Chapter 5Chapter 5Technology in Technology in

ServiceService

Learning ObjectivesLearning Objectives

1.1. The role of technology in the service The role of technology in the service encounter.encounter.

2.2. Describe the emergence of self-service.Describe the emergence of self-service.

3.3. Place an example of service automation in Place an example of service automation in its proper category.its proper category.

4.4. Describe different Internet business Describe different Internet business models.models.

5.5. Understand the importance of scalability to Understand the importance of scalability to e-commerce success.e-commerce success.

6.6. Discuss the managerial issues associated Discuss the managerial issues associated with the adoption of new technology.with the adoption of new technology.

Role of TechnologyRole of Technology 

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

Personal Care, Professional services

MRI, Optometrist, Airlines Financial

planner

Tech call center, House arrest monitoring ATM, Web based info, checkout scanning,

airport kiosks

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

Evolution of Self-Evolution of Self-serviceservice

Classification of Service Classification of Service AutomationAutomation

1.1. Fixed-sequence (F) Fixed-sequence (F) automatic tollbooth, automatic tollbooth,

newspaper dispensernewspaper dispenser 2.2. Variable-sequence (V) Variable-sequence (V) ATM, car wash, ATM, car wash,

collating copy machinecollating copy machine

3.3. Playback (P) Playback (P) directory assistance, directory assistance, answering answering

machine, spell checkmachine, spell check

4.4. Numerical controlled (N) Numerical controlled (N) IRS Forms, IRS Forms,

animationanimation

5.5. Intelligent (I) Intelligent (I) autopilot, computer games, Doppler autopilot, computer games, Doppler

radarradar

6.6. Expert system (E) Expert system (E) car diagnostics, car diagnostics, medical diagnosis, medical diagnosis,

stock tradingstock trading

7.7. Totally automated system (T) Totally automated system (T) telemarketing, telemarketing,

eft, space shuttleeft, space shuttle

Self-service Self-service Technologies (SST)Technologies (SST)

1.1. Does customer adoption of self-service Does customer adoption of self-service follow a predictable pattern? follow a predictable pattern? ffrequently asked requently asked

questionsquestions

2.2. How do we measure self-service quality?How do we measure self-service quality?ease of use, enjoyment, controlease of use, enjoyment, control

3.3. What is the optimal mix of SST and What is the optimal mix of SST and personal service for a service delivery personal service for a service delivery system? system? low vs. high touch low vs. high touch

4.4. How do we achieve continuous How do we achieve continuous improvement when using SST? improvement when using SST? feedback (feed feedback (feed

forward)forward)

5.5. What are the limits of self-service given the What are the limits of self-service given the loss of human interaction? loss of human interaction? lloss of social oss of social

interactioninteraction

Purpose of Web-Purpose of Web-sitesite

1.1. A retail channel A retail channel Amazon.comAmazon.com

2.2. Supplemental channel Supplemental channel Barnes & NobelBarnes & Nobel

3.3. Technical support Technical support Dell ComputerDell Computer

4.4. Embellish existing service Embellish existing service HBR, News HBR, News

websiteswebsites

5.5. Order processing Order processing Airlines, Expedia.comAirlines, Expedia.com

6.6. Convey information Convey information Kelly Blue Book, Dr. Kelly Blue Book, Dr.

KoopKoop

7.7. Organization membership Organization membership asq.orgasq.org

8.8. Games Games treeloot.com treeloot.com

Internet ModelsInternet Models

1.1. Internet Access Providers Internet Access Providers AOL, AOL,

MSNMSN

2.2. Portal Portal Yahoo, Search, DirectoriesYahoo, Search, Directories

3.3. Information Content Information Content News, Hoover’sNews, Hoover’s

4.4. Online Retailer Online Retailer amazon, gardenamazon, garden

5.5. Transaction Enablers Transaction Enablers e-e-

tradetrade

6.6. Market Makers Market Makers ebayebay

E-Business ModelsE-Business Models1.1. Content Provider Content Provider new new

agenciesagencies 2.2. Direct to Customer Direct to Customer Dell, GatewayDell, Gateway

3.3. Full-Service Provider Full-Service Provider GE SupplyGE Supply

4.4. IntermediaryIntermediary ebayebay

5.5. Shared InfrastructureShared Infrastructure Airline Airline

SABRESABRE

6.6. Value Net Integrator Value Net Integrator 7-Eleven Japan7-Eleven Japan

7.7. Virtual CommunityVirtual Community Monster.com Monster.com

8.8. Whole-of-Enterprise Whole-of-Enterprise US Federal US Federal

GovernmentGovernment

Electronic and Traditional Electronic and Traditional ServicesServices

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 Electronic interface

Physical environment

Payment Credit card Cash or check

Differentiation Convenience Personalization

Privacy Anonymity Social interaction

Grocery Shopping Grocery Shopping ComparisonComparison

On-line Shopping

Traditional Shopping

Advantages Convenience Saves time Less impulse buying

See new items Memory trigger Product sampling Social interaction

Disadvantages Forget items Less control Need computer Delivery fee

Time consuming Waiting lines Carry groceries Impulse buying

Economics of ScalabilityEconomics of Scalability(revenue-variable costs)(revenue-variable costs)

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 support Online retailer

Example Firm Kbb.com Biztravel.com Everdream.com Amazon.com

Topic for Open Topic for Open DiscussionDiscussion

Can an Internet service Can an Internet service encounter be a memorable encounter be a memorable experience?experience?