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User Friendly Let Your Fingers Do the Talking

August 1, 1995
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Perhaps more than any other forms of modern technology, the telephone and the personal computer have fundamentally changed how we do business, how we interact with one another, how we live our lives. The first is probably the most commonplace piece of technology in the modern world—and the second promises to soon overtake it. It's inevitable, then, that new ways to join these two devices are constantly being discovered. The Internet, which promises to radically alter life as we know it, is a group of computer networks interconnected by phone lines. And another union of telephones and computers, interactive voice response (IVR), seems poised to change dramatically the way business is done.

For general IVR information, press 1.
The HR applications for this technology are myriad. "This is a marketplace that's going to explode," says Jim Fredrickson, president of TelServe, a company that specializes in IVR services. Indeed, one survey projected 30% to 35% compound growth industrywide over the next five years. Adds Fredrickson: "Recognizing that IVR is still in its infancy, I see it spreading to become a major communications strategy for HR departments. By the year 2000, it will be the exceptional firm that doesn't do it."

IVR is much more than just an advanced voicemail system. It allows the caller to get questions answered, obtain data base information or process an order without ever speaking with another person. With IVR, the caller not only can retrieve information, but can alter that information as well. "That's the fundamental difference between IVR and voicemail," continues Fredrickson. "In a voicemail environment, all the caller really can accomplish is to leave a message that someone else has to retrieve at a later date. With IVR, where there's data base access, the caller can complete a transaction."

And in these days of doing more with less, that can lift a serious strain from HR's workload. "IVR technology is at its best when used to answer repetitive, non-interpretive questioning," says Fredrickson. Which means IVR can effectively take over such HR functions as enrolling employees in flex-benefits programs, posting jobs, dispersing compensation plan information, handling dependent status inquiries and administration, and monitoring time and attendance. All of which can help human resources professionals concentrate on the more strategic, interpretive aspects of their jobs.

To read about stand-alone IVR systems, press 2.
Hewlett-Packard understands the value and adaptability of IVR. It already uses the technology to automate Stock/401k plan administration, employment verification, benefit plan information, reference information and more. The company maintains more than 40 different IVR platforms. Although not all of them automate HR information, they all directly affect the HR function by changing the job descriptions of HR's internal customers. For example, Hewlett-Packard's Express Support Operation, a Roseville, California-based warehouse of more than 125,000 H-P parts for sale to trade and internal customers, takes nearly 8,000 calls a day on its IVR system. Callers can price parts, quote availability, get order status, obtain warranties and place orders, all at the push of a touch-tone button. Besides being a much more efficient and cost-effective means of performing these tasks, IVR also has raised the job-skill level of the company's customer service representatives. "IVR siphoned off all the easy stuff, and the agents started receiving more complex, more challenging calls—the calls that required a human interface," says Mike Pontillo, project manager for IVR applications.

Pontillo says when Hewlett-Packard wants to add a new application, they often design it, script it and maintain it themselves. To help them do so, they maintain a standard hardware and software platform, one developed by Norcross, Georgia-based Computer Communications Specialists (CCS), a firm that specializes in IVR applications. The hardware is built specifically for the company's IVR software, making the process as efficient as possible. But, says Pontillo, the specialized system isn't dependent on arcane and uninterpretable commands: "It's a pretty flexible tool to work with," he says. CCS says this is true of most of its clients; though the company usually writes the first application, any subsequent applications are usually written by the customer.

Although stand-alone systems provide a great deal of flexibility, they require consistent maintenance. Says Bill Hutchison, vice president of sales and marketing for CCS: "Maintenance begins with good application design, and with testing and modification before implementation." He adds that "any IVR script should have built in checkpoints, so the system manager can monitor the system. If you're getting lots of bailouts at a certain point, you'd better check the script there for ambiguities, and fine-tune to make it more clear."

Hutchison says once the system is installed, it requires two kinds of maintenance: maintaining the data tables and maintaining the hardware. For the former, he suggests at least one member of the system management team be a benefits administrator familiar with all the different eligibility requirements and types of employee classifications. And maintaining the hardware can be just as tricky. "An IVR is linked very critically between your host computers, which have all the information, and your telephone switch," says Pontillo. "When a problem arises, it could be with the computers, the IVR program or the telephone switch. You need to have someone well schooled in all three technologies."

Although the stand-alone IVR system has been a good fit for Hewlett-Packard—Pontillo estimates that if the functions performed by the IVR system were performed by people, the costs would be four or five times higher—not every company can justify the cost of buying and maintaining such a system. Hutchison says a company with fewer than 2,500 employees will have difficulty justifying the cost of a stand-alone IVR system.

To learn about service bureaus, press 3.
A different strategy is to contract a service bureau to rent, house and maintain a system for you. This definitely is a better alternative if you only need the IVR system for a short period of time. Take, for example, interactive employee surveys. Carole Henson, manager of voice response services for The Segal Co., a New York City-based IVR firm, says the technology is good for getting to know how your employees feel about certain issues. She tells of one multi-employer fund for retirees that realized rising costs had pushed it to where it could no longer sustain the benefits level it had in the past. But, rather than make an unpopular unilateral decision, the fund used IVR to solicit the retirees' input on what was important to them. Retirees could call a toll-free number and register their opinion on how they wanted to help pay for the rising costs: through raising the deductible, raising their contribution, cutting out dental or life insurance, or cutting down the benefit level. It worked—the one-third participation rate was enough to make the fund's managers feel their product reflected the needs of their constituency, and enough to make the seniors feel they understood the situation and that their opinions counted.

Short-term IVR applications aren't the only ones appropriate for service bureaus, however. Take St. Louis-based McDonnell Douglas Corp., for example. According to Tom Mackay, senior manager, HRIS, who works from the company's Huntington Beach, California, office, recent changes in the marketplace "had us downsizing, but we still had the obligation to verify employment. And we were supplying data on approximately 40,000 people just in the Southern California area." With that kind of volume, and with the HR department similarly downsizing, "we had to reduce the number of hours people could get that information to something like one or two hours a day." This made it extremely difficult for employees trying to get a loan or rent an apartment, because the lenders or landlords had trouble verifying that they were employed with McDonnell Douglas.

Mackay decided an IVR system would solve the availability problem. "Someone could call the computer any time of the day or night, even on the weekend. If [an employee] were looking for an apartment on a Saturday afternoon, they could get their employment verified right then and there."

Mackay and his team attempted to build their own system—bought the hardware, bought the software, hired someone to maintain it—but had a difficult time chasing down the bugs in the system. McDonnell Douglas soon decided an outsourcing company could do the job more efficiently, and also provide better and more reliable service. So it approached TALX, a St. Louis-based IVR company, to help them come up with a solution.

They call it "The Work Number for Everyone." More than just verifying employment status, The Work Number for Everyone can also provide information about employment history, base salary and salary history, job title, and other pertinent information. It works like this: The employee calls the system and generates a random access code, which he or she then gives to the lender. The access code is valid only for a single usage. The lender can then select from three levels of information, depending on its needs, and can obtain the information either over the phone or by requesting a faxed copy. The average call takes from two to four minutes. According to TALX's vice president of business development, Mike Smith, the service is paid for by the lender, either through a subscription to the service or by calling a 900-number—it costs the employees nothing, and the employer just pennies per active employee per month.

To obtain employee buy-in, McDonnell Douglas launched several communications efforts, including newsletter articles, bulletin board postings and paycheck stuffers, all designed to make employees aware of the new service. And the system has worked so well that McDonnell Douglas has expanded its service to include employment verification for people recently let go by the company. "We've given TALX all the employment records plus two years of history so that people who worked here can use it for background checks by prospective employers. So we service probably well over 150,000 people, counting former employees," says Mackay. Although he had not worked out the numbers, he says the savings, even with the expanded service, have been "substantial."

The question then becomes, which way to go? Do you try to build your own stand-alone IVR system, or do you contract with a service bureau? According to TelServe's Fredrickson, you should begin the decision-making process by prioritizing your needs in the following areas: cost, flexibility and support. The type of system you'll need will change depending on how important each of these characteristics is to you. Generally speaking and to oversimplify, if you want a long-term system over which you have a lot of control, developing and maintaining your own, stand-alone system is probably the way to go. If, however, you're working on a short-term project, or you have an application that doesn't make sense for you to maintain, outsource it. And, adds Fredrickson, unless you're absolutely sure of what you want to accomplish with your IVR system, it only makes sense to contract with a service bureau and "test your marketing theories—then decide what your long-term approach is going to be."

Whichever way you decide to go, realize that interactive voice response is here to stay. Companies will continue to find even more ways to manage information and workflow—and IVR will be there every step of the way.

For more information about how IVR can help HR, please stay on the line...

Personnel Journal, August 1995, Vol. 74, No. 8, pp. 105-108.

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