Business Case and Project Proposal: Adoption of Artificial
Intelligence in Customer Service.

1. Business Background

Artificial intelligence (AI) has emerged as a part of pop culture and the recent

developments in AI mean that businesses require managers who understand the

significant need of AI in business. In the last few years, customer service has been

intense with the growth of e-commerce where most customers shop online prompting

the need for more services, and an influx in budgets. One key question is how

businesses do more with less in customer service because the need to engage

customers means businesses require more customer service employees. Thus, there is

a need for cost-effective services, which has resulted in to use of service robots, AI, and

intelligence automation (Kunz, W. H., & Wirtz, J. (2023).

Since the COVID-19 pandemic, online businesses and transactions increased by

tenfold and customers’ expectations have grown because they expect businesses to

respond to their orders in time, give regular updates on their shipments, and answer

their queries quickly. The only solution to this increasing need is AI-powered chatbots in

customer service which not only provide customers with answers to common questions

but can also greet them, serve them with knowledge base articles, and guide them

through important business processes or even send technicians to the field at request.

Take for instance a customer who bought a defective dishwasher and wants to return

PMG501 – Scope Project

ManagementBusiness Case and Project Proposal Outline Template

the product and sends a message to an agent who takes over thirty minutes to respond.

The customer will be unsatisfied and may not come again but with AI customer

services, they will get personalized responses to their queries in seconds.

2. Business Requirements

1. We require the capability to have executive sponsorship to allow us to infuse

Artificial intelligence within the existing business processes for business

optimization and support.

2. We require to have defined business objectives and outcomes on what is

expected from AI use.

3. We require a budget that will support short-term and long-term AI objectives in

the company by exploring the initial pilot phase.

3. Description of Proposed Project/Solution

The significant growth in AI probably in 2023 and beyond has brought serious

discussions to this project. We discussed the pitfalls of using AI in customer service and

the viewpoint was that the proposed project is not a one-size-fit for all customer service

teams. Therefore, we analyzed key characteristics of output that the project will have;

 The project will help customer service teams improve their customer experiences by

assisting customer agents in response composure, and information sharing.

 The AI chatbots in customer service will help customers by providing them with 24/7

support through automation, and personalized scale.

 AI will also provide customer analytics which will provide the business with customer

insights because the tools are capable of analyzing large amounts of data through

auctionable summaries and trends.

 The AI technology in customer service will also create an exciting frontier that will help in

managing customer expectations.

 The new technology in customer service will also make it easy for customers ordering

their goods online to quickly and easily manage their orders, refunds, and their

subscriptions at their convenience. They can also cancel the order if they make a

mistake before they are dispatched.

3.1 Solution Benefits

1. AI will play a significant role in handling large volumes of data which will transform the

business to be more efficient and productive.

2. Help in pinpointing the needs of the customers and their expectations better by trying to

meet the increasing need for customer satisfaction by raising the standards.

3. Almost every business is working to cut costs and AI customer service is one of the most

effective ways to do that. Since revenue growth is not guaranteed in the current

competitive businesses, using AI will help the business remain competitive in the market

and increase profits through customer satisfaction.

3.2 Solution Costs

a) The first cost associated with this business project is software cost, AI

requires data storage and computational power to run and train

algorithms. Thus, the business will incur data collection, processing, and

analysis costs.

b) The labor cost of installing AI will range between $100,000 to $150,000

which the business will use to hire data scientists software developers,

and machine learning engineers.

c) Customer service agents will also need to be trained, the business will

incur costs for training and maintenance of the project.

3.3 Solution Risks

 In some instances, AI might incorrectly interpret customer’s information, if this

happens, the customer is likely to receive incorrect responses which may

generate confusion leading to medium risk.

 The AI system may also generate biased information such as political, sexist, or

racist remarks which may damage the organization’s reputation which may lead

to a high risk for the business.

 In the event the developers did not train the AI chatbots well, they are likely to

generate inconsistent answers which may affect customer service delivery which

is a medium risk for the business.

 AI is an open technology and bad actors within the business may insert false

information which leads to high risk due to data breaches.

 AI tools also lack empathy in their responses, even those that stimulate empathy,

they lack compassion which may result in a low risk for the business.

4. Analysis of Alternatives

a) One of the alternatives for using AI in customer service is using a 24-hour

customer agent platform which ensures customers’ needs are sorted as quickly

as possible. However, this alternative is not cost-effective because more

customer agents are required, it also has low benefits since a customer agent

may take longer to respond to clients and this may result in a loss of customers.

b) Another Alternative is using hybrid models, whereby AI will handle routine

business inquiries and human agents will deal with complex issues. This

combination will ensure that there is efficiency and it will maintain customer touch

reducing the risk of losing customers.

5. Final Recommendation

AI is an important tool in customer service and it plays a crucial role in providing

businesses with workflow, therefore, I support this project and I believe that it will create

efficiency and eliminate time as customers get intelligent responses in real-time. Thus,

this project will reduce customer service costs, reduce risks of losing customers to late

responses and anable the business to focus on service delivery.

Reference

Kunz, W. H., & Wirtz, J. (2023). AI in Customer Service: A Service Revolution in the

Making. In Artificial Intelligence in Customer Service: The Next Frontier for

Personalized Engagement (pp. 15-32). Cham: Springer International Publishing.

https://doi.org/10.1007/978-3-031-33898-4_2