Self-Service Options May Displace Offshore Agents

Speech-enabled self-service technology will compete with offshore call center agents, because the technology provides a more cost-effective approach to service low-level transactions, according to a report from London-based research firm Datamonitor. The costs of popular offshore locations like India and the Philippines are rising as labor costs in those countries rise, according to Daniel Hong, Datamonitor's voice business analyst. "Companies that have offshore call center operations can further reduce costs with speech, but companies that are looking to expand offshore may find more overall value by staying onshore and implementing a speech self-service solution," Hong says. "As the labor rate increases, the prospect of going offshore is a lot less compelling." According to the report, using an offshore call center can save 25 percent to 35 percent per call compared to a U.S. location. Yet a speech-enabled call center can handle the same call for 15 percent to 25 percent of the cost of an India-based call center. Businesses that already have offshore call centers can look to drive greater cost savings by implementing speech-enabled self-service solutions. These systems can pay for themselves in as few as nine to 12 months, according to Hong. Another problem with the offshore locations, according to Hong, is the high turnover rates of call center agents. Speech technology remains once its installed, so customers can continually receive a higher level of service. Speech-enabled technologies also enable a customer to get service more quickly than waiting on hold until an agent is available, Hong adds. Customers, particularly younger customers, don't have the patience to wait online several minutes for a live call center agent. Although IVR systems help solve some of this problem, the phone menus themselves can take more time to negotiate than a natural-language speech technology system. It's quicker to say "credit card balance" than to wait for an IVR system to run through the various options before getting to "account balance," Hong says, adding that natural speech recognition systems can handle a variety of questions (e.g., What is my credit card balance?, I need my credit card balance, etc.) that seek the same information. Speech technology systems no longer have the robotic-sounding voices of years past, and vendors are constantly improving them to make them sound more natural. The more advanced systems also enable users to tweak them with words, phrases, etc., as customers ask for the same information in new or unexpected ways. Some companies are seeing these systems as differentiators in customer relationship management. According to Hong, spending on speech-enabled self-service technology in North America will more than double, from $480 million in 2004 to $1.2 billion by 2008. Datamonitor also estimates that the Caribbean and Latin American voice business market will be worth $180 million by the end of 2008. Principal Caribbean and Latin American markets for voice business include Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. Large enterprises like American Airlines, Bank of America, CIBC Oppenheimer, Citigroup, Continental Airlines, MCI, Qwest, T-mobile, and Verizon have already implemented speech-enabled self-service solutions and are benchmarking significant cost savings and improved customer service levels, Hong says. "As the early-adopter companies exhibit tangible success with speech-enabled self-service, other companies will follow suit," he says. "This is leading to a greater uptake of speech solutions as the market awareness and visibility of speech recognition technology increases." Related article: Monitoring Your Agents, But Not Your Self-Service Applications? Think Again
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