Service Operations Management

Course Introduction

• A service is any act or performance that one party can offer to another that is
essentially intangible and does not result in ownership of anything. Its
production may or may not be linked to a physical product.

• Service operations management involves understanding the requirements of

customers, managing processes through which a service is delivered and ensuring
a smooth delivery of services. Thus, managing operations in service industry is
called service operations management. It is used to convert inputs (customer
needs) to desired outputs (customer satisfaction).

• In other words, service operations management can be defined as a process of

planning, executing, monitoring and controlling service operations.
S. No Reference No Particulars

1 Chapter 1 Introduction to Service Operations Management

2 Chapter 2 Service Strategy Formulation and Execution

3 Chapter 3 Service Design

4 Chapter 4 Service Process Design

5 Chapter 5 Service Delivery

6 Chapter 6 Service Quality

7 Chapter 7 Service Productivity Measurement and Management
8 Chapter 8 Service Decoupling
9 Chapter 9 Role of IT in Service Operations
10 Chapter 10 Service Operations Management in Different Sectors
Service Operations Management Session 6

Chapter 9: Role of IT in Service Operations

 Chapter Index

S. No Reference No Particulars

1 Learning Objectives

2 Topic 1 Competitive Role of Information Technology in Services

3 Topic 2 Internet as a Service Enabler

4 Topic 3 Challenges in Adopting a New Technology in Services

5 Topic 4 Role of SMAC (Social, Mobility, Analytics and Cloud) in

Service Delivery

6 Topic 5 Role of Internet of Things (IoT) in Services

7 Let’s Sum Up
• Explain the role of information technology in services

• Discuss the Internet as a service enabler

• List challenges in adopting a new technology in services

• Explain the role of SMAC (Social, Mobility, Analytics and Cloud) in delivering
services

• Explain the role of Internet of Things (IoT) in services

 1. Competitive Role of Information Technology in Services

• Information Technology (IT) has helped service providers to offer consistently

high quality service to customers by keeping real-time track of customer data.

• The term ‘IT’ refers to the application of technology, such as computers and
telecommunications equipment that store, recover, transmit and operate data or
information.

• This data is often used in the context of business. Apart from computers and
computer networks, IT also consists of other information distribution technologies
such as television and telephone networks.
 2. Competitive Role of Information Technology in Services

• In the service sector, IT helps organisations to formulate their competitive

strategy by creating a market entry barrier for new competitors.

• A market entry barrier refers to obstacles that prevent new competitors to enter
easily in an industry or business area. Such entry barriers lead existing service
organisations to sustain in the market.

• An effective entry barrier not only helps an organisation to appeal customers

with a new service but also holds the customer’s interest for an enduring period.

• The harder the service is to imitate, the higher the barrier for competitors to
enter the market.
 3. Competitive Role of Information Technology in Services

• IT has shifted the nature of services dramatically in recent years, and brought
forth the concept of service innovation to help organisations in seizing
opportunities and remaining in the competition.

• Today, customers demand greater involvement, customisation, personalisation

and flexibility from service with immediate results.

• IT has helped organisations in meeting with such higher customer expectations

by keeping track of data related to customer needs and expectations.

• As service innovation is closely related to service design and new service

development, technological elements help in the application of better solutions
that meet the new requirements, unarticulated needs or existing market needs.
 4. Competitive Role of Information Technology in Services

• The following points explain how IT has transformed the scenario of service
delivery in different areas:

– Mobile Internet has also transformed the way of service delivery. Entry of
Uber and Ola in the taxi business is one prominent example that shows how
IT is altering the ways of service delivery to customers and offering a
competitive advantage to these service organisations.

– With the advent of Big Data and advanced analytics, organisations, such as
Amazon and Harrah’s are using customer data to personalise and tailor their
services.

– In addition, IT has also enabled service organisations in providing real-time

service delivery with the help of the Internet of Things (IoT).
 5. Competitive Role of Information Technology in Services

Limitations of Using Information Technology

High implementation cost

Job elimination

Security breaches
 1. Internet as a Service Enabler

• The Internet is the worldwide, publicly accessible system of interconnected

computer networks that use the Internet Protocol Suite (TCP/ IP) to link devices
globally.

• It is a ‘network of networks’ that involves millions of private, public, academic,

business and government networks.

• These networks are linked by a broad array of electronic, wireless and optical
networking technologies.

• They carry a huge amount of data, such as online chat, electronic mails,
streaming media, file transfer, voice-over-IP (VoIP) and provide an access to the
World Wide Web (www).

• Thus, you can define the Internet as a world-wide communication network of

computers.
 2. Internet as a Service Enabler

• The Internet works as a connecting tool that links a service provider to its
customers in the most cost-efficient manner.

• It enables a service provider to connect with its customers through a desktop

computer/ laptop/tablet with Internet access using phone, cable or satellite.

• In addition, the advent of modern wireless communications and social networking

(Facebook, Twitter, LinkedIn and YouTube, etc.) are presenting new opportunities
for service providers to connect with their existing customers and find new ones
in an effective way.
 3. Internet as a Service Enabler

• In today’s competitive environment, service providers, instead of waiting for a

customer to make an enquiry, are trying to push information to customers with
the help of the Internet.

• There are certain communication-based technologies like General Packet Radio

Service (GPRS) (packet oriented mobile data service on the 2G and 3G cellular
communication system) that helps in delivering data directly to handsets.

• There are various service organisations that are using the Internet for solving
different purposes of their business. They use the Internet to communicate not
only with customers, but also with employees and suppliers.

• The Internet is also used by organisations to provide technical support and offer
after-sales services to customers to solve their common problems.
1. Challenges in Adopting a New Technology in Services

• Customer’s readiness to embrace new technology:

– For any service organisation, the success of technological innovation
in any process depends largely on customer’s acceptance.
– For a service organisation, adoption of new technology is not enough
as customers directly participate in the service delivery process.
– If the customer does not accept the technology or find the technology
difficult enough to understand, the whole process of delivering
service would fail.
• Employee’s enthusiasm to learn new technology:
– Apart from customers, employees are also affected by new
technology and often require training.
– A poorly trained employee would fail to use new technology
appropriately, which would negatively affect the service delivery
process.
2. Challenges in Adopting a New Technology in Services

• Service innovation that does not directly affect customers:

– Sometimes organisations waver in adopting technologies that do not
directly affect customers.
– However, they can make the end process more reliable. Many a time,
service organisations ignore the need of applying such technologies
as they consider them as a cost-increasing factor.
– This limits the effectiveness of the entire service delivery process.
• Quick imitation by competitors:
– Imitation of technology also presents a big challenge in front of
service providers.
– This hampers the implementation of innovative technologies in
services.
3. Challenges in Adopting a New Technology in Services

• Lack of budget:
– It is another factor that affects the adoption of technology, especially
in smaller organisations.
– Budget limitations acts as a constraint to small business technology
adoption.
• ‰
Lack of leadership support:
– Usually, the adoption of a new technology involves the
implementation of new processes.
– It is therefore, the responsibility of leaders to support and motivate
employees to adapt to new processes.
– When a leader endorses technological innovation, motivates flexible
behaviour and encourages process changes by providing appropriate
training, it becomes easier for employees to adapt to the new
technology.
 1. Role of SMAC (Social, Mobility, Analytics and Cloud) in
Service Delivery
• SMAC (Social, Mobility, Analytics and Cloud) is a concept that unites four
technologies social media, mobility, analytics and cloud to develop an ecosystem
where businesses can increase their operational performance and maximise their
customer reach with minimal cost.

• Social media has provided organisations with new ways to reach and interact
with customers.

• Mobile technologies have transformed the way people communicate, buy and
work. Analytics helps organisations in understanding the consumption pattern of
customers for certain products/services. On the other hand, cloud computing
provides an innovative way to organisations to access technology and data
required for responding swiftly to changing markets and complex business
problems.
 2. Role of SMAC (Social, Mobility, Analytics and Cloud) in
Service Delivery
• Implementation of SMAC in any organisation focuses on three fundamental
changes, which are:

– Focusing on to create more digitalised business ecosystem. Digitalisation

helps in combining digital and physical resources within and outside of an
organisation. This integrates technologies and human talent in innovative
ways to achieve operational excellence.

– Developing a digital operating model that could integrate with expanding

digital ecosystems. Such a model will enable organisations to gain a
competitive advantage in terms of scale, pace, agility and closeness to their
customers.

– Adjusting business architecture to allow easy digital connection with

customers and stakeholders. This helps in deriving business value.
 3. Role of SMAC (Social, Mobility, Analytics and Cloud) in
Service Delivery
• Social media:
– Usage of social media is no more than just a fashion. It has turned out
to be an important tools for enhancing business performance.
– Organisations are using social media in shaping customers’ behaviour
– The accessibility of social media makes people use social media to get
advice on what products/services to buy, where to shop, etc.
– Social media offers vast scope for customer engagement and brand
building.
• Mobility:
– Mobile devices have transformed the way people access digital content.
– The enormous upsurge in the adoption of smart mobile devices has
been so promising that it resulted in the inception of a new stream of
business, called m-commerce (mobile commerce).
– With the use of smartphones and tablets, digital content has got an
easy accessibility by consumers.
 4. Role of SMAC (Social, Mobility, Analytics and Cloud) in
Service Delivery
• Analytics:
– Every year, organisations generate billions of gigabytes of data, which if
effectively analysed and utilised, can prove to be an extremely valuable
asset for an organisation.
– This data can be later used by the organisation as a competitive tool by
predicting accurate buying patterns of customers.
• Cloud:
– Cloud computing has emerged as one of the most effective techniques of
storing, collaborating and sharing data.
– It is vastly adopted by organisations for fostering innovation and
improvising productivity.
– Cloud computing enables multiple users to participate in the process at
the same time, thereby ensuring transparency and speed.
 1. Role of Internet of Things (IoT) in Services

• The Internet of Things (IoT) refers to a system of connected computing devices,

mechanical and digital machines or objects that are embedded with electronics,
software, sensors, actuators and network connectivity to enable these objects
collect and exchange data.

• In other words, IoT uses sensors, actuators and communication technology

embedded into physical objects to keep track and control of these objects over
networks like the Internet.

• The usage of these devices involves three main steps, which are:

1. Capturing data using sensors

2. Collecting data over the network

3. Making a decision based on analysis of the data.

 2. Role of Internet of Things (IoT) in Services

• IoT presents a concept where all smart things in the world are connected to each
other and communicate with each other with no or minimum human
intervention.

• The goal of IoT is to create a better connected world with the help of smart
objects, providing services which are real-time, inexpensive and non-intrusive.

• IoT tends to revolutionise the approach to service management as everything

connected to the Internet requires process and technology support, which
ultimately brings the need of service management.

• IoT can help service organisations to innovate and improve their business model,
reduce costs and risks and improve the overall value of services they deliver and
support.
 3. Role of Internet of Things (IoT) in Services

• IoT can speed up and increase the capabilities of service providers in creating and
maintaining valuable automated processes that could eventually enhance and
transform the overall service delivery system.

• Today, a number of service organisations, dealing in healthcare, retail, sports and

fitness, safety and security markets, are investing in sensor- enabled devices that
connect to the Internet.

• The IoT with its numerous sensors embedded in devices collects and analyses
data that can be used to understand human behaviour and improve technology,
health services, products, customer service and service management.

• IoT is changing traditional behaviour and business models all around the world.
 Let’s Sum Up

• The term ‘IT’ refers to the application of technology, such as computers and
telecommunications equipment that store, recover, transmit and operate data or
information.

• The Internet is a worldwide, publicly accessible system of interconnected

computer networks that use the Internet Protocol Suite (TCP/IP) to link devices
globally.

• In the service sector, IT helps organisations to formulate their competitive

strategy by creating a market entry barrier for new competitors.

• SMAC is a concept that unites four technologies—social media, mobility, analytics

and cloud to develop an ecosystem, where businesses can increase their
operational performance and maximise their customer reach with minimal cost.
 Post Your Query

Course related queries are channelized through Blackboard.

To post a query relating to this course presentation please login to

Student Zone.