Alex Green, CEO, Fluency Voice Technology

NewsBlast
Congratulations on your acquisition of Vocalis. Why do this transaction at this time?

Alex Green Thank you. This is really an exciting time for us. When I joined over a year ago, we had very clearly defined strategic goals. We saw the industry moving toward pre-built applications, and we knew with our experience, skill, and component-based development, we were in prime position to become an industry leader. We have successfully reached that goal, and with the release of TravelHub™ earlier this year, we are now working with some of the world's leading travel and tour operators such as Carlson Leisure in the U.S. and TUI and National Express in Europe. Additionally in Financial Services working with Wells Fargo has been fantastic. The acquisition was more opportunistic than strategic, it just happened to come along at the right time for us. The market has been tough, and Vocalis had not been able to convert their pipeline as quickly as they had hoped. It was a chance for us to build on our own talent pool by acquiring some of the most highly skilled people in the industry, and to add some important new clients particularly in utilities and financial services, most notably with Chelsea Building Society and Powergen in the UK.
NB
What does this combination do for the speech industry? Your respective customers?

AG We see this as positive move in the development of pre-built applications. We still very firmly believe this is the future of the speech recognition industry. Pre-built applications are cheaper, essentially pre-tuned, and faster to implement. With the addition of Vocalis' experience and client base, we are only broadening our coverage and reinforcing our position as an industry leader.
NB
How do you plan to mitigate integration challenges? The integration will not happen overnight.

AG At the moment we at Fluency have a number of implementations on-going and we need to remain focused on those and Vocalis is also working on delivering a number of projects. I want to keep any disruption to a minimum, particularly for the development teams, and so we will be operating as separate businesses in the short term. On the other hand, our business development and operational divisions will start working together very quickly. We are fortunate in that the cultures and visions of the two companies were very similar, and I have spent a significant amount of time with Vocalis and see much alignment between the two organizations. We are looking forward to working with them in joint development teams as we start to share learning across the new organization, but we need to give that a little time.
NB
Please discuss any management changes and what they mean to your customers and to your partners.

AG Vocalis has been in the industry for almost 10 years, and have long been recognized as leaders in the field. Richard Watrasiewicz, Vocalis' Group Operations director, will be bringing his extensive operational experience to the new organization. In the coming months we will be working very closely together with the Vocalis management team to define our combined technology roadmap and create an integrated management team.
NB
Please tell us a little about your parent company, netdecisions.

AG Two former senior partners at Monitor Group, the Strategy Consultants, founded netdecisions in mid-1998. The group has now grown to more than 1,000 professionals across a network of offices spanning Europe, Asia and the U.S. They have an integrated range of capabilities from business operations, strategy and process, user experience and design, to applications development, systems design, security and all other core technology areas. netdecisions clients include organizations such as Hewlett-Packard, Invensys, McDonald's and Wells Fargo. I think part of their success is that they have always focused on building very strong relationships with senior management and board level executives, helping them to solve complex strategy and technology issues. Fluency started life as netdecisions' Voice Research & Development team established in Cambridge in 1998. The R&D operation was focused on the development of speech recognition systems based on the VoiceXML standard and in particular on Voice User Interface design. Netdecisions very soon saw the commercial value in the research, and Fluency was established as a separate entity in May 2001 and began the creation of a software platform specifically aimed at automating call centre activities. This platform is our VoiceRunner™ platform which has been successfully deployed at a number of organizations.
NB
It seems that there is going to be even more consolidation with regard to the 'speech ecosystem.' For example, ScanSoft and SpeechWorks' merger and HP's acquisition of PipeBeach. Do you plan further acquisitions to enhance your speech product line?

AG We have seen significant consolidation in this space in the past year, but no, we are not planning any additional acquisitions. Our priority now is to scale the penetration of our applications through our current channels. We have a very strong position, and great products. My focus right now is to capitalize on those.
NB
What is your market outlook for speech solutions in the UK, Europe, Asia and the U.S.?

AG The interest level is unprecedented and the underlying trend is extremely strong - we see an enormous number of RFP's being issued, and everyone is interested in exploring speech. People are becoming more and more confident that the technology works and user acceptance levels are high; many people actually prefer using speech-automated applications to live agents. Organizations are clearly starting to understand the benefits in terms of cost savings and customer satisfaction. The challenge for us and for others is that moving from DTMF or CSR's to speech is a big step for organizations to take, and so it is almost always a first time purchase which in turn often means a long sales cycle. In Europe I think we are still significantly behind the U.S. in terms of adoption, but the growth rate is higher and the gap is closing.
NB
We hear a lot about how customers are not served when organizations automate customer service. What do you think is the right balance between great customer service and automation?

AG Automation does not always imply poor service. Speaking to an agent who does not have the right information provides a very poor service. You have to strike the right balance; speech will not be the answer in every instance. Smart organizations recognize this and use a combination of in-source, out-source, DTMF, speech and Web in the appropriate mix. We just recently completed a study on user acceptance, and will shortly be releasing the report, but I think people will be surprised and reassured by some of our findings. It's not that people don't like using speech recognition systems, they just dislike using badly designed systems which can be confusing and counter-productive. Overwhelmingly, we found that negative preconceptions about speech can very easily be dispelled with the right application.
NB
Please discuss a couple of examples of recent deployments and explain why your client was interested in speech and the results from the deployments.

AG We worked recently with the National Express Group which carries more than 1 billion passengers a year on bus, train, light rail and express coach operations. We worked with their UK coach division, which carries over 12 million passengers a year to 1,200 destinations with links to an additional 2,500 European destinations. The issues they were facing in their call centre included: Lost revenue on 978 lost calls per day (7 percent of all calls);
The cost of skilled call centre agents handling calls from travel agents who were also being paid commission resulted in high transaction costs;
Handling daily spikes, with 30 percent of all calls in one hour;
Annual attrition rates of 32 percent resulted in high recruitment and training costs. We worked with them and implemented a speech recognition solution which now completes the full booking of complex journeys across Europe in one call with an average duration of 3 minutes. The business case has been proven and we have helped them to significantly reduce their call centre operating costs and improve customer service levels. Another client, a leading U.S. retail bank, was looking to reduce costs and improve customer service levels in their small business loan center. The center handles over 2,000 calls a day from customers and branches enquiring about the status of loan applications. As you can imagine, that takes up a lot of call centre agent time, but is a fairly straightforward enquiry. We developed a solution which integrates with the bank's real-time loan origination system and will be automating approximately 60 percent of incoming calls. As a result, we are freeing up contact center resources to handle more complex enquiries, and customers are getting the information they need in the most efficient way.