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Technology in Service
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Learning Objectives
Discuss the of technology in the serviceencounter.
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 associatedwith the adoption of new technology.
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Role of Technology in the Service Encounter
Technology Technology Technology
Technology Technology
Customer Customer Server Server
Server Server
Server
CustomerCustomer
Customer
D. Technology-Mediated
Service Encounter
E. Technology-Generated
Service Encounter
A. Technology-Free
Service Encounter
B. Technology-Assisted
Service Encounter
C. Technology-Facilitated
Service Encounter
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Evolution of Self-service
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
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Self-service Technologies (SST)
Does customer adoption of self-service followa 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 personalservice for a service delivery system?
How do we achieve continuous improvementwhen using SST?
What are the limits of self-service given theloss of human interaction?
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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
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Purpose of Web-site A retail channel (Amazon.com)
Supplemental channel (Barnes & Nobel)
Technical support (Dell Computer)
Embellish existing service (HBS Press)
Order processing (Delta Airline)
Convey information (Kelly Blue Book)
Organization membership (POMS.org)
Games (Treeloot.com)
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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
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E-Business Models
(Weill & Vitale,Place to Space, HBS Press, 2001)
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
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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
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Grocery Shopping Comparison
On-lineShopping
Tr itionalShopping
Advantages ConvenienceSaves timeLess impulsebuying
See new itemsMemory triggerProduct samplingSocial interaction
Disadvan
tages Forget itemsLess control
Need computerDelivery fee
Time consumingWaiting linesCarry groceriesImpulse buying
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Economics of ScalabilityDimensions High Scalability Low
E-commerce
continuum
Selling
information
(E-service)
Selling value-
added service
Selling
services with
goods
Selling goods
(E-commerce)
Information vs.
Goods Content
Information
dominates
Information with
some service
Goods with support
services
Goods dominate
Degree of CustomerContent Self-service Call center backup Call center support Call center orderprocessing
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
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Adoption of New Technology in
Services
Challenges of Adopting New Technology
The Process is the Product
Back Office vs Front Office ChangesNeed for Standardization
Managing the New Technology Adoption
Process
Ten step process with concern foremployees and customers
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Topics for Discussion
1. Can an Internet service encounter be amemorable experience?
2. How does the economics of scalability
explain the failure of Living.com, an onlinefurniture retailer?
3. What are the characteristics of earlyadopters of self-service?
4. How can we design for self-recovery whenself-service failure occurs?
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Interactive Exercise
The class breaks into small groups and
each comes up with an Internet site that
they believe will be successful in thelong run and explain why.
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Amazon.com
How would you contrast Amazons businessdesign 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 achieveprofitability?
Will Amazon continue to be successfulagainst click and mortar competitors, suchas Barnes & Nobel, which go online?
Is Amazon.com a model for the future of
retailing?
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Evolution of B2C E-Commerce in Japan
1. What features of the 7-Eleven Japandistribution system illustrate 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 illustrate the impact ofculture on service system design?
4. Will the 7-Eleven Konbiniand Mobilesystem be adopted in the United States?
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E-Business Supply Chain
(Network) Elements Major entities including firm of interest and its
customers, suppliers, and allies
Major flows of product, information, andmoney
Revenues and other benefits each participantreceives
Critical aspects: participants, relationships,and flows
Example: 7-Eleven Japan