TAKE AN EARLY BITE OF THE CHERRY; 80% GROWTH BY 2005 IN VOICE OUTSOURCING

Outsourced voice solutions are a perfect fit for customer services which are costly and time inefficient for contact center agents to handle and frequently unsuitable for touch tone. Voice applications can handle customer enquiries. Examples include checking bank balances, confirming flight arrival, or getting the latest weather report, in a cost and time effective fashion, through the most natural of communication methods, talking. Outsourcing these voice applications allows a broader range of organizations to access the technology, and offer it to their customers. Voice interactions are more natural than traditional touchtone interactive voice response (IVR) systems consumers are so used to, and offer broader access to information without the frustration associated with the long option lists of touchtone menus.

Improving customer experience is becoming a fundamental differentiator for many companies and voice applications are gaining recognition in the public eye. Major deployments include British Airways' interactive speech information service, from Nuance, providing scheduling, real-time flight information and flight re-confirmation. Another example is the State of Delaware's outsourced voice solution from BeVocal. It allows users to locate their nearest public internet access point, tax office and polling stations by simply speaking their zip code or town. This voice solution was sought in response to a study by Delaware which showed 40-45% of their citizens didn't have internet access. By operating a speech recognition system Delaware has enabled wider information access.

Strong case for outsourced voice in financial services, telecommunications and government

The emergence of 'packaged' voice applications will enable outsourcers to offer a horizontal voice solution to businesses with a specific problem.

The traditional benefits associated with outsourcing technology and applications, including the elimination of capital costs and continuous upgrading, are all pertinent to voice outsourcing. However, unique advantages exist that will help drive the market forward. Horizontal solutions allow outsourcers to offer a 'one size fits all' approach to a particular problem. One such solution would be branch/store locating speech solutions. Whether you're calling a bank, or a home improvement chain, the solution required is very similar. Voice outsourcers offering this service will have market appeal across verticals, growing their revenue share.

Due to both their propensity to adopt new technologies, and the high volume of calls requesting information services they tend to receive, Datamonitor expects outsourced voice to be used most widely in financial services, telecommunications, technology and government representing a combined 58% of total outsourced voice revenues.

Asia Pacific and CALA will be the fastest growing markets for voice outsourcing

Datamonitor's research indicates strong growth for voice outsourcing if it overcomes current inhibitors, building global supply-side revenues from $42.3 million 2003, to $76.5 million in 2005. North America is the largest market accounting for 45% of revenues, while Europe, the Middle East and Africa (EMEA) is a close second at 35%. Although Asia Pacific and CALA are currently very small, Datamonitor expects they will experience the highest levels of growth due to their higher propensity to outsource. While the market is certainly nascent, the high levels of growth predicted will afford those vendors who offer these services as part of their product portfolio a unique advantage.

Tom Pringle, Technology Analyst at Datamonitor comments:

"Voice business technologies are still relatively new, and as a result there are few businesses out there with the necessary expertise to develop and deploy voice solutions. There can be little doubt that over time this intelligence will be dispersed as the market is continually pushed from niche to commodity. However, with the market in a comparatively early stage of development, this expertise matters. There is a considerable role to be played by vendors in educating the market in both terms of the value of voice solutions and the benefits of outsourcing them to experts."

Datamonitor's report, "Creating demand for outsourcing voice services," examines the full scope of the voice business value chain from an outsourced perspective. It is global in scope and identifies the different geographic, vertical and application trends in the outsourced voice market. The key demand drivers are highlighted along with the development path voice outsourcing is likely to take. Market sizing and revenue splits are given by a number of variables, including vertical and geography. Datamonitor's suggested vendor strategies and action points are also presented.

Tom Pringle, a Technology Analyst at Datamonitor and author of this report, is available for comment. To arrange an interview or for further information please contact:

London:

Krishna Rao T:+44 20 7675 7271 or E: [email protected]

New York:

Sarah Person T:+1 212 652 5316 or E: [email protected]

Datamonitor plc (DTM.L) is a premium businesses information company specializing in industry analysis. We help out clients, 5000 of the world's leading companies, to address complex strategy issues. Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for six industry sectors; Automotive, Consumer Markets, Energy, Financial Services, Healthcare and Technology. Datamonitor maintains its headquarters in London and has regional offices in New York, Frankfurt, Hong Kong, Shanghai, Sydney and Tokyo.