NativeMinds Finds AI Not Just a Movie Plot

When government agencies rushed to put information on the Web, little did they realize how ill-prepared they were to answer specific questions from Internet users.

As a consequence, many agency Web sites have become an intermediate stopping place for customers who use the sites to get the names of agency officials to call for answers to their questions. For some organizations, the Internet has had the paradoxical effect of increasing, rather than reducing, costly and time-consuming phone calls.

Now, user-beleaguered government organizations can get a virtual hand from artificial intelligence-driven help software developed by NativeMinds Inc. of San Francisco.

The Defense Logistics Information Service is the first government agency to try NativeMinds' software ? and is enjoying the cost savings. As a part of the Defense Logistics Agency, DLIS manages logistics and supply data used by the armed forces, contractors and international agencies.

Typically, DLIS' call center would receive 1,500 to 2,000 calls a week. But "Phyllis," the NativeMinds' virtual representative on the DLIS Web page, has cut the number of those calls by a third since it was installed in mid-May.

"We are extremely happy with the results," said Ray Zingaretti, DLIS project manager for the online help service.

Phyllis is powered by an automated online customer service and support agent called vRep, which keeps a database of 4,000 frequently asked questions that is added to daily. The site gets 200 queries a day, 88 percent of which are successfully answered by Phyllis.

While DLIS' customer support costs were already quite low for the industry, ranging from $1.55 to $9.50 per call (the industry average is around $33, according to analyst estimates), vRep is even cheaper: 50 cents to $1 per transaction, depending on volume and level of service.

DLIS is NativeMinds' first foray into the federal government. The company also is partnered with Accenture Ltd. of Reston, Va., and communications company Avaya Inc. of Basking Ridge, N.J., on two proposals for state services.

Although the privately held NativeMinds won't disclose its earnings, the company experienced a 300 percent growth in sales last year and expects a 100 percent increase this year, said Andrew de Vries, vice president of marketing. The company plans to expand its product base for wireless devices and even phone-based support.

The vRep software is a natural fit for system integration, de Vries said, because it can be used as part of a comprehensive customer relations management solution. System integrators could also offer consulting services along with vRep in knowledge-base management.

Tools such as vRep are being used increasingly by organizations looking to automate the repetitive aspects of customer support.

"Many businesses get the same questions over and over," said Bob Zurek, a senior analyst covering electronic business applications for Forrester Research Inc., a market research firm in Cambridge, Mass. "Maybe 40 percent of the calls coming to a company that makes water sprinklers may be the same question: How do I turn on my sprinkler?"

Hence, organizations can save money and improve customer satisfaction by answering queries without human intervention. According to a Forrester Research report on customer self service in May, a reduction in call volumes by 12.6 percent can result in a 200 percent return on investment.

It's this promise of savings that could make Web-based self-help tools a $4.5 billion market in 2001, according to industry analyst firm Gartner Inc. of Stamford, Conn.

Yet simple Web pages and automated e-mail replies often don't cut it. In fact, Forrester found that 17 percent of the companies it interviewed actually saw an increase in call center traffic after implementing customer self-help services. Often people just come away from the Web frequently asked questions, known as FAQs, more confused.

So a new breed of companies is offering personalized software that attempts to make Internet help even easier to use. Customized e-mail responders have been developed by companies such as Kana Software Inc. of Redwood City, Calif., and Banter Inc. of San Francisco.

In addition to NativeMinds' software, natural language-based solutions are offered by YY Software Corp. of Mountain View, Calif., and Expound Inc. of Bedford, Mass. ActiveBuddy Inc. of New York offers a virtual agent that works through instant messaging.

Zurek said NativeMinds has "hit the sweet spot of customer self-service." Ford Motor Co. uses vRep to power "Ernie," which answers technician questions for Ford dealerships. GlaxoSmithKline Plc has a vRep cyberassistant named "Nick" to provide information on the NicoDerm and Nicorette nicotine replacement therapies. Other customers include the Coca-Cola Co. ("Hank"), billing and customer care-specialists Convergys Corp. ("C.C."), and Oracle Corp. ("Sam"). All told, about 15 companies use the vRep software.

The vRep software is based from work in a field of artificial intelligence research called natural-language processing, or NLP, which is the ability for computers to understand natural human language at the level of meaning, said Timothy Finin, a professor in computer science at the University of Maryland Baltimore County, who has done work in NLP.

Although NLP is far from being completely realized, commercial products using NLP techniques can show impressive humanlike understanding, at least in limited domains of discourse, such as help desk work, he said.

NLP, according to de Vries, is what separates vReps from regular search engines, which only return links to the Web pages to a query, rather than an exact answer.

By understanding how people ask questions, the software can better find the answer needed. DLIS, for instance, makes careful notes on how users ask questions in order to tweak vRep performance.

"Do users ask follow-up questions? Or do they ask multiple questions at once? Are there variations in word placement? We take note of all that," said Luman Williams, the vRep system administrator for DLIS.

This tweaking has paid off: The hit rate of correct answers has improved more than 11 percent in the six weeks since Phyllis has been online.

Still, virtual helpers such as Phyllis may work best with technically inclined audiences, such as those at DLIS. Many organizations will still have to educate their clients in using automated self-help services, said Esteban Kolsky, a senior analyst at Gartner.

People seem have a natural reluctance to use automated systems, at first anyway, he said. Companies such as Bank One Corp., Wells Fargo & Co. and the Pacific Bell Telephone Co. all lost customers when they introduced automated responses into their help phone lines.

"It's a trade-off. People want the personalized service, but they don't want to pay the costs," Kolsky said.