Voice Self-Service to the Rescue


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The interactive voice response (IVR) market has come back to life, driven by the need to automate inquiries that do not require the assistance of live agents. Both for-profit and non-profit organizations appreciate the value of providing live assistance when necessary and possible, but when live agents are not practical or cost effective, a well-designed voice self-service application may be the next best option.

Few technology sectors regain their momentum, but the IVR market has. This sector is growing on the strength of new applications and product innovation from the highly competitive hosted/managed service providers.

IVRs are Mission-Critical

The ongoing recession has sped up the pace of adoption and has infused life into the hosted/managed service IVR market.

Interactive voice response systems have been considered mission-critical for contact centers ever since they were introduced in the 1980s. IVRs give callers the ability to help themselves. During the last few years, contact center managers have been under tremendous pressure to reduce their operating expenses, and the recession has only heightened this challenge. When used properly, IVRs can automate anywhere from 20 percent to 95 percent of incoming calls, dramatically reducing operating expenses while providing an outstanding or at least satisfactory customer experience.

The Emergence of Outbound IVR

While contact center managers have re-embraced IVRs, user interest has extended beyond the traditional market. The outbound IVR is altering market dynamics, changing the way that many types of organizations—enterprises, government, municipalities, higher-education, non-profits, etc.—interact with their customers/constituents. The evolution will continue as IVR capabilities are expanded to handle many of the newer channels, such as short message system (SMS), video, and much more.

Recession Speeds Up Adoption of Hosted/Managed Service IVR

The ongoing recession has sped up the pace of adoption and has infused life into the hosted/managed service IVR market. Many organizations in a variety of verticals have previously bypassed hosted/managed service IVR offerings, whether because of security concerns or a desire to control their own destinies and technology platforms. Today, many of these organizations are not only considering these offerings, but making investments. And somewhat to their surprise, most are very pleased with the results.

Recession Speeds Up Adoption of Hosted/Managed Service IVR

The primary factors driving contact center and technology managers to invest in hosted /managed service IVRs are:

  1. No need for capital investments
  2. Small or non-existent start-up costs
  3. Limited need for internal technical resources
  4. Highly scalable (up and down)
  5. Ease of handling multi-site and remote agent deployments
  6. Ongoing investment protection

Many companies with old IVR solutions installed prior to Y2K are finding hosted/managed service IVR offerings highly appealing. They often have traditional, on-premise IVRs that are not Internet Protocol (IP)/Session Initiation Protocol (SIP)-based, do not have Voice XML (VXML) development environments, and are becoming too expensive to maintain.

Good News for Prospects

Because of increased competition in the hosted/managed service IVR market, vendors large and small are willing to negotiate most aspects of the relationship, including price and start-up costs. There are many strong and viable hosted/managed service offerings, but they are not all the same. To make sure that their full range of needs will be met, prospects need to carefully assess many factors, including: technology, platform, scalability, integration capability, contingency/back-up capabilities, development environment and resources, reporting and analytics, functional capabilities, management tools, ongoing service and maintenance, optimization capabilities, customer references, vendor responsiveness, financial strength and planned research and development (R&D) investments of the vendors they are considering. Price is important, but should not be the primary deciding factor.

To learn more about the offerings in the hosted/managed service IVR market, see DMG’s 2009 Hosted/Managed Service IVR Market Report. Or contact Donna Fluss at [email protected].

Donna Fluss
Donna Fluss is founder and president of DMG Consulting LLC, a firm specializing in customer-focused business strategy, operations and technology consulting. DMG helps companies build world-class contact centers and vendors develop and deliver high-value solutions to market. Fluss is a recognized authority and thought leader on customer experience, contact center, workforce optimization, speech technology and real-time analytics. She is the author of The Real-Time Contact Center and many leading industry reports.


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