RESEARCH REPORT
The Intelligent Service Center
Reinvent service and improve outcomes at lower costs with GenAI and agentic AI
5-MINUTE READ
July 22, 2025
In brief
- Federal agencies face rising service center costs and inefficiencies due to outdated tech, high labor costs and growing citizen expectations.
- The report proposes an AI-powered Intelligent Service Center to reimagine service delivery through contact elimination, containment and agent efficiency.
- A phased approach to an Intelligent Service Center can lead to a potential 40% reduction in operational expenses for federal agencies.
Federal agencies today face a perfect storm: increasing citizen expectations for seamless, personalized services colliding head on with budget constraints, aging infrastructure and a workforce grappling with attrition. The pressure to deliver more, with less, has never been greater. Antiquated systems and manual processes simply can't keep pace with the demands of a modern populace accustomed to instant access and tailored experiences.
But this challenge also presents an unprecedented opportunity. By embracing the transformative potential of generative AI (GenAI) and agentic AI, agencies can reinvent their service delivery models and unlock new levels of efficiency and effectiveness. We've looked at the plans of top businesses and new government agencies. We found a clear way to create an Intelligent Service Center: a dynamic system powered by AI that improves both the citizen experience and the agent's ability to serve.
DATA
A major telecom provider implemented GenAI to improve its overwhelmed services centers.
85%
automated customer interactions, reducing wait times and improving experience
40%
reduction in operational costs, while improving customer satisfaction
Designing an Intelligent Service Center
With the correct type of transition and design, AI can help agencies rapidly modernize their service center processes. Intelligent Service Center design must recognize the constraints on federal agencies: hefty labor costs, high attrition rates, the training burden, legacy technology that restricts agents to manual tasks, and reliance on paper forms that slow down processing. It is time for agencies to transform and rethink these barriers.
Improvements are delivered by driving three elements: contact elimination, contact containment, and agent efficiency. AI and automation deflect as much human contact as possible while raising the effectiveness and productivity of the remaining human contact.
This model improves quality while maximizing efficiency.
Adapting your technology
These recommendations enable a successful Intelligent Service Center implementation
Consolidate contact center capabilities from multiple vendors into modern solutions from leading providers like Google Cloud and Salesforce. This drives cost efficiency, seamless integration and simplified vendor management.
Replace cost-plus, time and materials (T&M) contracts with firm fixed price (FFP) or outcomes-based procurement to hold vendors accountable for results, incentivize innovation and encourage cost reductions.
Streamline intra-agency service centers to remove redundancies and achieve efficiencies of scale. Settle on one or two solution vendors who can provide a comprehensive package with AI tools for all the necessary capabilities.
Enhance customer-facing processes and agent workflows by emulating human-like autonomy and decision-making, continuously learning from every interaction to boost performance and minimize errors.
The transformation journey
Begin with a low-risk approach to realize immediate cost savings within your existing technology stack. Then, build the foundation for a new, smart Service Center solution. The goal is to cut operating costs by 40% in a short time. This transformative journey involves three phases.
Generate funding from early productivity gains and data by recording all interactions. Add capabilities like automated call summaries, quality improvement and sentiment analysis. These efforts lead to tangible results.
8%
reduction in operational costs
Customize a language model to handle almost any question received by the contact center. Expand the range and quality of service center interactions, building more transformational enhancements in the technology stack and agent operations.
>30%
agent reduction
Complete the transformation to a modern, end-to-end Intelligent Service Center. Scale up operational efficiencies, providing the necessary training and support, along with new operational capabilities such as Agent Assist.
>10%
agent reduction
In all three phases, define goals and measure progress with precision, using key performance indicators (KPIs) tailored to your circumstances.
A New Era of Citizen Service
Federal agencies stand at the cusp of a new era in citizen service, one that is defined by efficiency, personalization and empathy. By strategically embracing GenAI and agentic AI, agencies can transform their service centers into engines of innovation, cost savings and enhanced citizen experiences.
By strategically implementing AI across contact elimination, containment and agent efficiency, agencies can unlock unprecedented value. But understanding the potential is only the first step; now, it's time to translate these insights into actionable strategies.
DATA
Federal Retirement Thrift Investment Board created a robust service center by streamlining interactions with AI.
32%
decrease in average wait time in 2024
93%
participant satisfaction (PSAT) score in 2024
