An Interactive Voice Response or IVR uses dual-tone multi-frequency signaling (DTMF) so customers can interact with a host system a company has set up through a voice menu. The information is accessed in real-time, and depending on the company it can have several different layers to answer a wide range of questions about a product or service.

With an IVR system, organizations can provide information to callers 24 hours a day without having to use live agents to answer questions. The cost benefit of this system is significant, especially for organizations with thousands or even millions of customers. So it’s not surprising that a new report by TechNavio forecasts the global IVR system market to grow at a compound annual growth rate of 11.86 percent from 2014-2018.

The report points out that growth is going to be driven by IP-based IVRs, which will reduce network management and provide accessibility to a larger customer base around the world. The migration to the cloud or hosted systems is affecting virtually every industry as companies get rid of on-premises-based systems. A hosted solution doesn’t require the CAPEX and OPEX (News - Alert) of traditional systems. Additionally, it delivers more flexibility for adding new services and scale without limitations.

The report covers inbound and outbound services, and considers the prospects of segmentation and growth of the market on deployment models based on hosted IVR systems and on-premises IVR systems. TechNavio looked at the market in the Americas, APAC and EMEA region as well as the vendors supplying the solutions.

While existing on-premises systems will continue to provide valuable services for organizations, the development of hosted systems is growing at such a fast rate that many companies are in the process of seriously considering migrating to a hosted system. A hosted system provides 24/7 support, reliability, proven security, multiple IVR options and, depending on the service provider, availability of more than 99.99 percent.

“The market for IP telephony and contact centers is growing very fast and IP IVRs are expected to make business operations more compatible,” said Faisal Ghaus, vice president of TechNavio. “This has resulted in the development of hosted technology by contact routing vendors for handling customer interaction processes. There is also an increase in the investments so as to improve the use of IP technology. Vendors like Siemens (News - Alert) and NEC have even developed rationalized contact routing strategy to enhance transactional capabilities.”