NT: What types of services does West Interactive provide or support?

TS: If there's a tag line for West Interactive, it would be "helping our clients maximize the value of every customer interaction." We do that by developing and managing world-class automated customer contact and voice self-service applications for large and medium-sized enterprises. Whether our clients’ customers are consumers or other businesses, we support our clients’ telephony front end, whether that telephone call is a sales inquiry, customer complaint, billing inquiry, technical question, or any of the myriad reasons customers need to call. These calls – and the self-service applications we build to support them—tend to fall into one of three categories: the customer is seeking information; looking to conduct a transaction; or trying to solve a problem. Our job is to work with our clients to maximize the value of each of these types of interactions; providing voice self-service applications that offer outstanding customer service while maximizing their revenue potential and minimizing their costs.

NT: How have automated customer contact solutions advanced in the past five years?

TS: The biggest advance is in the realm of advanced speech recognition. In the last few years, from a speech perspective, we have really been at the bottom end of the traditional technology "S" curve. It has simply taken time to get adoption in the marketplace—from the large enterprise level down to the small and mid-sized company level. There have been a number of reasons for that. One has to do with the state of the technology. The speech engines themselves have gotten increasingly better in the last five years. The current state of speech engines is quite "The current state of speech engines is quite remarkable in terms of what they are able to recognize, even in very difficult and noisy environments."remarkable in terms of what they are able to recognize, even in very difficult and noisy environments. A second barrier to adoption over the last five years has been a lack of expertise in the speech market. Deploying a speech self-service application is similar to deploying a touch-tone self-service application, but there are many differences in terms of the design, the deployment and the ongoing tuning and grammar development that is required to deliver a world-class speech application. The industry has not had enough resources to support significant growth. That has recently changed. We now have a critical mass of both companies in the marketplace and people with the skill sets to enable speech to grow. Third, there has been a bit of a shift in terms of how enterprises themselves think of speech. I'm going to make a general statement here, as there are exceptions, but for the most part, if you look inside an enterprise and think about the customer care applications and who supports what, typically the live agent side—the call center side—is driven by an operations or customer care group, and the IVR side is traditionally driven by IT or the telcom organization. Certainly these two groups have worked together, but often their goals are different and distinct, and speech recognition technology has sometimes fallen between the two. What we are seeing now, because of some of the changes I have already mentioned, is the customer care side of the enterprise starting to take note of what speech can do to help them not only reduce costs, but provide a more robust and user friendly experience than what they have been able to do with touch-tone applications.

NT: My own personal feeling is that, given all of the wonderful benefits of using advanced speech technology, do you think that better education of the enterprise would help to grow this industry a little faster?

TS: Absolutely. One of the things we have to do is not just continue the education of speech per se, but to be clear about where speech applications best fit into the overall customer contact strategy. A speech application will not necessarily be the best customer contact solution for every situation. We have all heard horror stories of companies trying to migrate their entire voice self-service environment to speech all at once, only to find certain applications were not well suited for a speech solution. These negative experiences make it that much harder to articulate and demonstrate the value of speech, when properly deployed. Speech applications are not the same across industries or vertical markets. It ultimately depends on who the enterprise's customer base is and what the company’s unique objectives and strategies are for dealing with its customers.

NT: What would you say are the advantages of using voice self-service solutions?

TS: Traditionally, the biggest advantage has been cost savings. That has been true for the past 20 years if you think about a fairly typical DTMF application and what that application is designed to do. I would say cost savings is still the number one advantage, especially now as we think about speech. Because of the increasing sophistication of the technology, speech applications can do more than what DTMF can do. We are now at a point where we can automate many more live agent calls and transactions, which translates into cost savings. Think about the three levels of interactions with a customer mentioned earlier: capturing or providing information, conducting a transaction and solving a problem. Speech provides the ability to recognize the customer's need faster. It enables us to do transactions that DTMF could not have done before, such as being able to recognize what state you are from rather than going through a menu of all 50 states. It also enables you to do some problem solving that very few DTMF applications were capable of performing. There are still problem-solving issues that our clients have with their customers that will require live agents, but advanced speech recognition will be able to carve a chunk of them off. That, too, translates into more cost savings.

Beyond the cost savings benefits, today’s self-service applications actually have the opportunity to drive increased levels of customer satisfaction. One of the ways this happens is through the advantages of consistency. A live agent environment can certainly be a tremendous opportunity to serve customers, and you can even "wow" customers with a great live agent interaction. One of the downsides, though, is that inconsistency can creep in, whether it's a bad agent or a bad day. Voice self-service applications are consistent—a consistent feel, a consistent tone of voice, a consistent delivery of your brand. That consistency is absolutely worth something in terms of increased customer satisfaction. In addition, customers are becoming increasingly used to speech recognition technology and some find it a better interaction than a DTMF application. That was not true three or four years ago, when as often as not, the interaction with a speech recognition application was frustrating because the recognition engine performed at an 80 percent effective level.

NT: What are the advantages of outsourcing voice self-service solutions, in general, and to someone like West?

TS: There are several advantages. First, there is the increasing complexity required to maintain and build self-service applications. While it has become easier and there is a critical mass of skill sets in the marketplace, the ongoing maintenance of managing a voice self-service environment is fairly sophisticated. It is one of the age-old arguments of outsourcing: do companies want to focus their resources and capital on having those functions in-house when that is not what their core competency is? If they are a health care provider, shouldn't they be focused on the risk management of their customer base and provider network? As we move to speech, the management of these self-service applications becomes even more complex.

The second issue, closely related, is the surrounding technology issues. For example, if we look at voice over IP, we can see that companies are making investments in VoIP and getting it to their in-house call centers. But that is an incremental investment they are going to have to make from the voice self-service platform. If you think about how remote agent strategies fit into an in-house environment, building the capability to route calls and manage remote agents is very difficul—that's another reason to outsource. Some of the media gateway technologies are evolving. How do companies invest there? Consider the complexity behind making a speech engine decision. To some extent, the merger of Nuance and ScanSoft takes away that particular trade-off decision, but we know that Nuance won't have a monopoly on that market over the next 10 years. IBM and Microsoft are making investments in speech engine technology. So, do you want to put all your chips on number 36 on the roulette table rather than work with an outsourcing provider who by its very nature is able to spread that technology risk?

Third is the advantage of scale and scope. The cost advantage that scale provides is easy to understand and convey to the market. Communicating the advantages of scope is a little harder, but those advantages, like being able to see best practices across industries, and bringing those best practices to bear on behalf of clients, are very real. There is a lot to be said for being able to work with a provider who not only sees best practices across a number of clients within a particular vertical market, but is also able to raise the level of customer interaction performance across the board for clients because of that knowledge.

NT: For the second part of the question, "Why West?," I could write a book on the subject, but I'd like to hear it in your words.

TS: Number one is our flexible architecture and rapid development environment. Over the years, we have built a platform that has an architecture that enables us to make rapid changes on a client-by-client basis. We can literally make changes, often controlled by the client through an interface on the client's desktop, within minutes. This rapid development environment we have built to get applications up and running and make changes is an enormous competitive advantage—quite likely our most important.

The second point of differentiation is our systems integration expertise and capabilities. While the number one priority is the voice application itself; the persona, the grammars, the tuning and the routing, the back-end systems integration work has to be flawless, so we're pulling from the right customer databases and bringing in the right scoring to make sure we route the call correctly. All of the billing and back-end integration work with our clients also has to be seamless. We've done that for 15 years, it is a core strength of ours, and I think we do it better than anyone.

Third would be the information management tools we provide our clients to support their CRM operations and strategies. At a base level, this is the reporting we provide, but more and more, it's real-time interfaces and dashboards as well as the analytics we provide to our clients to allow them to better understand their customer environment—who the repeat callers are and what their cost to service is, not only on an aggregate basis, but on a "segment of one" basis. I would like to be able to say that we are down to that segment of one…that is certainly the goal. We are pretty far along the path of providing many sophisticated tools to our clients.

Fourth, our speech recognition design and deployment on a large-scale basis is excellent. We have deployed over 300 speech applications across multiple clients in 11 different vertical markets, and we are just beginning to tap the potential of where voice is going as a self-service medium.

Fifth would be our scale-driven redundancy and cost structure. I have already mentioned how any outsourcer should be able to provide a better cost structure, but our scale gives us the ability to provide a structure that is second to none in terms of cost. Redundancy is just as important. As a provider, I might have the scale to give you low cost, but then say, "Oh, by the way, I forgot about the redundancy," or "I don't quite have the redundancy built into the platform that's needed." When we think about cost structure, we not only think about it in terms of being able to deliver a transaction on a routine basis, but being able to handle a transaction on a non-routine, emergency, disaster-recovery basis, and that's where that redundancy fits in.

Finally, we are a client-driven company. We provide client-driven solutions, and client-driven feature functionality. For example, within the same vertical market, we are able to support many clients’ different ways of wanting to handle bill payments, credit card payments or dealer locator applications. We are able to provide those unique solutions to our clients and that is why they stay with us.

NT: What industries are the early adopters of voice self-service technology solutions?

TS: The financial services industry has certainly been an early adopter. Large banks and financial services organizations have been leaders in technology investment over the last five to 10 years. They were one of the earliest industries to provide customer information and transactions over the Web. Because of that early Web experience, financial services firms are uniquely positioned to transition to self-service through voice channels. The healthcare industry, specifically the HMOs, and the travel industry have also been early adopters. Most recently, we are starting to see awareness from the vertical markets that touch large groups of consumers: telcoms, cable, satellite and ISPs are all moving fairly quickly to adopt speech.

NT: Does West Interactive offer both managed and hosted solutions?

TS: We do. What we refer to as a managed solution is a fully turnkey solution where we work with our clients to do the design, the build, the deployment and the ongoing maintenance. The vast majority of our business today fits in that managed business model. When we talk about hosted solutions, we have clients that want to either build the applications themselves or use another third party to build the applications but take advantage of West's scale, infrastructure, redundancy and architecture to host the transaction. The VXML standard has enabled this business model as much as anything. We see hosted solutions as one of the growth areas for West Interactive. I think the jury is still out as to whether the hosted model is going to be more attractive to large enterprises or small to mid-sized companies. We are already well positioned to sell to large enterprises and we are addressing the small to mid-sized market by picking the right channel partners to sell through.

In addition to providing a hosted voice self-service solution, what we have built from an infrastructure and capability standpoint also enables us to host other technology applications. For example, we provide a hosted, virtual ACD using our IVR and speech platform so companies can use this service to enable remote agent capability, to forgo investment in a new switch or a new ACD, to plan for seasonal or other high volume spikes, or to implement a robust disaster recovery and business continuity plan.

NT: What are the greatest challenges that West Interactive is facing?

TS: I'll talk about three. First is keeping up with the speech growth and making sure we are positioned to do an exceptional job with the volume of work that is coming at us, both from existing clients and from new clients. That is certainly a good challenge to have.

The second challenge we face is making the right investments in the right technologies at the right time. This is most likely the biggest challenge that a firm that tries to do it in-house faces. However, they have a much greater challenge than we do: they get just one shot to get it right. We have the scale to effectively spread our technology and investment risk. We have been partners of ScanSoft and Nuance, and now the combined organization. But we are also going to stay close to what IBM and Microsoft are doing. We need to make sure we are on the leading edge of technology where appropriate.

The third challenge would be continuing to educate the industry and the market about outsourcing. Today, approximately 20 to 25 percent of the market outsources voice self-service, whether it's touch-tone or speech, so there is still an enormous opportunity for companies like West to educate firms about the value of outsourcing. The way to address that challenge is to communicate, communicate, communicate. We need to talk about not only the specific advantages of West, but generically, about the benefits of outsourcing.

NT: What is the greatest need of our industry today?

TS: The biggest need in the next five years will be finding a way to cost-effectively provide enterprises with the ability to deliver the right message or offer to the right customer at the right time, getting down to that elusive "segment of one" level in terms of how enterprises treat their customers. It will be different for each enterprise, but being able to cost-effectively (and I use that term precisely, because there is technology and capability available today to do these things, but some technologies might be cost-prohibitive and the return on investment on some of these systems just does not make sense) provide live agent and self-service applications to customer-centric organizations is certainly a requirement in helping our industry’s clients deliver the right message to the right customer at the right time.

NT: How would you describe the status of the customer interaction/CRM/teleservices industry today?

TS: It is as strong as it has ever been. The segment of the market that West Corp. overall competes in—live agents, voice self-service—has never been stronger. As an industry, we sometimes focus on the negative aspects of the business, such as the regulatory changes like the do-not-call list and how outbound call center work has gone away. However, if you think about the inbound customer care and customer acquisition environment, the state of the business is remarkably strong. Companies like West have been able to invest a lot of money in technology, capacity, "Companies like West have been able to invest a lot of money in technology, capacity, resources and skills to be able to provide clients with an outstanding service."resources and skills to be able to provide clients with an outstanding service. We are pretty bullish on the next three to five years in terms of where this industry is headed and what we can do for clients.

NT: What is your vision of the future of the industry?

TS: First, speech is going to continue to grow. Second, the telephony trend around VoIP and how networks are going to have to change is certainly one to pay attention to. Finally, and maybe most importantly, we, as an industry, need to continue to work toward creating solutions that provide cost-effective ways for enterprises to deliver the right message and the right offer to the right prospect at the right time. These are the high-level trends that we expect to see over the next three to five years. Companies that don't focus on those trends will be left behind.

NT: What's the greatest core competency of West Corp.?

TS: If I had to narrow it down to one, it is being able to identify our clients' needs and customize a solution to address those needs. If you asked me for the top three, I would add our ability to efficiently and effectively deploy resources; essentially, to make the appropriate investments in people, process and technology at the right time. Finally, our economies of scale and scope across numerous vertical markets gives us the experience to bring “best practice” services to our clients and the market.

NT: Thank you for your time.