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‍Interactive Voice Response Systems


An Interactive Voice Response (IVR) is a computer-based system allowing callers to use their telephone keypad or voice commands to retrieve and/or provide information without assistance from trained specialists. The IVR presents callers with a list of options and questions about the nature of their call, provides answers to frequently asked questions, and directs the calls for further assistance to trained specialists.


Menu options can be made available for specific times-of-the-day, days-of-the-week, holidays, special events or multiple languages. Announcements can be professionally recorded or computer generated from a database using text-to-speech technology.


IVRs can be provided on-premise or hosted by a service provider at a remote location.


Why IVRs are Important

An IVR is an entry point for incoming telephone calls. It directs callers to the appropriate resources to answer calls in the most efficient manner. An IVR can enhance a contact center’s performance by:


**Increasing operating efficiency and improving the customer experience—**An IVR can answer a large volume of calls automatically without delay. When equipped with sufficient number of ports, an IVR can eliminate the frustrating busy signals so often experienced during periods of high call volume. It can enable callers to obtain recorded information and/or to conduct transactions without the assistance of trained specialists. For calls that require live assistance, the IVR can collect caller information and route the calls expeditiously, without multiple hand-offs.

**Lowering overall operating costs—**An IVR can reduce the staff needed during business hours by providing information to callers without the help of trained specialists, which in turn lowers the contact center’s operating costs.

**Extending service hours—**An IVR can operate around-the-clock without human intervention, providing a menu of information and services based on times-of-the-day, days-of-the-week, and holiday schedules.

**Polling and collecting customer survey and performance data—**An IVR can serve as a customer survey tool to collect feedback on performance of the IVR and trained specialists. It can also log call detail information into its own database for auditing, analysis, and reporting, which can further improve the IVR and contact center performance.


Different Types of IVR

IVRs can be located in the same location as other contact center systems or hosted by a telecommunications service provider or an IVR application service provider at a remote location. These two different types of IVR are described below, along with the advantages and disadvantages for each.


1. On-Premise IVRs


On-premise IVRs are generally located with Automatic Call Distributors (ACDs) and Customer Relationship Management (CRM) systems that support contact center operations.




Design and operation of on-premise IVRs can be integrated with the ACD and CRM systems to ensure maximum efficiency in call handling. On-premise IVRs offer the most control and systems integration flexibility.

Call transfers within the system can be more flexible and less costly to implement.

A premise-based service offers more access control and changes to call flows, recorded announcements, and management reports.

Recurring costs of operating and maintaining on-premise IVRs are generally lower than hosted IVRs and aren’t call-volume sensitive if the IVR is equipped with sufficient ports.

System upgrades can be implemented when the need arises.




On-premise IVRs require a large initial capital investment. An organization must also have in-house technical expertise to procure, implement, and maintain an on-premise IVR. Professional voice talent for recorded messages may need to be arranged separately.

Call handling capacity of the on-premise IVRs is dependent on the number of ports available in the system. There is limited ability to scale quickly to accommodate unexpected surges in call volume.

The need to provide for redundancy and disaster recovery will further add to the initial capital investment.

Call transfers outside the system will be treated as separate calls and will tie-up both incoming and outgoing trunks for the duration of the calls, resulting in higher telecommunications costs.

Time required for initial implementation is generally longer than that of hosted IVRs.


2. Hosted IVRs


Hosted IVR services are provided by third-party providers who leverage their technology infrastructure and management expertise to serve many customers. Generally, hosted IVR services provided by established nationwide telecommunications service providers are perceived as more scalable than those provided by IVR application service providers.




Call-handling capacity can be scaled quickly to take advantage of the system’s unused capacity to respond to unexpected surges in call volume.

Initial capital investment for a hosted IVR is limited. The start-up cost for a service provider to set-up the service is substantially lower than the initial investment required for an on-premise IVR. A hosted IVR can be scaled up or down quickly with no long-term financial commitment.

Requires less in-house technical expertise to procure, implement, and maintain than on-premise IVRs.

Time required for initial implementation is generally shorter than for that of on-premise IVRs.

If hosted by a telecommunications service provider, call transfers to pre-defined locations outside the system can be done via a take-back-and-transfer feature, thereby eliminating the need to tie up incoming and outgoing trunks.

Redundancy and 24 x 7 monitoring are generally built-in as part of the hosted IVR solution, thus ensuring high reliability.




Tight integration between the hosted IVRs and ACD and CRM systems is more difficult to achieve and may require costly third-party integration support.

Call transfers from the hosted IVR to ACD may be more difficult and cost more to implement than on-premise IVR.

Hosted services afford less access control and changes to call flows, recorded announcements, and management reports.

Recurring hosted IVR service cost is generally higher than that of a premise-based system and is call-volume sensitive.

Little or no control exists over system upgrade schedule.

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