Artificial intelligence (AI) is as effective as the intelligence it is trained on. Without the right intelligence, it can hallucinate to spew incorrect information with complete confidence. 

However, Vasudeva Rao Munnaluri, regional vice president for India and SAARC at Zendesk, is unwilling to write off AI. He believes that over time, it can learn the nuances of a business, and the more it learns, the more accurate it can be. Conversely, if AI is inaccurate, it can result in clunky chatbots that lack intuitiveness, leading to customer frustration.

In an exclusive interview with Outlook Start-Up, Munnaluri explains how Zendesk has integrated AI within its solutions, emphasising transparency and accuracy.

Edited excerpts:

In the past year and a half, Zendesk has undergone a roller coaster ride—from rejecting a $17 billion offer in February 2022 to being sold for $10 billion nine months later to a consortium of private equity (PE) entities. How has this impacted the brand’s perception amongst customers?

Indeed, it was an eventful year for us. Late last year, Zendesk announced the completion of our acquisition by a consortium of investors. The closing of this transaction marked an exciting new chapter for our company. 

Our partners at the consortium understand and hold dear what makes us special, which makes them passionate partners, committed to our mutual success and willing to invest in us to continue making Zendesk great. Our customers understand this as a positive development for Zendesk.

In June 2023, Zendesk announced its decision to lay off 8 per cent of its workforce, around 320 workers, due to tough macroeconomic conditions. When do you expect these conditions to reverse, and till it happens, how is Zendesk trying to stay on top of its competition in the customer experience (CX) space?

The macroeconomic conditions we operate in within each market and globally are not within our control. Hence, it would not be appropriate to speculate when we expect them to shift. 

We have an incredible opportunity to lead the new era of intelligent CX. The new solutions we announced recently, Zendesk AI and Conversational Commerce, will help our customers transform how they do business. 

We continue to invest and innovate. We recently announced the acquisition of Tymeshift, through which we can help companies simplify the management of complex CX workloads. 

In the prevalent economic uncertainty, start-ups are trying to increase their productivity while minimising costs and managing hiring shortages. How can Zendesk help them respond faster to their customer queries in the right context, leveraging the power of AI?

When we think about AI in the context of customer service, the most common perception is that of chatbots that can emulate humans. But AI that aids in customer service really exists to help humans do their jobs better, not replace them. 

Central to this concept is Zendesk AI, built to make customer service teams more agile, especially when they have to tackle large volumes of customer requests. Agents often end up spending a significant amount of time and energy on repetitive tasks, manually categorising each query to ensure it gets routed to the right people. And when it comes to driving meaningful conversations, they often lack important insights that could speed up the resolution time. 

With Zendesk AI, intelligence is at the agents’ fingertips. It works behind the scenes to improve business operations with advanced, pre-trained bots that can gauge customer intent, speeding up the process of query triaging. 

All this helps drive efficiencies, cost savings and improved performance that helps teams—especially, as is common in start-ups, lean teams—get the most out of what they do and deliver better for customers. This is essential to achieving the scale start-ups need in that critical early growth stage.

According to Zendesk’s CX Accelerator report, only 17 per cent of Indian businesses deliver ‘exceptional’ customer services, even though 79 per cent said CX is a way to drive revenue. How are you helping these companies to balance human and automation strategies and integrate vital data from critical apps to reap benefits in CX?

Building trust in the technology is crucial for AI adoption, as regaining lost customer trust can be challenging. This is why human oversight is important while deploying any AI solution. Zendesk’s solutions are trained on billions of customer conversations and the right safeguards and testing. 

For instance, Zendesk’s AI solution identifies when a customer is frustrated with a chatbot and automatically routes it to the right agent who is equipped to tackle such issues. It also arms agents with the right customer context to deliver personalised experiences in that process. 

Such seamless bot-to-human handoffs ensure customer issues are resolved faster while ensuring the conversations are industry-specific and accurate. 

Like most other tech companies, Zendesk is also leaning towards AI. How can this help start-ups in particular?

Start-ups today are under a lot of pressure to innovate and ramp up productivity while working on a tight budget. AI may seem like the most plausible solution to this problem. 

But there’s a reason why less than 15 per cent of businesses in India have aligned AI adoption with the broader corporate strategy, as per the NASSCOM AI Adoption Index. This is because powerful AI solutions are out of reach for start-ups already operating on minimal resources. 

Many of these solutions need enormous IT spending, long implementation times and specialised talent just to kickstart AI adoption. Others are simply designed to work on specific problems, creating more silos than necessary. 

The bottom line is that AI adoption can be expensive. Zendesk’s solutions aim at democratising access to AI. 

AI has to be accessible to everyone, whether it is an enterprise or a start-up. The best solutions are always easy to set up and use, ensuring agents have the right intelligence and assistance in making every customer conversation more meaningful. 

AI is now within reach of start-ups as it works out of the box and seamlessly integrates with existing software. Businesses don’t need months or years to adopt AI. Our platform allows businesses to do this in minutes. 

So, you do not think that AI is another bubble that is likely to burst and that it is here for the long haul?

At Zendesk, we anticipate that most customer service interactions will be AI-first by 2025, and we can already observe this change happening rapidly. The future lies in AI and how businesses can use it to grow. 

Among the biggest gains AI offers is creating a data-driven culture. AI's benefits are massive, be it insights from customer conversations to drive financial and marketing strategies to find new revenue opportunities. 

With the rising concerns about a potential recession, many companies, especially start-ups, are tightening their IT budgets to deal with a shrinking economy. Has this caused Zendesk to evaluate its relationships with its technology partners and suppliers to ensure it does not lose out on diminishing opportunities?

We continue to invest and innovate. Our partner ecosystem is a strong one from which we constantly evaluate avenues to create the right solutions for our customers. 

For start-ups, it is essential that the solutions we bring them are agile, customised and scalable but also address where they are in their growth to ensure that their IT spends not only maximise ROI but help with their development goals as well.

In the ongoing funding winter, start-ups are increasingly focused on network optimisation, simplification and automation. How is Zendesk gearing up to meet these needs, especially in India?

This follows from our broad approach to delivering the right solutions for the stage of growth that start-ups are at. Currently, we see many opportunities for businesses to achieve that optimisation, simplification and automation through adopting AI-powered tools. 

Hence, we launched ZendeskAI recently. Additionally, we see the opportunity for support, marketing and sales to connect within a conversation seamlessly, so we brought Conversational Commerce to market. We also recently announced the acquisition of Tymeshift, an AI-powered workforce management tool.

Will the current economic climate see companies like Zendesk lose their negotiating leverage while trying to retain their customers?

Many of our customers started their partnership with us as local start-ups and are now multinational companies. This has happened by delivering value through every stage of the relationship. 

Start-ups benefit from free trial periods, insights and connections to founder communities. And as they scale, we continue to add value through thoughtful recommendations and seamless implementations that support their business goals.

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