IVR, or Interactive Voice Response, has been around for a while now. When first introduced, IVR used text-to-speech or recorded prompts to convey information to callers. Callers then interacted with the IVR using a touch-tone phone. With advances in voice recognition, callers were able to interact with the IVR by speaking. However, IVR, till very recently, required expensive and specialized telephony equipment to be installed and could therefore be deployed only by large companies (banks, telephone providers, etc).

The situation that plagued IVR till very recently can be compared to what existed in the web world in the early to mid 90s. Hosting web sites meant large investments in hardware, software and technical staffs that only big companies could afford to do. However, costs associated with web sites dropped considerably with the advent of shared and outsourced hosting. Nowadays, any individual or business can easily afford a web site.

IVR, with advances in shared and outsourced voice hosting, is now at a stage where individuals and small businesses can easily afford it; no telephony equipment need to be deployed. In fact, IVR can actually be used to bring down costs by automating a lot of the tasks that are handled by people. Just like the web had driven down the cost of doing business, IVR can also be used to do the same. In addition, the presence of the ubiqitous cell phone makes IVR a more "natural" way to conduct business in many situations as compared to the web.

An IVR can be a completely self-contained solution. Or, it can be a front to a back-end system (datastore) from which it can fetch information and into which it can store information.

Some of the situations where an IVR can be used are:

• Call Centers with Call Queuing
• Order Entry and/or Order Tracking
• Voice-based Surveys
• Store Locator/Direction Finder
• Customer Support
• Virtual Receptionist or Personal/Professional Assistant