internet service economy ppt

8/8/2019 Internet Service Economy Ppt

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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

internet service economy ppt

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