What academic research tell us about service

Topics: Service system, Marketing, Economy Pages: 23 (5800 words) Published: October 1, 2013
BY Roland T. Rust AND Carol Miu

A computing-driven revolution is under way in the global economy guided by the principle that every business must become a service business in order to survive. echnology has revolutionized the way that companies perform

service, enabling the development of long-term individualized relationships with customers. Advancements in computing have allowed companies to improve both profits and financial
accountability by providing high quality, personalized service more easily and affordably than ever before. IT not only lowers the cost of service, it creates avenues to enhance revenue through service. Gone are the days of standardization, mass production, and mass marketing. Academic research has revealed that the service sector is now dominant in every developed economy. The goods sector is shrinking as a proportion of the overall economy; and as goods increasingly become commodities, service is becoming the key differentiator even in the goods sector. Thus, to compete effectively, all companies must become service companies. For over a century, technological development has driven an economic shift from a focus on goods to a focus on service. Innovation is often associated with greater efficiency in the manufacturing of goods, namely decreasing costs through faster and cheaper production and transportation. However, new technologies also have service-related consequences. Businesses can gain information about their customers, competitors, and the product market and use this information to separate

COMMUNICATIONS OF THE ACM July 2006/Vol. 49, No. 7


from the competition by providing services desirable to
customers. Consequently, technological advances have
led businesses to focus more on service and give service
a more prominent role in the economy.
The rise of service in the economy has been reflected
by an explosion of academic research on service. This
research has tended to emphasize different themes over
time (see Table 1 for a summary). In the 1970s the
emphasis was on the differences between goods and
services, recognizing that services had characteristics
that made for new aspects to consider. Research then
set out to understand the unique characteristics of services. The quality revolution of the 1980s resulted in service research of a different flavor—emphasizing service quality measurement, customer satisfaction measurement, and complaint management systems. This evolved in the 1990s into models for making service

financially accountable. At the same time, the advances
in IT in the 1990s resulted in academic research paying increased attention to direct contact with individual customers, storing and analyzing individual customer data, and then using that information to

serve individual customers better. Since 2000, academic research has moved to using customer relationships as a foundation for a new approach to strategy, based
on “customer equity” (the discounted cash flows
expected from the current and future customer base).
This requires managing the customer lifetime values of
individual customers, a topic that has received considerable research attention in recent years. The explosion of service research has been facilitated
by the introduction of several influential academic centers for service research. Notable centers currently include the Center for Excellence in Service at the University of Maryland, the Center for Services Leadership at Arizona State University (see the article by Bitner

and Brown in this section), the Service Research Center at the University of Karlstad (Sweden), the Maastricht Academic Center for Research in Services (Netherlands), and the Center for Relationship Marketing and Service Management at the Swedish School of Economics (Finland). The progress of the service

research field has been accelerated by international con-

ferences—most notably the annual AMA...

Bibliography: Labor. University of Chicago Press, Chicago, IL, 1988.
3. Alic, J. Postindustrial technology policy. Research Policy 30 (2001),
4. Alter, S. The Work System Method: People, Process, and Technology
Marketing Science 16, 2 (1997), 129–145.
6. Aspray, W. and Williams, O.B. Arming American scientists: NSF and the
provision of scientific computing facilities for universities, 1950–1973.
IEEE Annals of the History of Computing 16, 4 (1994), 60–74.
Behavior 25 (2004), 547–587.
system management tools and practices. In Proceedings of the ACM Conference on Computer Supported Cooperative Work, 2004.
14. Bonabeau, E. Agent-based modeling: Methods and techniques for simulating human systems. In Proceedings of the National Academy of Science
99, 3 (2002), 7280–7287.
15. Bordoloi, S. and Matsuo, H. Human resource planning in knowledgeintensive operations: A model for learning with stochastic turnover. European Journal of Operational Research 130, 1 (2002), 169–189.
Service Operations Mgmt 5, 3 (2003), 179–202.
Remade in America: Transplanting and Transforming Japanese Management Systems. J.F. Liker, W.M. Fruin, and P.S. Adler, Eds. Oxford University Press, NY, 1999, 117–154.
18. Brown, S.W. and Bitner, M.J. Mandating a services revolution for marketing. The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions. R.F. Lusch and S.L. Vargo, Eds. M.E. Sharpe, Armonk, NY, 2006.
19. Bryson, J.R., Daniels, P.W., and Warf, B. Service Worlds: People, Organisations, Technology. Routledge, London, 2004.
Computing, (Sept.–Oct. 2005), 52–61.
21. Burt, R.S. The network structure of social capital. Research in Organizational Behavior, Vol. 22. R.I Sutton and B.M. Staw, Eds. JAI Press,
Greenwich, CT, 2000.
MA, 2003.
27. Davenport, T. The coming commoditization of processes. Harvard Business Rev. (June 2005), 100–108.
30. Emery, F.E. Characteristics of socio-technical systems. Tavistock Document 527. London, 1959.
35. Fitzsimmons, J.A. and Fitzsimmons, M.J. Service Management: Operations, Strategy, and Information Technology, 3rd Edition. McGraw-Hill,
NY, NY, 2001.
36. Fitzsimmons, J.A. and Fitzsimmons, M.J. Services Management: Operations, Strategy, and Information Technology, 4th Edition. McGraw-Hill,
NY, NY, 2004.
37. Friedman, T. The World is Flat: A Brief History of the 21st Century. Farrar, Straus and Giroux, NY, 2005.
Approaches. J. Gadrey and F. Gallouj, Eds.. Edward Elgar Publisher, 2002.
40. George, B. Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. Jossey-Bass, San Francisco, 2003.
of Economic Perspectives 19, 1 (2005), 33–50.
42. Gustafsson, A. and Johnson, M. Competing in a Service Economy. JosseyBass, San Francisco, 2003.
43. Hacigumus, H., Rhodes, J., Spangler, W., and Kreulen, J. BISON: Providing business information analysis as a service. To appear in Proceedings
of EDBT, 2006.
45. Hill, T.P. On goods and services. The Review of Income and Wealth 23, 4
(1977), 314–339.
46. Horn, P. The new discipline of services science. Business Week (Jan. 21,
2006); www.businessweek.com/technology/content/jan2005/ tc20050121
47. Kotler, P. and Bloom, P.N. Marketing Professional Services. Prentice-Hall,
Englewood Cliffs, NJ, 1984.
48. Kouzes, J.M., and Posner, B.Z. The Leadership Challenge: How to Get Extraordinary Things Done in Organizations. Jossey-Bass, San Francisco, 1987.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on The Bog Bodies and What They Tell Us About the Past
  • What does the world around us tell us about human nature? Essay
  • Mass media doesn’t tell you what to think, but it tells you what to think about Essay
  • Tell us more about yourself Essay
  • What can the study of grave-goods tell us about the nature of society? Research Paper
  • What do visual hallucinations tell us about the nature of consciousness Essay
  • About Us Essay
  • Poems tell us about life experiences Essay

Become a StudyMode Member

Sign Up - It's Free