Technological Innovation in Services

Introduction
A service system is a value coproduction configuration of people, technology, other internal and
external service systems and shared information (Spohrer et al.,). Services play a crucial role in
world commerce, as it has the power to control the economy of the countries. The profitability of
any industry is dependent on the services that it can provide to its consumers. The growth of
service sector is certainly influenced by technology and innovation.
In todays competitive market, firms compete on the basis of services they provide rather than
the physical products for a fact that there is very little differentiation that can be made with
similar products, but a change can be brought through the additional services provided. Hence
firms pay a lot of interest on improving their services by using various means. One such tool that
firms use to leverage service level is technology. Advances in Information technology has
brought rapid changes in the way businesses function today. The innovations brought through
technology is a major element of interaction between the customer and the firm.

LITERATURE REVIEW
Technological Readiness and SST
The growth of internet users has increased exponentially. Recent statistics reveal that there are
over 3.2 billion users and 4.4 billion smartphone users. These numbers reveal that there is a huge
network connecting people globally. Another observation here is people have accepted the
change in technology and integrated in their daily lives. The businesses today are smart enough
to identify this technology readiness to make profits.
Technology readiness is the willingness of people to embrace technology than any other means
to get a work done. This is majorly influenced by SST or self-service technology. Few examples
of SSTs used by firms today include Automated Teller Machines (ATM), Interactive Voice
Response (IVR), automated ticketing, websites through internet, mobile applications through
smart phones etc. (Castro et al., 2010).

According to a repport by American Bankers association 58% of customers prefer to transact

online through internet or mobile apps, 68% of airline customers check for their flights through
mobile phones or self-check in kiosks at airport. (Scherer, 2015). SSTs are revolutionizing the
way services are conceived, planned, delivered and integrated enhancing innovation in services,
improvising on service delivery modes, expanding the market reach (Bitner et al., 2010). Having
said that, SSTs are helping customers by creating easy and faster ways to avail service and also
the service providers are equipped with the option of smoothening demand. Jiun-Sheng Chris Lin
Hsing-Chi Chang in their work of Managing Service Quality, quote an example of Redbox, a
DVD company which offers DVD rentals at 19000 kiosks in US at various locations including
pharmacies and fast food restaurants. Customers are given an option of selecting thr movie
through touch screen displays and make online payments through credit cards to rent a DVD.
They can also visit the companys website to select a DVD and online tracking system is enabled
to reserve and pick it up at a particular location. (Jiun-Sheng, 1991) When customers are
provided such variety of options to avail services, the firm can reduce overcrowding in stores and
also the cost of service delivery. However the fact remains that it is Technological readiness
which decides the success of any SST.

Application of Technology innovation in Banking service

Banking sector plays a major role in economy of a nation. It is also true that, the competition in
this sector is very intense due to new entrants emerging with attractive financial service schemes.
Since the products offered are intangible, the quality of the service is used as a key differentiator
to gain competitive advantage over rivals. Banks use technology save time and money, avoid
repetitive works, eliminate errors and minimizing direct customer interaction etc. (Curry, 2004).
Adrienne Curry, further adds to the discussion that banks use technology to maintain and use
customer information when required, gives flexibility to customers to carry out transactions at
anytime and anywhere. Although technology is beneficial to both customers and banks, a second
view to look at is the reduced interactions and real time experiences that doesnt bring any
emotions into the picture. According to Carlzon, quality in service operation is created at the
Moment of Truth (Carlzon, 1989) which adds value to the perceived service quality and the
problems has to be fixed through recovery to ensure rich customer experience is rendered.
However, the obstacle with technology intervention is it makes Moment of Truth a mechanical

experience without having any emotional touch. Some service providers have tried to involve
human interaction through online mediums such as websites by enabling instant chat or help
service. A relevant aspect to look here is the extent to which technology should be used to
enhance customer service offerings. Jamal and Naser (2002) came with a finding that, banks has
to satisfy customers by providing core and relational dimension of services. A bank also has to
focus on meeting the expectations of expert customers who expect high level of functional and
IT support from the service provider. Lloyd-Walker and Cheung (1998) supported this argument
by stating having a good IT planning and purchasing with dedicated customer focus will
certainly contribute to building relationship between customers and service providers. . Jun and
Cal (2001) gave 17 dimensions to measure the quality of service which were categorized into
three broad categories of customer service quality, online system quality and banking service
product quality. However (Black et al.2002) stated that choosing a perfect service delivery
channel and level of technological interference is a complex decision and in fact impossible task
due to the existence of multiple channels and products. Understanding a Consumers behavior
becomes important in this decision. Efforts has to be made on analyzing customers needs and
preferences and render service. For a technology service quality has to be assessed in terms of
reliability, assurance, functionality, responsiveness and privacy.

CONCLUSION
Technology is certainly a factor that can fuel innovation in a service organization. In todays
scenario customers expect every service provider to give a delightful experience for the money
that the pay. Firms have also designed strategies to delight customers by involving continuous
creativity in their all endeavors that ensures a long term success. The firms also face a challenge
of building increased expectations among customers. However, they are ready to make huge
investments on Research and Development to ensure innovation is brought in to the picture to
give a better customer service experience. Technological innovations today are ensuring benefits
to individuals of both worlds. On one hand, customers are gaining assistances through flexible
and accessible services at a convenient mode and on the other hand service providers are
successful in establishing social bonds and trust among the customers by giving wide range of
service with assurance with significant cost saving techniques. Technology and services have
become so integrated that they are now seen as inseparable parts in the service industry. With the

increasing number of customers are increasing more and more of service providers. However, the
technology is enabling them to use the customers data to acquire, maintain and retain customers.
It will certainly not be any surprise when service industry dominates the entire economy in the
future with technological innovations playing a major role in its growth.

References

Scherer, Anne And Wnderlich, V. Nancy And Wangenheim, Florian

(2015), The Value Of Selfservice: Long-Term Effects Of TechnologyBased Self-Service Usage On Customer Retention, Service innovation

in digital age, Vol 39.

Curry, Adrienne (2004) Managing Service Quality: An International
Journal, The relative importance of technology in enhancing customer
relationships in banking a Scottish perspective, Vol 14.

Kandampully, Jay, (2002)European Journal of Innovation Management,

Innovation as the core competency of a service organization: the role
of technology, knowledge and networks Vol. 5.

Sheng, Jiun (2011), Managing Service Quality: An International Journal,

The role of technology readiness in self-service technology
acceptance, Vol 21.