Will AI Replace Contact Center Agents?

Executives, contact center leaders, and agents have been grappling with this question since late 2022, when OpenAI brought ChatGPT and generative artificial intelligence (GenAI) into the mainstream. Although the answer isn’t clear-cut, it is a key insight that CX and enterprise leaders need for both short- and long-term planning. While artificial intelligence (AI) technologies are relatively new, especially those based on genAI, the notion of using technology to reduce the headcount of contact center agents has come up repeatedly throughout the five-decade history of these operating environments.

And for good reason. CEOs and CFOs target contact centers for reductions in force because these departments are generally one of the largest employers in organizations, and people are expensive. It’s fair to assume that 60 percent of a North American-based contact center’s costs are people-related. Of equal significance, contact center employees are typically a variable expense that can be reduced quickly. For these reasons, when something like genAI comes along and is touted as a high-quality replacement for human agents, executives and boards push for major contact center staff reductions because they can have a direct impact on a company’s bottom line. But there is much more to the story.

GenAI is exciting because it significantly improves the accuracy and usefulness of many contact center applications due to its ability to identify intents and source appropriate responses. It’s useful by itself, but when genAI is combined with agentic AI and fully integrated into contact center systems and applications—including CRM, conversational AI (CAI) self-service, agent augmentation tools, automated quality management (AQM), real-time guidance (RTG), next-best-action tools, automated post-interaction summarization, voice-of-the-customer (VoC) tools, workforce management (WFM), knowledge management (KM), and more—the benefits can be considerable if the risks are mitigated.

The current thinking in many businesses—some of which initially planned to use AI to significantly reduce their contact center staff, and in some cases tried—is now focused on taking a more nuanced approach. Companies are using CAI to assist (but not replace) human agents by automating some of their tasks as they fully resolve customer inquiries and complete transactions. They are also using CAI’s self-service capabilities to increase the percentage of fully automated interactions, so they do not require a human agent.

But the benefits do not stop there. The synergies between customer-facing CAI self-service solutions and agent-facing augmentation tools are also proving to be highly beneficial in improving the CX and employee experience (EX), as they enable personalized, context-relevant handoffs and accurate conversation summaries. As a result, these capabilities are driving productivity improvements. This allows enterprises to scale their service organizations to handle continuously growing volumes without adding agents at the same customer-to-employee ratio applied in the past. So AI is driving increased productivity in contact centers while also enhancing the CX and EX.

But other factors still need to be taken into consideration. Even if CAI solutions were perfect—which they are not—many consumers prefer to speak to human agents, particularly in times of stress. And this is not likely to change anytime soon.

DMG does not project that organizations will fully replace their human agents with intelligent bots during the next five years, but they are expected to expand AI utilization to enable them to scale and grow their business and support infrastructure while delivering a high-quality CX. The 10-year outlook is similar in that DMG predicts many companies will continue to provide access to human agents under certain circumstances, although not to all customers.

Donna Fluss, founder and president of DMG Consulting LLC, provides a unique and unparalleled understanding of the people, processes, and technology that drive the strategic direction of the dynamic and rapidly transforming contact center and back-office markets. As the foremost analyst and visionary dedicated to the contact center and back-office markets, Fuss has provided expert guidance for more than 30 years to technology leaders as well as disruptive newcomers, investors, and enterprises that want to build next-generation AI-enabled contact centers  She can be reached at Donna.Fluss@dmgconsult.com.