Technology in ServicesBMGMT 3101| Service Operation Management

Prepared by Facilitator’s Name

Week 4Technology in Service

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

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

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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.

5-3

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

5-4

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

5-5

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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?

5-6

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

5-7

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

5-8

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

5-10

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

5-11

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

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

5-12

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

FEATURES VIRTUAL SERVICE PHYSICAL SERVICE

     

Service Encounter    

Availability    

Access    

Market Area    

Ambiance    

 

 

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation ManagementADVANTAGES ONLINE SHOPPING

PHYSICAL SHOPPING

     

     

     

     

     

     

     

     

     

     

     

     

     

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

TECHNOLOGICAL INNOVATION IN SERVICES

• The great gains in agricultural and manufacturing productivity came from

the substitution of technology for human effort.

• Technology need not be confined to hardware and machines, however. It

also includes innovative systems, such as electronic funds transfer or

automated multiphasic health testing.

• In manu facturing, the introduction of technological innovations goes

unnoticed by con sumers, but such innovations become an integral part of

the service that is pro vided.

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

Challenges of Adopting New Technology in Services

• For services, "the process is the product," because customers participate

directly in the service delivery.

• Therefore, the success of technological innovations, par ticularly for the

front office, depends on customer acceptance.

• The impact on cus tomers is not always limited to a loss of personal

attention.

• Customers also may need to learn new skills (e.g., how to operate an

automatic teller machine or pump gasoline), or they may have to forgo

some benefit (e.g., loss of float through the use of electronic funds transfer).

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation ManagementChallenges of Adopting New Technology in Services

• As internal customers, employees also are affected by new technology and

often need retraining.

• Service has to be standardize.

• Other examples of this need to standardize occurred in retailing with the ac

ceptance of the Universal Product Code (UPC) by manufacturers.

• Retailers who have adopted the UPC can use laser scanners to read a bar

code (i.e., a series of vertical stripes of different widths) on products.

Consequently, they can use a computer to register sales and update

inventory levels simultaneously

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

Amazon.com

• Discussion:

– What were / are the key drivers of success?

– What role has technology played?

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation ManagementDiscussion

• Name

1. An existing service that could be improved by new technology

2. A new service that could be introduced if new technology were

developed

3. A technology that hasn’t yet converged to a service

ALL RIGHTS RESERVEDNo part of this document may be reproduced without written approval from Limkokwing University of Creative Technology Worldwide

INSERT FACULTY NAME HERE

BMGMT3102| Service Operation Management

End of Lecture