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Speech self-service slowly leaving indelible impact on voice of customer service

13th March 2007
By BBR Staff Writer

Speech recognition technology is becoming increasingly prominent as a cost-cutting and value-enhancing solution for customer care and service enablement. As firms look to improve customer interaction in a cost effective manner, the technology will serve as an adjunct to offshore customer service operations.

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A report released by Datamonitor three years back predicted speech-enabled self-service technology would compete with offshore contact center customer service agents. According to Datamonitor research, a contact center in an offshore location, like India, saves western businesses approximately 25% to 35% per transaction. However, a call serviced through speech automation costs approximately 15% to 25% of the cost of a call handled by an agent in India.

Testament to this shift came recently when Lloyds TSB, the UK's fifth largest bank, announced that it is to close its contact center in Mumbai, which typically handles overflow calls when UK agents are busy. The bank said that the widespread use and success of its automated speech-enabled phone self-service system has eliminated the need for additional agent capacity in Mumbai.

Speech recognition was once viewed as a futuristic technology that would never leave the realm of science fiction. However, over the past 50 years, key technology and commercial achievements in speech recognition, along with increased central processing unit performance and lower hardware costs, have helped make speech commercially viable for enterprises and service providers. Today, speech recognition is becoming increasingly prominent as a cost-cutting and value-enhancing solution for customer care and service enablement.

As we roll out the tape over the next several years, cost pressures and globalization will undoubtedly continue to create strong tailwinds for offshoring. However, speech self-service will also proliferate, and in many instances compete, with offshoring as companies scramble to assemble the optimal blend of automation and agents for customer care.

It is important to note that increased reliance on speech will not supplant the need for offshore contact centers for a lot of companies, rather the technology will serve as an adjunct to offshore operations as these companies look to improve customer interaction in a cost-effective manner.

In fact, it appears that the offshoring movement is not going away anytime soon. One only needs to look at the recent Dell expansion into the Philippines as a sign that customer care served from foreign locations is a model that works. Companies across western nations are clearly seeing the benefits to housing some elements of customer care offshore. These include lower costs, accessing agents with excellent language skills and commercial sophistication. It is also apparent that many firms that feel offshoring is a one-stop shop are re-thinking their strategy, and are incorporating nearshore/onshore capabilities in addition to self-service.

While the movement by Lloyds TSB represents only one instance of speech self-service displacing offshore agents, this is expected to become a growing trend over time as businesses learn to leverage technology from more of a strategic standpoint.
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