1. Chapter – 5 Technology in Services
Service Management (5e)
Operations, Strategy, Information Technology By
Fitzsimmons and Fitzsimmons
Chapter – 5
Technology in Services

2. Learning Objectives
Discuss the of technology in the service encounter.
Describe the emergence of self-service.
Place an example of service automation in its proper category.
Describe different Internet business models.
Understand the importance of scalability to e-commerce success.
Discuss the managerial issues associated with the adoption of new technology.

3. Role of Technology in the Service Encounter
Technology
Customer
Server
D. Technology-Mediated
Service Encounter
E. Technology-Generated
A. Technology-Free
B. Technology-Assisted
C. Technology-Facilitated

4. Evolution of Self-service
Service Industry
Human Contact
Machine Assisted Service
Electronic Service
Banking
Teller
ATM
Online banking
Grocery
Checkout clerk
Self-checkout station
Online order/ pickup
Airlines
Ticket agent
Check-in kiosk
Print boarding pass
Restaurants
Wait person
Vending machine
Online order/ delivery
Movie theater
Ticket sale
Kiosk ticketing
Pay-for-view
Book store
Information clerk
Stock-availability terminal
Online shopping
Education
Teacher
Computer tutorial
Distance learning
Gambling
Poker dealer
Computer poker
Online poker

5. Self-service Technologies (SST)
Does customer adoption of self-service follow a predictable pattern?
How do we measure self-service quality (e.g., ease of use, enjoyment, and/or control)?
What is the optimal mix of SST and personal service for a service delivery system?
How do we achieve continuous improvement when using SST?
What are the limits of self-service given the loss of human interaction?

6. Classification of Service Automation
Fixed-sequence (F) –
A machine that repetitively performs successive steps in a given operation according to a predetermined sequence, condition, and position, and whose set information cannot be changed easily. Example, automatic parking lot gate
Variable-sequence (V) –
A machine that is the same as a fixed-sequence robot but whose set information can be changed easily. Example, ATM machine
Playback (P) –
A machine that can produce operations from memory that were originally executed under human control. Example, answering machine

7. Continued….. Numerical controlled (N) – Intelligent (I) –
A machine that can perform a given task according to a sequence, conditions, and a position as commanded by stored instructions that can be reprogrammed easily. Example, animated characters at an amusement park
Intelligent (I) –
A machine with sensory perception devices, such as visual or tactile receptors, that can detect changes in the work environment or task by itself and has its own decision-making abilities. Example, autopilot for a commercial plane

8. Continued….. Expert system (E) – Totally automated system (T) –
A computer program that uses an inference engine (i.e decision rule) and a knowledge base (i.e. information on a particular subject) to diagnose problems. Example, maintenance troubleshooting for elevator repair
Totally automated system (T) –
A system of machines and computers that performs all the physical and intellectual tasks that are required to produce or deliver a service. Example, electronic funds transfer

9. Purpose of Web-site A retail channel (Amazon.com)
These firms sell exclusively through the Internet
Supplemental channel (Barnes & Nobel)
Buy in-store or on-line
Technical support (Dell Computer)
Embellish existing service (HBS Press)
Cases that you can get on-line instead of typically being mailed
Order processing (Delta Airline)
Electronic tickets

10. Continued….. Convey information (Kelly Blue Book)
Communicate with membership (POMS.org)
To play games (Treeloot.com)

11. Technology Convergence Enabling E-Business
Internet
Global telephone system
Communications standard TCP/IP (Transfer Control Protocol/Internet Protocol)
Addressing system of URLs
Personal computers and cable TV
Customer databases
Sound and graphics
User-friendly free browser

12. Internet Models Internet access providers Portal Information content
Firms such as America online provide access to World Wide Web and service.
Portal
They provide a variety of service that include information searching, news, white and yellow pages, etc. – Example google, Yahoo.
Information content
Use Internet to provide news, example The New York Times
Online Retailers
Example, Amazon.com
Transaction enablers
Stock trading
Market makers – online auction, example ebay

13. E-Business Models (Weill & Vitale, Place to Space, HBS Press, 2001)
Content Provider:
Provides content (information, digital products, and services). Example, Reuters, a British news agency
Direct to Customer:
Provides goods or services directly to the customer. Example, Dell
Full-Service Provider:
Provides a full range of services in one domain. Example, financial, health, industrial, chemical) directly and via allies. Example, General Electric Supply.
Intermediary:
Brings together buyers and suppliers by concentrating information. Example, eBay

14. Continued….. Shared Infrastructure: Value Net Integrator:
Brings together multiple competitors to cooperate by sharing common IT infrastructure. Example, SABRE reservations system
Value Net Integrator:
Coordinates activities across the value net by gathering, synthesizing, and distributing information. Example, 7-Eleven Japan
Virtual Community:
Creates and facilitates an online community of people with a common interest, enabling interaction and service provision. Example, Monster.com, the job placement firm.
Whole-of-Enterprise:
Provides a firmwide single point of contact, consolidating all services provided by a large multiunit organization. Example, U.S. federal Government

15. Economics of E-Business
Sources of Revenue:
Transaction fees
Information and advice
Fees for services and commissions
Advertising and listing fees
Ownership
Customer relationship
Customer data
Customer transaction

16. Electronic and Traditional Services table 5.3, pp. 114

17. Grocery Shopping Comparison table 5.4, pp. 114

18. Service Product Dimensions
Electronic services are intangible
Heterogeneity due to different perceptions of customers (depends on your speed of connection, your computer’s ability, your level of knowledge)
Simultaneous delivery and consumption of electronic services

19. Service Process Dimensions
Service processes can be categorized by
Degree of customer contact and interaction
Degree of labor intensity
Degree of customization
Electronic services differ from traditional service
Customer contact
Customization
Labor intensity
To provide electronic service a firm has
On-line part, where the customer interacts (like front-office)
Of-line part, which helps on-line part to happen (like back-office)

20. Economics of Scalability Table 5.5, pp. 116
Dimensions
High Scalability Low
E-commerce continuum
Selling
information
(E-service)
Selling value-
added service
services with
goods
Selling goods
(E-commerce)
Information vs. Goods Content
Information dominates
Information with some service
Goods with support services
Goods dominate
Degree of Customer Content
Self-service
Call center backup
Call center support
Call center order processing
Standardization vs. Customization
Mass distribution
Some personalization
Limited customization
Fill individual orders
Shipping and Handling Costs
Digital asset
Mailing
Shipping
Shipping, order fulfillment, and warehousing
After-sales service
None
Answer questions
Remote maintenance
Returns possible
Example Service
Used car prices
Online travel agent
Computer support
Online retailer
Example Firm
Kbb.com
Biztravel.com
Everdream.com
Amazon.com

21. Adoption of New Technology in Services
Challenges of Adopting New Technology
Customer education of the use of technology
Customer acceptance
Employee training
Integration with existing technology
Industry standards
Managing change

22. Continued….. Managing the New Technology Adoption Process
Japanese model vs American model of introducing change
Ten step process with concern for employees and customers
Orientation and education
Technology opportunity analysis
Application requirements analysis
Functional specifications
Design specifications
Implementation planning
Equipment selection and control commitments
Implementation
Testing of technology
Review of results

23. Topics for Discussion
Can an Internet service encounter be a memorable experience?
How does the economics of scalability explain the failure of Living.com, an online furniture retailer?
What are the characteristics of early adopters of self-service?
How can we design for self-recovery when self-service failure occurs?