The traditional contact centre is undergoing a profound transformation. Central to this shift is Voice Artificial Intelligence (AI), which is moving far beyond simple automation to fundamentally reshape how organisations manage both their inbound and outbound call operations. It represents a fusion of different AI technologies to to deliver immediate, intelligent and scalable 27/7 customer support.
Andy O’Dower, VP Product Management, Twilio, says, “When I think of the term Voice AI, it truly entails a few different core technologies that are all coming together, and that have all kind of reached a tipping point within the last couple of years”.
Industry analyst, Audrey William, founder of Crayon IQ, explains, “Voice AI fundamentally represents the capability for consumers to express their intent through natural speech. This spoken intent must then be accurately understood by the underlying intelligence—powered by Machine Learning and AI engines, often including Large Language Models (LLMs)—allowing the system to autonomously process the request and act appropriately to sustain a fluid conversation”.
Unlike a menu-driven IVR, Voice AI allows customers to speak freely, in their own words, and handles multi-turn conversations while remembering context from previous interactions. “It is this seamless, back-and-forth dialogue between the Voice AI solution and the customer that marks a crucial evolution beyond the rigid limitations of traditional IVR systems”, says William.
Beyond IVR
Voice AI is set to replace and transform traditional Interactive Voice Response (IVR) systems by moving customer service from rigid, menu-driven interactions to flexible, natural conversations. Traditional IVR systems rely on predefined scripts and touch-tone inputs (e.g., “Press 1 for Sales, press 2 for Support”) or very basic keyword recognition. Voice AI, powered by advanced technologies, overcomes these limitations to deliver a superior customer experience.
Conversational Voice AI, however, is fundamentally smarter. It is powered by a sophisticated stack of core technologies, primarily Automatic Speech Recognition (ASR) and Natural Language Processing (NLP). It also uses Machine Learning (ML) to continuously learn from every interaction.
William highlights“In the early stages of Voice AI development, if we look broadly across the contributing technologies, Automatic Speech Recognition (ASR) was foundational. Its core function has always been the accurate transcription of spoken language into text. This focus on making transcription more accurate remains crucial. A second, equally important component is Text-to-Speech (TTS), which allows the AI to respond to the customer using synthesised voices with natural intonation and cadence”.
“I think the single biggest thing we need to call out—the one that is genuinely going to be a game-changer—is Speech-to-Speech. Not many vendors are fully there yet; some are trying. But from what I’ve gathered when speaking to people and vendors in the market, it is still slightly harder to implement consistently. So, I think that is really the future, and I am sure we are going to hear a lot of announcements about proper Speech-to-Speech solutions in Voice AI coming out around 2026.”
Unlike the traditional pipeline of Speech-to-Text followed by Text-to-Speech,Speech-to-Speech technology is an advanced form of artificial intelligence that processes spoken input and directly generates spoken output. For Voice AI, Speech-to-Speech is the technology that makes real-time, back-and-forth voice interactions with machines feel genuinely natural and human-like, allowing for features like “barge-in” (interrupting the AI) and maintaining conversational context.
Does Voice AI mean the death of IVR?
Dower doesn’t believe that the total replacement of IVR with Voice AI is likely in the near future, “A complete ‘kill off’ of traditional Interactive Voice Response (IVR) within the next year or two is likely too aggressive. While Voice AI is definitely replacing IVR, the transition for large enterprises is strategic and gradual. Major companies often have dozens of decision paths built into their existing IVR system. Initially, some try to use Generative AI as a blunt instrument, attempting to replace all of those paths at once. This frequently leads to solutions that are incomplete or don’t work reliably”.
The successful strategy is instead a targeted, data-driven approach. “Successful customers avoid trying to replace everything at once. They strategically pick one or two high-volume, low-complexity use cases—those that sit on the bottom rung of the complexity pyramid. They focus on completely nailing these specific areas, understanding exactly which languages, keywords, and call flows are dominant”, says Dower.
Always-on, intelligent support
By deploying AI agents, businesses can offer 24/7 availability without the prohibitive cost of round-the-clock human staffing. These agents are instantly scalable, handling thousands of simultaneous calls without wait times, ensuring that every customer receives an immediate response. Voice AI also allows interactions to be natural and flexible where the AI agent can understand context and provide resolution rather than offer a rigid set of options.
Traditional IVR systems, however, are defined by rigid, predetermined menus. When you call a bank,a customer experiences this as a series of complex decision trees – press one for this, press two for something else. William says, “These pathways are entirely static, as the programming has already been fixed. This static nature is the key limitation of older IVR. There is no real chance for you to simply speak and ask for what you want; you are forced to navigate the pre-designed system, which is what we’ve been used to”.
“Where Voice AI comes in in a major way, is handling transactional resolution. Because you are speaking directly to the AI, it can now help you with tasks like resetting passwords, making changes to appointments, or updating bookings. Traditional IVRs cannot handle this; you still need to wade through the menu to finally reach a human. Furthermore, IVRs cannot recall context. For instance, if you have called the bank four times this week because you are interested in a new home loan, the IVR might register that you have called, but it cannot recall the full context of those past conversations. Voice AI, on the other hand, has the potential to do this”.
Challenges and hurdles
The transition to effective Voice AI systems introduces several complex challenges, many of which relate to the engineering of natural conversation and the foundational data fueling the AI. William advises, “One of the most critical and difficult areas is what is known as turn detection. This space is incredibly important for creating a natural dialogue. Turn detection requires the AI system to be smart enough to precisely determine when a speaker has finished speaking. It needs to account for natural human pauses, breathing, or hesitation, and understand -Okay, the customer has stopped talking now, so the AI must come in and start talking.”
Another significant challenge is managing noise in the surrounding environment. “The problem with noisy backgrounds is that it degrades the system’s ability to accurately understand the speech. This, in turn, impacts the accuracy of the dialogue and the perceived intent, which can lead to wrong outcomes for the customer”, says William.
The third major piece is enabling the AI to be truly conversational so the dialogue can carry on seamlessly. As William points out, “This comes down to getting the data right. If an organisation doesn’t start with the correct data, and if they lack a clear roadmap on how to continuously build and refine that data, the deployment of a smart, conversational AI will be very tough. To ensure the AI is intelligent and conversational, it needs to be fed with comprehensive, live information”.
Unfortunately as O’Dower agrees, “Data is often scattered across various departments and systems within a company. For instance, a separate marketing technology stack handles all website and app analytics, and these systems might not communicate with one another effectively. Furthermore, you might have separate data regarding the customer’s initial touchpoint—for example, was it a social media ad, a Google search ad that led them to the site, or perhaps even a ChatGPT search query.”
Traditional IVR systems, defined by their static pathways and inability to manage context, are steadily being replaced by Voice AI that can understand intent, recall past conversations, and handle transactional resolution tasks previously reserved for human agents.
However, the path to fully autonomous and seamless Voice AI is not without its hurdles. The success of these deployments hinges on mastering complex engineering challenges like perfectly accurate turn detection and mitigating environmental noise through voice isolation tools. Crucially, the intelligence of the system is only as good as its fuel; deep, conversational AI requires extensive, strategic data integration from disparate systems like ERPs and CRMs.
While Voice AI is decisively replacing the rigid core of IVR, the smart approach is to focus on high-volume, low-complexity use cases first. The ultimate goal, represented by the development of sophisticated Speech-to-Speech capabilities, is a world where the spoken interaction with a business is indistinguishable from a conversation with a highly informed human expert, making every interaction immediate, flexible, and fully contextual.