Chatbots as Catalysts for Operational Excellence in Service Industries

Purpose This study examines the strategic value of chatbots in service industries from a managerial perspective, focusing on operational efficiency, cost reduction, customer satisfaction, and leveraging chatbot-generated data for strategic decision-making. Methodology Employing a mixed-methods approach, we conducted qualitative interviews with Chief Technology Officers from seven service firms and a quantitative survey of 287 industry professionals involved in technology implementation. Findings The qualitative findings reveal that firms adopt chatbots primarily to enhance operational efficiency, reduce costs, and meet evolving customer expectations for instant, 24/7 service. Chatbots significantly reduce workload, improve response times, optimize resources, and enhance customer satisfaction through consistent and accessible service. Additionally, chatbot-generated data emerges as an asset for informing product development and service improvements. Motivations for chatbot adoption significantly impact operational outcomes, customer satisfaction, and implementation challenges. Operational impact and customer satisfaction strongly influence overall chatbot effectiveness and the intention to expand their use. Originality We explore chatbot adoption from a managerial perspective, combining qualitative and quantitative methods. By emphasizing the strategic use of chatbot-generated data for decision-making and demonstrating how overcoming implementation challenges can enhance chatbot effectiveness, the research provides novel insights that extend beyond the current literature on AI technologies in service industries. Practical Implications The study emphasizes the importance of aligning chatbot implementation with organizational objectives, proactively addressing implementation challenges, and investing in advanced capabilities to enhance customer experiences. These findings offer practical insights for executives who leverage chatbot technologies to optimize operations, enhance customer satisfaction, and gain a competitive advantage in service industries.