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Technology in Service

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 ecommerce success.
Discuss the managerial issues associated with
the adoption of new technology.

Role of Technology in the Service Encounter

Technology

Customer

Technology

Server

A. Technology-Free
Service Encounter

Customer

Technology

Server

B. Technology-Assisted
Service Encounter

Technology

Customer

Customer

C. Technology-Facilitated
Service Encounter

Technology

Server

D. Technology-Mediated
Service Encounter

Customer

Server

Server

E. Technology-Generated
Service Encounter

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

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?

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

Purpose of Web-site

A retail channel (Amazon.com)


Supplemental channel (Barnes & Nobel)
Technical support (Dell Computer)
Embellish existing service (HBS Press)
Order processing (Delta Airline)
Convey information (Kelly Blue Book)
Organization membership (POMS.org)
Games (Treeloot.com)

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

E-Business Models
(Weill & Vitale, Place to Space, HBS Press, 2001)

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

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

Electronic and Traditional Services


Features

Electronic

Traditional

Encounter

Screen-to-face

Face-to-face

Availability

Anytime

Working hours

Access

From anywhere

Travel to location

Market Area

Worldwide

Local

Ambiance
Payment

Electronic
interface
Credit card

Physical
environment
Cash or check

Differentiation

Convenience

Personalization

Privacy

Anonymity

Social interaction

Grocery Shopping Comparison


On-line
Shopping
Advantages

Convenience
Saves time
Less impulse
buying
Disadvantages Forget items
Less control
Need computer
Delivery fee

Traditional
Shopping
See new items
Memory trigger
Product sampling
Social interaction
Time consuming
Waiting lines
Carry groceries
Impulse buying

Economics of Scalability
Dimensions

High

Scalability

Low

E-commerce
continuum

Selling
information
(E-service)

Selling valueadded service

Selling
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

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
Managing the New Technology Adoption
Process
Ten step process with concern for
employees and customers

Topics for Discussion


1.
2.

3.
4.

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?

Interactive Exercise
The class breaks into small groups and
each comes up with an Internet site that
they believe will be successful in the
long run and explain why.

Amazon.com

How would you contrast Amazons business


design with that of Barnes & Noble before
Barnes & Noble went online?
Why has Amazon.com not turned a profit yet and
what needs to be done to achieve profitability?
Will Amazon continue to be successful against
click and mortar competitors, such as Barnes &
Nobel, which go online?
Is Amazon.com a model for the future of
retailing?

Evolution of B2C E-Commerce in Japan


1.

2.
3.

4.

What features of the 7-Eleven Japan


distribution system illustrate the Value Net
Integrator e-business model?
Does the 7-Eleven Japan distribution system
exhibit scalability economics?
How does the 7-Eleven example of B2C ecommerce in Japan illustrate the impact of
culture on service system design?
Will the 7-Eleven Konbini and Mobile system
be adopted in the United States?

E-Business Supply Chain


(Network) Elements

Major entities including firm of interest and its


customers, suppliers, and allies
Major flows of product, information, and money
Revenues and other benefits each participant
receives
Critical aspects: participants, relationships, and
flows
Example: 7-Eleven Japan