Strong Growth Projected for IVR Market
Driven by growing outbound systems, new pricing strategies, and the development of open standards, the global interactive voice response (IVR) market is expected to reach $2.78 billion by 2017, according to a report from Global Industry Analysts (GIA).
"The market in the future will be driven by the growing prominence of outbound IVR as a cost-effective solution for delivering important notifications, providing proactive and personalized customer service, and expediting collections," GIA concludes in the report.
Efforts to improve CRM have also helped boost growth during the past few years. Contact centers have a greater need to strategically invest in technologies and tools that help companies differentiate themselves from their competitors, according to the report. An increased focus on benchmarking customer experience, as well as an emphasis on IVR optimization, has spurred new opportunities for product replacements and upgrades.
"We're seeing a lot more emphasis on improving the customer experience and the value of customer loyalty and how it impacts the bottom line," Kim Martin, director of marketing at Voxeo, says. "At the same time, companies can make an investment, and do it in a way that doesn't erode profits."
Companies are also driving down costs by taking advantage of open-standard IVR technologies such as VoiceXML.
"Most vendors have VoiceXML platforms, but some enterprise companies have old proprietary systems, and those can be replaced," Martin says. "They get to the point where they can't personalize the customer experience. VoiceXML can make customers more apt to use a system rather than transfer to an agent."
An additional growth factor comes from quality monitoring/recording solutions. QM/recording solutions are now available as software-as-a-service (SaaS) or on a hosted basis instead of the conventional, premises-based, licensed product delivery model.
"SaaS certainly makes IVR more accessible to the masses and eradicates sometimes prohibitive capital expenditure outlay," Andrew McNair, head of global benchmarking at Dimension Data, says. "QM/recording solutions themselves are becoming more popular and accessible via SaaS, which validates the business case around IVR/speech refresh/upgrade initiatives. We're seeing a huge growth in QM activity."
Globally, the United States continues to lead the pack as the largest and one of the fastest growing regional markets for IVR systems, waxing at a compound average growth rate of more than 10 percent per year.
Continuing demand, particularly from the financial services industry, is a key driver in U.S. IVR growth, thanks in large part to significant restructuring post-recession. "Increased regulatory controls in other sectors, along with their own financial service compliance obligations, such as billing inquiries, combined with the global economic challenges, are in turn driving IVR deployments within many other sectors, such as government and education," McNair says.
Growing opportunities from developing markets, especially Asia-Pacific, also augur well for the market, GIA concludes.
IVR provider Nuance Communications is also seeing growth in voice biometric solutions. "While companies have been evaluating voice biometrics for several years, many have realized that these solutions are no longer a nice-to-have, but a necessary part of providing a secure, convenient customer experience in the contact center," Dan Nordale, vice president of marketing in Nuance's enterprise division, says.
While the large enterprise segment (65-plus IVR ports) has been the traditional leader in the IVR systems market, future growth is expected to be generated from small and midsized businesses; opportunities among call centers with 25–46 ports represent the fastest growing product segment, the analysts report.
"We have a lot of customers that are in SMB markets, and it's exploding due to things like open standards," Martin says. "It's easier for SMBs to adopt now. Before you had to be a huge company to have an IVR system; it was sort of a country club mentality. But barriers have come down. Now there's technology such as cloud hosting, where SMBs don't have to make huge investments in hardware."
The rosy outlook comes on the heels of moderate IVR system growth in 2010, after a disappointing year in 2009, when new order growth slowed, a victim of recession-related declines in tech spending and investment.
McNair believes that the future does indeed look bright for IVR systems. "The widespread acceptance of emerging self-service channels is changing the landscape in which we operate, and IVR has an opportunity to reinvent itself," he says.
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08 May 2013