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Impact of speech self-service on call centres

A report released by independent market analyst Datamonitor three years back predicted speech-enabled self-service technology would compete with offshore contact centre customer service agents. Testament to this shift came early in March 2007 when Lloyds TSB, the UK’s fifth largest bank, announced it is to close its contact centre in Mumbai.
Lloyds TSB says the widespread use and success of its automated speech-enabled phone self-service system has eliminated the need for additional agent capacity in Mumbai, which typically handles overflow calls when UK agents are busy.

According to Datamonitor research, a contact centre in an offshore location, such as India, saves Western businesses approximately 25 - 35% per transaction. However, a call serviced through speech automation costs approximately 15% - 25% of the cost of a call handled by an agent in India.

Futuristic technology

Speech recognition was once viewed as a futuristic technology that would never leave the realm of science fiction. But over the past 50 years, key technology and commercial achievements in speech recognition along with increased cost per unit (CPU) performance and lower hardware costs have helped make speech commercially viable for enterprises and service providers.

Today, speech recognition is becoming increasingly prominent as a cost-cutting and value-enhancing solution for customer care and service enablement.

“As we roll out the tape over the next several years, cost pressures and globalisation will undoubtedly continue to create strong tailwinds for offshoring,” says Daniel Hong, lead analyst of Voice Business Research at Datamonitor.

“However, speech self-service will also proliferate and in many instances compete with offshoring as companies scramble to assemble the optimal blend of automation and agents for customer care. It is important to note that increased reliance on speech will not supplant the need for offshore contact centres for a lot of companies, rather the technology will serve as an adjunct to offshore operations as these companies look to improve customer interaction in a cost effective manner.”

In fact, according to Datamonitor research, the offshoring movement is not going away anytime soon.

Offshore benefits

Peter Ryan, senior analyst of Contact Centre Outsourcing Research at Datamonitor, says, “One only needs to look at the recent Dell expansion into the Philippines as a sign that customer care served from foreign locations is a model that works. Companies across Western nations are clearly seeing the benefits to housing some elements of customer care offshore. These include lower costs, accessing agents with excellent language skills and commercial sophistication.

“It is also apparent that many firms that feel offshoring is a one-stop shop are rethinking their strategy, and are incorporating nearshore/onshore capabilities in addition to self-service.”

While the movement by Lloyds TSB represents only one instance of speech self-service displacing offshore agents, Datamonitor sees this as a growing trend over time as businesses learn to leverage technology from more of a strategic standpoint.
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