A crucial business function, warranty management has always been a challenging task for OEMs. Even before the advent of AI-powered warranty management systems, the traditional processes were complex, considered to be one of the most sophisticated processes in the business. Maintaining the whole chain of processes and streamlining the claims processing has been the goal of businesses.
The warranty claim process is long and involves multiple stakeholders – from claim generation at the dealers end to supplier recovery at the supplier’s end – it has multiple data touchpoints. With such an intricate process, one error can lead to a cascade of errors which often results in huge losses for businesses. In addition to revenue losses, the business also loses on customer satisfaction and a diminished brand value and reputation.
With traditional warranty management systems, the reliance on manual processes resulted in many challenges such as duplicate entries, errors in data maintenance and collaboration of the stakeholders. This also resulted in additional costs for OEMs in managing manual, paper-based warranties. This resulted in multiple warranty frauds with no means to keep a check on them and long resolution times that resulted in unhappy customers. With such processes where data was stored in silos and there were no means to check such errors, OEMs often ended up losing a chunk of their revenue on warranty management. This called for a solution that not only manages the end-to-end warranty in a streamlined way but also reduces errors and has a centralised system which complies with the organisations warranty policies.
As we progressed further, the advancements in technology led to the introduction of systems that make the warranty management systems efficient and streamlined and helped improve the brand reputation and value. Such systems also helped in collaboration of stakeholders and were able to reduce the errors in the warranty management systems and helped the businesses save the losses they would have made otherwise.
But, to really improve the processes further, a solution was needed that provided insights on the trends and effectiveness of the warranty management system deployed. Thus came the incorporation of AI-powered systems which enabled OEMs in making data-backed decisions and provided deep insights on the effectiveness of the warranty management software and process.
What Are the Challenges of Warranty Management?
Warranty management consists of set processes which include registration of warranty, processing of claims, detection of frauds, and analytics. In the traditional set up, the warranty management processes were manually managed which resulted in multiple errors and collaborations issues with the stakeholders. This often resulted in businesses incurring costs and inconsistencies in managing the warranty. This manual warranty management system relied on paper and hard copies were maintained for every claim which made it possible to track the latest information about the warranty. From the customers point-of-view, such inconsistencies resulted in an increase in waiting times for a resolution on the warranty claim. This traditional warranty management system often resulted in dissatisfied customers and a hampered brand image of the OEM.
Let us take a look at all the challenges of traditional warranty management systems:
Manual Processes
These warranty management systems had manual processes which resulted in data being inconsistently maintained. In addition to that, the data maintained had many errors which caused more harm than good to the OEM. This also called for an additional cost of purchase of paper and also the increased maintenance costs.
Data Inaccuracy
These manually maintained data were in multiple silos as there was little or no collaboration which resulted in inaccuracy in data. This led to various errors and missing information about warranty claims. This warranty management system hindered efficient decision-making for companies as they weren't able to provide any insights on the maintained data.
Claim Processing Delays
Manually managed warranty management systems caused delays in the processing of claims as every information was manually managed. This also meant that the validation of all information was also done manually which resulted in higher time consumption for each claim. With such delays in processing times, the customers were often left dissatisfied which caused damage to the brand reputation.
Fraudulent Claims
With manual warranty management systems, it was common that many claims were fraudulently generated and many of them were also resolved - with a longer time frame, no doubt. This manual process lacked fraud detection processes and mechanisms that resulted in OEMs incurring huge losses because of fraudulent activities.
Limited Analytics and Insights
The manual warranty management systems lacked a robust mechanism to collect data and compile them into actionable insights. Due to lack of this mechanism, the OEMs were unable to get a proper visibility into the performance of warranty management systems and how efficient their set systems were. This also prevented OEMs in making efficient decision making as there was little or no data to refer to for such a decision.
How AI has Transformed Warranty Management Systems
Artificial intelligence technologies employ advanced and new age techniques to collect and compile information in a way that is beneficial for decision making. The warranty management software which have an inherent AI capabilities utilize machine learning, natural language processing and predictive analytics to transform the warranty management processes of OEMs. Let us see how AI impacts the warranty management systems:
Automation in Processes
Artificial intelligence automates the tasks that are repetitive in nature and ensures these are maintained with zero errors which results in higher efficiency. These repetitive tasks are registration of warranty, processing of claims and data entry. This automation reduces any possibilities of human errors and results in efficient handling of data. This automation also ensures that data is not maintained in silos and available in case required.
Predictive Analytics
This is perhaps a standing out feature of a warranty management software with AI enabled features or capabilities. As the data is stored in a central repository, the warranty management system is able to extract useful insights from it by analyzing the data. This analysis results in business being able to identify trends and patterns, and also find anomalies in the warranty management processes. These predictive analytical features enable organizations to forecast warranty claims, the performance, detect potential issues and find scope of improvements, and also optimize inventory management in many cases. This leads to significant reduction in costs and also enables data backed, improved decision making.
Detection of Frauds and Preventing Them
Warranty management software with artificial intelligence capabilities have inbuilt, robust mechanisms to detect fraud by analyzing the claims in real-time. This real-time detection also leads to flagging of suspicious claims which require further investigation or more information to satisfy the claim. This proactive identification and flagging of suspicious activity helps businesses protect their interests and reduce the extra cost incurred due to fraudulent claims. With such an achievement, businesses can improve their bottom line which leads to higher performance and efficiency.
Tailored Customer Experience
Warranty management software with artificial intelligence capabilities is able to personalize the interactions with customers throughout their warranty lifecycle. There are chatbots which are equipped with natural language processing abilities to address the customer issues in a prompt and efficient manner. They can also provide self service options for warranty registration and claim submission, further enabling organizations to achieve a higher customer engagement rate and betterment of their experiences. This feature also enables a personalized touch to customers by offering tailored recommendations which are based purely on customer preferences and their behavior.
Continuous Improvements
Any organization, process or system is as good as their rate of improvement and how well they are able to incorporate their learning from the past experiences, identify scope of improvement and enable a better feedback loop.
With artificial intelligence enabled warranty management software, this is completely taken care of. With AI-powered feedback loops, a continuous improvement of warranty management processes is enabled. This makes sure that the system is learning and evolving with every touchpoint. Machine learning algorithms have the ability to learn from historical data and feedback from customers. Machine learning models can also optimize the workflows based on the evolving needs of the business, adapt to changing market dynamics, while ensuring the ongoing processes of efficiency and effectiveness.
Artificial Intelligence Enablement Helps Build Trust Among Customers: Conclusion
We have seen how the traditional warranty management systems struggled with inaccuracies and inefficiencies. To tackle these challenges, warranty management software were built with inherent artificial intelligence capabilities which resulted in higher efficiencies, better performance, and highly streamlined activities.
With businesses now harnessing the power of artificial intelligence, warranty management systems can be enabled into assets that help enhance accuracy, efficiency and achieve higher degree of customer trust. These AI-enabled warranty management systems help streamline the OEMs processes, improve data accuracy, ensure that the claims are processed in a stipulated time frame, reduce and detect frauds all while delivering customized and tailored customer experiences. With changing business dynamics and evolving customer needs, OEMs must ensure they incorporate solutions that augment their existing capabilities in warranty management. With such an approach, these businesses are able to achieve a unique positioning and value proposition that they are able to meet the dynamic and evolving needs of today’s customers.
Artificial intelligence can not just help achieve all that but can also act as a catalyst for innovation and improvement and enable the warranty management system to become a support function for the customers which delivers a competitive advantage to achieving higher customer satisfaction rates.
