5 Technology in Services Copyright © 2006 by The McGrawHil Companies, Inc. Al rights reserved. McGrawHil /Irwin
5-3 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.
5-4 Role of Technology in the Service Encounter Technology Technology Technology Customer Server Customer Server Customer Server A. Technology-Free B. Technology-Assisted C. Technology-Facilitated Service Encounter Service Encounter Service Encounter Technology Technology Customer Server Customer Server D. Technology-Mediated E. Technology-Generated Service Encounter Service Encounter
5-5 Evolution of Self-service Service Industry Human Contact Machine Assisted Electronic Service Service Banking Tel er 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
5-6 Self-service Technologies (SS S T ST) Does customer adoption of self-service fol ow 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?
5-7 Classifica cation of Service Au Automation Fixed-sequence (F) – parking lot gate Variable-sequence (V) – ATM Playback (P) – answering machine Numerical control ed (N) – animation Intel igent (I) – autopilot Expert system (E) – medical diagnosis Total y automated system (T) – EFT
5-8 Purpose of Web-site A retail channel (Amazon.com) Supplemental channel (Barnes & Nobel) Technical support (Del Computer) Embel ish existing service (HBS Press) Order processing (Delta Airline) Convey information (Kel y Blue Book) Organization membership (POMS.org) Games (Treeloot.com)
5-9 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
5-10 E- E-Business Models (Weil & Vitale, Place to Space, HBS Press, 2001) Content Provider: Reuters Direct to Customer: Del Ful -Service Provider: GE Supply Co. Intermediary: eBay Shared Infrastructure: SABRE Value Net Integrator: 7-Eleven Japan Virtual Community: Monster.com Whole-of-Enterprise: Government
5-11 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
5-12 Electronic and Traditional Servi vices 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 Physical interface environment Payment Credit card Cash or check Differentiation Convenience Personalization Privacy Anonymity Social interaction
5-13 Grocery y Shopping Compariso son On-line Traditional Shopping Shopping Advantages Convenience See new items Saves time Memory trigger Less impulse Product sampling buying Social interaction Disadvantages Forget items Time consuming Less control Waiting lines Need computer Carry groceries Delivery fee Impulse buying
5-14 Economics of Scalability Dimensions High Scalability Low E-commerce Selling Sel ing value- Sel ing Sel ing goods continuum information added service services with (E-commerce) (E-service) goods Information vs. Information Information with Goods with Goods dominate Goods Content dominates some service support services Degree of Self-service Cal center Call center support Cal center order Customer Content backup processing Standardization vs. Mass distribution Some Limited Fill individual orders Customization personalization customization Shipping and Digital asset Mailing Shipping Shipping, order Handling Costs fulfil ment, and warehousing After-sales service None Answer questions Remote Returns possible maintenance Example Service Used car prices Online travel Computer support Online retailer agent Example Firm Kbb.com Biztravel.com Everdream.com Amazon.com
5-15 Ad Adoption of New Technology in Services Chal enges of Adopting New Technology The Process is the ProductBack Office vs Front Office ChangesNeed for Standardization Managing the New Technology Adoption Process Ten step process with concern for employees and customers
5-16 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?
5-17 Interactive ve Exerci cise The class breaks into smal groups and each comes up with an Internet site that they believe wil be successful in the long run and explain why.
5-18 Amazon.com How would you contrast Amazon’s 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? Wil 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?
5-19 Evolution of B2C E- E-Commerce ce in Japan 1. What features of the 7-Eleven Japan distribution system il ustrate the “Value Net Integrator” e-business model? 2. Does the 7-Eleven Japan distribution system exhibit scalability economics? 3. How does the 7-Eleven example of B2C e-commerce in Japan il ustrate the impact of culture on service system design? 4. Wil the 7-Eleven “Konbini and Mobile” system be adopted in the United States?
5-21 E-Business ss Supply Chain (Network) Elements Major entities including firm of interest and its customers, suppliers, and al ies Major flows of product, information, and money Revenues and other benefits each participant receives Critical aspects: participants, relationships, and flows Example: 7-Eleven Japan