IVR: Human Versus Machine

Picture this. You dial into a customer care center of a bank and the first
thing that greets you is an automated voice, 'Welcome to customer-care of the
bank. To know more about our products dial 1, for bills dial 2, for complaints
dial 3, for account and balances dial 4, to speak to an agent dial 5.' Chances
are you will press 5 to speak with an agent without giving a second thought to
any other option.

That may be changing now. Studies of customer behavior have shown that the
IVR is no longer shunned like it used to be. There are more likelihood of
customers pressing 1, 2, or 3 as the need maybe. In fact customers are even
likely to avoid speaking to an agent.

Two recent reports-Merchants Global Contact Center Benchmarking Report
2005, by South Africa-based Dimension Data and a report commissioned by UK-based
Intervoice titled, Offshore or Off target-have shown a customer preference for
automation over agents. The Dimension Data report states that one in every five
calls is handled through self-service of which 76 percent are successfully
closed. The second report says 70 percent of those expressing an opinion saw
automation in call centers as a better long-term solution rather than offshoring.

This is a complete turnaround from the earlier customer tendency to speak to
an agent.

So what has brought this reversal in customer preference? One, technology
deployment has matured and more people are doing it right. Many companies are
deploying the right applications on self-service and creating customer delight.
Back-end processes have become integrated with many more systems talking to each
other.

Technology itself is neutral-it can make life easier, and cause customer
frustration. Sarvesh Goorha, CEO, Six Sigma Outsourcing Practice and former CTO,
EXL Services says, IVR always had great potential. The trick was understanding
customer needs and doing the implementation right.

Customers no longer shun technology. The benchmarking report by Merchants
Global points out, "Negative experience with voice technologies, general
scepticism of new technology, and reduced technology investment are some of the
reasons." It adds, developments in voice-based, self-service tools means
substantial adoption of these will take place over the next couple of years.

Second, and more obvious, the cost of deploying live agents has gone up.
Staffing account for 60 to 70 percent of a contact center. The cost of agent
call averages $10.72 as against $2.10 per call on self-service, says Dimension
Data.

This has led to a drop in providing training to agents, resulting in poor
performance. Declining agent performance has increased customer frustration as
compared to self-service.

This raises an interesting question, if the objective is to service customers
and if customers prefer self-service, will call centers become obsolete?

Can IVRs Replace Agents

This question has taxed many minds and reports like these fuel nagging
doubts. Partly because everyone expects technology to take on more tasks and
partly because the cost of human resources has been escalating even in low-cost
destinations, automation seems to be a logical progression.

Already skeptics like Narayan Murthy, chairman and mentor of Infosys has
articulated the concern that automation will end the call center industry. At
Nasscom 2005, Mumbai where the comment was made, it created a furor with call
center proponents vociferously rejecting any such possibility.

While Murthy's statement might be an exaggeration, there is
a strong possibility that more customer care will be put on automation with
agents training for complex processes. No one believes that automation will run
over call centers and agents.

Masters' Potshots NR Narayana Murthy Chairman and Chief Mentor, Infosys Technologies Pramod bhasin President and CEO, GECIS Global “Call centers will become obsolete once voice-recognition techniques are perfected. This is unlikely to happen in software.” “Call centers will become more mature. The margins won't be great, but it ain't going anywhere.”

Atul Kanwar, senior vice president, Global Outsourcing and MD
e-Funds India says, automation and live agents will coexist because a machine
cannot handle everything. And adds, "At the same time we shall not shy of
deploying technology wherever required because it is cost-effective, efficient,
and it has matured immensely."

This sentiment is echoed by Sean Eagan, CEO, Aviva Offshore
Services, a customer who has outsourced work to vendors in India on a BOT model,
"The idea is to use a judicious mix of live agents and technology. We have
deployed IVR as a tool to help customers navigate through our help-desks. At the
same time we subscribe to the view that it is a more enhancing experience for
our customers when they interact with an agent.... IVR and subsequently voice
recognition was seen as a tremendous opportunity some years ago but the results
have not been very good. Therefore a balance between technology and humans has
to be struck."A balance has also to be struck between investment and
pay-offs. Eagan candidly admits that had Aviva's not offshored its customer
care support, some of its processes would have been automated.

And that's the catch. Going by the reports favoring
automation, Aviva may have erred in deploying agents. But in these surveys, call
centers primarily in Europe and UK had been considered. Representation from
India was next to negligible. Dimension Data shows 52 percent of the call
centers it surveyed were based in the UK or Europe, 24 percent in Africa and
West Asia, 20 percent in Asia-Pacific region, and six percent in the US. The
report Offshoring or Off Target was entirely based on a survey of call centers
in the UK.

Offshoring brings in a new dimension to the debate on
automation.

Offshoring, primarily dominated by India with over 85 percent marketshare, has
become popular not simply because of lower cost but also because of quality of
service delivery. Indian vendors invest a lot on technology and employee
training. According to the Dimension Data, investment in agent training has gone
down. While, in India recruiting, retaining, and training of manpower are the
top agenda for HR professionals and the BPO industry at large.

Although service providers in India do use voice automation
wherever required there are instances where automation has completely replaced
by agents. PPMS, the captive arm of Prudential Insurance, has embarked on an
initiative to replace all IVRs by agents.

The decision was driven by an unusual business imperative:
emotion. Says Atul Sharma, director, HR, PPMS, "Our business is about human
trust. PPMS reasoned that being in the insurance business, it had a high
proportion of senior citizens who would rather speak to an agent when discussing
their life-long savings then be serviced by an automated voice."

Compelling Technology

A key element in the evolution of IVRs was the intelligent
use of customer detail record (CDR). "IVR deployments which used CDRs have
invariably succeeded while there has been disasters wherever it has been left
out," says Vinay Chandok, global head of business development, Periphonics,
the IVR from Nortel.

In most of the outsourced customer care, the clients decides
how much traffic will be automated and how much diverted to offshore call
centers. With increasing use of CDRs and as clients' association with service
providers matures, clients seem to allow the service provider design the flow of
traffic.

There are compelling reasons to automate processes. Studies
have shown that 37 percent of all typical contact center transactions are
routine inquiries and can easily be automated.

But the technology itself is not matured enough for a
technical help-desk.

Even as the debate rages on, it is evident that the role of a
human voice is not over, yet. At the same time, self-service will get popular
with increasing maturity in video-IVR and speech recognition technologies. Given
the disruptive potential of IVR, it can assume center-stage in customer care
provided
it is tapped judiciously by service providers.

Balaka Baruah Aggarwal