Biz Features

How Will Artificial Intelligence Affect Small Business? – Why Watson is Only The Beginning

by . May 27th, 2013

 Integrated Circuit by oskay via photopin cc

When will artificial intelligence change small businesses? It’s no longer a matter of if, but when. There was little fanfare last week when IBM announced that it would be offering Watson, the artificial intelligence algorithm that famously beat Ken Jennings in Jeopardy!, as a way to augment or even completely replace first-line customer service.

The implications are astounding.

Watson is now a much more compact and powerful tool than it was when it first came out on Jeopardy!, and is now better able to hold eerily lifelike conversations with users. An “Ask Watson” feature will allow callers to ask Watson questions directly from a phone or through instant messaging in a conversational style, allowing it to perform almost all of the tasks now typically handled by first-line contact centers- minus the waiting times and with faster response rates.

Reigh LeBlanc via photopin cc

Customer Service Will Never Be The Same

Craig Hayman, general manager of industry solutions for IBM’s Software Group said during the product launch last week “Many customers engage with a brand through the call center… and because call centers tend to frustrate customers, the company’s brand suffers as a result”.

IBM’s own internal studies indicate that of the 270 billion customer service calls that are handled annually, approximately 50 percent go unresolved, which they also claim indicate a dire problem in the way customer service is handled.

Call Center by EcoVirtual via photopin cc

AI may soon augment contact centers – or completely replace them

Overseas contact centers will soon find themselves directly competing with AI algorithms as a source of affordable front-line customer service solutions. AI tech like Watson promises several competitive advantages to human customer service.

Some of these include instant access to important data, the ability to learn from thousands of different simultaneous customers service cases as they happen, the ability to take any accent to better serve specific areas, and vastly reduced waiting times, not to mention the relative ease of having 24/7 operations with no added labor costs.

Combine this technology with cloud computing, and you give small businesses and even single entrepreneurs all over the world customer service capabilities that were previously only available to much larger companies.

There is also the potential to greatly reduce the expenses of businesses already operating contact centers, either by using AI as a reference for agents or having it take over customer service  tasks altogether.

The scaling up AI tech will also likely cost much lower than it would for human customer service – no service rep turnover, no training period, no additional physical space requirements, no agent availability issues, no seat shortages – none of the problems that typically plague contact centers and even smaller customer service set-ups.

A.I. Will Change Data Analytics- Forever

ArtificialFictionBrain by Genghiskanhg via Wikicommons

And it’s not just in customer service that AI technology can make a huge impact either- ANZ, a major Australia and New Zealand finance firm, has already begun testing Watson as to help financial advisers make better decisions, with good results.

The world famous Nielsen Company has also expressed interest in using Watson as a way to simplify analysis of data gathered from Web, social media, print and television marketing campaigns – possibly rendering the work of many specialized data analysts obsolete.

Admittedly, AI still has a pretty long way to go before it can totally replace humans. We weren’t as a whole impressed with SIRI when it debuted October 2011. But even SIRI has managed to improve, even with its relatively wide scope.

Watson and similar AI programs will be working within more defined limits, allowing for more focused improvement, making it more likely to succeed, and less likely they will encounter SIRI’s growing pains on a similar scale.

Will Humans Be Obsolete?

Customer service and analytics is just the beginning. Soon other jobs in the knowledge economy will be under fire as well. Machine intelligence is already capable of producing passable poetry and of creating musical pieces. Take this example created by a Youtube user’s algorithm:

Perhaps even small business blogging will become obsolete as well, with AI likely improving to the point that it can aggregate news, and create a new analysis based on gathered items. The fear of jobs being taken over by machines has been around for at least over 200 years, and science fiction is rife with apocalyptic scenarios.

Doomsday visions like in The Terminator and The Matrix universes notwithstanding -even if AI doesn’t take over in the way it promises to within the decade, we’ve got nowhere to go but up from here. If it’s not Watson that does it, succeeding generations will.

While cheap working AI will expand the capabilities of entrepreneurs, several fields even within the tech industry are likely to soon go the way of the  buggy whip. Jobs will be lost and new opportunities will come up, as has always been the case historically. But humans have always been needed to do the qualitative thinking, and these recent developments seem to have taken that monopoly away.

So if you’re thinking of creating an analytics firm or starting a contact center, or any knowledge-based venture in the next few years, you’d better seriously rethink how you’re doing things. The question of whether we humans will be rendered redundant still seems to be unanswerable for now. One of the few things left certain, is that the future of small business -and knowledge-based jobs, will forever be changed in our lifetimes.

Additional Reading

New York Times – I.B.M. Puts Watson to Work In Business

New York Times archives – Creating Artificial Intelligence Based On The Real Thing. – December 6, 2011

Wikipedia – Applications_of_artificial_intelligence – For a basic understanding and historical overview on how AI logic is developed

Artificial Intelligence Techniques Enhance Business Forecasts: Computer-based analysis increases accuracy; By OWEN P. HALL, JR., PE, PHD, JULIAN VIRTUE PROFESSOR – A 2002 Paper predicting the use of AI for analysis

For a look into a intelligence amplification, an alternative to AI which seeks to augment existing human brainpower: – Intelligence_amplification – Humans With Amplified Intelligence Could Be More Powerful

Image Credits

oskay via photopin cc
Reigh LeBlanc via photopin cc
EcoVirtual via photopin cc
ArtificialFictionBrain by Genghiskanhg via commons.wikimedia


Arthur Piccio manages YouTheEntrepreneur and has managed content for major players in the online printing industry. He was previously BizSugar's contributor of the week. His work has appeared multiple times on The New York Times' You're the Boss Small Business Blog. He enjoys guitar maintenance and reading up on history and psychology in his spare time.