If there’s one undeniable trend in IVR, it’s that enterprises, government agencies and other organizations are migrating to hosted solutions. In 2012, Ovum estimates that hosted and managed speech services will account for 60 percent of the total spending on IVR speech solutions in North America. This percentage is expected to grow through 2016 as more enterprises choose cloud and hybrid-cloud deployment models for voice self-service over that of premises-based solutions, Ovum says.

Significant top and bottom-line savings are driving the hosted-IVR trend. For example, hosted speech eliminates upfront costs. As speech and IVR technology become more sophisticated and complex, so does the cost to build great self-service platforms. By providing the same services in a shared, cloud-based environment, hosted vendors eliminate the upfront cost of hardware and software, as well as ongoing costs for upgrades and for specialized staff. In today’s competitive climate, few organizations can afford to ignore the massive bottom-line savings.

Hosted systems eliminate the need to maintain unused capacity.  Most organizations operate 75 percent or more idle capacity every day during the much of the year for the “just in case” scenario of an extremely busy season or even a single busy day. For this reason, on-premises operating costs are flat month over month, year over year, and higher than needed because of the excess. By paying for only for the capacity they use as they use it, hosting can save tens or even hundreds of thousands of dollars in operating expense. This model also means that if IVR call volume decreases due to callers choosing other channels, IVR costs also drop.

Hosting virtually eliminates the cost of operating the IVR.  Hosted customers don’t have to build or lease data center space for the IVR, nor do they incur the costs associated with the reliability and redundancy of IVR data centers and infrastructure. Hosting vendors commit to a service level agreement with financial penalties for service disruption. Organization can focus their IT personnel on initiatives that are critical to the business.

Hosted IVR platforms are always current, so organizations are freed from having to plan and pay for forklift upgrades. The savings from the newest, highest performing technologies, as well as the elimination of software maintenance expense, adds up fast. For example, companies that use the Nuance OnDemand platform report a 20 to 30 percent increase in performance over other solutions, translating into millions of dollars in annual contact center savings.

Companies are also are flocking to hosted speech for the competitive advantages they provide. They finally have the ability to deliver a branded, conversational customer service experience that’s far superior and more agile than what they could have delivered with on-premises IVRs. For example, US Airways is using the audio innovations available on the Nuance OnDemand platform to provide a high-quality, conversational audio experience that clearly defines the US Airways brand in the ears of travelers.

Hosted IVR solutions are the fastest, most cost-effective way for organizations to extend self-service and natural language capabilities across multiple channels – such as IVR and mobile – while ensuring a consistent customer experience and single company persona. Imagine a friendly, convenient phone call reminder about a payment due that also allows the caller to make a payment right then and there using natural language IVR.  Or imagine a virtual assistant mobile app that connects users right to the contact center and preserves all of the data so the agent knows exactly what that customer was doing before she requested assistance. All this is possible using intelligent, cloud-based technologies.

If you’ve already run the numbers on hosted vs. on-premises speech IVR, it may be time to take another look. That’s because as the rate of innovation and evolution continues to accelerate, the price of remaining tethered to an on-premises system becomes harder to justify every day. For a view of how much you could save with hosted IVR, email me at dena.skrbina@nuance.com to get exclusive access to Nuance’s new TCO tool as soon as it’s available.

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Dena Skrbina

About Dena Skrbina

This was a contributed post by Dena Skrbina. To see more content like this, visit the Customer experience section of our blog.