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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.

Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

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Page 1: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

Chapter 05Technology in Service

McGraw-Hill/IrwinService Management: Operations, Strategy, and Information Technology, 6e

Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.

Page 2: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

Role of Technology in the Service Encounter

Technology Technology Technology

Technology Technology

Customer Customer 

Server 

Server 

Server 

Server 

Server 

CustomerCustomer

Customer

 

D. Technology-MediatedService Encounter

E. Technology-GeneratedService Encounter

A. Technology-FreeService Encounter

B. Technology-AssistedService Encounter

C. Technology-FacilitatedService Encounter

5-2

Page 3: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

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

5-3

Page 4: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill
Page 5: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

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?

5-5

Page 6: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill
Page 7: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

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

5-7

http://www.cob.sjsu.edu/kwan_s/118w/ecomm.htm

Page 8: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

Product

Promotion

Price

Placement

CustomerRelationshipManagement

Interactivity Connectivity

InternetProcess

E-ServicesPeople – customers - interface with the Service Provider1. Through a Process that represent the 4P’s and Customer Relationship Management2. Implemented on top of a platform that provides connectivity and interactivity

Kwan & Min 2008

Marketspace Model for E-Services

““For Services - the Process is the Product”For Services - the Process is the Product”

Page 9: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

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)

5-9

Page 10: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

Electronic and Traditional Services

Features Virtual Physical

Encounter Screen-to-face Face-to-face

Availability Anytime Working hours

Access From anywhere Travel to location

Market Area Worldwide Local

Ambiance Electronic interface

Physical environment

Payment Credit card Cash or check

Differentiation Convenience Personalization

Privacy Anonymity Social interaction

5-10

Page 11: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill
Page 12: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

Grocery Shopping Comparison

On-lineShopping

TraditionalShopping

Advantages ConvenienceSaves timeLess impulsebuying

See new itemsMemory triggerProduct samplingSocial interaction

Disadvantages Forget itemsLess controlNeed computerDelivery fee

Time consumingWaiting linesCarry groceriesImpulse buying

5-12

Page 13: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

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

5-13

Page 14: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

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

5-14

Page 15: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

Economics of Scalability

Dimensions High Scalability Low

E-commerce continuum

Sellinginformation(E-service)

Selling value-added service

Sellingservices 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

5-15

Page 16: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

Adoption of New Technology in Services

Challenges of Adopting New TechnologyThe Process is the ProductBack Office vs Front Office

ChangesNeed for Standardization

Readiness to Embrace New Technology The Case of Radio Frequency

Identification

5-16

Page 17: Chapter 05 Technology in Service McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill

5-17


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