Intelligent Virtual Agents Are on the Move

Enterprises are ready for intelligent virtual agents (IVAs) to replace old and outdated self-service solutions. Artificial intelligence (AI) is a hot topic for many enterprise functions, and customer service is no exception. Combine AI with machine learning and natural language processing (NLP) and the results sound highly innovative and exciting. While the pairing is proving to be beneficial, especially when supported by fast servers, the truth is that none of these technologies is new to enterprises or to their customer service or contact center departments; vendors have been trying to sell AI-based contact center solutions for more than 30 years.

Self-Service IVRs Need an Overhaul

There's no doubt that contact center self-service applications, particularly interactive voice response (IVR) systems, need a major overhaul or a full replacement. The market opportunity for IVAs (also known as bots, chatbots, virtual assistants, virtual agents, and some 150-plus other synonyms) has arrived, as the technology seems to be ready for prime time. This was not the case in 1998 when these types of solutions were introduced. Back then, bots failed to catch on because they were considered unrealistic, impractical, hard to use, and ineffective. Moreover, many of the bot applications were offered as a concierge-type service on websites, and consumers didn't like them.

The current generation of IVAs comes in all types of channels and styles. IVAs are being heralded as the next generation of self-service applications, more accurate and smarter than natutral language-based IVR systems. IVA solutions are touted as much more effective because, for starters, they use AI and are self-learning technology. This is compelling, but when you look beneath the surface at some of the solutions in the market, it's a bit hard to see the difference between IVAs and IVRs, particularly since some of these solutions come from the same vendors.

IVAs and IVRs Are Not the Same

Clearly, there must be more to the story, and there is. The market needs better self-service technology and applications. Touch-tone-based IVRs are ineffective in this era of hands-free, mobile-enabled conversations. Many enterprises want to use speech-enabled self-service applications but are unwilling to pay high prices for the software or implementation. Speech-enabled IVR remains expensive, which has limited its adoption. IVAs offer companies an alternative approach; they make it possible to build advanced speech and digital-enabled self-service solutions that are more cost-effective and very likely more intelligent.

In many companies the voice self-service applications are 10 to 20 years old. While some companies have put money and effort into keeping their self-service voice applications up to date, a surprisingly large number have not, as their existing IVR systems have been deemed adequate, even if they aren't meeting their customers' expectations. In many companies, the IVR applications and underlying technology are so old that it would be more cost-effective to replace them than to try to update them. If IVAs can deliver on their promise and automate just a few percentage points of additional calls (or emails, or chats, etc.) that previously had to be handled by live agents while also delivering an excellent service experience, adoption will be higher and more rapid than for most new IT segments, certainly higher than for speech-enabled IVRs.

Even though IVA technology is conceptually similar to advanced speech-enabled IVR, the underlying science is newer and adoption could leapfrog traditional speech recognition. IVAs run on faster virtual servers, many of which are in the cloud, which gives them the processing power and scalability to better meet customer needs. But IVAs are not just a replacement for IVR solutions. IVAs are being used in many channels, from Facebook Messenger to mobile apps, to automate activities that do not require live agents and to route those that do to the right people.

There is a lot of excitement about the new generation of AI-based IVAs, much of which is marketing hype. But even if these solutions are only slightly better than the current generation of speech-enabled IVRs, they are going to catch on, as they are more flexible and multimodal and appeal to consumers around the world. Enterprises are in great need of enhanced self-service capabilities that are easy to use, flexible, and cost-effective, particularly because, when they work well, a growing number of customers prefer to help themselves. A well-designed IVA can replace an outdated IVR, but this is just the beginning of the benefits these solutions are expected to bring to companies. The potential for IVA technology is great, but the solutions have a long way to go before the vendors fully deliver on their promises.

Donna Fluss, president of DMG Consulting, is an expert on contact centers, analytics, and back-office technology. She has 30 years of experience helping organizations build contact centers and back-office operating environments and assisting vendors to deliver competitive solutions. She can be reached at