Innovate Your Business Model With Conversational AI: Part 1

Ivo van Barneveld

Part 1 in the 3-part “Driving Innovation with Conversational AI” series

While the industry has finally adopted a “mobile-first” mindset when it comes to application design, a new interaction paradigm is marching in: chatbots, or digital assistants, that offer a completely new user experience. In an earlier blog series, I wrote about the shift from “mobile-first” to “conversational UI-first” in application design.

Artificial intelligence (AI) is one of the driving forces behind conversational UIs: interfaces that engage with users through a conversation. They provide a more natural way for humans to interact with machines. Moreover, conversational UIs bring additional benefits in the form of context: the system remembers your previous interactions and learns your behavior and patterns.

In this new blog series, I will look at conversational artificial intelligence from the perspective of business model innovation. By using the business model canvas, I will explain how conversational AI can be a value driver for business models and create new revenue streams. I will explore not only its impact on the solutions or services you produce and sell, but also how it changes the way your employees work and how you interact with your customers. Let’s start with a perspective on today’s main interaction paradigm: the graphical user interface (GUI).

Graphical user interface is reaching it limits

For nearly 40 years, human-computer interaction has happened through GUIs. Ever since its appearance in 1973 on the Xerox Alto, the GUI has evolved over time: from monochrome to color screens, from static graphics to catchy animations, from keyboard and mouse input to touch interaction. People have embraced GUIs and accepted them as the way to interact with computer systems. GUIs keep evolving: innovations like gesture control and immersion (augmented reality, virtual reality, mixed reality) provide new user experiences.

In today’s digital world, graphical user interfaces dictate to a large extent how your customers deal with your solutions or services or how your employees perform their work. That is going to change drastically in the next couple of years. The graphical user interface is reaching its limits. New and more natural ways of human-computer interaction have emerged: eye-tracking, wearable sensors, emotion detection, and even mind control are already in research or prototype stage.

Conversational AI will take over

Conversational AI is bound to be the next paradigm in human-computer interaction. We have entered the age of voice. In the consumer application space, Apple Siri, Amazon Alexa, and Google Assistant are already in wide use, and they learn new skills rapidly (for example, by connecting to new services). Another example is the smart speaker Raven H, recently announced by Baidu, that is tapping into the enormous Chinese market.

Powered by machine learning and featuring sophisticated speech recognition, all these virtual assistants offer natural interaction patterns with computer systems. Appearing as chatbots, conversational AI is already present on platforms like Facebook Messenger, WeChat, and Slack, to name a few. And anyone raising children can attest that Generation Z is more comfortable than other generations commanding their smartphones by voice. Gartner has predicted that by 2020, the average person will have more conversations with bots than with their spouse!

Looking at its capabilities and uptake, it is clear that conversational AI will go beyond simple conversations like “Play Coldplay on Spotify,” “Switch on the lights,” and “What’s the weather for today?” Conversational AI offers huge business potential, and companies should start evaluating the use of virtual digital assistants both internally and externally. In my next blog, we’ll take a look at the impact of conversational AI on a company’s business model.

As AI becomes more sophisticated, digital experiences will become increasingly multisensory and more convincingly “real.” Forward-thinking businesses are Diving Deep Into Digital Experiences.

Ivo van Barneveld

About Ivo van Barneveld

Ivo van Barneveld is a passionate evangelist of innovations in user experience, mobile, and Internet of Things. His work focuses on the intersection of technology and business. He is currently a member of the UX Customer Office team in SAP Global Design, with the remit to drive adoption of SAP’s award-winning user experience, SAP Fiori. Previously, he worked at SAP as a lead consultant, supporting customers with planning and executing digital transformation strategies. Prior to joining SAP in 2012, he held several business development, account manager, and partner manager roles at Nokia and Layar, among others. Ivo holds a Master’s degree in Applied Physics from the Delft University of Technology, and is based in the Netherlands.