How NICE is using AI to change the customer relations game

NICE Ltd. (NICE) is seeing some nice customer growth. The customer relations software company reported that it in 2023, it grew the number of AI deals it closed by 300%. Overall, NICE reported fourth-quarter results that topped analyst estimates on both the top and bottom lines.

NICE CEO Barak Eilam Yahoo Finance Live that his company's customers need "very specific, tailor-made, if you'd like, and highly-tuned AI based on very specific data that we have. We see that demand really, really happening as we speak." Eilam says that customers that have tried to go more of a ChatGPT route ultimately turn to NICE because they require the more sophisticated system that NICE can provide.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich

Video Transcript

- Well, the AI hype and enthusiasm is continuing. DA Davidson, Wedbush, Oppenheimer all upping their price targets on a software company called NICE. It's thanks to the company's strong AI-driven fourth quarter. NICE's robust full-year guidance also topped expectations for earnings and revenue, helping lift the stock to a two-year high. And the company called artificial intelligence an overarching catalyst for growth in the year ahead.

For more, we are joined by Barak Eilam, NICE CEO, Barak, it's good to see you again. Thank you so much for joining us.

BARAK EILAM: Thank you very much for having me back, Julie and Josh.

- So

BARAK EILAM: It's so great to be here.

- Great. And so for those who are not familiar with NICE, you guys are using AI in particular for sort of call center assistance, right? You all may call center software. So I'm curious, as you look at your offerings, how many of your customers are using generative AI in their-- in what they're buying from you at this point?

BARAK EILAM: You know, last time I was on the show, it was early June. And we spoke about the potential of AI and how it will impact the whole world of customer care and CX. And we talked about the theory over here.

And here we are eight months later. And we actually see it in motion. We reported our earning. Yesterday. And we actually see it driving our business. And it goes to, you know, the demand from customers.

Many of them tried to use generic gen AI. And it just doesn't work for that particular purpose. It's very different the way enterprises adopt AI versus the way individual do that.

So the need is for very specific tailored made, if you would like, and highly tuned AI based on very specific data that we have. And we see that demand really, really happening as we speak. And I think it speaks to our earnings in Q4 but also the guidance we gave for this year.

- And so, Barak, so just looking ahead, I'm curious. And you're kind of touching on a point I wanted to raise. What is the risk, Barak, though, that, you know, down the road, customers, they start going to OpenAI and create their own virtual agents and kind of sidestep NICE?

BARAK EILAM: I don't think we see that. We see customers trying to go that path. And then they go-- they come to us. And we see a spike in demand on how many of those enterprises come to us.

If you think about how AI is being used as a customer care, we would like to provide an outstanding care. We don't want any issues of either privacy hallucinations, wrong answer, biased answers, if you would like. And for that, you need 100% accuracy.

It needs to be fully secured. It needs to be able to augment people as well as providing an automated service. So it's a bit more complicated than just taking something like a generic gen AI and applying it to the enterprise.

- Barak, something else I wanted to get an update on since we talked last year is that issue you just alluded to, which is assistance versus replacement. How many of your customers are using only software to interact with their customers versus a person being assisted by software?

BARAK EILAM: I think most of them see the perfect balance between the two. I call it augmented intelligence together with artificial intelligence. Think about the customer care environment. Most of the very basic services we no longer get from assisted service. We get it online or through the mobile.

The things that get to that individuals are very complicated. And the amount of knowledge these individuals need to have is just outstanding. And for that, we need to make them 10x better. And the best way to do it is, of course, with AI-- augmenting the user. But at the same time, some of those things, as they progress, can move to a fully automated.

So the perfect match. And we stayed with our customer. The perfect balance, is doing both, provide that, and provide that and the ability to toggle between them when there is a misunderstanding or lack of understanding of the customer intent.

- Barak, let's talk competition as well. You know, legacy on-premise incumbents like Cisco-- you've got cloud-based vendors-- Genesys, Five9, Zoom now as well. In that fight, Barak, what are your competitive advantages?

BARAK EILAM: You know, we've been preparing for that era for the last decade. We've built a platform called CXone from the ground up. There are no shortcuts in creating a platform. And you can actually see it from our growth.

We are at a much higher scale as a company and growing faster, both in absolute number and percentages, and taking a market share. I think it thanks to the completeness of our offering, the way we have built our solution, and our very strong financial foundation as a company.

You know, look at our balance sheet and the rest of the things that we're doing for our customers and the brand that the company has. So yes, we have competition. But we are expanding our market share these days.

- Barak, I think it would-- we would be remiss if we didn't ask you about what's happening with your workforce, your own workforce. You're, of course, based in Israel. And I don't know what percentage of your workforce is there. But I just wanted to get an update from you on that as well. How that's affecting-- do you have folks who have been called up to serve in the war? And how are you sort of coping with all of that?

BARAK EILAM: I really appreciate the question. First of all, you know, someone that was born and raised in Israel, our hearts goes to everything happening over there. And of course, our heart goes to the situation with the 134 hostages over there.

In terms of our business, we didn't see any impact. We have 8,400 employees around the globe, 900 of them in Israel. And a few dozen of them were called for army service. Of course, we supported them throughout their service. And we are happy to welcome, you know, them back to the workplace. But there's been no impact to our business.

- Barak, thank you so much for joining the show today. Really appreciate it. Have a nice weekend.

BARAK EILAM: Thank you very much.