key technologies such as voice recognition (VR), interactive voice response (IVR), call routing, customer information management, middleware connectivity, and workforce management have become more powerful and less expensive. Companies that invest in these technologies are seeing their operational expenses tumble even as revenues grow.

The next wave of improvements will probably come from using technology to automate contact with callers, to help frontline staff resolve calls, and to handle call volumes more efficiently.

Transactions that cost $2 to $10 when handled by a live agent cost only 2 cents to 20 cents when automated. A major telecom company recently invested $30 million in technologies that automatically handle additional transactions and allow callers to speak their answers instead of pushing buttons. The new systems are capable of handling 10% more calls, and executives anticipate saving upward of $50 million a year.