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The Cost of Building Speech Applications in Contact Centers 

The Cost of Building Speech Applications in Contact Centers

The Cost of Building Speech Applications in Contact Centers

1/1/2005
By Donna Fluss
CRMXchange

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Building a sophisticated, natural language-like speech applications for your contact center generally pays for itself in 3 to 12 months, even though the start-up costs are high. It’s rare to develop a contact center speech system for less than $250K today; many are in the $500K to $1 million range and some cost more than $1 million. Despite the high start-up costs, companies are investing, albeit slowly, because the pay-back and contribution to their bottom line and customer satisfaction is very real. It’s not a case of analysts theorizing about the benefits for companies. There are hundreds and, by now, possibly thousands of very satisfied users of speech recognition applications.

Developing a speech application requires both internal and external resources. Even if the project is going to be handled predominantly by the speech vendor and/or other external consultants, its success depends upon assigning an internal project manager to oversee and facilitate all aspects of the project. (The cost for the internal project manager is not reflected in the chart below. )

The external expenses for contact center speech projects fall into five major categories, as can be seen in Figure One: Contact Center Speech Expense Analysis. This chart was compiled based on input from a number of industry sources and reflects the costs involved in building a sophisticated speech application in a contact center environment. (Speech standards, packaged applications and development platforms are expected to reduce these costs during the next two years, as reviewed in my last two columns at CRMXchange: Building the Case for Speech and Speech Standards Improve Service Quality, Customer Experience and Reduce Cost.)

Speech Project Costs Categories

Typically, the five cost components of a contact center speech recognition development effort are:

  1. Speech software, speech recognition, text-to-speech and voice authentication expenses
  2. Voice-specific professional services
  3. Touch-tone interactive voice response (IVR) software
  4. Hardware
  5. System integration services

Figure One: Contact Center Speech Expense Analysis:

Speech software expenses: The cost of speech software generally accounts for 15% of the project. The speech software includes the engines for speech recognition, text-to-speech, voice verification and other related products. The software used will vary by project.

Organizations put a great deal of energy into negotiating the cost of speech software. It’s important to manage all of the cost components, but companies should place at least as much effort into controlling the cost of system integration and professional services, as these are more expensive and more variable.

Voice-specific professional services: This includes voice-specific professional services for developing the visual user interface (VUI), building the grammars and fine tuning the application. It may also include the cost of the voice talent. This category accounts for 10% of typical projects and is critical for the success of the application. The way a speech application interfaces with your customers is the most essential component of any speech system.

Touch-tone IVR software: The majority of speech applications are built on a touchtone IVR platform, although it doesn’t have to be that way. Most speech applications allow system users to either press or say a number, even those that do not specifically say, “please press or say….” This category accounts for 35% of the cost of most speech projects.

Hardware: Hardware costs account for approximately 15% of most speech implementations. Some organizations can reduce these costs by using their own purchasing power to buy system hardware.

System integration (SI) services: This represents the cost of integrating the speech application with existing systems. System integration costs typically account for 35% of a speech project. It’s the largest cost category and the one that requires the closest management to keep a project on time and on budget. System integration is handled by traditional SI’s such as Accenture or Bearing Point, call center SIs, or one of the IVR vendors themselves, such as Nortel or Syntellect.

Speech projects are complex system development efforts that require strong project management skills to keep them on track and on budget. But for organizations that succeed, the payback is rapid and substantial.

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