The Anatomy Of A Decision

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Naturally, weighing a hosted speech-enabled IVR solution against buying an on-premises system requires a thorough financial evaluation. Dena Skrbina, Nuance’s senior director of solutions marketing, outlines the following three elements as critical to the decision-making process:

• Infrastructure and operational cost savings. The well-known set of benefits includes refocusing IT staff on the company’s core business, a pay-as-you-use pricing model that eliminates capital expenditures spending, the ability to more easily handle spiky call volumes, cost-effective employment of rigorous security standards, a variety of well-designed modern technologies, and operational performance superiority with unmatched guarantees.

• Loyalty and higher share of wallet.
IVR self-service is evolving into a marketing tool that promotes customer loyalty and spending. A well-designed IVR—one that unifies inbound, outbound, and mobile service across the customer interaction life cycle—helps companies earn the right to keep and even to up-sell to their customers. Some companies using Nuance On Demand offer their callers the option to buy relevant products at precisely the ideal point in the IVR interaction, generating millions of dollars each year with zero agent involvement.

• Continual improvement resulting in higher self-service rates.
Today’s business climate and consumers are changing rapidly. Successful companies must evolve their businesses and the ways in which they interact with their customers. For companies in highly competitive marketplaces, such as travel, transportation, financial services, insurance, or wireless, it’s imperative that they keep up with customer demand and stay one step ahead of the competition. That means continually evaluating their self-service solutions and iterating to meet customer demands, as well as wringing more value out of every interaction. Nuance leverages lessons learned through thousands of deployments to improve not only self-service technology but also the effectiveness of every interaction. For many customers, a 1 percent increase in the caller self-service rate equates to millions of dollars in savings.

In addition, Grant Shirk, director of industry solutions at Microsoft Tellme, emphasizes these elements in an ROI analysis:

• Determine your up-front capital investment versus your ongoing operational costs. For businesses that are either capital-constrained or have strict policies about when to make capital investments, the on-demand model is beneficial because of the way it prices itself by the minute or uses utility-based pricing. The up-front cost is basically minor. It consists of just what an enterprise would expect to pay for the physical connectivity between the two sites if it is doing any secure data transmission. In most cases, that amounts to less than 1 percent of the total solution.

• Determine your need for scalability. In an on-premises model, an enterprise is generally trying to do very accurate traffic-volume predictions to figure out exactly how much port usage it would need to buy over time, and it will pay for that up front. With an on-demand pricing model, you pay for what you’ve used after you use it.

“We have a number of companies on our platform who either have very unpredictable or very seasonally spiky call volume,” Shirk says. “The utility pricing model allows them to perfectly right-size their IVR expense against the traffic they’re driving. They don’t have any wasted or excess capacity sitting around. On the flip side, they have infinite burstability. When they have an event and go from 5,000 ports one day to 9,000 the next, they don’t have to carry those additional 4,000 ports of capacity for a full year and pay maintenance on it,” Shirk says.

Paul Hyman is a freelance writer based in New York. He can be reached at phyman@optonline.net.

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