Customers crave one on one interaction with a living, breathing customer service representative, but automated response systems ("Press one if you'd like to hear your account balance. Press two....") are more cost effective albeit often frustrating for the user. Now, advances in voice recognition technology coupled with the spread of mobile applications may present the perfect compromise solution for many enterprises.

The convergence of several factors is behind this change. Those factors include the Internet, advances in voice recognition technologies and the boom in wireless, has spurred a tremendous amount of activity among a broad base of applications developers, enterprises and telecommunications carriers, according to the Kelsey Group, a market research and consulting firm specializing in voice processing and e commerce.

Kelsey Group has identified more than 100 companies actively working with speech technology across a spectrum of applications and markets and projects an annual market of $41 billion in speech enabled applications by 2005.

Customers crave one-on-one interaction with living, breathing customer service rep.

Some of the advances in voice technology are simply the result of computer platforms and, memory becoming faster and less expensive. "Speech recognition is pattern recognition. It's much the same technology as that used for fingerprint recognition, for example, so greater processing power at lower cost is a significant development in this field," Miller explains. The development of more sophisticated algorithms is also boosting voice recognition performance.

Just how much more human like voice recognition can make an automated customer service operation is illustrated by T. Rowe Price Retirement Plan Services' new system, which uses IBM Voice Systems technology.

Callers can change their mind part way through a transaction and execute tasks in any order capabilities sorely lacking in conventional interactive voice response (IVR) .systems.

NATURAL LANGUAGE

The system relies on "Natural Language Understanding" (NLU), a feature of IBM's WebSphere Voice Server and DirectTalk products for voice enabling contact centers and the Web.

It does not require a particular script, since its developers have "taught" it to respond to thousands of different ways a person might express the same request from diverse phrasings and sentence structures to regional accents.

Amtrak has been using a speech recognition system built by Speechworks to handle train status inquiries since last May in a pilot program that was expanded nationwide in October. About 10 percent of the .27 million annual calls to Amtrak's toll free reservation number are to request train status information.

In the pilot program with the new system, 70 percent completed their call using the speech recognition feature. Amtrak estimates that the system will result in 850,000 fewer operator assisted calls each year, generating savings of more than $1.3 million annually.

Customer service calls handled by live operators typically cost $5 to $10 to support, according to IBM's data, and automated voice recognition can lower that to 10 to 30 cents.

Speech recognition can boost ROI by enhancing customer satisfaction and retention.

Additional boosts to ROI will come from enhanced customer satisfaction and client retention, as automated speech reduces lost calls and frees agents to up sell and provide superior service, Miller says

The spread of mobile communications devices such as cell phones, personal information managers (PIMs) and personal digital assistants (PDAs) promises to greatly expand the number of applications where voice recognition technology's bulked up capabilities can be harnessed, says Sunil Soares, director, product development at IBM Voice Systems.

"This is a much more natural way for people to interact with IVR under any circumstances, but voice enabling is particularly well suited to the mobile environment," he says. "For example, a customer could use his voice to instruct his PIM or cell phone to dial a call center, then check a stock price or perform some other customer service function simply by speaking a command. He never has to take his hands off the wheel."

While speech recognition fused to mobile applications still . represents an emerging technology, it's already "nibbling around the edges of mainstream," as Miller puts it. Besides the examples mentioned above, industry leaders such as United Airlines, AT&T, Charles Schwab, E Trade and others are already saving millions of dollars a year while simultaneously enhancing the customer service experience.

"SAP, BEA, Oracle all the big ERP and MRP shops have some sort of voice initiative going," Miller notes. Speech recognition systems can also leverage existing Web application infrastructures using a standard called Voice XML.

The bottom line is that speech recognition technology is here now, it works, and mobile applications are only going to make it more valuable. As soares points out, any solution that can address the issues of improving customer service and reducing costs at the same time is worth a closer look by every chief executive.

CHANGING NEEDS

There are dramatic changes taking place in how business is conducted at the start of the 21st century, and it's not too much of a stretch to describe those changes as revolutionary. "The simple and singular force driving the revolution is the consumer," notes Willard Bishop, principal of the renowned retail consulting firm bearing his name.

"An old industry truism in retailing holds that the consumer is king," he says. "Retailers today would update that to say the consumer is dictator. The market power of consumers is strong, and growing stronger as a result of fierce competition, new technology and new business practices."

Bishop's comments are as relevant to the service sector and other industries as they are to retailing. The relationship between end user and product or service provider has changed forever, be it a business-to-consumer transaction or a business-to-business deal.

The balance power has shifted to the consumer side in almost all types of business.

"Many of the challenges Facing business owners today have been brought on by the Internet, which has generally raised consumer expectations in areas such as customer service and instantaneous access to information," notes Kenneth Leung, director of business development and emerging technologies at Informix Software.

"Consumers got used to having access to these services as a result of the dot.com explosion;" he says. "Now, even though many of the dot.coms are dead and buried, consumers still expect conventional businesses to provide the same kinds of services via the Web."

Consumer market power is also being ingrained through increased use of technology in other areas, such as scanning data in the retail segment.