60% of Asia's Top Firms to Pivot CX Budgets to GenAI, Phasing Out Old Software by 2027
By 2027, IDC predicts that 60% of APAC firms will reallocate 35% of CX budget as genAI improves, rendering entire software categories obsolete.
Companies are prioritizing genAI for customer-facing applications.
Many organizations expect genAI to integrate into existing processes to improve customer satisfaction, service, and retention.
Lavanya Jindal, Research Analyst, CX, Martech, and Value Streams at IDC
In a recent FutureScape report, IDC FutureScape: Worldwide Future of Customer Experience 2024 Predictions — Asia/Pacific (Excluding Japan) Implications, IDC predicts that by 2027, 60% of A2000 firms will reallocate 35% of CX spend on emerging products and skills as improved Generative AI renders entire software categories obsolete. This shift signifies that companies are starting to prioritize GenAI for customer-facing applications, expecting it to be integrated into existing processes to improve customer satisfaction, service, and retention.
Customer Experience, or CX, is emerging as a top investment area, reflective of the IDC Future Enterprise Resiliency & Spending Survey 2023 Wave 8 findings, where CX initiatives have ascended to the top of the C-suite agenda. The report elucidates that the reinvestment in GenAI is not merely a trend but a response to the call for deep-seated technological renewal. GenAI is poised to enhance real-time contextual understanding, paving the way for more personalized and anticipatory customer interactions.
This reveals a pivotal shift: a surge in investments toward GenAI and AI-driven solutions that are set to redefine customer experiences. Below are AI-driven predictions for customer experience in the region:
Conversations undergird all experiences. As sentiment and intent AI improve real-time contextual awareness, 55% of A2000 firms will fulfill all customer journeys primarily through conversations by 2026, boosting revenue and customer loyalty.
Experience control becomes bidirectional. By 2028, 60% of A500 firms will leverage ubiquitous experiences, edge analytics, and GenAI to enable customers to create their own experience journeys, improving customer-desired outcome and value.
Contextual outcomes dominate CX. By 2025, 60% of A1000 firms will eclipse competitors by leveraging real-time AI-mined data on product usage, interactions, and sentiment to direct the service and support experience.
In the area of CX, in the near-term (2024-2026) the focus would be on the value AI holds in terms of real-time contextual conversational capabilities while in the longer term (2027-2029), there will be emphasis on edge analytics, shift from numerous point solutions to unified platforms, CDPs as the driving engine for better customer insights, improving customer trust, and value parity.
While AI has taken center stage, IDC underscores that a holistic technological and strategic approach is imperative to navigate the digital business era:
Customer communications go dynamic. With the rise in digital self-service, organizations will shift 30% of their customer communications to support dynamic updates by 2026 to meet expectations and provide context continuity.
Data underpins next-gen CX. Customer data platforms deliver high-quality data for predictive AI and GenAI, activating 75% of real-time personalized customer interactions at scale for A1000 firms with 2X engagement gains by 2027.
Removing friction in real time. By 2029, powered by CX analytics at the edge, real-time sentiment analytics will drive 40% of customer engagements, delivering 10% growth in customer loyalty and retention for A2000 firms.
Fortune favors the trusted. Data availability, customer expectations, and competitive pressures will drive 30% of large enterprises to establish formal trust scores for all customers/prospects by 2029.
Service drives product design. To ensure customer retention and reduced effort, 60% of A1000 firms will design new product features primarily based on service interactions and customer usage, improving profitability by 2028.
Value streams trump experiences. By 2027, to differentiate and drive loyalty, 30% of organizations will undergo structural and technological changes to deliver value outcomes, shifting focus from providing experiences to value parity.
"As organizations continue to struggle with data siloes, and inability to prove business value from CX initiatives, there will be a need for structural and technological changes to enable better metrics to track the bidirectional flow of value, both for the customer and for the organization. There will also be a greater focus on those AI use cases that enable contextual customer conversations, and further translate to engagement gains, retention, and customer value," says Lavanya Jindal, Research Analyst, CX, Martech, and Value Streams at IDC.
To read more, please visit www.idc.com.