My article on IVR systems – PART 2 (translated to English), Banka magazine, May 2002

This second part of the article published in Banka magazine in May 2002 talks about the recent technologies and trend in Interactive Voice Response (IVR) industry. While the first part of the article is pretty universal from time perspective, this one has to be read taking in mind that it was written in 2002. Today the major change is about today’s handy nature of mobile broadband and all the services and applications that exist on modern mobile devices. Enjoy reading how the future looked like in 2002.

IVR – technology for a great compromise – PART 2

Part 1 of this article was posted immediately before the Part 2. I recommend to read it first.

If you will use this text for publishing or academic purposes, be so kind to cite the author and source: Alen Gojceta, Banka, 05/2002. Thank you!

The Future of IVR

Except the growth of the number and size of call centers and the need to reduce their labor costs, the IVR market growth forecasts rely on new technologies that enable easier and more natural interaction comparing to the one based on tone dialing and pre-recorded speech sequences.

Here we primarily emphasize Natural Language Speech Recognition (NLSR), Voice Recognition (VR) and Text-to-Speech (TTS) technologies. Growing trends are as well driven by the new approach to using IVR technology, so called voice portals.

When it comes to advanced IVR technology, the future has already begun. Many solutions already exist. Due to the complex technology, there are a few suppliers of functional NLSR, TTS and VR software products in the world. To support these technologies, the leading providers of IVR systems usually integrate technological solutions by niche software vendors such as Nuance and SpeechWorks.

NLSR technology supports giving instructions to IVR by voice, using natural language. In the case of well-designed system, an order will be given in spoken like: “I want to make 550$ transfer from my savings to my current account”. The machine will perform the operation without employee interference. NLSR makes possible what was hard to imagine, and in some cases, it is inevitable replacement to the traditional service management based on tone dialing.

TTS technology enables translation of any digitally stored text to speech. In this way it is possible to dynamically leave a message to a caller. For example, a bank client contacts the call center to check the status of his account or other routine interaction. After identification of the client, the IVR automatically communicates a personalized message that was entered into the system in form of text by a bank employee in the loan approval department: “Dear sir (Jones) we are still waiting for your mortgage estimation to close your credit claim. Please contact mrs. Patty on 123456. Thank you.”.

VR technology is based on voice recognition algorithms that rely on original features of each individual’s voice. VR is one among many increasingly popular biometric identification methods, based on specific characteristics that are unique for each of us, such as fingerprint, eye pattern, and even the DNA structure.

All this technologically demanding solutions are based on complex mathematical algorithms and artificial intelligence technologies, such as neural networks. Important role in its success have the ever more affordable processor power and storage capacity.

The companies providing these technologies have operated at loss for years, funded by capital from different sources. We are witnessing a market capitalization of the few that survived. New technologies are constantly making management of IVR services easier, transforming in this way the IVR platform from a system of compromises to a system of customer desires.

Voice Portals

Voice portals are single access points that allow a caller to retrieve different types of information or manage personal communications services, by voice using the telephone service. Voice portals integrate Natural Language Speech Recognition (NLSR), Voice Recognition (VR) and Text-to-Speech (TTS) technologies with the communication infrastructure and application expertise. Simply put, voice portals are IVR systems with extended functionality resulting in increased ease of use and a better flow of information, thanks to the use of new technologies.

The concept of voice portals is very similar to the concept of web portals, so the supported types of services are very similar to those on the Internet. Most of these services will be focused on content, communication, voice commerce (as opposed to online store) and remote access to business resources.

The advantage of voice comparing to web portals, is in the handy nature of telephone communication. Consequently, the information that the user “pulls” by a phone will be the one that is urgent, updated and time sensitive.

As in the case of web portals, business organization behind the voice portal is a labor-intensive and complex. Therefore, their maintenance is left to specialized organizations that provide such services on the market. In line with this need, recently a new category of service providers appeared – Voice Application Service Providers.

Today (2002) we can identify a large number of application cases using the advanced IVR technology in various industries such as booking systems in tourism and passenger transport, access to financial data and performing transactions in banking, retail and catalog sales, accessing information of the government administration, CRM applications at mobile service providers…

As already mentioned, the Croatian market of “traditional” IVR systems is well developed. We will still have a lot to wait for new technologies like NLSR or TTS due to high cost of development of new languages patterns. But this is the fate of all small “non English speaking” markets.

END

My article on IVR systems – PART 1 (translated to English), Banka magazine, May 2002

This is the English translation of an article published in Banka magazine in 2002. The article is about Interactive Voice Response devices (IVR). IVR systems find their “best fit” within call center environments where they represent the “finest compromise” of a CRM strategy. This is the first part of the article, addressing pretty universal topics of CRM, IVR and call centers, and therefore still actual, despite its origin from 2002.

IVR – technology for a great compromise – PART 1

If you will use this text for publishing or academic pursposes, be so kind to cite the author and source: Alen Gojceta, Banka, 05/2002. Thank you!

CRM – the concept of technologycal compromises

One of the basic postulates of any CRM (Customer Relationship Management) strategy is to make customer’s interaction with the organization easy and accessible. Taking an ideal situation from the financial industry as an example, it would mean that each of us had his or her personal banking clerk on full disposition. In accordance with our wishes, let’s call him Super personal banker. He would appear at our office or apartment shortly after we called him. In a pleasant atmosphere, he would carry out the necessary transactions, advise on investing our money, and help us select the optimal insurance policy or recommend the best plan to close our loan. Of course, in this ideal case, the client would not need to pay considerable financial amount for such a great service.

It is obvious that the ideal case for a bank is not the same as the ideal case for its clients. That’s why the CRM strategy is usually characterized by multiple win-win challenges, where such wins-wins are necessarily converted into (winning) compromises-compromises.

Managing customer relationships is basically oriented to managing such compromises. By balancing between the cost of advanced customer service and provided total added value to the client, healthy development of a successful CRM strategy is assured.

IVR – the simplest service making the greatest savings, 24×7

The existence of a call center as supporting tool for an advanced CRM strategy also represents a compromise of its own. Whatever our position on cost is, a call center is a pretty expensive tool for any service provider, looking on a short or long term. The reason is simple – the price of labor makes up to 70% of the total call center cost. Exactly for this reason, there are machines that substitute different functions in the Call Center. These machines are called Interactive Voice Response (IVR) devices.

When talking about telephone communication, IVR devices represent one of the most common compromises of advanced customer relationship management. IVR is, in its principle, a computer that performs certain activities automatically upon caller’s requests, given by phone.

IVR functions can be divided into two basic groups.

First, filtering phone calls based on who the caller is and what is the purpose of the call, and finally attaching such attributes to the call. Based on those, calls are further processed within the call center routing algorithms. Processing herein means operations such as identification of caller’s segment, call routing to a particular agent or group of agents, triggering certain applications to enable agents solving caller’s requests. All of it based on the attributes that IVR has attached to the call.

Second, automatically solving telephone inquiries, usually via dial tone or voice recognition. IVR can read the data, both dynamically from a database, or just play predefined recordings from static voice boxes. Responses to inquiries can be using voice, by fax, or via e-mail. Usually the answers are numbers synthesized by a computer, from pre-recorded sequences. There are several providers that offer IVR solutions with messages in Croatian language. Known examples of IVR solutions in Croatia are widely adopted various forms of automated telephone banking in different banks, popular Infozap and devices for activation of prepaid services for GSM operators.

IVR applications are mostly being easily made and changed by special tools. There are cases when those can not be changed. Such machines are usually intended for specific areas of application as complete solutions.

IVR role in call center environment

In the Computers and business insert of the last issue of Banka magazine (03/2002), there was a Gartner’s estimation that IVR systems within call centers will be one of rare segments of the IT market that will record higher growth rates than average. This is not unusual. In the EMEA (Europe, Middle East and Africa) region there is an average of 5 new call centers a day. Different analysts predict growth of the number of call center agents in Western Europe between 400 and 500% for the period 1999 – 2004. Although IVR systems can function as standalone solutions, their real value is shown when implemented within call center ecosystems.

The growth of the total number of employees in call centers and growing number of transactions and CRM processes that rely on telephone communication causes growth of the related work force cost. IVR solutions are among the most effective vehicles to reduce this cost. Of course, such solutions are driven by compromises introduced earlier in this text. IVR lets service providers to provision simple information to its users in an inexpensive and efficient manner, 24 hours a day and seven days a week. Customers have the ability to access frequently requested services and information, in a relatively simple manner, with guaranteed quality and availability. The compromise is reflected here in the lack of human contact and unpopular scrolling through predefined dial tone menus.

There are two factors where IVRs significantly reduce labor costs in Call centers: reduction of the needed number of agents due to the calls managed by the IVR, and reduced turnover of agents who are released from boring, repetitive and uncreative activities.

Statistics say that, usage of an IVR system reduces the average call length for 18%, which cause reduction in related labor costs. In today’s call centers around 12% of calls are resolved within IVR systems without any interaction with “live” agents. In some industries, such as financial services, entertainment and tourism, this share ranges even between 16 and 18%. Moreover 35% of total calls, before being routed to agents, are received to the IVR system.

Health Risk Management – an example of a successful IVR implementation

This case study has been extracted from a Lucent white paper. The source document is available today (January 2010) at: www.goldsys.com/…/21-Gold%20Systems%20Health%20Risk%20Case%20Study.pdf

Health Risk Management Inc. (HRM) is a company from Minneapolis, United States, which since 1977 provides health care services and health risk management. As a part of the U.S. health care system, the HRM takes care of the medical insurance coverage for health treatment expenses. They assess health risk and serve as an intermediary between health institutions and health insured.

Like other companies in the industry, HRM already owned an IVR system which provided restricted functions to callers, such as checking the status of their requests. In order to reduce traffic and offloading call center representatives, HRM decided to introduce two IVR applications: the eligibility of patients for medical services and health insurance benefits. In addition, the existing application, that checked statuses of requests for refund of medical services, was enhanced.

While the old application was limited only to communicating the status of a request, the new one has added information about reasons of delays. In addition, the insured was able to get the information about the amount of health services covered by the insurer and the remaining of the amount to be paid. As part of advanced customer relationship, support for Spanish language was introduced. Some HRM customers had up 15% of the Spanish-speaking insured. The new application eased their access to information through their native language.

Calls to check eligibility of a policy holder for a particular health service where performed by physicians and medical institutions. IVR application used to return the information about the status of an insured, services covered by health policy and its expiration.

When integrating applications for medical benefits, the major challenge was how to communicate complex, accurate and understandable information from a wide selection of options in a reasonably short time. HRM was able to overcome this obstacle by achieving the most important compromise of IVR systems – releasing people of simple tasks, thus making a machine provision easy and fast automatic self-service, enforcing customer satisfaction.

HRM’s success was complete. IVR system was very well accepted. It used to completely resolve 58% of 50,000 calls dialed during the first three months. More importantly, the surveys among users showed no objections to such self service “information supplying system”.

TO BE CONTINUED IN PART 2… My next post will be the last two paragraphs of this article: “The future of IVR” and “Voice portals”. My plan is to post it on January 11 2010.