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Backup Slides. Omitted Slides IBM Transformation Case Study WVS 5.1 Presentation. We know your Industry. Speech is Driven by Clear Value Proposition. “Self-service transactions can reduce costs up to 90% compared to assisted services.” – Forrester Research, 2004.

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    1. Backup Slides • Omitted Slides • IBM Transformation Case Study • WVS 5.1 Presentation

    2. We know your Industry

    3. Speech is Driven by Clear Value Proposition “Self-service transactions can reduce costs up to 90% compared to assisted services.” – Forrester Research, 2004 Relative costs per transaction Agent Chat Email Web Voice Portal IVR $6 $6 $2.40 $1.50 $0.60 $0.48 Decreasing Per Transaction Cost Total Cost Example: Billing Inquiry Medium Call Center with 800,000 calls per year $4,399,200 Before 90% phone 5% IVR 5% web – $3,818,400 After 75% phone 10% IVR 15% web Net savings of $580,800 or 15% Example: Shift 5% of calls from the Agent to the IVR Large Call Center with 120 million calls per year 100% phone $720,000,000 Before 95% phone 5% IVR – $687,000,000 After Net savings of $37 Million Source: IBM Business Consulting Services, US Customer Engagement

    4. Fully automated self-service Automated Speech RecognitionApplication Classes and their Objectives Enterprise Deployment Employee Productivity Operational Process Efficiency Value-Add and Differentiation Embedded command & control Continuous dictation Automated switchboard Call center routing Mobile office Message services Service Provider Deployment Source: Quocirca Ltd.

    5. Business is Driving Speech Technology Acceptance • In Automotive • Competitive Advantage at Honda – “As in-car navigation systems evolve and become more commonplace in today’s vehicles, our extensive voice-recognition features give Honda and Acura products a distinct competitive advantage.” ….. Tom Elliott, Executive VP, American Honda Motor Co. • Importance of Quality • 38% of value of automobile is in software and electronics • 32% problems associated with software and electronics • Warranty costs today are greater than $3 billion annually • Speech technologies can provide early detection and problem prevention • In the Contact Center

    6. Web Open Standards Leadership 1998 / 1999 Java, XML and ebXML • Co-founder andlead architect for RosettaNet • Author of XML4J • Chair OMG XML Metadata Interch. Format • Co-author W3C Document Object Model • FounderXML.org • Elected to Board of Directors in OASIS 2000 Web Services and UDDI • Co-author of SOAP 1.1 and submission to W3C • Cofounder of UDDI.org and author of original UDDI specification • Co-author of WSDL • IBM contributes SOAP4J to Apache 2001 Web Services and Tools • Led submission of WSDL to the W3C • Co-chaired W3 Web Services Workshop • Founder of Eclipse.org • Co-author of W3C XML Schema standard • Chair of Web Services Interactive Applications TC 2002 Web Services and Security • Founder and chair, Web Services Interoperability Organization • Co-author of web services bus process specification (BPEL, WS-TX, WS-TC) • Co-author for Web Services Security roadmap and specification 2003 Web Services and Security • Submission of BPEL to OASIS • Co-chair WSBPELTC in OASIS • Submission of Common Base Events to WSDM TC in OASIS • Submission of WS-Manageability to WSDM TC in OASIS • Co-authored and published EPAL specification to WC3 • Co-chair WSDM TC in OASIS • More than 1,000 developers devoted to XML and more than 1,500 focused on Linux. Over 200 software products running on Linux • Led workgroup responsible for finalization of SOAP 1.2 Over 160 business integration technology patents First integrated private UDDI directory First Web Services Gateway

    7. Improving the Customer ExperienceOnstar Challenge • Improve user access to OnStar voice-enabled services Business Benefits • Improved customer access to OnStar safety & security services • Improved performance of OnStar hands-free dialing • Ongoing integration of advances in speech recognition in collaboration with OnStar requirements Solution • IBM Embedded ViaVoice provides faster, more intuitive, continuous digit dialing and improved voice recognition accuracy • By 2005, IBM Embedded ViaVoice will be integrated into all GM vehicles offering OnStar (approximately 2.2 million cars) Technology Benefits • State-of-the-art voice recognition accuracy • Continuous digit dialing

    8. Realizing Cost SavingsParcelforce (UK) Challenge • Labor intensive processes for managing customer phone contact on parcel redelivery and tracking Business Benefits • Automated service available 24 x 7 • Major cost savings due to increase in automated self service - anticipate $3.5m per year saving on < $2m investment Solution • New customer conversational self-service applications from IBM Business Partner, Fluency, deployed on IBM WebSphere Voice Server Technology Benefits • Use of IBM speech recognition for alphanumeric parcel codes and postal codes

    9. WVS Languages Language   WVS V4.2 - WVR/AIX   WVS V5.1.x (MRCP) - Linux   U.S. English   YesYes U.K. English   YesYes Australian English   Yes Brazilian Portuguese   Yes Canadian French   YesYes Dutch   Yes French   Yes German   YesYes Italian   Yes Spanish (Mexican and Castilian) Yes Japanese   YesYes Korean   Yes Cantonese Chinese   Yes Simplified Chinese   YesYes

    10. Financial Markets Stock price inquiries Stock Trading Request Financial Reports Banking Pay bills Request transaction history Balance inquiry Branch locator Change personal info, e.g. address Insurance Quote inquiries Form requests Agent locator Claims status tracking Utilities Account management Outage reporting Appliance repair request Address change Connect/disconnect Telco Subscriber voice portals -- request info -- request services Call steering to CSR Automated directory service • Benefits are Cross Sector • Reduce “Cost to Serve” • Improve Quality of Service • Provide Consistency of Data • and business logic across • channels Retail Catalog order Request catalog Request business hours Call steering to store/dept Travel/Transportation Request schedules Request fares Manage loyalty points Track packages WebSphere Voice Self-Service Applications Speech-enabled self-service applications Financial Services Sector Communication Sector Telco Subscriber voice portals -- request info -- request services Call steering to CSR Automated directory service Distribution Sector

    11. LOB IT Integration into broad Software and Consulting Solutions Insurance Claims Management Underwriting Policy Administration Channel Dist. Integration Customer Insight … Banking Branch Transformation Customer Insight Core Systems Transformation Risk & Compliance Wholesale Pmts … Financial Markets Front Customer Insight Trade & Order Management Financial Info Interchange Post Execution Integration Risk & Compliance … Retail/Aftermarket Dealer Collab. Automotive Product Lifecycle Mgmt. Systems & SW Engineering Production Retail/Aftermarket Quality Insight Telematics Retail / Wholesale Store Operations Advertising, Mktg & Promotions Merchandising Item Management Inventory Management Multi-Channel Management Consumer Products Item Management Customer Management Consumer Info. Management Brand Management Risk & Compliance Mgmt. … Energy & Utilities Trading & Settlement Mobile Workforce Management Contact Center Optimizer Asset Operations Regulatory Compliance … Telecom OSS/BSS Optimization Contact Center Optimizer Mobile Services Delivery Partner Content Enabler Next Gen Network Serv. … Electronics Innovation Management Business Perf. Management Software Lifecycle Mgmt Supply Chain Collaboration Regulatory Compliance … Health Patient Centric Portal Healthcare Collaborative Network Clinical Decision Intelligence Payer Services Portal Health Plan Administration … Government Government Access On Demand Workplace e-Forms & Records Mgmt. Government Collaboration Emergency Response … Life Sciences Corporate Info Asset Management Investigator Recruitment & Trials Mgmt. Clinical Genomics Annotations & Knowledge Sharing Clinical Trials Management … . . . … … … … … …

    12. IBM’s Transformation Case Study

    13. The ibm.com transformation success story is part of IBM’s larger contact center transformation* IBM’s Contact Centers • IBM • 32,000 Contact Center FTEs • 235 Global Locations • ibm.com • 5,000 Contact Center FTEs • 23 Global Locations • 3 North American Locations General Sales Technical Customer Service X ibm.com X X Personal Computer X X X Division GlobalServices X X Customer Support X Org. (CSO) Techline X Software X X X * Only the North American ibm.com transformation is referenced because of IBM’s policy to not disclose individual division’s operating statistics

    14. ibm.com transformation story Mid 1990’s 2001 • Face to face sales channel • Branch offices • 40+ centers (NA) • 2000+ Toll-free numbers (NA) • 8AM to 5PM Monday thru Friday • CIO the decision maker • On-site education • System engineers • ibm.com, business partners, face to face • Mobility Centers • 3 Contact Centers (NA) • 4 Toll-free numbers (NA) • 24 X 7 • LOB executives and CIO as decision makers • e-learning • e-support and service • 14,000 IBM products

    15. ibm.com transformation approach • Business model • Drivers of change • Strategy and planning • Business case • Develop CRM business strategies, complimentary business and value propositions • Identify, design and implement process and organizational improvements to explicitly deploy CRM strategies • Roles and responsibilities • Activities • Decision and collaborations • Sequence and timeline • Performance management • Information requirements • Infrastructure • Packages • System integration • Programming • Deploy and integrate the technology to support the new way of doing business

    16. Transformation Vision and Strategy ibm.com Vision • A single, integrated IBM in the marketplace • A leading e-business • The premier sales, service, and marketing company in our industry • The highest standard of customer satisfaction and loyalty • World-class performance and reliability

    17. Cost Reduction Revenue Generation • $2.2B savings 1st year (May ‘00 to May ‘01) • 22% productivity improvement • Shifted non-sales face-to-face interactions to call center (estimated at 25%) • New employee training time was reduced from 2 weeks to 1.5 days • Generates 65 leads per hour - valued at $3.1M • Generates $3.5M revenue per hour (TeleWeb) • 29% annual revenue growth Transformation Benefits Customer Satisfaction Employee Satisfaction • Customer satisfaction targets were met/ exceeded 94% (vs. 90% target) • More stringent satisfaction metric exceeded in 2002 – 55.3% very satisfied (vs. 55% target) • Employee turnover went from 13% to 7% • Eliminated time discussing who’s data is right - everyone has same data • Better decision-making based on current data (e.g. proceeding with campaign) Transformation benefits

    18. Conversational BiometricsCustomer Scenarios Ran Zilca November 2004

    19. Scenarios • Automated User Authentication and Authorization over the phone • Call center live agent user authentication and authorization • Offline fraud detection - banking/finance • Offline fraud detection – telecom • Trusted 3rd party voice authentication provider • Mobile Commerce • Government / forensic / intelligence • Password reset • Secure physical access • Parolee tracking

    20. Scenario 1: Automated User Authentication and Authorization over the phone • User calls a VRU self service application, or calls a call center and goes through the automated system first. • Value add of using CB: • Faster user authentication of genuine users • Higher detection rate of break-in attempts • Ability to not only authenticate the user (binary decision) but also to determine a authorization level Self Service / Call Center Authentication / authorization CB

    21. Scenario 2: Call center live agent user authentication and authorization Audio Call Center Agent System or phone display CB Similarity Scores Suggested action

    22. Voice Logger Call Center database Fraud Detection system (rule based, neural, etc.) Detected fraudulent accounts SIV Enrollment Call Center / Self Service Audio Past Fraudsters Voiceprints SIV Scoring Fraud alert Scenario 3: Offline fraud detection - banking/financeDetecting repeating fraudsters

    23. Voice Logger Call Center database Fraud Detection system (rule based, neural, etc.) Detected fraudulent accounts SIV Enrollment Audio Past Fraudsters Voiceprints SIV Scoring Fraud alert Scenario 4: Offline fraud detection - telecomDetecting repeating fraudsters

    24. Enterprise C Enterprise A Enterprise B Trusted 3rd Party SIV Central Voiceprint Repository Scenario 5: Trusted 3rd party voice authentication provider Authentication result audio

    25. Merchant Scenario 6: Mobile Commerce • User places an order using browser on phone • Immediately receives an automated call from the merchant • Verifies her/his voice • Transaction approved and goes through • (Requires simultaneous voice and data session)

    26. Audio SIV Scenario 7: Government Applications • Forensic: Wiretapping predetermined suspects and/or comparing voice samples offline • Signal Intelligence: Monitoring large amount of calls continuously to detect calls of particular speakers

    27. Other Scenarios: • Password/PIN reset: higher level of secure authentication required for forgotten passwords • Secure physical access: government and sensitive locations and/or replace badge access • Parolee tracking: call parolee at random times to validate their presence at home.

    28. Voice Server 5.1:Enabling the on demand Business of Tomorrow Title slide

    29. Speech & on Demand History & WebSphere Key Differentiators Summary & QA Agenda Speech for on demand Business WVS and the WebSphere family Key WVS 5.1 Differentiators Rapid Speech Application Development Administrative Ease of Use On Demand Speech Technology Standards-Based Architecture Summary and Q&A

    30. Business flexibility Business flexibility through integration of people, processes and information within and beyond the enterprise IT simplification IT simplification through automation and virtualization enables access and creates a consolidated, logical view of resources across a network Taking business to the next level Requires on demand operating environment Integration On demand operating environment • Business Modeling • Process Transformation • Application and Information Integration • Access • Collaboration • Business Process Management Speech technology Infrastructure management • Availability • Security • Optimization • Provisioning • Infrastructure Orchestration • Business Service Management • Resource Virtualization of Servers, Storage, Distributed Systems/Grid and the Network Open standards are table stakes for an on demand operating environment

    31. What is Voice Server 5.1? A WebSphere-based implementation of the industry standard MRCP

    32. The New WVS 5.1 Message WVS Enhances IBM’s speech solutions by providing: • Administrative ease of use • Standards-based architecture for speech • WebSphere quality • Improved integration and flexibility for existing customer environments • Integration with other IVR platforms to better integrate into existing customer environments Promoting: • WebSphere Application Server as the focus of IBM’s speech architectures • WebSphere as the preferred application development and deployment environment for voice • A single infrastructure for voice and data applications Basic text slide

    33. Why is WVS 5.1 important? • Provides IBM’s strength in complex systems management to speech technology • Brings a new focus to the sales message that niche competitors ignore or minimize • Integrates speech technology into the IBM on demand strategy • Integrates Speech resources into the IT infrastructure Basic text slide

    34. Where does WVS 5.1 fit in a total speech solution? • Speech Solution = hardware + software + services • Services drag product (esp. SUI design process and expertise) • WVS 5.1 offers capabilities that positively impact 2 phases in a speech project: • Development – Voice Toolkit speeds development time, lowers costs of services • Deployment – advanced WVS 5.1 administrative abilities keeps apps running, reduces system down time, and prevents customer dissatisfaction

    35. Key Voice Server 5.1 Dates • Sept. 7th, 2004, Product Announcement • US, UK, Simplified Chinese and Japanese languages • Intel Linux offering available on SuSE SLES 8.0 and RedHat Enterprise Linux 3.0 • Sept. 13-16th, Demos/Splash at SpeechTEK with Steve Mills as a Keynote speaker • November 5th, 2004, electronic General Availability • December 3rd, 2004, General Availability

    36. Speech & on Demand History & WebSphere Key Differentiators Summary & QA Agenda Speech for on demand Business WVS and the WebSphere family Key WVS 5.1 Differentiators Rapid Speech Application Development Administrative Ease of Use On Demand Speech Technology Standards-Based Architecture Summary and Q&A

    37. VXML WVS Proprietary Interfaces Not Integrated to WebSphere Lack of flexibility and robustness Past Speech Technology: WVR & WVS WVR TTS ASR

    38. ASR MRCP TTS WebSphere Voice Server 5.1 IVR CCXML VXML WebSphere (WAS) foundation MRCP standard speech interface

    39. WVS 5.1 is Strategic for IBM • WebSphere is the preferred application development and deployment environment for voice apps • Common application and business logic for visual and voice applications • WAS, J2EE, WMQ, WBI, DB2 • Common development tools & skills • Eclipse, WSAD, Rational • Markup based on W3C Standards • XML, xHTML, VoiceXML, CCXML • Separate presentation logic for visual & voice channels • WebSphere Portal, WVAA, WEA • Value migrates to the application server and tooling

    40. Benefits for IBM Customers • Fully Integrated WebSphere Solution across all 3 tiers • End to End systems management via WebSphere • Integrated deployment across all elements • Single Tooling Solution • Open Interfaces and Standards • Performance Monitoring (via Tivoli Performance Viewer in WAS)

    41. Speech & on Demand History & WebSphere Key Differentiators Summary & QA Agenda Speech for on demand Business WVS and the WebSphere family Key WVS 5.1 Differentiators Rapid Speech Application Development Administrative Ease of Use On Demand Speech Technology Standards-Based Architecture Summary and Q&A

    42. Key WVS 5.1 Differentiators • Rapid, High Quality Application Development • Administrative Ease of Use • On Demand Speech Technology • Standards-based Architecture for Speech Basic text slide

    43. Speech & on Demand History & WebSphere Key Differentiators Summary & QA Agenda Speech for on demand Business WVS and the WebSphere family Key WVS 5.1 Differentiators Rapid Speech Application Development Administrative Ease of Use On Demand Speech Technology Standards-Based Architecture Summary and Q&A

    44. Rapid, High-Quality Application Development • Application development consists of: • Creating speech user interface and grammars • Coding • Recording audio files (voice talent) and preparing for maximum quality and timing • Important to IBM customers because speech projects are: • Expensive • Time consuming • Complex • Requires deep skills in several areas • Directly impacts customer satisfaction, loyalty, and revenue (ROI) • WVS 5.1 supports application development through the Voice Toolkit and enhancements to ASR and TTS

    45. Voice Toolkit 5.1 – Speech App Development • Voice Toolkit 5.0.2 Content • Existing development environment for WVAA 5.0, WVS 4.2, and WVR 4.2 • Pre-req of Portal Toolkit for Voice Portlet functionality • Fixes made for 5.0.2 Translation Release • MRCP Grammar Test Tool • Remote connection to WVS 5.1 MRCP server for loading and testing grammars • Same functionality as previous grammar test tool for Enumeration, Testing with Text, etc. (no microphone testing;uses audio files instead) • Additional functionality for bulk audio file testing, showing semantic interpretation results, n-best matches, and confidence scores • Lexicon Editor with Pronunciation Migration • XML-based editor for TTS and Recognition pronunciation files • Automated migration functions for pool files and exception dictionaries • Support for WebSphere Studio 5.1.2 • Site Developer (WSSD), Application Developer (WSAD), Enterprise Developer (WSED), WAS-Express

    46. Voice Toolkit 5.1 - Drag and Drop SUI

    47. Voice Toolkit 5.1 – Vendor Interoperability • Editors (VoiceXML, SRGS-XML, CCXML) • Standards based • Customizable DTD • Call Flow Builder (Code Generation and Prototyping) • Standard VoiceXML 2.0 output • Extensible Code Generator (future: RDCs) • Call Simulator and VoiceXML Debugger (Browser execution) • “Run as…” extensibility for other Launch Configurations • Debugger API definition • Speech Technology (TTS and Recognition) • Extensible engine interface classes (MRCP being staged in)

    48. Speech & on Demand History & WebSphere Key Differentiators Summary & QA Agenda Speech for on demand Business WVS and the WebSphere family Key WVS 5.1 Differentiators Rapid Speech Application Development Administrative Ease of Use On Demand Speech Technology Standards-Based Architecture Summary and Q&A

    49. Administrative Ease of Use • Speech is typically used for customer self-service • Applications unavailable = loss of customer = loss of revenue • Administration of complex systems includes: • Installation/configuration • Monitoring • Problem determination • Troubleshooting • WVS was designed with system administration in mind

    50. Why is Ease of Use important? • Minimal time and skill required to get speech system up and running (installation, configuration) • Administrators need to quickly identify and resolve system problems • Decreases down time if system or application problem occurs • Prevents end user from encountering unavailable or atypical self-service interaction • Prevents “shopping” by end user – improves customer satisfaction and loyalty