The role of technology in services

The role of technology in the service sector has been growing along with the development of the Internet as a service channel. From the service management point of view, new phe-nomena influencing the entire nature of service business have arisen. As Heinonen and Strandvik (2005, 187) note, new electronic media, such as the Internet, has high potential for interactivity and flexibility in terms of accessibility (where) and availability (when) of services. Further, following the insights of Normann (2002, 145) three essential types of new phenomena for services in the electronic environment can be identified: 1) customers are now living in real-time economy by expecting that they get service without delays, 2) service is interactive meaning that the electronic system on the Internet through which customer is using a certain service is responding to customer’s needs, and 3) along with the Internet as a network service business has become global.

Other kind of characterization of electronic services has been suggested by Fitzsim-mons and FitzsimFitzsim-mons (2006). In their characterization the essential features of tradi-tional (physical) services are compared to the ones of electronic services. The characteriza-tion by Fitzsimmons and Fitzsimmons is depicted in Table 3.

TABLE 3. ELECTRONIC SERVICES VS.TRADITIONAL SERVICES (ADAPTED FROM FITZSIMMONS AND FITZSIMMONS

2006, 114)

Features Electronic Service Traditional Service

Service encounter Screen-to-face Face-to-face

Availability Anytime Standard working hours

Access Anywhere Travel to location

Market area Worldwide Local

Ambiance Electronic interface Physical environment

Competitive differentiation Convenience Personalization

Privacy Anonymity Social interaction

The classification presented above describes particularly well the essential differences be-tween the traditional (physical) services and electronic services. Naturally, it should be noted that this classification is not, by any means, exhaustive. In addition, some of the

characteristics presented in the table are somewhat questionable. For example, in recent years firms within different fields of service business have put effort to the development of personalized electronic services. Services that are secured with user names and passwords (user accounts) in order to provide a customer with services that are tailored according to the customer information (e.g. delivering news and other kind of information based on customers preferences) exist at least within the banking and insurance business. However, the classification provides an illustrative insight into the characteristics of electronic ser-vice environment, and thereby, is useful for the purpose of this study.

Technology can be involved in service experience in many ways. It can be seen as a sup-porting tool, assisting resource, or a crucial part of the service system enabling the service experience as a whole. In my opinion, Froehle and Roth (2004, 3) have successfully de-scribed the different roles of technology in service experience through five distinct modes.

The model is depicted in Figure 9.

FIGURE 9. TYPES OF CUSTOMER CONTACT IN RELATION TO TECHNOLOGY (ADAPTED FROM FROEHLE ANDROTH

2004, 3)

Customer

Modes of Face-to-Screen Customer Contact

D. Technology-Mediated Service Experience

E. Technology-Generated Service Experience Service

provider

Technology Technology

Customer A. Technology-Free

Service Experience

B. Technology-Assisted Service Experience

C. Technology-Facilitated Service Experience

Technology Technology Technology

Customer Service

provider Customer Service

provider Customer Service

provider

Service provider Modes of Face-to-Face

Customer Contect

Mode A (technology-free service experience) refers to the traditional service experience where a customer and a service provider are communicating together in a physical loca-tion and service is based on service provider’s physical skills, such as getting a haircut.

Mode B (technology-assisted service) describes a situation in which a service provider uses technology (e.g. technical device or software) that assists finishing the service experience.

Check-in at the airport can be mentioned as an example of technology assisted service ex-perience. Technology-facilitated service experience (mode C) refers to a situation in which a customer and a service provider are using the same technological device or system in creat-ing service experience. For example, financial advisors can show models, stock rates etc. to the customer on the screen. Customers using call-center services to support the electronic transactions on the Internet can be mentioned as an example of mode D (technology-me-diated service experience). Mode E (technology-generated service experience) refers to a situ-ation that generally refers to a Internet-based service. In this case a customer completes a service encounter in an electronic service environment without a (physical) support, help or any kind of presence of the service provider. In the service literature this mode of service experience is also defined as self-service (see e.g. Fitzsimmons and Fitzsimmons 2006, 106;

Meuter, Ostrom, Roundtree, and Bitner 2000; Bitner, Meuter, and Ostrom 2002; Boyer et al. 2002, 179).

From the conceptual point of view, “Self Service Technologies (SSTs)” is a generally es-tablished term referring to, for instance, Internet-based services, services through tele-phone or other services in which technology and/or technical interface is involved but the physical service contact is lacking (see e.g. Bateson 1985; Dabholkar 1996; Meuter et al. 2000; Rust and Kannan 2002; Curran, Meuter, and Surprenant 2003; Chen 2005).

SSTs are defined as “technological interfaces that enable customers to produce a service in-dependent of direct service employee involvement” (Meuter et al. 2000, 50). Of course one could criticize that self-service is not service at all since customers have to take care of their service needs by themselves, for instance, by using services available on the Internet. This is certainly one way to approach the issue.

However, as electronic services in many cases, such as banking, have become particu-larly common, customers perceive them and their characteristics, such as self-service logic (customers might produce the entire service outcome, or part of it, by themselves) or good accessibility, as one considerable and equal option to other service channels – despite the lack of physical contact and support. Since a possibility to get advises through telephone has been a widely utilized strategy within insurance sector already before the Internet era, and still is, SSTs are considered to include both technology-mediated and technology-gener-ated types of service experiences in this study. Nevertheless, as the goal of service environ-ment design in the scope of this study is offering comprehensive and comprehensible

elec-tronic services without any need to switch to another service channel, such as telephone, technology-generated service experiences obviously are in the main role.

In order to describe the change in how customer and service provider interact in a marketplace, a new term has been suggested to replace term marketplace in electronic ser-vice environment, namely “marketspace” (Rayport and Sviokla 1994, 1995; Lovelock and Wright 2002). The traditional term marketplace refers to the physical place where cus-tomer and service provider meet in order to do business 2002, 243). Marketspace refers to the “electronic virtual realm where products and services exist as digital information, and where customer and service provider do not meet but where they can do business elec-tronically, for example, through the Internet” (Rayport and Sviokla 1995, 14).

To conclude, technology-generated, and also technology-mediated services to some extent, are in the main focus of this study. In this regard, term “SSTs” as conceptually determining the nature of the electronic services, which are mainly based on self-service logic is used in the extant service literature. In this study, I mainly use terms “self-service logic”, “servicescape”, or “service evironment” throughout the report while referring to “SSTs”.

Whereas this sub-chapter generally characterized the role of technology in services from service provider’s viewpoint, the main attention in the next sub-chapter is paid to custom-ers.