Chapter

1
5
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.

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Role of Technology in the Service Encounter
 

4
Evolution of Self-service
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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?

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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)
• 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)
• 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

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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)

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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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Internet Models

• Internet access providers
• Firms such as America online provide access to
  World Wide Web and email 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

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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

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Continued..

• Shared Infrastructure
• 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

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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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Electronic and Traditional Servicestable 5.3,
pp. 114
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Grocery Shopping Comparisontable 5.4, pp. 114
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Service Product Dimensions

• Electronic services are intangible
• Heterogeneity due to different perceptions of
  customers (depends on your speed of connection,
  your computers ability, your level of knowledge)
• Simultaneous delivery and consumption of
  electronic services

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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)

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Economics of Scalability Table 5.5, pp. 116
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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

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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

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Topics for Discussion

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