Top Menu

Like Them or Hate Them, IVRs Make Major Contributions to Contact Centers and Enterprises

Like Them or Hate Them, IVRs Make Major Contributions to Contact Centers and Enterprises

Interactive Voice Response (IVR) systems have been around since the 1980s and are still going strong. Investments in self-service applications have exploded during the past two years, as enterprises of all sizes are building or enhancing self-service solutions. DMG estimates that the IVR market reached $1.867 billion by the end of 2007, making it the largest contact center technology segment after the automatic call distributor (ACD) sector. The IVR market is being driven by strong demand for self-service applications, a steady flow of innovation, the growth of hosted solutions and expansion of the outbound notification market. Recently, slower IVR growth in the US has been offset by increases in international sales, especially in Brazil, India, Saudi Arabia, Eastern Europe and the Pacific Rim.

IVRs Address Tactical and Strategic Goals

IVRs are both strategic and tactical solutions that are mission-critical for a growing number of contact centers around the world. Some customers complain about these automated systems, but most people consider IVRs convenient and easy to use, and have come to depend on them. With the emergence of the proactive outbound notification market, IVRs are delivering additional strategic benefits, as they make major contributions to revenue generation and help provide an outstanding customer experience.

IVRs Handle Majority of Contact Center Calls

IVRs are essential for the success of many contact centers, as they typically handle between 30% and 90% of all incoming calls. Like most self-service applications, IVRs were originally introduced to help contact centers decrease operating expenses by reducing the volume of calls that need to be handled by live agents. IVRs continue to do an excellent job delivering on cost savings, their primary value proposition. In recent years, driven by the adoption of speech recognition, their benefits have extended beyond productivity to improving service quality, the overall customer experience, and brand building.

IVR Trends

A variety of trends are driving change and investments in the IVR market worldwide. The trends fall into the following three categories: technical, enterprise, and contact center. The four most important technology trends are:

  1. Ongoing migration of IVR from hardware to software-based technology
  2. Continued transition from time division multiplexing (TDM) environments to Internet Protocol (IP)-based switching solutions
  3. Growing adoption of voice portal environments
  4. Increasing popularity of VXML development environments

The enterprise-centric trends impacting the IVR market include:

  1. The need to reduce call center operating expenses in order to improve the company’s margins and bottom line
  2. The desire to automate as many servicing tasks as possible prior to moving call center activities to an outsourcer (usually offshore)

Additionally, many contact center departmental trends are pushing even the most quality-conscious managers to consider using self-service to eliminate or dramatically reduce their need for live agents. The most critical of these trends are:

  1. The ongoing agent attrition problem
  2. The challenge of finding qualified agents

Impact of the Economy on IVR Market

DMG expects the current economic meltdown to temporarily slow IVR growth, as companies of all sizes delay all but critical expenditures. But once companies lift investment freezes, DMG predicts that there will be an increased emphasis on self-service applications in order to reduce operating expenses. The IVR market will continue to benefit from the need to replace outdated and costly systems with newer technology. Sales will also be positively impacted by the need to standardize technology in newly merged companies, particularly in the IVR-intensive financial services industry.

For an independent and objective analysis of the current revenue size, market share, vendor positioning and future direction of the Interactive Voice Response (IVR) technology sector, please see DMG Consulting’s 2008 Worldwide IVR Trends and Market Share Report. This Report is available at, or by calling Debbie Navarra at 516-628-1098.

Ask the Experts

Can you offer any tips or techniques for refreshing our call center agents during the day? Many of our agents are suffering from the monotonous nature of the job and turnover at our call center is very high.

Keeping call center agents motivated and fresh throughout the day is a challenge for call centers large and small. Here are some general techniques that have proven to be effective, although the exact approach will vary based on the specifics of your operation.

Use Interactive Voice Response (IVR) and Web self-service. These solutions can automate all routine inquiries that do not require the cognitive capabilities of live call center agents. If your organization supports self-service solutions, use them to automate the handling of frequent and routine inquiries, such as balance questions, order status, store hours/locations, directions, etc…Learn more.

DMG Consulting LLC is a leading independent research, advisory and consulting firm specializing in unified communications, contact centers, back-office and real-time analytics. Learn more at