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Elevating Communication: The AI Assistant Leap

Elevating Communication: The AI Assistant Leap
Published at 23 September 2024 | Croatia

General details

EDIHs involved

Customer

ADRIA P.A. LOGO
Customer type: SME
Customer size: Small (10-49)

Services provided
Test before invest
Technologies
Artificial Intelligence & Decision support
Sectors
Retail, wholesale or distribution
Automotive

Challenges

Adria P.A., a Renault and Dacia dealership, encountered significant challenges due to the high volume of sales and service activities. The company needed to manage customer interactions effectively, especially during peak periods and outside regular working hours. Their traditional customer service model, heavily reliant on human resources, struggled to keep up with the increasing demand. This put considerable pressure on employees and risked the quality of service, which is essential for maintaining customer loyalty and brand reputation. 

Adria P.A. recognized the necessity of digital transformation to enhance operational efficiency and improve customer satisfaction. Specifically, to integrate AI-based sales and service assistants into their operations. These AI tools were expected to support existing staff during busy times and provide accurate information to customers during off-hours, when human staff might not be available. 

However, despite having a modern IT infrastructure, Adria P.A. lacked experience with artificial intelligence (AI) and its practical application in everyday business operations. This lack of expertise posed a significant barrier to their digital transformation goals. As a result, Adria P.A. decided to engage EDIH Adria to assess the feasibility of implementing AI solutions that could integrate seamlessly into their existing business processes, support their workforce, and ultimately improve customer experiences. 

This engagement was driven by the understanding that digital transformation is not just about adopting new technologies but also about rethinking how the business operates and interacts with customers. Adria P.A. needed to ensure that any solution adopted would be scalable, adaptable to future needs, and capable of delivering measurable improvements in both customer service and operational efficiency. This challenge set the stage for a comprehensive exploration of AI technologies to meet Adria P.A.'s specific needs. 

Solutions

The European Digital Innovation Hub (EDIH) approached Adria P.A.’s challenge with a structured plan to leverage artificial intelligence (AI) for digital transformation. First, EDIH identified the company's specific needs for enhanced customer support and service efficiency. Two AI-based solutions were proposed: one utilizing the Infobip platform, known for its advanced chatbots, and another based on open-source technologies from OpenAI. 

The Infobip platform offered a straightforward setup with high-performance chatbots, but it came with costs that Adria P.A. needed to consider. The open-source solution from OpenAI provided greater flexibility and customization, including the ability to create a comprehensive knowledge base, support multilingual communication, and integrate voice interaction capabilities. This solution, while more complex, aligned better with Adria P.A.’s long-term needs and budget constraints. 

After evaluating both options, Adria P.A. chose the open-source solution for its adaptability and cost-effectiveness. Implementation involved configuring an AI conversational agent using data from employee interviews and various company resources, such as vehicle price lists and sales processes. The AI assistant was designed to provide accurate, timely, and contextually relevant responses to customer inquiries, both online and via voice channels. 

RAG System Architecture: The diagram shows the flow of information in the Retrieval-Augmented Generation (RAG) system, illustrating how user queries are processed through context enhancement and large language models to generate accurate answers.The EDIH team used the Retrieval-Augmented Generation (RAG) methodology to create a dynamic knowledge base that the AI could access when interacting with customers. This approach ensured that the AI generated responses that were accurate and highly relevant to the context of each inquiry. Additionally, vehicle manuals were digitized and integrated into the AI system, further enhancing its ability to provide precise information. The demonstrated solution met Adria P.A.’s digital transformation needs by automating customer support, improving operational efficiency, and integrating with existing systems. 

Chatbot properties

Results and Benefits

Adria P.A. chatbotDuring the test phase of the AI project at Adria P.A., significant potential benefits were identified, which are expected to materialize once the solution is fully implemented. Quantitatively, it is anticipated that the AI assistant will reduce the workload on customer support staff by automating responses to routine inquiries, such as questions about vehicle availability, service booking, and pricing. This automation is expected to allow human agents to focus on more complex tasks, leading to improved productivity. Faster response times are also expected, with the AI providing instant replies, enhancing customer experience and satisfaction. The AI’s ability to operate 24/7 should ensure that customers can access information and support outside regular business hours, broadening the customer base and improving service availability. 

The AI assistant's multilingual capabilities are projected to be particularly beneficial, enabling Adria P.A. to serve international customers more effectively by reducing language barriers. The integration of the AI with Adria P.A.’s CRM and ERP systems is expected to streamline data management, allowing for more efficient utilization of customer interactions, which can lead to refined marketing strategies, personalized interactions, and optimized inventory management. This data-driven approach should enable more targeted sales efforts and better stock level management, contributing to overall operational efficiency. 

Qualitatively, the AI assistant is expected to significantly enhance customer interactions by delivering consistent, accurate, and personalized responses. This consistency should help build trust with customers, as the AI will provide uniform answers, ensuring all customers receive high-quality service. The AI’s ability to manage peak demand periods effectively is expected to allow Adria P.A. to handle surges in inquiries during high-traffic times, such as vehicle launches or promotions, without overwhelming their support team. This capability is anticipated to enhance operational efficiency and customer satisfaction during critical business periods. 

The AI’s data analysis capabilities are expected to contribute to continuous improvement by enabling real-time monitoring of customer interactions. This should help Adria P.A. identify trends and adjust strategies accordingly, ensuring the AI provides accurate and relevant information. As a result, customer satisfaction and loyalty are expected to remain high. 

From a financial perspective, the AI assistant is projected to offer a strong return on investment (ROI). Although the initial costs of development and implementation are significant, they are expected to be offset by long-term savings from reduced manual labor and increased productivity. The AI system’s ability to operate continuously without breaks or downtime should allow Adria P.A. to provide uninterrupted service at a lower cost than hiring additional staff. Moreover, the AI is expected to contribute to revenue growth by improving lead conversion rates, guiding potential customers through the decision-making process, and increasing sales conversions. 

The AI is also anticipated to enhance cross-selling and upselling efforts by offering customers relevant products and services based on their previous purchases and inquiries. This personalized approach is expected to further drive revenue growth. The AI’s scalability is projected to ensure that Adria P.A. can handle increased workloads without significant additional investments in human resources or infrastructure, making the system sustainable and cost-effective in the long term. 

In summary, the test phase indicated that once fully implemented, the AI at Adria P.A. is expected to transform the company’s operations by enhancing customer service, increasing efficiency, and providing a strong financial return on investment.  

Perceived social/economic impact

Once fully implemented, the AI at Adria P.A. is expected to have significant social and economic impacts. Socially, the AI assistant should enhance customer experience by providing timely, accurate, and personalized service. This improvement in service quality is anticipated to increase customer satisfaction and loyalty, as customers will appreciate the immediate and consistent support provided by the AI. The AI’s 24/7 availability is expected to make the service more accessible and convenient, especially for customers seeking assistance outside regular business hours. Multilingual capabilities should further expand access, making the service more inclusive, particularly for international customers. 

Economically, the AI system is expected to improve operational efficiency by reducing costs associated with manual labor and increasing revenue through higher conversion rates. The AI is anticipated to allow Adria P.A. to handle more customer inquiries without needing additional staff, leading to cost savings and increased profitability. The system’s scalability should enable Adria P.A. to grow its operations without a proportional increase in costs, ensuring long-term sustainability and competitiveness. 

The successful implementation of AI at Adria P.A. is likely to serve as a model for other businesses in the region, potentially encouraging wider adoption of AI technologies. This broader adoption could drive regional economic growth by improving business efficiencies, fostering innovation, and enhancing competitiveness across various industries. The project demonstrated the value of AI in addressing modern business challenges, providing a roadmap for other companies considering similar digital transformations. 

Measurable data

While the project remains in the test phase, measurable outcomes for Adria P.A. are expected once the AI-driven assistant is fully implemented. These outcomes can be tracked through several key performance indicators (KPIs), such as:

  1. Reduction in Customer Response Time: It is anticipated that customer response times will decrease significantly due to the AI assistant’s 24/7 availability, likely cutting response times from several hours or days to mere seconds for frequently asked questions.

  2. Increased Customer Satisfaction: By monitoring customer feedback, surveys, and Net Promoter Scores (NPS), Adria P.A. can track improvements in customer satisfaction. A projected 10-20% improvement in customer satisfaction scores is expected, thanks to faster and more accurate responses.

  3. Reduction in Operational Costs: The AI assistant is expected to reduce the workload on customer service staff by automating routine inquiries. A 20-30% decrease in customer service labor costs could be expected as fewer agents are required to handle high volumes of inquiries.

  4. Improved Lead Conversion Rates: By providing potential customers with timely and relevant information, the AI assistant could lead to a 10-15% increase in conversion rates from website visitors to paying customers.

DMA score and results - Stage 0

DMA T0 for Adria PA showed that SME has significant potential for business improvement. There is clear support from management and employees regarding the needs of the company's digital transformation, given the operational challenges they face in their daily work. Knowledge of new technologies such as the practical application of artificial intelligence to optimize business processes is insufficient, but a strong desire for their application is evident, especially in the demanding processes of vehicle sales and service. In this sense, they represented an ideal candidate for the implementation of advanced AI assistants and the realization of EDIH grants. 

DMA score and results – Stage 1

The implementation of the new solution is in progress, T1 DMA will be realized after the implementation of the project. 

Lessons learned

The test phase of the AI project at Adria P.A. provided several key insights for Adria PA Management and it solidified their decision to take the leap in the direction of implementing AI technologies in their enterprise. First, it became clear that using vehicle manuals as the primary data source for AI was challenging due to their complexity. The results suggested that a separate, structured database specifically designed for AI use would be necessary for better outcomes. Employee involvement was also highlighted as crucial; insights from staff interviews were vital for shaping the AI’s understanding of customer interactions. However, the project revealed that a more systematic approach to gathering employee input could further improve AI performance. Future projects should prioritize extensive employee consultations to ensure the AI captures the nuances of their work accurately. 

Managing expectations regarding AI capabilities was another critical lesson. While the AI performed well with routine inquiries during the test phase, it faced challenges with more complex scenarios, emphasizing the ongoing need for human expertise. This highlighted the importance of clear communication about what AI can realistically achieve and where human involvement remains essential. 

The test phase also encountered difficulties with voice communication in Croatian, suggesting that text-based chatbots should remain the focus until AI language processing improves. Finally, successful integration with existing CRM and ERP systems was crucial for maintaining service consistency. The need for continuous employee training and support was emphasized to ensure smooth adoption and effective use of AI. These lessons underscore the importance of tailored data, clear expectations, and ongoing staff involvement in future AI implementations. 

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