Speech allows your callers to

conduct business,TODAY, over any network

just by talking!

SpeechWorks at a Glance Founded 1994, Headquarters Boston, MA (SPWX)

Core Software:

– Automated Speech Recognition (ASR)– Text – to – Speech (TTS)– Speaker Verification

Technology Origins: MIT

320+ people around the world

Market Leadership 2001 #1 in market share* (2001 Rev. 45m +49% growth)

Vertical Focus:– Tier 2

~ Retail~ Utilities~ Government

– Tier 1~ Financial Services~ Healthcare~ Travel & Hospitality~ Telecommunications

Why Companies Deploy Speech…

Justification Rank

Reduce Operational Costs 1

Increase Successful Call Resolution Rate 2

Increase Revenue Per Agent Interaction 3

Increase Customer Satisfaction 4

Increase Self-Service Options for Callers 5

Reduce Capital Expenses 6

Ability to Deploy Additional Apps More Quickly 7

Source: Kelsey Group ROI Study, June 2002

Kelsey Group ROI Study Highlights

Critical Metrics FindingsAverage Annual Savings per Deployment

$1.02 Million

ROI Met or Exceeded Your Expectations

100% - Yes

Average Cost Recovery (Payback) 9.5 months

Fastest Return on Premise Based Solution

6 months

Respondents Recovering Costs in 12 Months or Less

90%

Increased Automation over Existing IVR (Touch-Tone)

30 to 55%

Source: Kelsey Group ROI Study, June 2002

Speech Delivers Value

1. Reduce Costs

2. Increase Customer Satisfaction

3. Competitive differentiation

4. Revenue generation

Reduced Costs: Amtrak

Before

– Annual call volume: 2.8 million calls– Touch Tone VRU handled 42% of all train status calls (1.2

m calls)

After

– Speech-activated train status app deployed September 2001

– Speech handling 72% of calls

Application

Additional Automated Calls

(Annual)

Savings per call

Annual Savings

Train Status 850,000 $1.60 $1.36

million

Reduced Costs: United Airlines Flight Information

“United Airlines flight information system has taken over 50 million calls since it went live at the end of 1999 and has saved UAL

over $25 million.”

-Bob Bongiorno, UAL - Managing Director of Customer Service

SpeechWorks 2002 Global SpeechDays Event

Purdue University Banking Call Center Study

According to a benchmark study on bank call centers by the Center for Customer-Driven Quality at Purdue

University…

Speech-enabled calls…

…improve Customer Service and save time.– Speech interaction reduces call time by 35%, compared to

touchtone

Source: Purdue University, December 2001

$0.00$0.50

$1.00$1.50

$2.00$2.50

$3.00$3.50$4.00

Agent SpeechRec

Agent SpeechRec

…provide compelling cost savings.– Agent-assisted calls cost ~ $4.00– ASR calls cost only 45 cents!

…free agents from low-value calls, which…

– …can last almost five minutes– …have an abandon rate of almost 6% – …have an average hold time of 37

seconds

15%

36%

47%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Much MoreSatisfied withTouch Tone

Neutral Much MoreSatisfied with

Voice Recognition

Gartner Customer Satisfaction Study: Satisfaction Comparison

Source: Gartner SpeechWorks Customer Satisfaction Study, 2002

Note: 2% Unsure

14%

27%

49%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Much MoreSatisfied with

Internet

Neutral Much MoreSatisfied with

Voice Recognition

Touch Tone vs.Speech

Recognition

Internet vs.Speech

Recognition

Respondents ‘Top of Mind’ Reactions

Voice Recognition ‘Likes’

It’s quick (32%)

Easy to use (15%)

Answer all questions, get needed info (12%)

Don’t have to wait or be on hold (11%)

Works well overall (8%)

Voice Recognition ‘Dislikes’

Nothing negative about voice recognition (28%)

Impersonal, prefer live person (19%)

Can take more time (14%)

System can have difficulty understanding me (14%)

System couldn’t answer the specific question (10%)

Source: Gartner SpeechWorks Customer Satisfaction Study, 2002

Customer Satisfaction: Citibank Germany

Expected results for stock quoting/trading application

– Ramp-up rate was based on experience in persuading customers onto existing Touchtone IVR Systems

Expected Take-up Rates

Year 1

Year 2

Year 3 Year 4 Year 5

30% 40% 50% 60% 70%

Buy & Sell Orders Placed by Phone

0

10

20

30

40

50

60

70

80

90

100

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Weeks Since Deployment

Per

cen

tag

e o

f O

rder

s

Exe

cute

d o

n I

VR

Pe

rce

nta

ge

of

Ord

ers

E

xe

cu

ted

on

th

e I

VR

Buy & Sell Orders Placed by Phone

Weeks Since Deployment

1 3 5 7 9

11 13 15 17 19 21 23 25 27 29 31

10%

50%

100%

5 Year Target Reached in 5 Months – and still rising!

Competitive Differentiation: CIBC

1. Speech-activated retail banking allows customers to:

– Register and pay bills from any phone – Re-order checks and locate bank branches and bank machines

2. Speech-activated discount brokerage service allows customers:

– To place equity trades, review account information and open orders

3. Speech-activated mortgage service allows customers to:

– Obtain current mortgage rates and comprehensive information about a specific mortgage

4. Embedded Text-to-Speech in ATMs (Speechify Solo)Have received press and analyst

praise for innovative customer service

Adopted and deployed speech across 4 business units:

Revenue Generation – Voice Portal: AOL Ten speech applications in

service

– Check email, weather, sports, stocks and news

Members can customize the weather, stock and headline news information

Can default to weather information based on area code from where call is placed

Over 200,000 members have signed up for AOLbyPhone and agreed to pay $4.95/month for service

(800) AOL-1234 Subscription service generates $1 million in incremental revenue per month

Summary of Speech Versus Touch Tone

Touch-Tone

Speech

Speech Advantages

More intuitive interface

Flattens menus

Facilitates hands-free use

Easier navigation through commands

Ease of use

– spelling with touchtone keys

– entry of currencies, dates, etc. with touchtone keys

Thank you!