Dan Yachin on Smart Homes

Dan Yachin is an independent advisor with more than 15 years of experience in the market research field. As a founder and manager of IDC’s Emerging Technologies Group, he has been involved in various research and consulting activities with some of the leading and most innovative companies in the global high-tech industry.

Veego took the opportunity to interview Dan about smart homes.

What are the main challenges for Telecom companies with respect to “Tomorrow in the Connected Home”?

According to IDC’s data, the global smart home market will reach 840.7 million units by the end of 2019 and grow to 1.46 billion units by 2023 with a compound annual growth rate (CAGR) of 14.9%. Not only is the number of devices rocketing upward, but new in-home networks are gaining traction (WiFi, Zigbee, BLE, Zwave). In addition, streaming and gaming usage is spreading rapidly. All of these dynamics create a rather large recipe for malfunctions. In this regard, the main challenge for ISPs stem from their unique position in the connected home ecosystem. ISPs provide everything from broadband and mobile connectivity to consolidated customer relationships. As such, from the end-user perspective, the ISP is the first address for anything not functioning properly in the connected home.

What might be the implications for ISPs?

More and more connected devices in homes and a variety of communication protocols between them will mean more problems for users. Devices will be increasingly interconnected with other devices via hubs or directly. No tools currently exist to diagnose the types of complex problems that will invariably arise. Whether they want it or not, ISPs will probably be regarded as “the throat to choke”, facing challenges such as mounting support costs with more and longer calls, many truck rolls and unwarranted hardware replacements, First Call Resolution (FCR) rates, workforce inefficiency, customer dissatisfaction, high customer churn rates and even brand damage. It’s not a pleasant scenario.

Why can’t ISPs diagnose the nature of these problems and their root cause in a connected home environment?

The new-generation home with its devices and services is not the main reason why ISPs are facing a rash of complicated trouble-shooting incidents. In addition to the numbers of malfunctions, their location is shifting from the in-home and router-controllable WiFi to external locations in the service delivery chain, primarily to the smart device themselves and to the cloud delivery components. ISPs don’t have access to these links in the chain, so they are often unable to pinpoint the source of malfunctions. They actually have to make a best guess to free their customers from many problems. The best guess is often incorrect and thus the problems are not solved or they recur.

Do you think that putting artificial intelligence (AI) at the disposal of the ISPs might give them a chance to see the entire service delivery chain for each service and thus they might actually understand the when, where and how malfunctions are generated?

Absolutely. AI and, more specifically, Machine Learning (ML) are key enablers of advanced smart home products and services in areas such as consumer interaction, energy efficiency, home security and many others. Using AI will assist ISPs in gaining a deeper understanding of their customers and their connected homes, which could be utilized for proactive detection of malfunctions. This means improved ongoing CX, and fewer and shorter service calls, which will translate to saving time and money for Customer Care and Customer Experience departments.

What are the main use cases for the ISP’s Customer Experience department to use AI in their daily routine?

In a perfect world, AI systems would stand guard, constantly detecting problems and behavior anomalies as they occur and even predicting them ahead of time based on learning and experience. AI systems can locate the sources and diagnose the effects of a problem anywhere across the service-delivery chain. It’s very likely that in a few years, AI will be called upon to aid ISPs to notice malfunctions within the home and autonomously make the necessary adjustments to assure smooth operation of all services that users want to enjoy.

What are the main use cases for the ISP’s Customer Care department while adopting AI in their systems?

AI can definitely cut the cost and effort of customer service. With the help of AI and Machine Learning, anomalous behaviors and malfunctions can be detected, located, analyzed and repaired often without the user even knowing. Implementing AI successfully into Customer Care departments can make a huge difference in reducing the number and duration of smart home-related support, eliminating unnecessary dispatch of replacement equipment and reducing truck rolls. Those facts represent giant cost savings for Customer Care departments.

Any chance that using AI might be a solution for ISPs to generate new revenue streams in addition to the reduction of support cost savings and customer experience?

Yes, indeed. It’s all about providing a differentiated and personalized customer service and experience. AI will provide ISPs with “smart” upsell opportunities based on the actual “behavior” in each home. It means that first, ISPs will be able to sell service packages that are fully correlated with specific problems that a home suffers so that malfunctions are solved once and for all. Second, these service packages will be fully tuned to the behavior of the specific smart devices and the services they consume, such as streaming and gaming, on a home-by- home basis. Issues like capacity, coverage and device compatibility will be understood by the ISP who will be able to approach customers with attractive packages to satisfy specific needs.

Thank you, Dan, for your time and thoughts.