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August 2003

Speaking Up For Cost Savings In The Call Center: VoiceXML Takes On The Dinosaur Of Legacy IVR

By Eric Jackson, VoiceGenie And VoiceXML Forum Marketing Committee

Most enterprise call centers and service providers today are saddled with aging, proprietary IVR systems that are costly to maintain. These providers are trying to keep up with changing customer demand. As a result, many are looking to the open-standard of VoiceXML to help them deliver lower costs and improved customer self-service.

In fact, we may look back on the summer of 2003 as a key transition point where almost every major call center, enterprise and service provider has made a decision to move from legacy IVR to open standards, next-generation IVR. These open and more flexible telephony platforms are based on the three-and-a-half-year-old standard VoiceXML. Among the many benefits promised by the VoiceXML standard are faster application development and deployment cycles and less costly hardware and professional services costs than traditional IVR.

With VoiceXML, the standard language for creating telephony voice-user interfaces, speech recognition application development is greatly simplified by using familiar Web infrastructure and tools. Any telephone can access VoiceXML applications via a VoiceXML Gateway.

By way of a little history, the VoiceXML 1.0 specification was established in March 2000 by AT&T, Lucent, Motorola and IBM, and then evolved by the W3C to VoiceXML 2.0 in October 2001. The W3C is preparing to announce a release of version 2.1 shortly. Over 400 companies have joined the VoiceXML Forum, the industry body responsible for VoiceXML advancement, marketing and education. VoiceXML's swift adoption is due to its open nature. There can be significant cost savings in creating, modifying and personalizing VoiceXML applications compared to proprietary and traditional IVR and other methods. Ease of application development allows companies to leverage in-house resources rather than employ specialized developers.

Some reasons VoiceXML is seen to be surpassing proprietary IVR include the following:

  • Over three-and-a-half-years-old, VoiceXML has attained the maturity it needs for large-scale, carrier-grade deployments;
  • Most developers confirm VoiceXML is at least three times faster in terms of application development compared to traditional IVR;
  • VoiceXML offers off-the-shelf applications;
  • VoiceXML is infinitely less expensive than traditional IVR, partly due to the fact that IVR requires a second silo infrastructure from existing Web infrastructure, and VoiceXML does not (think of the costs savings a financial institution can realize from having its Web banking team also manage its IVR application, as opposed to having separate Web banking and IVR banking development teams); and
  • VoiceXML's ease of integration with existing application server infrastructure (i.e., running VoiceXML apps off the same app servers that Web services run off) allows for reuse of e-business investments in a flexible, distributed architecture, rather than on a 'big iron' legacy IVR platform seen in the past.

Aside from being deployed behind a customer's firewall on their own premises, VoiceXML solutions can be hosted by service providers for rapid deployment at minimal up-front cost. As needs grow, these solutions can be migrated to on-premises platforms to maximize control and cost savings.

VoiceXML was conceived to separate application from execution. To take advantage of the flexibility the language provides, separating applications from the IVR is one of the major net gains. In theory, any VoiceXML application can run off any VoiceXML platform.

The VoiceXML architecture is very similar to traditional Web-based technologies as well as wireless technologies such as WAP. A user can call a VoiceXML server from a phone; the user's voice actually becomes the data in this system. On the server, a gateway translates the user's voice input, retrieves VoiceXML pages from a content server via HTTP and performs actions based on the interpreted VoiceXML page. The gateway may also respond back to the user from the VoiceXML page using text-to-speech and recorded voice.

VoiceXML Saves Costs
With VoiceXML, businesses of all sizes can be better positioned to afford enterprise-class, state-of-the-art voice systems that can lower costs and maximize revenue-generating opportunities.

The ROI is compelling. The cost of employing personnel to handle routine telephone requests can average over $5 per call. The incremental cost of handling calls with a VoiceXML telephony portal is often close to zero. Generally, cost savings spring from VoiceXML's ability to deliver:

  • Improved customer loyalty,
  • Lower operating costs saved from hardware and professional services,
  • Increased system performance,
  • Higher automation rates,
  • Reduced call wait times and caller abandons,
  • Increased first-call resolution rates,
  • Improved agent productivity, and
  • Lower agent turnover, due to fewer mundane calls.

Shorter Deployment Schedule
In the traditional IVR model, hardware must be purchased before application development even begins. VoiceXML applications, on the other hand, can be prototyped on VoiceXML Gateway platforms prior to purchasing on-premises platforms.

IVR applications take, on average, 14 to 18 months to deploy; VoiceXML applications take, on average, 6 to 9 months to deploy (and often less).

Lower professional services costs. As a result of its proprietary nature, IVR's professional services cost about 50 percent more than VoiceXML. An example is included in Table 1.

Table 1. Enterprise Applications.


Average Cost

Average Time to Complete

IVR Professional Services

$2,500 ' $3,500

per day

Engaged for 9 ' 12 person-months,

VoiceXML Professional Services

$1,000 ' $1,500

per day

Engaged for 4 ' 6 person-months, or completed by the customer.


Lower hardware and maintenance costs. Annual maintenance costs on IVR software are, on average, 30 percent because the proprietary nature creates monopolistic pricing. VoiceXML vendors' annual maintenance costs on software are 15 to 20 percent. VoiceXML IVR systems run on commonly available server hardware, ensuring that capital costs today and tomorrow will be as low as possible.

Lower software upgrade costs. IVR software, on average, must be replaced every two-and-a-half years, with a forklift upgrade that usually costs about 50 percent of the initial software costs. VoiceXML software typically delivers point releases, included in annual maintenance fees.

Lower costs for application modifications. VoiceXML is a well-documented standard similar to HTML. Application development and maintenance does not require specialized knowledge of proprietary telephony systems. Companies that deploy IVR typically budget $10,000 per month for professional services costs attributed to IVR application modifications. In the open VoiceXML landscape, companies' existing technical staff can easily make application modifications when required.

Lower costs for back-end integration. With proprietary IVR, companies typically allocate 50 percent of their application development budgets (about $250,000) for back-end integration costs. VoiceXML raises no backend integration issues because it reuses existing Web infrastructure.

Next-gen functionality. VoiceXML solutions can employ speech recognition or touch-tone commands to receive input from callers, while delivering responses using text-to-speech or pre-recorded messages.

Portability. VoiceXML applications can be moved easily from one VoiceXML platform to another, which is a portability not possible with proprietary platforms.

Reduced facility costs. Reduced staffing means reduced facility costs. VoiceXML customer self-service applications do not require floor space, wiring, workstations, and the costly accommodations that large IVR DTMF-only contact centers dictate.

Reduced PSTN charges. A major contact center expense involves the charges paid to public telephone service providers for toll-free numbers. Voice-driven customer self-service applications reduce PSTN expenses by reducing the amount of time callers spend on the phone. Callers can enter account data and other information more quickly in a VoiceXML-based VUI than waiting to speak to a live agent, or entering digits on a telephone key pad in the old IVR model. Callers on toll-free lines spend less time obtaining the information they need, substantially reducing toll charges.

Call control. A major benefit of VoiceXML is that it provides sophisticated call control capabilities, either through its sister language CCXML or supported natively on the VoiceXML Gateway through extensions, and allows CTI integration either at the application or the platform level. With VoiceXML, users need not worry about working directly with telephony cards, since they are normally controlled via the gateway software. With some implementations, users can actually run concurrent applications in VoIP and PSTN, providing additional flexibility.

VoiceXML In The Call Center
As customers find new ways to demand service, and as competitors and other enterprises continue to raise the bar in customer service, call centers are continually challenged to provide superior customer care while controlling costs.

Forced to constantly improve service quality just to maintain status quo, successful enterprises know they must differentiate through exceptional customer care. Today, 83 percent of the world's Fortune 1000 corporations have call centers, and call center operations are expected to grow 21 percent annually.

Voice empowers customers by allowing them to speak naturally into the phone to handle their own requests 24 hours a day, 7 days a week. Speech makes the caller experience engaging and efficient, preventing customers from 'zeroing out' to a live operator. Speech reduces hold times and can also help agents work more productively by interacting with callers up front to gather important customer information.

VoiceXML self-service solutions control costs by reducing staffing expenses, facility costs and PSTN charges. But VoiceXML solutions go beyond cost savings to make positive contributions to the top line. VoiceXML does this by allowing organizations to extend their business hours and market reach, to rapidly deploy revenue-generating applications, and to free customer service, sales and support representatives so they can focus on revenue-driving tasks.

Tips For Migrating To Open Standards VoiceXML
Due to large capital investments in proprietary systems, operators and enterprises typically refrain from complete 'one-shot' system replacements. Usually, a combination of existing legacy systems and new solutions will exist for a certain period of time. This requires that new technologies integrate well with existing legacy systems during the migration to open standards. To migrate efficiently from legacy systems to open standards, consider the following:

  • Ensure support for a wide range of interconnection options, both PSTN and VoIP, to enable successful operation in the legacy environment. This strategy also allows the system to be re-deployed at a later time.
  • Ensure that strong support for DTMF as well as speech recognition technologies is provided. Interacting with legacy systems may involve 'dialing through' existing proprietary infrastructures in order to connect a user with services that are provided by legacy and open systems.
  • Look for superior call control and call transfer capabilities, allowing calls to be effectively handled between open and legacy systems. Abilities such as outbound calling, control of method and timing for joining these calls with inbound calls, flexible support for various transfer types (e.g., hook-flash, RLT, TBCT, transfer connect, etc.) are critical for efficient call handling across systems.

Eric Jackson, Ph.D. is vice president, Strategy and Business Development, for VoiceGenie. He is responsible for its business development, Asia Pacific and Latin America sales, OEM partnerships, indirect sales through VARs, corporate strategy and private financings. He is currently chair of the VoiceXML Forum Marketing Committee and also represents VoiceGenie on other W3C and SALT Forum subcommittees. VoiceGenie provides carrier-grade VoiceXML gateway solutions that enable telecom carriers and enterprises to develop and deploy sophisticated speech-enabled Internet and data services.


20 Popular Voice Applications

E-mail reader
Voice conferencing
Transfer funds between accounts
Track flight status
Buy and sell stocks
Apply for a bank loan
Access lab results
Locate a physician
Enable appointment alerts
Access company databases
Find business locations and auto-dial
Request product information
Change of address information
Report lost credit cards
Track packages and shipments
Gaming and lotteries
Movie and restaurant guides
Track insurance claims
Sales force automation

[ Return To The August 2003 Table Of Contents ]

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