productive and connected.