VEE Is for Victory in Competitive Retail Arena

Voice-enabled enterprise applications broaden a companys reach to customers, employees, and partners.
Posted December 19, 2000

John Rossheim

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Have you ever wondered how a box of ballpoint pens can cost you less now than when you were in grade school? It's the cutthroat competition, stupid. And that's also the reason why office supplies market leader Office Depot Inc. is leveraging every available technology to squeeze out pennies and speed growth.

With Staples Inc. snapping at its heels, the $10 billion retail titan has quickly embraced voice-enabled enterprise (VEE) applications as a way to reach more customers, make life a little easier, and cut costs. The service integrates telephony and speech technologies into a hosting platform that promises to reduce the use of expensive, staffed, customer-service call centers. VEE applications let customers interact directly with e-commerce databases like that of Office Depot, reducing transcription errors introduced by telephone sales clerks and virtually eliminating time spent on hold.

We've tried to put together a model of letting customers shop us any way they want, says Ken Jackowitz, vice president of business systems at Office Depot in Delray Beach, Fla. In addition to its concrete-block-and-mortar stores, Office Depot takes orders on its Web site and by fax, mail-order catalog, and telephone.

In November 1999, speech application service provider (ASP) Inc. of Boca Raton, Fla., approached Office Depot with a proposal. NetByTel wanted to extend and streamline the company's existing customer services offered via telephone by enabling callers to locate their nearest store or order a catalog by answering the prompts of an automated speech recognition (ASR) system.

Most corporations today are deploying VEE by contracting with speech ASPs. VEE applications typically require real-time telephony and speech recognition and synthesis services. These technologies carry steep learning curves; most companies can't project a reasonable ROI if they take on the high up-front costs of deploying, operating, and frequently updating speech and telephony servers and software. At the same time, speech access to a company's products and enterprise data promises to extend its markets and streamline operations.

At a Glance: Office Depot Inc.
The company: Office Depot Inc. of Delray Beach, Fla., is the leading chain of office supplies superstores, selling more than $10 billion of paperclips, report covers, and white boards every year.

The problem: Customers want to be able to place orders by telephone, but staffed call centers are expensive to run, especially for a retailer that sells many small, low-priced items.

The solution: A voice-enabled ordering application gives customers the convenience of buying by telephone, while enabling Office Depot to cut per-call costs up to 88% compared to a labor-intensive call center.

The IT infrastructure: Office Depot chose speech ASP NetByTel Inc.'s Catalog Ordering Module and SpeechWorks Inc.'s SpeechWorks 6.0 speech-recognition software to connect calls directly to the company's order-fulfillment database.

We've Heard Talk

For years there has been talk of accelerating improvements in the accuracy and ease of use of desktop speech-recognition products from companies like Lernout & Hauspie Speech Products N.V., Nuance Communications Inc., and SpeechWorks International Inc. to boost productivity and reduce repetitive stress injuries in tasks such as word processing. Now, those technologies, which enable PC end users to input and output text as spoken language, are trickling into the enterprise.

We're seeing a shift from desktop-based dictation systems to network systems that allow true mobility and device independence, because the recognition is in the network, says Mark Plakias, vice president for voice and wireless commerce at analyst firm The Kelsey Group, headquartered in Princeton, N.J.

VEE applications are well suited to specialized environments like warehousing, where you need a hands-free solution, says Plakias, in New York. He also sees a market for horizontal road warrior apps, which can give mobile workers easy access to productivity tools and corporate data via cellular telephones and landlines. But for the foreseeable future, call centers are where the cash is in voice-enabled applications, according to John Dalton, an analyst with Forrester Research Inc. in Cambridge, Mass.

A handful of narrow vertical markets have already embraced VEE applications, according to Walter Tetschner, president of Tern Systems Inc., a Concord, Mass., research firm. Major airlines now let their customers retrieve flight-status information via voice-enabled systems, and online brokers are using speech as an interface for stock-quote applications, he says. Tetschner sees the overall market for speech-recognition technology growing to $1 billion by 2002.

Players in the enterprise speech services market include BeVocal Inc. of Santa Clara, Calif.; General Magic of Sunnyvale, Calif.; JustTalk Inc. of Ann Arbor, Mich.; IBM Corp. of Armonk, N.Y.; Interactive Telesis Inc. of San Diego, Calif.; NetByTel; PriceInteractive of Reston, Va.; Telera Inc. of Campbell, Calif.; Tellme Networks Inc. of Mountain View, Calif.; UCallNet Inc. of Santa Clara, Calif.; Inc. of Redwood City, Calif.; and Webversa Inc. of Fairfax, Va.

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