HowStuffWorks _IVR Systems

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How Interactive Voice Response (IVR) Worksby Dave Roos

Browse the article How Interactive Voice Response (IVR) Works

Many companies are switching from

staffed receptionists to interactivevoice response

Photographer: Fred Goldstein |Agency: Dreamstime

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IVR allows callers to enter prompts so they're immediately directed to the

right department.

Tim Boyle/Getty Images

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Introduction to How Interactive Voice Response (IVR) Works

Meet Emily. Emily works for Bell Canada, answering phones for the customer se

New Brunswick, got her degree from Carleton University and enjoys listening to

"Emily" is the name of Bell Canada's interactive voice response (IVR)system

When a customer calls with a question about their bill or to talk to a support spe

pre-recorded voice, Emily guides them through the menu options, using speech-

difference between "billing" and "support." If the customer wants to talk to a "real

zero. Emily won't be offended.

It's hard to think of a customer-oriented business that hasn't made the switch fro

credit card company, you can use the IVR to pay your balance or report a fraudu

reservationsand check the real-time status of flights. Pharmacies use IVRs for r

uses IVRs to route calls to separate extensions or to access the company phone

Large and small businesses have adopted IVR technology because it saves mo

breathing (expensive) employees. An IVR system's effectiveness is rated by the

operator. The lower the percentage, the more successful the system. Of course

the option of speaking to a live operator. But even among IVR fans, that's consid

So how do these automated phone systems work? Are we actually talking to a r

to learn more about the technology behind IVR systems.

IVR Systems

IVR systems are an example of computer-te

way for a phone to communicate with a comp

on the telephone keypad. These are known a

Each number key on a telephone emits two si

high-frequency. The number one, for example

that's universally interpreted by the public swi

A computer needs special hardware called a

understand the DTMF signals produced by a

computer hooked up to a phone line through

software. The IVR software allows you to pre-

can select using his telephone keypad.

More advanced IVR systems include speech-

communicate with a computer using simple v

has become sophisticated enough to underst

perhaps a credit card or flight number.

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With interactive voice response, callers are routed to the right departmentor can obtain simple information.

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On the other end of the phone call, an organization can employ text-to-speech (TTS) software to fully automate its out

possible responses to a customer query, the computer can generate customized text-like account balances or flight ti

automated voice.

Many of today's most advanced IVR systems are based on a special programming language called voice extensible

components of a VXML-based IVR system:

Telephone network-- Incoming and outgoing phone calls are routed through the regular Public Switched Telephon

TCP/IP network-- A standard Internet network, like the ones that provide Internet and intranet connectivity in an offi

VXML telephony server-- This special server sits between the phone network and the Internet network. It serves a

interface with the IVR software and access information on databases. The server also contains the software that contr

recognition and DTMF recognition.

Web/application server-- This is where the IVR software applications live. There might be several different applica

service, one for outgoing sales calls, one for voice-to-text transcription. All of these application are written in VXML. Th

VXML telephony server over the TCP/IP network.

Databases-- Databases contain real-time information that can be accessed by the IVR applications. If you call your

current balance, the IVR application retrieves the current balance total from a database. Same for flight arrival times,

can be linked to the Web/application server over the TCP/IP network.

[source: VoiceXML Review]

A company or organization can choose to purchase all of this hardware and software and run it in-house, or it can sub

service charges a monthly fee to use its servers and IVR software. The hosting service helps the organization customi

provides technical support should anything go wrong.

Now let's talk about some of the most common uses of IVR systems.

Common IVR Applications

One of the most common uses for an IVR sy

the past, you'd hire a receptionist or a switch

route the callers to the right extension. An IV

customer-service calls. The system can pres

questions about the nature of the call. If possi

frequently asked questions and route the rest

IVR systems are ideal for retrieving simple, re

times are a good example. Each week the m

This database can also be used to populate t

made to the theater, the caller can look up m

keypad commands. The same system can be

recent credit card purchases, checking flight

scheduling car maintenance, university class

IVR systems are also useful for sales. A sale

callers can fill out using their telephone keypa

then fax or e-mail a copy of the form to a member of the sales staff. A sales department could also use the IVR as a vi

product or service with an option for speaking to a live representative at any time.

Marketing departments and political pollsters can use the outgoing call features of IVR systems. A political campaign

a poll that voters can fill out over the phone. A marketer could gauge a customer's interest in his products or services.

pitch, they could press a key to talk to a sales associate.


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IVR systems can be used to answer simple questions so employees can

focus on more difficult problems.

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IVR systems can also be used as electronic notificationsystems. Let's say your organization has employees who wor

The IVR system can be programmed with employee contact information: home phone number, cell phone, fax number

to be routed to that employee, the IVR system will try each and every contact method in succession until a connection

An interesting use of IVR technology is for transcribing medical records. Doctors currently record their patient records

service. But with powerful voice recognition software, a doctor could call up the IVR system, record his notes and hav

faxed to his office.

So what are the advantages and disadvantages of using an IVR system instead of live operators? Read on to learn m

Advantages of Using IVR Systems

The biggest advantage of IVR for small and l

Answering phone calls takes a lot of time, an

a trained employee. IVR systems can take ca

an organization receives (office hours, directi

questions, et cetera) and allow customer serv

to concentrate on the harder stuff.

If a large company is able to shave even a se

with a live operator, it can save them hundred

[source: Human Factors International].

IVR systems have the advantage of making c

attended to, even if it's just by a machine. If y

quick answer from a computerized operator t

a human being.

Another advantage is that IVR systems don'tgo on vacations to the Bahamas. An IVR system can be available 24 hours a day to field questions and help customer

An IVR system can make a small company look bigger. Let's say you work from home as a consultant. By using a hos

already appear like a larger organization. You can get tricky by adding several menu options for different departments,

IVR hosting plans even set you up with an 800 number to look more official.

Subscription IVR hosting plans make it easier for businesses and organizations to use these automated phone service

only large companies with big telecommunications and computing budgets could afford the hardware, software and st

Now check out the next page to learn about the disadvantages of IVR systems.

Disadvantages of Using IVR Syste

The greatest disadvantage of IVR systems is

machines. Older adults may have a hard time

instructions. And younger callers get frustrate

The problem with IVR systems is that it's har

one. Here are some of the most common use

Menus are too long. Experts recommend th

Customer Management Insight]. This makes i

waste the caller's time listening to tons of cho

There's too much information. When writing

amount of extraneous information possible; fo


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Some companies still offer live customer service as callers often dislike

talking to automated machines.

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IVR systems are helpful in many circumstances and are increasingly

being used to save money.

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system, hours of operation, extension numbe

request more information instead of offering it

Voice prompts are hard to understand. This

save money, the organization didn't hire profe

audio over the phone instead of in a studio. Or, if the organization opted to use an automated voice, they may have ch

to understand.

Sales departments need to be careful when using IVR systems to receive customer calls. If a customer or potential cupick up the phone and call to find out more about a product, he doesn't want to feel like he's being ignored. So if a sal

or an automated order form, it must make it clear that the caller can talk to a live representative at any time.

People are particularly adverse to receiving automated calls as part of telemarketing campaigns or polling. It's bad en

to sell you health insurance, but it's even worse when that guy is a computer.

Now let's look at a few IVR companies and the specific products and services that they offer.

IVR Providers

Let's take a look at a few of the most popular

inContact. Voxeo offers two basic options for l

an organization, you can either buy Voxeo's s

you can subscribe to its IVR hosting service a

Voxeo's IVR technology runs on the VoiceCe

can be integrated with existing telephone and

An advantage of the VoiceCenter platform is t

so that in-house or third-party developers can

many larger companies already have Web/ap

easy to integrate the VoiceCenter server into

Voxeo claims that its hosted IVR service can

hardware, software, administration and maint

company $3,000 per phone line to set up an i

installation and configuration by the IT staff [s

$0.11 a minute for its hosted IVR service with

unlimited number of phone lines.

Voxeo focuses its marketing attention on the open nature of its IVR platform. It even gives away its software to third-p

that make the system even more robust.

PlumVoice offers technology and services that are very similar to Voxeo. It sells on-site server and software solutions

PlumVoice also sells lots of pre-built IVR applications customized to different industries and different-sized organizatio

an organization can deploy an IVR system quickly by recording a few menu options and integrating with existing datab

InContact is different than Voxeo and PlumVoice in that it only offers subscription IVR hosting, not in-house server and

similar to those offered by Voxeo and PlumVoice, with more of a focus on simple user controls.

The inContact service comes with a software package called inControl that lets an organization easily customize scrip

graphical interface. You drag and drop boxes into a virtual workspace. Each box represents a different step in the auto

prompt to enter a pass code and another box plays hold music. You can also preview the call sequence before deployi

All three of these companies offer free demos or trial versions of their products and services.

We hope this HowStuffWorks article has helped you better understand the world of IVR. For more information on inter


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out the links on the next page.

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