The Telephone as Computer

Introduction

Alexander Graham Bell would scarcely recognize his invention today. From a device that transmitted voice from one point to another, the telephone has developed into a sophisticated instrument that resembles a simple computer. Just by pressing a few keys on an ordinary telephone, people at home or in an office can transfer money between bank accounts, register for classes, or check on the status of merchandise they have ordered. Or they can call an 800 telephone number, press a few additional buttons and be connected instantly to the right department in a company with locations all across the country. And they can do all this without uttering a single word.

The automation of the telephone doesn't replace human contact, nor should it. But, used for routine transactions, it is introducing a new level of efficiency to the way America does business. Although a few consumers may resist, most appreciate the benefits. And why not? All they need is that familiar old instrument, the telephone, and their business is handled without delay.

This article will review how companies and institutions are using the computer-like capabilities of the telephone to streamline costs and increase customer satisfaction. It will highlight an AT&T Advanced 800 Service feature, the 800 Call Prompter; review voice response systems in general and, in particular, voice response in banking; and discuss the human factor. And finally, it will reveal where the telephone as computer may be heading in the future.

The Plain Old Telephone

First, let's take a brief look at what is required at the caller's end. When we talk about the telephone as computer, we're really talking about a telephone with touchtone signaling.

Touchtone, or, in technical terms, dual tone multi-frequency signaling (DTMF) is the name for technology AT&T introduced in 1961. With DTMF, each button pressed on the touchtone pad emits its own distinctive audible tone, actually two tones blended into one. The tone is transmitted across the network to the 800 Call Prompter or to voice response systems on customers' premises. These recognize the signal for interactive purposes and respond to it. Rotary sets, also known as dial pulse, cannot be used interactively because they don't operate on frequencies.

Not every residence and office has a telephone capable of computer-like interaction -- at least, not yet. But their numbers are growing. Research by the Yankee Group shows that touchtone telephones from AT&T and other vendors are in well over 55 percent of U.S. households. And when consumers buy new telephones, nine times out of ten it's touchtone. The presence of touchtone in offices is undoubtedly even higher.

A note of caution: Many rotary sets on the market today mimic the look of touchtone. Just because a telephone set has pushbutton doesn't mean it uses DTMF.

AT&T 800 Call Prompter

If you call an 800 number and instead of a ring hear an announcement saying, "To complete your call, please press or dial 1 now," you have reached AT&T's 800 Call Prompter. A feature available with AT&T Advanced 800 Service, the 800 Call Prompter plays back announcements stored in the AT&T network to direct customers to the right destination within an organization. Designed for companies with more than one location, the 800 Call Prompter directs calls wherever the client company specifies, to any location in the U.S. At this time, AT&T is the only long-distance carrier with the ability to intercept calls while they're still in the network.

When the 800 call reaches the appropriate node on the AT&T network, a database notifies the system that a specific recorded announcement, designed for the customer, is to be played. The announcement might say something like:

"Thank you for calling the Mega Corporation.

You may press the number you want as soon as you hear it. For sales, please press 1. For service, please press 2. If you're calling from a rotary phone or if you require assistance, please stay on the line."

Or the announcement may ask for a zip code, or an area code, or an identification number or security code. After a caller makes his or her first selection, he/she may be offered a second, and sometimes a third level of choice, to help determine precisely to which location the call should be channeled.

In terms of the technology and the database structure, the number of choices that can be offered a caller are virtually unlimited. Practically speaking, choices should be restricted to what a caller can easily assimilate and remember. (How to structure effective announcements/prompts is discussed later in this article.) Moreover, the number of geographical locations that can be reached through one 800 number is far larger than any corporation is likely to require.

Client companies are finding a wide variety of uses for 800 Call Prompter:

* Several state police emergency hotlines pinpoint the caller's location so that the call is routed to the nearest dispatch center.

* National or regional real estate and insurance firms route the call to the closest broker or agent.

* An airline presorts time-critical reservations and general information calls.

* A hotel chain separates calls dealing with current and future reservations.

* A financial services organization channels callers to specialists in stocks, bonds, and other financial products.

* An insurance company uses two levels, offering a choice between group and individual insurance, and then sorting further among underwriting, claims, or policy questions.

Customers have reported that 800 Call Prompter frees employees who formerly did nothing but route calls. Moreover, employees can be more productive because they don't spend time fielding or transferring calls not intended for them. From the caller's point of view, 800 Call Prompter eliminates the frustration of repeatedly being transferred and expedites connection to the right department. And that, of course, translates into better customer service.

Voice Response Systems

If you dial a number and hear one or more rings and then an announcement or instructions, you have reached a voice response system. Located on the customer's premises, these systems are programmed to answer calls, accept instructions from a touchtone pad, and give out stored information, in human speech, when the caller presses the appropriate keys. Voice response systems are used for three types of applications: to distribute calls, much as the 800 Call Prompter does; to provide general product or service information to the public; or to provide personalized account information and perform account transactions.

A caller might hear the following initial instructions:

"Thank you for calling the XYZ company. For help at any time, or if you're calling from a rotary phone, please press or dial 'O.' Otherwise, please enter your account number now."

Or the message might be:

"You have reached Fly-rite Airlines. For arrival and departure times of today's flights, please press 1. For frequent flier mileage information, please press 2. For vacation package information, please press 3. If you wish to speak to a service agent, please press 4."

After the caller makes his or her first selection, more choices may be presented. The number of selections, and the number of levels to which they are taken, depends largely on the type of business being transacted.

Voice response systems made their appearance in the early 1970s, but they didn't catch on until the mid-1980s when their technology improved significantly -- and their cost came down. Most of what we see in systems from all vendors today was originally developed at AT&T Bell Laboratories.

In AT&T's voice response systems, most of the software is designed specifically for each customer. There are simply too many differences among customer requirements, even within the same industry, for an off-the-shelf product to satisfy.

The voice the caller hears on AT&T's systems is a real one that has been digitally recorded. In use in the telephone network for 28 years, digitized voice provides clear speech and an unlimited vocabulary. Digits and phrases appropriate to the customer's message are recorded and stored in memory. Then, whenever the computer receives the proper input signals from a touchtone phone, the recordings are retrieved with no degradation in quality.

Voice response systems may be used to channel calls to the right extension or to a live operator, much as AT&T 800 Call Prompter service does. While the 800 service directs calls to multiple locations, on-premises systems are designed for customers with a number of departments at one location.

AT&T's entry in this market, the Inbound Call Director, is user-friendly. We have designed it so that customers can easily do their own programming and can change recordings in minutes to suit business needs. Moreover, to help management with employee scheduling and business planning, the system tracks and reports on call and answering patterns.

Moving to more specialized uses, other AT&T voice response systems have been targeted at a variety of vertical markets. Among them:

* College registration, which has a fairly sizeable market. Students use identification numbers to select courses and sections. They receive confrmation of their choices, and may bill classes to a major credit card. Some colleges use their systems to impart information about cultural and sports events or about the university itself.

* Order entry. Consumers place orders with distributors for direct mail or catalog items. In a related application, retail stores place orders with wholesalers.

* Building inspection scheduling. Marketed to city and county governments, these systems are programmed to respond to building permit numbers. The system may assign an inspection data and advice the caller, or a clerk may call back with the information.

* Insurance. Doctors' offices or pharmacies enter a patient's social security number, and the system confirms the patient's eligibility for insurance benefits and advises how much co-payment is required.

* Shipping information. Shipping firms use the system to quote rates for freight and, with the entry of a bill of lading number, to track shipments.

Voice Response Systems in Banking

Of all the applications for voice response systems, perhaps the one used most widely is banking. Research conducted for AT&T indicates that 80 of the 300 largest banks use telebanking, and that two-thirds of them will do so by 1991.

And no wonder. Customers have come to expect increased levels of service; indeed, many select their bank based on service. But at the same time, the cost of delivering it, primarily in personnel expenses, has gone up. By capitalizing on the ubiquitous telephone, banks can provide 24-hour service and control expenses at the same time.

In banking, the marriage of the telephone and the computer is a natural. Most of the transactions between customers and the bank are routine, lending themselves readily to automation. Moreover, through widespread use of automatic teller machines (ATMs), customers have become accustomed to fast accurate transactions without human intervention. Telebanking is even easier -- people don't even have to leave home to do it, and if they're already away, they can call from almost anywhere.

Granted, an earlier experiment with automation -- banking via computer terminals or "home banking" -- met with mixed results. For one thing, many customers weren't comfortable with computer terminals. Even when banks provided them at cost, few people were willing to spend up to $300 for a device they had to plug into their TV and could use only for one function. And, finally, in some cases, the software didn't perform well enough. But the telephone has always been there.

A good voice response system can do everything an automated teller can do, and more. Well -- nearly everything. Someday, perhaps, an enterprising researcher will with an eighth Nobel prize for AT&T Bell Laboratories by designing a telephone that dispenses cash.

Until then, banks will have to content themselves with systems that, like AT&T's, provide information on the latest loan and savings rates, provide checking or savings balances, stop payments, process orders for additional checks, transfer funds between accounts, provide information on the last check to clear, determine whether a particular check has been processed, and even pay bills or transfer funds from the caller's account to someone else's.

It is a given that callers must provide account numbers and other code identification for all account information and transactions. And it is good practice to let callers cancel a transaction prior to completion in case they have made an error.

In addition to performing the banking functions listed above, AT&T's UNIX-based system can be programmed for customer service information -- for example, listing banking services or hours of operation for various branches.

The Human Factor

As the old saying goes, "You can lead a horse to water but you can't make it drink." So it is with voice response systems and the 800 Call Prompter. We can load them with the most advanced technology and can create the most exciting and useful array of services. But if the script is not written clearly and developed logically, if it is the least bit confusing, callers will bypass the automated features and go directly to a live operator.

At AT&T, we've learned from experience and from experts how to develop prompts -- those sentences that instruct callers on what to do next. Since every customer's needs are different, even within the same industry, it makes sense to have customers design and record their own, but we do provide guidance. Here are some basic principles:

* First-time callers need a few seconds to adjust to a recorded voice. So the first few words of an announcement should introduce the company or organization. Then start with critical information.

* Callers should be given the option of talking to a service representative or attendant.

* Enough options should be given to satisfy the needs of most callers. But they should be limited to five, or six at most. After that, callers become confused or tune out.

* Announcements and prompts should be brief so callers can remember them easily. Besides, the shorter the total announcement, the more callers can be accommodated.

* Callers should be told what to do and when. For example, "For sales, please press 1 now," or "Please enter your personal identification number now."

* If possible, identification codes should be limited to four or five digits. Longer codes are laborious for the caller.

* The number of levels or sub-levels of prompts should be three at most. Otherwise, the system becomes user-unfriendly.

What the Future Has in Store

At least on the surface, the future may look surprisingly like the past, when the telephone was a vehicle for voice communication. An exciting and relatively new technology permits callers to transmit instructions by speaking them, rather than by pressing numerical keys. Known as speech recognition, this version of voice response enables people with rotary phones and with disabilities to use their telephones as computers.

Today, speech recognition accounts for only one percent of the voice response market, in part because the vocabulary to which a system will reliably respond is fairly small. For example, recognition patterns are not yet accurate enough for the long strings of digits required in some applications. There are two types of speech recognition systems.

Speaker-independent systems take instructions from anyone who provides the right prompts. This approach relies primarily on a technique known as template matching, in which speech samples from people with a wide variety of dialects and speech patterns are recorded and put into a database. As you might imagine, hundreds of samples are required to make sure a system will recognize the pronunciation of all callers. Template matching provides a system with perhaps ten to twelve words it can be sure of "hearing" and to which it will respond.

Even with its vocabulary limitations, the current level of speech recognition is more than adequate for some uses. One of these is answering and directing calls, in which too many choices would only confuse or frustrate the caller. Accordingly, AT&T markets an automatic call director which commands seven vital words: the numbers "one" through "five," "yes," and "no."

Taking this a step further, AT&T also offers speaker-independent call directors that use both touchtone and speaker recognition in the same system. With this dual technology, speaker recognition resides in the system rather than on each line so that it is available to any caller on an as-needed basis. For example, callers are given the option of touching the number 1 or saying the word "one." If there is no touchtone response, the speaker capability is called into play for the line that needs it.

Speaker-dependent systems recognize only one voice, which makes vocabulary recognition far easier to develop. Consequently, these systems currently command about 50 words and are used mroe widely than their independent counterparts. Some speaker dependent vocabularies are derived through template matching. But they are increasingly using a newer and still experimental technique called phoneme recognition, which matches sounds as small as "th" or "sh" or even individual letters. With an intriguing display of intelligence, phoneme recognition even considers context and syntax.

Conclusion

Telephones have been around forever, and nearly everyone uses them and feels comfortable with them. As for computers -- to be honest, they remain a mystery to a substantial number of people in spite of the wonders they perform. So what could be more natural than making the power of the computer available through an instrument perceived as an old friend?

Everyone benefits from this marriage: businesses, which find they can be more efficient and cost-effective; and callers, who are served far more quickly. If and when speech recognition systems become more prevalent, even Mr. Bell might well feel comfortable using the modern version of his invention. AT&T will have come full circle then.

Nina Aversano is Director, Market Management Center at AT&T in Bridgewater, New Jersey.