Customer service: speech recognition to take off

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By: Wise Marketer Staff |

Posted on July 25, 2002

The market for voice business technologies and services was worth US$629 million by the end of 2001, having declined by 3% from the year 2000. Datamonitor sees the market (including platforms, enabling software, applications, and services) returning to positive growth until 2007, reaching some US$4.33 billion in value.

According to the Datamonitor report, Voice Portals and Applications, the silver lining of this delay in market growth has been a transformation of the speech recognition industry, in which vendors have been forced to use their technologies to solve real business needs. As a result, many vendors have been able to demonstrate their voice solutions' return on investment (ROI) to enterprises and service providers.

According to Datamonitor estimates, 25% of Fortune 500 companies had invested in voice technology during 2001, up from 12% in 2000. Currently, the greatest opportunity for voice technology vendors is customer-facing enterprise applications. These applications have a proven ability to cut costs, and ROI is the order of the day because of IT budget shrinkage.

Service providers
The service provider market is suffering from a general telco malaise, and less proven application business cases. This is likely to change in 2003/2004 as service provider voice portals and applications become the greater growth opportunity. This will depend on the service provider investment environment, and on the acceptance and success of earlier applications. According to Datamonitor, uptake in the service provider market will benefit the enterprise market in later years by exposing consumers to voice technologies.

Financial services
Financial services, an early adopter of voice solutions, continues to drive voice business and often serves as a proving ground for emerging advanced speech applications. Within financial services there are several unique opportunities. For example, the retail banking and investments & securities verticals are introducing speech technology to the masses, and will remain the largest markets for voice services. Insurance companies - usually being slower to integrate new technologies - will grow in importance, initially implementing account management automation and later introducing productivity applications including sales force automation.

Healthcare and pharmaceuticals, while small now, is also a growing market for voice business. Over the next five years it will outpace the overall market as hospitals seek to decrease administrative costs by automating applicant screening for studies, directory information, reservations, and physician paperwork. Vendors should also look to build upon existing CRM relationships with pharmaceuticals companies through voice-enabled sales force automation (SFA) applications. According to Datamonitor, these opportunities will enable the sector to grow more than 10% faster than any other vertical market.

Call centres
The report covers nine application categories, the largest of which is call centre automation, representing 44% of supply-side revenues. Large call centres are the main customers but - as the price of licenses decreases in the long term - small and medium-sized call centres will increasingly become a valuable market.

"There are a number of exciting developments in the speech recognition industry. Deployments are on the rise, revenues will soon return to positive growth, and the industry is ready to solve many business needs. Notably, a number of large technology vendors, including Oracle, Sun and Microsoft have increased their presence in this space. While this has caused some concern among voice vendors, it nevertheless represents significant opportunities for the market," explained Datamonitor voice business analyst Benjamin Farmer.

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