In the dynamic landscape of service ecosystems, smart technologies play a pivotal role in redefining service practices. By integrating advanced capabilities, these technologies streamline service provision and enrich service experiences through value co-creation. This blog post explores the transformative impact of smart technologies.
Technology smartness
The concept of ‘technology smartness’ refers to the ability of technology to sense, interpret, and respond to data, as well as its capacity to adapt and learn from interactions with users and contexts.
Service practices
Smart technologies offer significant opportunities to enhance service practices by affecting service provision and service experience, thanks to interactive feedback, connectivity, and responsiveness.
Smart service provision considers how smart technologies either take over human actors' tasks (automation) or improve human actors' agency (augmentation).
Automation in service provision, facilitated by artificial intelligence (AI), robotics, and blockchain, enables organizations to perform tasks more efficiently and accurately, reducing human error and operational costs.
Conversely, augmentation complements human capabilities, providing tools and information that enhance decision-making and personalize the service experience. For example, augmented reality (AR) and wearable technologies offer novel value propositions that blend digital and physical worlds.
The service experience, enriched by smart technologies, caters to utilitarian and hedonic aspects. Utilitarian value is enhanced through increased efficiency, reliability, and accessibility of services, making everyday tasks simpler and more convenient for consumers. Meanwhile, the hedonic value is amplified through personalized, interactive, and engaging experiences contributing to customer satisfaction and loyalty. For instance, chatbots and service robots can provide immediate, 24/7 assistance and support while offering enjoyable interaction.
System of insights and system of engagement
The widespread use of smart technologies enables companies to create an architecture of systems of insights and systems of engagement, enhancing service practices. These systems interact dynamically, with technologies like AI and wearables helping providers gather insights for deeper customer engagement. A system of insights allows for the detection of customers' conditions, enabling real-time feedback to meet their needs. Providers can predict behaviours, identify needs, and automate actions, applying advanced analytics to improve decision-making during customer interactions. This process strengthens systems of engagement, leveraging data insights to create connected experiences. Utilitarian and hedonic values are the levers of the systems of engagement, which involve engaging customers based on their specific task-oriented or emotional needs.
Implications
As we explore the implications of smart technologies on service practices, it becomes evident that their integration is not merely about adopting new tools but fundamentally rethinking how services are designed, delivered, and experienced. The synergy between automation and augmentation opens new avenues to co-create value (hedonic and utilitarian), enabling service providers to offer more responsive, efficient, and personalized services.
What’s ahead?
The future of service practices is intrinsically linked to the continued advancement and integration of smart technologies. By focusing on both the provision and experience of services, organizations can leverage these technologies to create competitive advantages, foster innovation, and meet their customers' evolving expectations. As we move forward, embracing the potential of smart technologies will be key to designing and developing services that are not only efficient and reliable but also engaging and fulfilling, thereby setting new standards in service excellence.
Ethical Considerations and Privacy Concerns
Integrating smart technologies into services is crucial to address ethical and privacy issues to protect customer data and maintain trust. Organizations must adhere to transparency, consent, and data protection principles, ensuring technologies comply with privacy and regulatory standards. Emphasizing secure data management and ethical technology use is essential. By prioritizing these considerations, service providers can create a responsible service ecosystem where smart technology benefits align with societal values.
Cristina Mele
Professor of Service Innovation, at University of Naples Federico II, and Visiting Professor at the Service Research Center (CTF) at Karlstad University
References
- Mele, C., & Russo-Spena, T. (2023). Artificial Intelligence in Services. Elgar Encyclopedia of Services, 356.
- Mele, C., Spena, T. R., & Kaartemo, V. (2022). Smart technologies in service provision and experience. In The Palgrave Handbook of Service Management (pp. 887-906). Cham: Springer International Publishing.
- Mele, C., & Russo-Spena, T. (2022). The architecture of the phygital customer journey: a dynamic interplay between systems of insights and systems of engagement. European Journal of Marketing, 56(1), 72-91.
- Mele, C., Spena, T. R., & Peschiera, S. (2018). Value creation and cognitive technologies: Opportunities and challenges. Journal of Creating Value, 4(2), 182-195.
