In 2023, worldwide spending on contact center (CC) technology and conversational AI and virtual assistants is projected to reach a total of $18.6 billion, marking a substantial 16.2 percent increase from the previous year, according to the latest report from Gartner.
The surge in investment comes as businesses strive to adapt to the ever-changing landscape influenced by economic volatility. The Gartner report did not reveal the likely job loss to contact center agents following the deployment of virtual agents.
Megan Marek Fernandez, Director Analyst at Gartner, explained that near-term growth rates for contact center technologies and conversational AI are expected to be slightly impacted by the fluctuating business environment, leading to more extended decision cycles.
However, looking ahead, the continuous advancement of generative AI and the growing maturity of conversational AI will drive a significant acceleration in contact center platform replacements. These upgrades will be driven by CX leaders seeking to enhance both the efficiency of customer service operations and overall customer experiences.
The most rapid growth in this sector is predicted in the global conversational AI and virtual assistant market, which is estimated to contribute to a remarkable 24 percent growth in 2024. Contact center decision-makers are increasingly investing in conversational AI capabilities, as they aim to incorporate AI as part of their long-term strategy to minimize reliance on live agents.
While the number of customer service interactions that incorporate AI is steadily increasing, the majority of these interactions are still augmented with contact center AI rather than being fully handled by virtual agents. Gartner projects that approximately 3 percent of interactions will be managed through contact center AI in 2023, with this figure expected to rise to 14 percent by 2027.
Gartner’s report takes into account the potential impact of general economic and geopolitical uncertainty, which could lead to budget constraints in 2023. This might result in a slowdown of premises-based contact center replacements and upgrade projects. However, it’s anticipated that customer-facing projects will be deemed crucial for revenue retention and generation strategies. As a result, investment in customer service and support initiatives that can enhance the customer experience or streamline operations may receive greater support, even amidst budget tightening.
Marek Fernandez emphasized that customer service projects that have the potential to differentiate the customer experience or optimize service operations could see an easier approval for investment. Consequently, contact center as a service (CCaaS) projects are expected to experience an acceleration in investment growth, particularly as decision-makers prioritize cloud-based contact center capabilities to modernize their customer service operations.
CCaaS solutions will be adopted by more contact centers with a large number of agents, which have been slow in embracing cloud-based solutions. The modernization efforts will include support for a broader mix of communications channels and will integrate advanced dashboards, analytics, routing, workforce optimization (WFO), knowledge and insight, and conversational AI capabilities.
In conclusion, the report from Gartner highlights the growing significance of conversational AI and virtual assistants in the contact center space, driving substantial investment and fostering advancements in customer service operations globally. As businesses navigate economic uncertainties, their focus on enhancing customer experiences remains paramount, driving the adoption of innovative technologies to improve service efficiency and overall satisfaction.
