The 2015 State of the Speech Technology Industry: Application Testing and Tuning

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Interactive voice response (IVR) and other speech systems deliver bottom-line benefits by enabling customers to conduct business and resolve problems on their own without involving costly contact center agents. So when self-service systems hiccup, the consequences can be immediate and significant.

Often the culprit is system design. As systems get used more, unintended anomalies, network glitches, and system bugs can—and often do—follow. Application flaws, improper system grammars, ill-defined parameters, improper or outdated routing, poor menu flows, and a host of other problems can have a negative effect on the customer experience and send service costs skyrocketing.

That's where testing and tuning come into play. And as speech technologies become more ubiquitous, the need for testing and tuning of applications and other supporting technologies will grow exponentially.

A Growing Field

Dan Miller, founder and lead analyst at Opus Research, sees testing and tuning revenue in 2015 exceeding $180 million, with great prospects for growth.

To highlight the potential, only 1.5 percent of all the speech applications currently in use around the world are being tested and tuned with any regularity, according to Russ Zilles, CEO and president of testing and tuning services solutions provider IQ Services.

"There's a lot of room for improvement in speech technology," confirms Alok Kulkarni, cofounder and CEO at Cyara Solutions, another testing and tuning software and services provider. "The speech testing and tuning market is growing very rapidly. We're finding tremendous traction with our products."

In 2014, Cyara saw its business expand by 70 percent globally and by 255 percent in North America, according to Kulkarni.

Other testing and tuning vendors are also reporting significant growth. Empirix, for example, has reported growth of more than 20 percent in the past five years, largely within the testing of unified communications and telecom technologies, such as 4G (LTE) and Voice over Internet Protocol (VoIP).

At IQ Services, Zilles reports consistent sales growth and profit margin improvements. In 2014, the company was looking at about 20 percent year-over-year growth.

Zilles also notes a big change in the types of companies that are now employing testing services and solutions. "We're seeing larger tests," he says. "The average test centers we see are about 400 agent seats, but there are certainly much larger centers coming on board now."

Some of those facilities, he adds, could have as many as 1,000 calls coming in at any given moment.

In many ways, the economic recovery has a lot to do with the increasing demand for testing and tuning services and solutions. As companies start to rebound, they're looking to replace outdated call center technologies that had been overlooked in previous budgets, and with each new technology refresh comes the need to test the system for bugs and design flaws.

"Companies are finally investing in improving the customer experience, where a couple of years ago they were just talking about it," Zilles says.

Miller agrees. "The largest driver for accelerated growth [among testing and tuning vendors] is the rapid refresh of enterprise software infrastructure, especially in the contact center," he says.

Taking Control

Also driving growth is demand from companies to take greater direct control of the customer experience, according to Kulkarni. "In the past, speech was something that they left for the experts," he says. "Now they want to be more hands-on. Applications are being directly controlled by companies, and changes are being made directly by users at those companies."

There's also a greater sense of urgency now, Kulkarni points out, noting that with new product and service introductions, some companies are making changes to their systems almost daily. "They don't want to wait for outside firms to take up to three weeks to make changes and test them," he says. "There's a big need for agility right now."

Yet another growth driver, Miller says, is the customer-driven demand for support and contact over new channels and modes of communications. "To stay competitive, companies have to introduce new features and functions, including intelligent assistants, 

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The 2015 State of the Speech Technology Industry

In our first State of the Speech Technology Industry issue, we reveal the latest trends and developments in eight market categories.