The Future of Service:An Extrapolation of the Present

or a Paradigm Shift?

P. K. KannanRalph J. Tyser Professor of Marketing Science

The Robert H. Smith School of BusinessUniversity of Maryland

The Distant Past…

An ancient toll boothPorta Borsari, Verona, Italy

The Past….

The Near Past.. and the Present!

A Mechanical Solution…

A Digital Solution…

Digital Technology Creates “Super-Service”

Technology eliminates service variabilityVariability due to technologyVariability due to customer skill-levelMakes service very efficient

A paradigm shift in service levelsCo-production of effort minimal!Traffic is smooth, congestion minimized,

community benefits!(Maglio 2011)

The rise of digital services…..

Media VisualAudio Gaming

Personalization/Add-on Services

Software/Apps

Software-as-ServiceUGC

E-Learning E-Health

Success of Technology….not quite uniform

Significant impact on individuals, firms, governments and societyEnormous productivity gains…In general, much improved outcomes…

Despite infusion of technology, some sectors have not seen significant gains in outcomeEducation expenses have been increasingHealthcare costs have explodedExpensive government services are the norm

Digital networks and services will come to the rescue..

Personal Services – A network of devices and apps

www.fastcodesign.com

Wearable computing…

Customization/Personalization Services Networking Apps

Networking of the apps personalizes the suite of service for an individual – apps to talk to each other…

Digital services will allocate “screen space” in as much as a retailer decides the “shelf space”

Renting will become fashionable….

Enabler is vast digital networksAirbnbUber, Lyft

Software as a ServiceDigital Services rather than Software ProductsEducation as a Digital ServiceTele-medicineOutcome based measures of success

Using customer as assets – co-creation using digital networks

Citizens/Customers

Institution Government/Business

Design InputEffort

Benefit/Value

REALMOF

SELF-SERVICE

Citizens/Customers Institution Government/Business

Effort

Community Benefit

CITIZENSERVICE

FORCOMMON

GOOD

Citizens/Customers Institution Government/Business

CITIZENSHELPINGOTHER

CITIZENSANDFOR

COMMONGOOD

Design Input

Effort

Value

Value

• Citizens are resources and assets• Defining value based on social outcomes• Building social networks• Building reciprocal relationships

Co-delivery is an active, creative and social process, based on collaboration between governments and

citizens, and/or between citizens and citizens that is initiated by the governmentto generate value for citizensthrough innovative “digital” services

Based on Ref: Prahalad and Ramaswamy (2004) Ref: www.promisecorp.com/newpathways

Co-Delivery of Services

Citizens participating in the development of a new policy or serviceTime-boundedCitizen groups

ExamplesConsulting CanadiansNew South Wales Education Department

Co-Design of Public Services

Co-production is anew way of thinking about public services;has the potential to deliver a paradigm shift in

providing services such ashealth, education, policing, etcto make them more effective, efficient, and

more sustainable

Ref: Boyle and Harris (2009)

Co-Production of Public Services

Big Data to Benefit the Small Guy…

Using the big data to benefit the customersProcessed information to help customersHealth indicatorsNutrition informationUtility consumptionPersonalized Financial Services

Visualization services for easy digestion of data

Learning from the aggregate data to aid the individual customerrecommendation services

Necessity for services to be real-time…

Services will need to become more real timeConsider advertising services…

Expanding media and formats Digital media, social media, print, TV, radio, mobile

Ever expanding number of devices Desktop, laptop, tablets, smartphones,…

When and where should customers be targeted Reaction times are in nanoseconds

More algorithmic servicesService quality issues, metrics and

measurement

In conclusion…

The changes brought about by digital servicesWill be significant and paradigm shiftingReal focus on reducing inefficienciesWill change the nature of service provisionWill change the nature of service providers

Challenges for firms and governmentsKeeping up with digital technologiesShorter time frame for recouping investments

and realizing ROIWill require new management skills