Next generation chatbots are now writing poetry and giving math lessons, but these smart applications have a bigger job to do. Advanced chatbots simulate human interaction via complex artificial intelligence (AI) processes, or conversational AI. As business-ready systems, conversational AI is joining mainstream tech to deliver strategic benefits to customers and employees. For companies looking to adopt or expand their use of conversational AI, there\u2019s quite a bit to understand and consider. \n\nNow that humans and machines are talking to each other, decision-makers will need clarity around the capabilities\u2014especially as they vet various products and platforms. It helps to start by defining some key terms.\n\nA Quick Rundown of How Conversational AI Works\n\nAsking a smart phone whether it\u2019s going to rain, telling a virtual assistant to play \u201990s hip hop, requesting a navigation system give directions to a new sushi restaurant\u2014each are examples of interacting with conversational AI. By speaking in a normal voice, a person can communicate with a device that understands, finds answers, and replies with natural-sounding speech.\n\nConversational AI may seem simple to the end user. But the technology behind it is intricate, involving multiple steps, a massive amount of computing power, and computations that occur in less than 300 milliseconds. When an application is presented with a question, the audio waveform is converted to text in what\u2019s known as the automatic speech recognition stage. Using NLP, the question is interpreted and a response is generated. At the next step, called text-to-speech, the text response is converted into speech signals to generate audio. \n\nWhy Customers and Employees Prefer Conversational AIMost people have experienced the frustration of talking to a legacy chatbot, and perhaps even resorted to anger or shouting \u201cRepresentatitive!\u201d. But once chatbots are enhanced with conversational AI capabilities, research shows customer satisfaction rates to be three times higher, attributed to shorter wait times and more accurate, consistent customer support.\n\nFor employees, conversational AI can reduce stress and boost productivity by handling most low-level tasks and easing their day-to-day human-machine interactions. This frees up staff for other valuable and higher-level functions, benefiting customers and increasing morale.\n\nOverall, for companies, the benefits may seem obvious: more productive staff and better customer service leading to increased productivity as well as higher customer satisfaction and retention rates. An additional benefit comes from the learning and training of models that continually improve and enhance employee and customer experiences.\n\nConversational AI in Action, From Retail to Healthcare to Real Estate\n\nIn constant search of competitive advantage, companies are increasing their investments in AI to the tune of a projected $204 billion by 2025. Across industries, the technology promises to deepen customer insights, drive employee efficiency, and accelerate innovation. \n\nIn retail, conversational AI is giving shoppers a streamlined experience with call centers and customer service interactions. As the clunky chatbots of yore are replaced with savvy AI chatbots, customers can quickly get their questions answered, receive product recommendations, find the proper digital channel for their inquiry, or connect with a human service agent. \n\nIn healthcare, applications for conversational AI can support telehealth patient triage to identify potential medical conditions. Systems can also be trained to securely manage patient data\u2014making it easier to access information such as test results or immunization records. And the technology can support patients who are scheduling an appointment, checking on insurance eligibility, or looking for a provider.\n\nIn real estate, conversational AI tools are being applied to the time-sensitive lead generation process, automating functions for accuracy and efficiency. Chatbots are also handling initial conversations to assess what a customer is looking to buy or sell. Given AI\u2019s ability to handle thousands of calls per day, a program can be integrated with the customer relationship management system, or CRM, to create more positive experiences.\n\nFive Questions to Ask Before Deploying a Conversational AI System\n\nOnce a company is ready to explore a conversational AI project, there will be groundwork. Here are five essential questions\u2014and clues to finding the answers.\n\nAs consumers become more familiar with AI, using it to create art and pay bills and plan their workouts, the technology holds greater professional promise. Conversational AI is already supporting a number of essential business functions\u2014a boon for customers, staff, and the bottom line. Executives can set the foundation for their own advanced chatbots and other applications by ensuring their IT systems are ready for innovation. Read the Guide to Conversational AI for Financial Services, and explore AI solutions from Dell Technologies and Intel.