technology in services bmgmt 3101 | service operation management prepared by facilitator’s name
TRANSCRIPT
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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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BMGMT3102| Service Operation Management
FEATURES VIRTUAL SERVICE PHYSICAL SERVICE
Service Encounter
Availability
Access
Market Area
Ambiance
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BMGMT3102| Service Operation ManagementADVANTAGES ONLINE SHOPPING
PHYSICAL SHOPPING
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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.
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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).
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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
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BMGMT3102| Service Operation Management
Amazon.com
• Discussion:
– What were / are the key drivers of success?
– What role has technology played?
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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