How does an IVR work?

It’s 2020, age of automation and we are sure you must be considering setup an IVR for your business need. So let’s dive more into the technical aspect of how does an IVR work.

In technical terms, IVR is a technology that allows a computer to interact with humans through the use of voice and Dual Tone Multi-Frequency (DTMF) tones input via a keypad. This means IVR allows computers to interact with the customers before their call can be automatically transferred to the concerned agent or department.

How does IVR work

For example: If you wish to book an air ticket and you call the ABC airline. Firstly an IVR system will greet you with an automated pre-rerecorded message. Next, it will ask some set of questions like:

Press 1 to book a new ticket.
Press 2 to cancel an existing ticket.
Press 3 to upgrade your booking.

In this case, you want to book a new ticket therefore you press 1. And the IVR gets into more details and ask you further in-depth questions:

Press 1 if you wish to book a domestic flight.

Press 2 if you wish to book an international flight.

This way IVR directs you to the agent or department, which specializes in your area of concern. This further means it saves your time by not talking to random agents who cannot be of your help. If you wish to know more about IVR systems, please go through this guide, which will help you clear your basics about IVR.

So let us understand how does an IVR work?

A typical IVR system is based on Computer Telephony Integration or CTI technology. A traditional IVR system consists of telephony equipment, software applications, a database, and the support infrastructure. To start with, the computer should be connected to the company’s telephone line.

IVR software has to be installed onto a computer, and a special piece of hardware called a telephony board, or telephony card, is required to identify the DTMF.

Some details illustrating the requirements:

IVR system
  • TCP/IP network: This is the internet network that serves to provide Internet and intranet connectivity.
  • Databases: real-time information that can be accessed by the IVR applications.
  • Web/application server: this can be viewed as the home of Interactive Voice Response system software. One thing to note is that there are several different applications designed to perform various functions.

How does an IVR work at the Backend in detail:

When a customer calls you or your company, unlike the traditional call the computer will attend this call. The computer will greet the customer with a pre-recorded message set by you or your team. After listening to the options presented by IVR, the caller can choose to use DTMF tones or Speech recognition technology to answer.

IVR call flow

1. DTMF tones:

DTMF tones also called Dual-tone multi-frequency. It is the tone, which is produced when you press a button on your phone keypad. Each number key on a telephone emits two simultaneous tones: one low frequency and one high-frequency. The number one, for example, produces both a 697-Hz and a 1209-Hz tone. A computer needs special hardware known as a telephony card to understand this DTMF response. The system recognizes these tones and navigates the caller accordingly.

2. Speech Recognition:

This is a relatively newer technology as compared to DTMF tones. In this, the caller speaks their option and IVR recognizes the words. It is most useful in native languages.

Now a caller can opt for a self-service option or talk to agent option. If a caller opts for a self-help option, then the answer to the query is retrieved from a database or a pre-recorded script.

However, if the caller opts to talk with the agent then features such as call forwarding or routing help to direct the caller to the desired customer service representative. And with the help of CTI technology, the calls are available on the agent’s desktop.

How does an IVR work for the end-user:

Though it may sound a little cumbersome at the backend but it is super easy and simple for the user, hence highly encouraged to use if you want to increase customer satisfaction. When a customer calls on the business phone number, the IVR system greets the caller by playing an automated greeting message along with a list of menu options. 

These IVR options are customized as per the company’s customer service needs. However, in most of the cases, the IVR options are divided by departments, geography, or the service/product company offers. These options are self-explanatory which makes the navigation and query resolution easier for the caller. The two major kinds of IVR options used by companies are self-help options and connect with a customer service representative option.

Press 1 for Billing Related Queries
Press 2 for Product Enquiries
Press 3 for Sales Related Issues

The above options are an example of a self-service menu. These options help the customers to resolve queries without the intervention of a live agent.


We really hope that this article gives you a brief understanding of how an IVR works, what all devices it requires, and the technicalities behind it. This will also make it easier for you to choose the right IVR system for you.


If you wish to see a demo of our IVR system, please visit VirtuIVR or contact us at We will be happy to resolve your queries and give you a trial of our IVR.

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