Speaking of Solid Payback
Speaking of Solid Payback
Optimizing your interactive voice response system may require only a small investment
By Donna Fluss
Voice self-service solutions are considered mission-critical by business managers in most North AmericaÐbased contact centers with more than 150 agents, and these systems are growing in importance in India, Western Europe, and other parts of the world.
The value proposition is clear, simple and highly profitable Ñ when interactive voice response(IVR) applications are well designed, properly implemented, and appropriately maintained, theyautomate anywhere from 20 percent to more than 90 percent of incoming calls. Many enterprises would face a major financial hit if they had to employ agents to handle the callsautomated by their IVRs.
Nevertheless, IVRs are often neglected and underresourced. Too many companies have IVRs that were implemented years ago and enhanced only when something broke or business requirements changed. Additionally, IVRs are often relegated to the non-essential category by CIOs, who were happy to outsource them long before hosting became acceptable for other mission-critical contact center solutions.
While a seeming contradiction, the success and dependability of many IVR solutions have caused them to be treated as second-class citizens. Technology groups take them for granted because the systems generally do not require a great deal of support to keep them in production. However, while call processing continues without interruption, the vast majority of IVRs in North America are not performing at optimal levels, according to recent DMG Consulting research.
DMG estimates that more than 80 percent of IVR users around the world can improve automation rates and dramatically increase customer satisfaction simply by investing in routine optimization of their IVR solutions. HereÕs another way to look at it: If an IVR was installed morethan three years ago and has not had an overhaul of its script or voice user interface (VUI) since then, itÕs time for a full health check.
The following example proves the point. A financial services organization receives 1 million callsper week. This organization has an IVR that automates 60 percent ofits callsÑ600,000 weekly. The variable cost per agent-handled call is $5.50.Ifas little as 2 percent of the remaining 400,000 calls per week were automated, an additional 8,000 calls from agents would be displaced. This would save the organization $44,000 per week or nearly $2. 3 million per year. At the same time, service quality would increase and complaints would decrease.
Of course, there are additional factors to consider. By automating some of the easier calls, an agentÕs average handle time is likely to increase for the remaining calls by an average of two to three seconds, at most. Assuming a 200-second average handle time, this would increase the cost per call by approximately 1 percent.
Yet, this gain could easily be offset by a corresponding reduction in average handle time due to a decrease in customer complaints about the IVR. (Note: During wrap-up, agents generally record the reason callers need help, so the volume of complaints about IVR applications may be under-appreciated.)
Additionally, consider also the cost of the optimization project, which runs from approximately $50,000 to $150,000Ñdepending upon the resources required.
The payback period from an IVR optimization, with a cost of $150,000 for the project and a 1 percent increase in the cost per call, was less than one month. (It saved the organization almost $1.9 million during the first year.)
Given these returns,one would expect many organizations to jump at the opportunity to enhance their IVRs. However, there are three primary reasons end-user organizations are not making investments, all based on fear:
- Vendors scare away prospects by pushing them to make major investments in expensive speech recognition-based platforms;
- enterprises lack the appropriate resources available in-house and are trying to avoid using expensive professional services for an uncertain return; and
- users do not see a compelling reason to take a chance on disrupting what they consider a highly effective solution.
IVR is not new or sexy. ItÕs perceived as a dependable core contact center application that runs without requiring a lot of attention. Most contact center leaders would prefer to invest in new solutions, like speech analytics,rather than in their old IVRs.
The catch is that a small investment in IVR might result in major cost savings. Any organization that has not optimized its IVR application in the past three years should undertake an assessment to identify ways to improve the existing system and estimate the potential long-term benefits of optimization.
If you determine that IVR optimization would be beneficial, find a vendor that can help deliver savings continually. IVR optimization should not be a one-time exercise. Leading IVR users continually strive to enhance the performance of their solutions; itÕs part of their annualbudget and their corporate culture.
If the necessary resources are not available in-house, find a hosted/managed service IVR provider that can help enhance the operating environment will little up-front investment and risk. The world of IVR has changed dramatically in the past five years, as have many business requirements.