1. Service Operations Management: The total experience SECOND EDITION
Chapter Twelve
Digital Service Operations Management

2. The Digital World Often described as disruptive technologies.
Digital services embrace various applications; although invariably recognizable as being internet based, automated, integrated with other systems, and, importantly, requiring minimal human interaction.
Significant changes resulting from Artificial Intelligence (AI), Data Analytics, Social network platforms, and robotics.
We need to be prepared for many of the services we manually do today to be automated using AI.

3. E-Service integration
There are significant differences between face-to-face service operations with a customer (high contact intensity - either internal or external to the organization) and electronic media, whether it is fax, voice over internet protocol (VOIP), telephone or the internet.
Computer-telephone integration (CTI) links together existing computer and telephone resources for faster, easier call processing and the intelligent routing of calls based upon customer-specific criteria such as service priority or individual need or preference.

4. Computer-telephone integration
Computer-telephone integration (CTI) is a common-sense merger of existing technologies linking a company's voice processing and data processing resources.
A CTI system allows information to be exchanged between the voice and data environments so a call and the caller's associated data are automatically and simultaneously delivered to the proper customer service advisor.
CTI is a tool that helps companies do what they already do - service customers - only better, cheaper and faster.

5. Fig 12.1 Computer-telephone integrated system

6. E-Service challenges
Engaging with a customer ‘live’ in real-time holds challenges of supplying accurate and timely information in a manner applicable to the needs of the customer.
When a customer interacts with an organization’s web page, with no opportunity for no real-time interaction, new challenges become apparent.
The relationship between the customer base and the organization is now a subliminal relationship based on tangible and intangible expectations.

7. Customers’ Perception of e-Service Operations
When the customer relationship is via an e-service operation, it might be stated that:
The customer’s expectation of the e-service is derived from prior experience (not necessarily with ours, possibly with our competitor), from gleaned perceptions and with positive anticipation.
This means that it can be just as important to manage customers' perceptions about the service as it is to manage the reality of the actual service.

8. Fig. 12.2. Customers perception of e-service operations

9. Reliability (Trust) and Responsiveness (Support)
Reliability is the organization’s ability to perform the promised service dependably and accurately. Customers interpret this as trust; in other words, customers invest their confidence in the ability of the organization to do what they say.
Responsiveness is willingness to help customers and provide prompt service; and is able to respond when the customer needs help. One of the ways competitors are able to create an opportunity to develop business with a new customer is to do for them the things that their existing suppliers will not.

10. Assurance, Empathy and Tangibles
Assurance is conveyed to customers in the knowledge and courtesy of employees and their ability to convey trust and confidence. Some businesses have recognized the importance of customer assurance and give guarantees that prove to customers they mean what they say.
Empathy is the caring and individualized attention that the organization provides. It involves seeing things from the customer's perspective rather than customers seeing things from the organization’s perspective.
Tangibles represent the physical appearance of the web site and its operational simplicity.

11. The e-service environment: operation management and customers
Born-global organizations, that from their very inception trade globally, and with new capabilities, deconstruct conventional trading channels. Whole layers are removed by superior e-services and disintermediation.
The qualities of good leadership are enormously important for creating the culture needed to exploit the new capabilities and to absorb present and future volatility.

12. Fig. 12.3 What people are currently doing on the internet
Social Network/
Fig What people are currently doing on the internet

13. Fig. 12.4 What people would like to do on the internet

14. Fig. 12.5 What businesses do on the internet

15. Fig. 12.6 What businesses would like to do on the internet

16. Skills of e-service operations managers
The unprecedented changes in technology we have seen in the last thirty years have led to new patterns of thinking, especially in early-career managers.
changes in behavior of the younger managers, many of which have been noticed individually, but which have been rarely, if ever, grasped in their totality;
these changes are creating, and will continue to create, important paradigm shifts in service operation models.
The new e-service operations management will be much more directly influenced by those whom they lead, in a true form of democratization.

17. e-Relationship Management
e-Relationship building (between the customer and the online service provider), needs to determine:
How the service provider will find the customer online – ‘who’
How a relationship can be developed over time – ‘how’
How the connectivity will be maintained – ‘why’
How the e-service meets the customer’s perception and expectation
How feedback will be established to ensure the e-service can be improved

18. Reach, Richness and Affiliation
The reach aspect of e-service relationship management is concerned with the organization’s access and connectivity with customers using their web-based interface.
Richness, describes the depth and detail of the two-way flow of information between the online service provider and the customer.
Affiliation is concerned with enabling better connectivity between the service provider and the customer.

19. Customer orientation
Customer orientation is not just rhetoric or an attitude of mind – it is a philosophy; it is a complete way of working; and encompasses the following principles:
Your customers are the greatest asset and developing and conserving this asset is the central task of e-relationship management
This is achieved by understanding customers' needs better than competitors - understanding these needs better than the competition is the key competitive advantage
Understanding customers’ needs will only be possible if customers come first.

20. Customer interaction with e-services
The amount of time people will tolerate searching for information on a web site before frustration overtakes them, or time people are prepared to wait for their telephone call to be answered, are examples of e-service quality measures that organizations need to understand.
The answer to the basic question of how long people are prepared to wait and search will always depend on the factors affecting customer tolerance; with more important factors being motivation and availability of substitutes

21. Fig. 12.7 E-relationship development

22. Fig. 12.8 Internet users by age 2008-09
Source: ABS 2009

23. Source: ABS 2009
Fig Internet users by income

24. Table. 12.1. Internet sales Australia, UK and USA
Source: PayPal (2010), Frost and Sullivan (2010), IBIS world (2010), Access Economics estimates

25. International dimensions of services
The phrases think globally but act nationally and local in focus but global in context are used frequently these days and give emphasis to the need to ensure that the local market and customer is central to the operations.
From an e-service perspective, especially when associated with the internet and call centre international perspective, customer service can be divided into two main broad categories:
Systems-driven e-service operations
Relationships-driven service