Case Study Interview Question:
You have been assigned by Genpact to perform a cost-benefit analysis for implementing a new customer service chatbot for a leading e-commerce company. The chatbot has already been developed and tested, but the company is hesitant to launch it due to the initial investment required.
Please walk me through your process of conducting the analysis and explain your decision-making criteria. What data sources would you use and what assumptions do you need to make? Additionally, how would you communicate your findings to the client and make recommendations for or against implementing the chatbot?
To conduct a cost-benefit analysis for implementing a new customer service chatbot for the e-commerce company, I would follow the following process:1. Identify the Objective: It is imperative to identify the objectives of the chatbot. The objective should be in line with the company's goal, such as reducing costs or enhancing customers' experience.2. Quantify the Costs: The next step would be to calculate the cost required to launch and maintain a chatbot. The cost includes software development costs, maintenance costs, training costs, and additional costs such as server costs and employee costs.3. Quantify the Benefits: Identifying the benefits is essential to assess the ROI of the project. The benefits could be in the form of reduced operating costs, enhanced customer engagement, and increased customer satisfaction.4. Data Sources: To quantify the costs and benefits, various data sources such as customer feedback reports, market research reports, and financial statements would be used.5. Assumptions: To evaluate the costs and benefits accurately, assumptions related to chatbot usage, training time, and employee costs would be made.6. Decision Criteria: After identifying, quantifying, and analyzing the cost and benefits, the decision criteria would be established. For instance, a chatbot project could be deemed beneficial if the ROI exceeds a specified value.7. Communication and Recommendation: Finally, the results of the analysis would be presented to the client in a clear and concise manner. The presentation would include the cost and benefit figures and highlight the key takeaways from the analysis. Based on the decision criteria, a recommendation would be made whether to implement the chatbot or not.In conclusion, by conducting a thorough cost-benefit analysis as outlined, we would offer the client a clear understanding of the potential financial and operational implications of launching a chatbot. This understanding is crucial to make informed decisions that align with their organizational goals.References:- Cost-Benefit Analysis: An Introduction (https://www.investopedia.com/terms/c/costbenefitanalysis.asp)- A Step-By-Step Guide To Cost-Benefit Analysis (https://www.forbes.com/advisor/investing/cost-benefit-analysis/)