The Meandering Path from IVRs to IVAs

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For decades, companies have been investing billions of dollars in interactive voice response (IVR) systems, which were designed to streamline business processes and speed up customer service. Recent technical advances are ushering in a replacement, the intelligent virtual assistant (IVA), with promises to push system capabilities to new heights. But the road from the old to the new is strewn with potential pitfalls, so organizations need to be realistic about IVA capabilities.

IVR’s roots go back decades. The technology took hold in the 1990s when call centers really started to move away from long-standing touchtone systems to ones that could link traditional voice and data systems, which had antithetical designs.

IVRs offer several advantages over live contact center agents: IVRs work 24/7, they often cost less than contact center staff, and they perform more consistently. They do certain functions well, such as initial routing. In this case, the caller identifies which service he wants and the system sends him to the appropriate party.

Yet IVR technology often garnered more groans than praises. “My wife hates IVRs; she gets into shouting matches with them,” says Ken Arakelian, director of cognitive innovation group engagements at Nuance Communications, a voice technology provider.

Such problems stem largely from IVR’s underlying technology and design. IVR systems were built when computer processing power was much more limited than it is today. Consequently, its functionality was constrained. As a result, the scripts outlining how calls would flow can create problems. “IVRs are rules-based systems, so they offer consumers a very limited set of options,” says Sarah Burnett, executive vice president and distinguished analyst at Everest Group, a management consulting and market research company.

Systems should have been designed in a customer-friendly manner, but most were not. The imagination of the person or group writing the scripts limits functionality. “Sometimes, corporations need to think through the call handling process more thoroughly,” Burnett explains.

Another design flaw with most IVRs is that they concentrate more on what the company needs out of the system than on what the consumer desires. In worst-case scenarios, systems point users to a website and then hang up, leaving consumers extremely frustrated.

In other cases, companies ask their IVR systems to do too much. An IVR can answer simple yes or no questions or quickly pull out data, like current account balances. “If the answer to a question is dependent on a number of factors, IVRs sometimes fail,” Arakelian laments. “Determining if an insurance policy will pay for a knee replacement is based on factors like if the customer has a deductible and if the doctor is in network or out. IVRs are not good at handling those types of inquiries.”


IVRs’ constraints have been exacerbated by executive decisions. Management often views the system as a way to reduce costs. “IVRs’ main goals are call deflection and containment, shifting inquiries away from paid agents, who are paid by the hour, to machines,” says Jim Freeze, chief marketing officer at Interactions, an IVA supplier.

And in the contact center, leadership is often tasked with keeping costs as low as possible. “Historically, companies made very little investments in their systems once they were running fairly well,” says Donna Fluss, president of DMG Consulting, a market research and consulting services provider. If a company determined that its IVR was deflecting, say, 88 percent of its calls appropriately, it would not invest the money needed to raise it just a few more percentage points.

On a related note, businesses typically allocate money for the initial IVR implementation but then don’t spend what’s needed to regularly update the system. As a result, they fall behind never-ending technical advancements.

The end result? The goals of the company and its customers are sometimes at odds, and systems are not user-friendly. A caller having to repeat personal information, such as his name and address, as he tries to resolve his problems is a common annoyance. In addition, companies provide few, if any, ways to bypass the menus. Customers feel trapped and become enraged rather than engaged.

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