1. Chapter 05 Technology in Service
McGraw-Hill/Irwin
Service Management: Operations, Strategy, and Information Technology, 6e
Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.

2. Learning Objectives
Describe the five roles of technology in the service encounter.
Give industry examples of the evolution of self-service from human contact, to machine assisted, to electronic service.
Describe the eight uses of web sites.
Describe and differentiate the eight generic E-business models.
Explain what is meant by scalability an how its is relevant to E-commerce.
Describe the managerial issues associated with the adoption of new technology.
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3. Role of Technology in the Service Encounter
Technology
Technology
Technology
Customer
Server
Customer
Server
Customer
Server
A. Technology-Free
Service Encounter
B. Technology-Assisted
Service Encounter
C. Technology-Facilitated
Service Encounter
Technology
Technology
Customer
Server
Customer
Server
D. Technology-Mediated
Service Encounter
E. Technology-Generated
Service Encounter
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4. Evolution of Self-service
Service Industry
Human Contact
Machine Assisted
Internet Facilitated
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
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5. Self-service Technologies (SST) Challenges
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?
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6. Classification of Service Automation
Fixed-sequence (F) - parking lot gate
Variable-sequence (V) - ATM
Playback (P) - answering machine
Numerical controlled (N) - animation
Intelligent (I) - autopilot
Expert system (E) - medical diagnosis
Totally automated system (T) - EFT
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7. 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
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8. Purpose of Web-sites Retail channel (Amazon.com)
Supplemental channel (Barnes & Nobel)
Technical support (Dell Computer)
Embellish existing service (HBS Press)
Process orders (Delta Airline)
Convey information (Kelly Blue Book)
Communicate with membership (POMS.org)
Play games (Treeloot.com)
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9. Electronic and Traditional Services
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10. Grocery Shopping Comparison
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11. E-Business Models Content Provider: Reuters Direct-to-Customer: Dell
Full-Service Provider: GE Supply Co.
Intermediary: eBay
Shared Infrastructure: SABRE
Value Net Integrator: 7-Eleven Japan
Virtual Community: Monster.com
Whole-of-Enterprise: Government
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12. 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
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13. Economics of Scalability
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 IT support
Online retailer
Example Firm
Kbb.com
Biztravel.com
Everdream.com
Amazon.com
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14. Adoption of New Technology in Services
Challenges of Adopting New Technology The Process is the Product Back Office vs Front Office Changes Need for Standardization
Readiness to Embrace New Technology
The Case of Radio Frequency Identification
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15. 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?
What could be the explanation for the high customer satisfaction scores in Table 5.6 for Internet services?
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16. Amazon.com
How would you contrast Amazon’s business design with that of Barnes & Noble before Barnes & Noble went online?
What are the advantages and disadvantages of each of the two designs?
Is Amazon.com a model for the future of retailing?
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