How Interactive Voice Response (IVR) Works

By: Dave Roos

IVR Providers

­IVR systems are helpful in many circumstances and are increasingly being used to save money.
­IVR systems are helpful in many circumstances and are increasingly being used to save money.
© Photographer: Savone | Agency: Dreamstime

Let's take a look at a few of the most popular IVR service providers: Voxeo, PlumVoice and inContact. Voxeo offers two basic options for leveraging its IVR technology and services. As an organization, you can either buy Voxeo's servers and software and install it in-house, or you can subscribe to its IVR hosting service and pay by the month.

Voxeo's IVR technology runs on the VoiceCenter platform. VoiceCenter is VXML-based and can be integrated with existing telephone and Internet networks using the VoiceCenter server. An advantage of the VoiceCenter platform is that the software is written using open standards, so that in-house or third-party developers can write customized IVR applications. And since many larger companies already have Web/application servers and databases, it's relatively easy to integrate the VoiceCenter server into the corporate network.


Voxeo claims that its hosted IVR service can save a company thousands of dollars in hardware, software, administration and maintenance costs. By Voxeo's calculations, it costs a company $3,000 per phone line to set up an in-house IVR system, requiring 100 hours of installation and configuration by the IT staff [source: Voxeo]. As a comparison, Voxeo charges $0.11 a minute for its hosted IVR service with a minimum monthly charge of $500 for an unlimited number of phone lines.

Voxeo focuses its marketing attention on the open nature of its IVR platform. It even gives away its software to third-party developers so they can build applications that make the system even more robust.

PlumVoice offers technology and services that are very similar to Voxeo. It sells on-site server and software solutions as well as off-site, full-service IVR hosting. PlumVoice also sells lots of pre-built IVR applications customized to different industries and different-sized organizations. The advantage of these applications is that an organization can deploy an IVR system quickly by recording a few menu options and integrating with existing databases.

InContact is different than Voxeo and PlumVoice in that it only offers subscription IVR hosting, not in-house server and software configurations. Its hosted service is similar to those offered by Voxeo and PlumVoice, with more of a focus on simple user controls.

The inContact service comes with a software package called inControl that lets an organization easily customize scripts and IVR system configuration through a graphical interface. You drag and drop boxes into a virtual workspace. Each box represents a different step in the automated call process. One box might signal a prompt to enter a pass code and another box plays hold music. You can also preview the call sequence before deploying it live.

All three of these companies offer free demos or trial versions of their products and services.

We hope this HowStuffWorks article has helped you better understand the world of IVR. For more information on interactive voice response and related topics, check out the links below.

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