Speech Self-Service, Slowly Leaving an Indelible Impact on the Voice of Customer Service


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Independent Analyst Comment
Daniel Hong and Peter Ryan, Datamonitor
13 March 2007

Speech Self-Service, Slowly Leaving an Indelible Impact on the Voice of Customer Service

“…Speech recognition technology is becoming increasingly prominent as a cost-cutting and value-enhancing solution for customer care and service enablement. As firms look to improve customer interaction in a cost effective manner, the technology will serve as an adjunct to offshore customer service operations …”

A report released by independent market analyst Datamonitor (DTM.L) three years back predicted speech-enabled self-service technology would compete with offshore contact center customer service agents. According to Datamonitor research, a contact center in an offshore location, like India, saves Western businesses approximately 25% to 35% per transaction. However, a call serviced through speech automation costs approximately 15% to 25% of the cost of a call handled by an agent in India.

Testament to this shift came last week when Lloyds TSB, the UK’s fifth largest bank, announced it is to close its contact center in Mumbai, which typically handles overflow calls when UK agents are busy. It says the widespread use and success of its automated speech-enabled phone self-service system has eliminated the need for additional agent capacity in Mumbai.

Speech recognition was once viewed as a futuristic technology that would never leave the realm of science fiction. But over the past 50 years, key technology and commercial achievements in speech recognition along with increased central processing unit (CPU) performance and lower hardware costs have helped make speech commercially viable for enterprises and service providers. Today, speech recognition is becoming increasingly prominent as a cost-cutting and value-enhancing solution for customer care and service enablement.

“As we roll out the tape over the next several years, cost pressures and globalization will undoubtedly continue to create strong tailwinds for offshoring, said Daniel Hong Lead Analyst of Voice Business Research at Datamonitor. “However, speech self-service will also proliferate and in many instances compete with offshoring as companies scramble to assemble the optimal blend of automation and agents for customer care. It is important to note that increased reliance on speech will not supplant the need for offshore contact centers for a lot of companies, rather the technology will serve as an adjunct to offshore operations as these companies look to improve customer interaction in a cost effective manner.”

In fact, according to Datamonitor research the offshoring movement is not going away anytime soon. Peter Ryan, Senior Analyst of Contact Center Outsourcing Research at Datamonitor says “one only needs to look at the recent Dell expansion into the Philippines as a sign that customer care served from foreign locations is a model that works. Companies across Western nations are clearly seeing the benefits to housing some elements of customer care offshore. These include lower costs, accessing agents with excellent language skills and commercial sophistication. It is also apparent that many firms that feel offshoring is a one-stop shop are re-thinking their strategy, and are incorporating nearshore / onshore capabilities in addition to self-service.”

While the movement by Lloyds TSB represents only one instance of speech self-service displacing offshore agents, Datamonitor sees this as a growing trend over time as businesses learn to leverage technology from more of a strategic standpoint.

Notes to Editors:

Daniel Hong is a Lead Analyst of Voice Business Research at Datamonitor, where he heads the firm’s global voice business research and consulting practice for that area. As an analyst on the Customer Interaction Team, Daniel analyzes trends, strategies and practices for speech recognition and IVR solutions across CRM, enterprise, desktop, mobile and ubiquitous computing environments. Daniel has authored numerous reports, benchmark studies and articles that examine the issues, trends, opportunities and trajectories of the voice business market. Over the years, he has acted as an advisor and consultant to Fortune 500 companies. He has also written many industry white papers on speech self-service and routing, process optimization, open-standards and enterprise IP solutions.

Peter Ryan is a Senior Analyst of Contact Center Outsourcing Research at Datamonitor. He brings with him a wealth of experience in the technology sector, gleaned through strategic marketing work with Bank of Ireland Treasury & International Banking, Gateway Computers, and NFO Prognostics. He has authored reports covering enterprise software market events, outsourced call centers in Canada, call centers in EMEA, North Africa and Eastern Europe, as well as voice applications investment and has presented his views at various conferences. He holds a Bachelor of Arts in Political Science and Economics from University of Saskatchewan (Canada), and an MBA specialising in International Business from Dalhousie University (Canada).

For further information or to get in touch with Daniel Hong or Peter Ryan, contact:
Krishna Rao T: +44 20 7675 7271 E: [email protected]
Naples (NY):
Suzanna Eygabroat T:+1 585 374 6326 x17 E: [email protected]
Denis Mason Tel: +61 2 8705 6903 E: [email protected]

Datamonitor plc (DTM.L) is the world’s leading provider of online data, analytic and forecasting platforms for key vertical sectors. We help our clients, 5,000 of the world’s leading companies profit from better, more timely decisions. Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for seven industry sectors: Automotive & Logistics, Consumer Markets, Energy, Financial Services, Healthcare, Retail and Technology. Datamonitor maintains its headquarters in London and has regional offices in Frankfurt, Hyderabad, New York, San Francisco and Sydney. See www.datamonitor.com for further details.

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