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Proceedings of the 37th Hawaii International Conference on System Sciences - 2004

Increase in Computing Capability and its Influence on Service Provision Adekunle Okunoye Williams College of Business, Xavier University [email protected]

Abstract Applications of information technology (IT) have in no doubt had significant impact in every stage of service provision, production, delivery, receipt and quality. Today, the greatly increased use of IT by service providers has in many ways changed the nature of service delivery. The dynamism and rapid changes in IT which progress from traditional business computing to mobile and pervasive computing and which is now tending towards ubiquitous computing have posed serious challenges to service globally. Service in the industrial era was well understood. It was considered distinct to product and limited by geographical locations and technological constraints. However, as we are entering the knowledge era, where knowledge has become the main competitive advantage, the distinction between services and products are blurring with increase application of information technology, and there seems to be no limit to what could be achieved with technology. Dynamism in the production of information technology also requires corresponding dynamism in its applications to the service provision. However, there is lack of adequate attention to these issues in information systems research and practice. There is little understanding of how the rapid changes and developments in IT could affect service provision. Using the four characteristics of service - intangibility, inseparability (of production and consumption), perishability and heterogeneity, this paper examines service provision, the current trends in ubiquitous computing and the possible changes it could have on service provision.

1. Introduction It is no doubt that information technology (IT) has had a significant impact in revolutionizing manufacturing and services. IT is one of the forces driving the changes in the global economy where organizational and national competitiveness is

knowledge [9][15][16][25]. The advances in and convergence of computing, telecommunication and broadcasting have significantly improved access to information and lowered the cost associated with information retrieval and processing. Information technology itself is evolving and could be acclaimed to be one of the most dynamic technologies. This has led to progression in capacity from business computing where computer is located within a place to mobile computing which provides capability to physically move computing services around. It has also led to pervasive computing where computer has capability to obtain information from the environment in which it is embedded and utilize it dynamically. The next step in IT revolution is towards ubiquitous computing in which computers will be embedded in our natural movements and interactions with our physical and social environments [28][40]. According to Lyytinen and Yoo [28] this shift poses many challenges in every sphere of human endeavor. Among the major challenges is the design and development of ubiquitous (IT) services and the shifting of focus between proactive designs of (IT) service and tailoring during use. Much has been written about the role that information technology plays in service industry [10] [24][31][32][42]. However, less attention has been paid to the dynamism in IT that is tending towards ubiquitous availability of IT and how this could further change service provision. In looking ahead of the changes that information technology would bring in the future of insurance industry, Schulte-Noelle [36] agrees that computers will become an integral part of life, even though she felt it was too early to decide what mobile computing will really bring for the industry. This seems to be the notion in the service industry and there appears to be little interest in anticipating the future of information technology and how it might subsequently affect service industry. However, due to the advantages that such changes in computing evolution have brought into service provision (like effect of the Web and the Internet on services [18][39][42], this paper raises researchers

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interest on issues related to IT and services and encourage practitioners to start thinking how to redesign services to provide for the future changes and development in information technology. The main question that this paper seeks to answer is: what will be the impact of ubiquitous computing on the four fundamental characteristics of service? In this paper, I examine the concepts of service delivery and ubiquitous computing. After detailed discussion of the concept of service, service experience and quality, I present different computing evolution and brief overview on how each has affected service. I then use the four characteristics of serviceintangibility, inseparability (of production and consumption), perishability and heterogeneity to analyze how ubiquitous computing could affect service provision. If we follow the trend that other changes in computing evolution brought to the nature of work and daily life, influence of ubiquitous computing poses a lot of opportunities and challenges globally. As the future research direction, I suggest examination of the influence of ubiquitous computing on public service provision in developing countries.

2. Service Experience and Quality 2.1. Services There are many characterizations of services, especially in economics and accounting where services are considered as everything that is not manufacturing or agriculture, as it is not able to add value to materials, and that services are non- durable [1]. However, Hill [19] presents service as a change in the condition of person, or of a good belonging to some economic entity, brought about as the result of the activity of some of the economic activity with the approval of the first person or economic entity. Although there have also been some discussion about whether there are differences between service work and knowledge work [11], this paper views service work as distinct from knowledge work, thus the application of information technology to support each of these kinds of work will vary. Likewise, classification of services is not bounded and the introduction of IT in services also makes the classification fuzzier. According to Andersen and Corley [1], services can be: • Producer services or business services which includes finance, insurance, real estate and other business services (e.g. research and development, and advertising)



• • •

Consumer services or personal services like hotels and restaurants, miscellaneous repair and maintenance services, motion pictures, amusement, recreation, private households, and personal care for final consumption Collective services like health, education, non-profit organizations Government which includes public administration and military Retail like shops

However, in the knowledge economy, these boundaries may no longer be meaningful, as service and non-service activities are becoming more interdependent and the operation of an organization could transcend manufacturing and service sector. In fact, many producers now include services in their goods delivery [1][13]. Despite this convergence, services are still being viewed as different from goods, due to the inherent characteristics of intangibility, inseparability (of production and consumption), perishability and heterogeneity [14][34]. According to Parasuraman et al. [34], most services are intangible because they are performances rather than objects. Most services cannot be counted, measured, inventoried, tested and verified in advance of sale to assure quality. Thus a firm may find it more difficult to understand how customers perceive services and service quality. Heterogeneity of services is based on the fact that service varies along the dimension of producer, customer and time. It is also called variability. There is no guarantee of consistency among the actors in service provision. The inseparability emphasizes the simultaneity of production and consumption of service. Delivery of some labor intensive service requires interaction between the customers and the provider and service quality cannot be predetermined. Also, some services require active participation of the consumer, the process of which could have impact on the whole service experience [34]. The perishability is concerned with the management of demand [13], it expresses the notion that a service cannot be made in advance and stored. For example, service provider can regulate demand and supply, such as charging different prices during off-peak hours, or charge for a missed appointment because the service value existed only at that point in time. For changes in service experience, there must be some impact on these characteristics of services. Andersen and Corley [1] present a more comprehensive view of service as objects (materials or immaterial /tangible or intangible) that experience transformations (permanent or non-permanent /durable

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or non-durable) within certain spheres. They further argue that service may involve typical mixture of object-entities (e.g. an environmental / milieu service may involve a mixture of artifacts, actors and nature; a business service may involve a mixture of actors and symbolic material). It may be mixture of types of transformations e.g. cooking and gene therapy, which involves both physical and biological transformations. A hair-cut and a tattoo can involves both a physical transformation as well as abstract transformation (e.g. social political attitude), which may involve a social transformation with respect to social relations and a mixture of transformation spheres (e.g. space and time in air-transport as well as storage services). The implication of different views of service and the possibility of the mixture is that the present state of computing may not be completely adequate to support the IT requirements of services. A computing service that simultaneously has a high level of embeddedness and mobility will be required to meet the IT requirements of mixtures of service’s objects, nature of transformation and transformation sphere. The present impacts of mobile computing, the Web and the Internet in service provision ([18][39][42]) provide evidence of expected influence of ubiquitous computing. Another implication is the complexity the mixture could introduce in measuring the service output and thus evaluation of the customer experience and service quality. Most of the present applications of IT in services are to achieve high service quality. This service quality is conceptualized as perceived quality in services literature, which is the customers’ judgment about an entity’s overall excellence or superiority [33] In essence, customer experience is centered on simultaneous delivery and receipt of the services [13].

2.2. Conceptualizing and Measuring Service Quality Customer’s experience will reveal how the service responds (availability), if the time for access to the service is satisfactory (speed) and whether the response of the service matches with the request of the customer (integrity) [41]. This implies that customer already had an expectation which would then be compared with the actual performance of the service provider to determine the quality of service. Thus, if we can measure factors that contribute to the expectations of the customer and the perception they have about service delivery, then we can determine the service quality [34]. To be able to measure these factors and for organizations to develop more effective ways of improving services, we need to understand the attributes of service that customers use to evaluate and define service quality

[13]. It was these attributes that Parasuraman et al. [34] identified as reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding the customer, and tangibles. Parasuraman et al. went further to develop a generic instrument called SERVQUAL to measure service quality based on five service dimensions from the original ten attributes [3][33][35].The dimensions included in SERVQUAL are reliability, responsiveness, assurance, empathy, and tangibles. They define reliability as the ability to perform the promised service dependably and accurately. The tangibles are the appearance of physical facilities, equipment, personnel and communication materials, and responsiveness as the willingness to help customers and provide prompt service, assurance as the knowledge and courtesy of employees and their abilities to convey trust and confidence. Empathy as the caring, individualized attention provided to the customer. These five dimensions have been used in many studies and amended when necessary. SERVQUAL remains the most widely used measure even with the dynamic service environment. SERVQUAL has also been extensively criticized about its dimensionality (see [30]), suitability across context [7], and its measurement of perceptions and expectations [6][8][12]. Despite these criticisms, SERVQUAL has been widely used and tested across different service industries [26][42]. It has also been recommended to measure IT services [21] and also criticized by Van Dyke et al. [38] for not totally suitable in measuring quality in IT services. These criticisms have helped researchers to add or remove dimensions based on any attribute that might be relevant or irrelevant to a specific service. For example, Voss [39] noted that empathy might not be relevant in determining web services, as empathy requires direct human interaction. Bowers et al. [4] also added two new dimensions such as the caring and patient outcomes to measure health service quality. There have been some arguments about differences in the service quality in an automated environment [39] and whether the way we perceive and measure service quality in the traditional service delivery channel can be applicable in the IT-based service era. Since the fundamental principle of service remains the same, measuring quality will only require some adjustments to cater for the changes that usually accompany introduction of technology and not necessarily a drastic change in the whole process. With the understanding of strengths and weaknesses of SERVQUAL and its extensive use in previous service quality research in different industries, the dimensions identified in SERVQUAL remain the most appropriate in discussion of the future impact that

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the information technology might have on service, although some of the dimensions may not be directly relevant with the impact of computing as earlier expressed. Nevertheless, ubiquitous computing will greatly influence the definition of these dimensions and how the customers perceive quality. However, unlike the claim of Voss [39] that empathy is not relevant in the web- service provision, it will only be in a different way with the application of the ubiquitous computing. Empathy will take another dimension and tangibility will include the appearance of the electronic front-end and the interaction medium and not only on the traditional physical facilities. Also, ubiquitous computing will raise questions on the actual provider of a service when the provider depends on the location of the customers and when the customers are no longer permanently aware of the identity and role of their service provider. The specific ways that the experience of the user and subsequently the service quality will be affected will be discussed later with the analysis of the service characteristics.

3. From Traditional Business to Ubiquitous Computing Traditionally, computing services have always been provided in a stationary location and its use is directly associated with physical presence at a particular location and time. The level of mobility and embeddedness in traditional computing is low [27][28] In addition, the high cost, big size and complex operation limited computer use to complex back office operations and process controls. However, the advent of micro-computer and various office productivity tools made the use of computer to become popular and it began to be integrated in both daily life and common business functions. In the last two decades, there has been an increase in the use of IT in service organizations. IT often provides benefits through improvements in timeliness and precision in, for example, rapid and customized access to individual accounts or product-specific information. According to Bancel-Charensol [2], the reduction in computing cost, and the simultaneous increase in speed and transmission capacities modify the processes of gathering, handling and transmitting data of enterprises. IT could enable modification of service (including widening of the range and lowering the prices of the offered services), the means of interaction of the process elements as well as the elements of the processes themselves (e.g. replacement of front-office personnel by automatic tellers). Traditional computing also affects the participation of customers in some

phases of the production of service and changes their experience. Yet, the need for physical presence in traditional computing constrains the mobility requirement of daily business and human activities, hence, there is an increasing demand for capabilities that will enable movement of computing capabilities independent of device’s location. Again, the advances in computing hardware technologies and increased computational power enable production of portable computing equipment and provision of access to computing capacity over a broadband network. Computers becomes a-taken-for-granted, ever-present device in form of laptop, palmtop and mobile telephones and other numerous portable computing hardware that can support wide range of human activities without any limitation of location [28]. This is complemented with the developments in wireless technologies where computing devices can connect and communicate with each other without limitation of time and space. There is recognition that access to technology resources from a range of locations or whilst in transit is necessary [22][23]. Mobile computing increases the degree of interactivity and makes consumers more involved in the production process with responsibility for the services they receive [13][20]. It enables them to be active in all parts of the production process and not only passive recipients but also active producers [37]. While computation power and reduced cost enables mobile computing, mobile computing on the other hand enables distant and automated servuction, where the customer could get the provision of services without having to physically move from a location (e.g. Internet Banking) and where an enterprise could provide a service without the intervention of a contact personnel (e.g. ATM), respectively [2]. Even in the era of low computing mobility, the miniaturized size of computer has enabled high level of embeddedness of computing services, where computing capabilities manifest in the environment without presence of any visible computing equipment that characterizes traditional business computing. According to Lyytinen and Yoo [28], this is the main idea behind pervasive computing where an area is populated with sensors, pads, badges, and virtual or physical models of the physical and social/cognitive environments. Pervasive computing has also had significant impact on service provision. For example, security service organizations can now install computer, and enable sensors to monitor activities at their client locations. Pervasive computing has enabled unmanned service points and has been used to monitor vehicle speed on highways. In short, it is pervasive computing that further enables delivery of some

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services without direct and physical intervention of human agent (automated servuction). While pervasive computing achieves a high level of embeddedness compared to mobile computing (see Figure 1), it is still limited by location and the challenges to make computers understand dynamic environments. Mobile computing enables high level of mobility and pervasive computing enables high level of embeddedness. Nevertheless, the most profound technologies will be those that disappear, those that weave themselves into the fabric of everyday life until they are indistinguishable from it [40]. These can be

achieved by integrating large-scale mobility with the pervasive computing functionality [28]. This integration is expected to cause another shift in the evolution of computing towards ubiquitous computing where computing devices will be able to build incrementally dynamic models of their various environments and configure their services accordingly, while still being mobile [28]. Accordingly, they argue that these devices should be able to remember past environment they operated in and ensure easy and smooth re-entry and also possess the ability to build up service in new environments.

Figure 1. Evolution of computing (adapted from [28]) According to Weiser [40], ubiquitous computers will come in different sizes, each suited to a particular task. They will understand locations and people will simply put them into use unconsciously in daily life and work activities. One example of services that ubiquitous computing has enabled is the worldwide roaming services of the GSM wireless mobile communication. A mobile terminal automatically detects the service provider at any particular location outside the area of coverage of the main carrier. Of particular interest here is the way the terminals connect to different service networks depending on the location. This could also be extended to a whole range of back office operations like billing and sharing of the revenue among operators, which seems to be without much conflict. Even though ubiquitous computing is expected to have effect on every sphere of human endeavour, the focus here is on the possible challenges

it poses in service industry. For general examples of possible impacts of ubiquitous computing, see [40] and [17], and see [27] for the challenges these developments bring in information systems practice and research.

4. Ubiquitous Services: Influence of Ubiquitous Computing on Service Provision The foundation of the applications of ubiquitous computing in our daily life and workplaces was comprehensively presented by Weiser [40]. The specific impact which ubiquitous computing could have on services was specifically discussed by Fano and Gershman [17]. They predicted a world of ubiquitous commerce where the definition of what we

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today call right services, right time, and right person will all change as well as the means and kinds of interaction. This could be extended beyond commerce to government and public services where the use of IT is currently gaining considerable attention. Ubiquitous computing will bring a new dimension to the nature of customer relationships since customers will be able to interact with a service through product rather than a medium like a PC or a telephone [17]. Ubiquitous computing consolidates the advantages that traditional business computing, pervasive computing and mobile computing had brought into services. We should note that the changes in computing services are not replacement but evolutionary, ubiquitous computing incrementally adds to the capabilities of traditional business, mobile and pervasive computing along the mobility and embeddedness dimensions. Ubiquitous computing will significantly improve on the earlier identified advantages of IT-based services [42], which include better conservation of time where the delivery of service could become instantaneous and more efficient. With the promise of anywhere anytime delivery, customers would be able to achieve the level of convenience they sought in service. Another important advantage ubiquitous computing could bring to service is in privacy, with less human intervention and contact, customers could transact their business in absolute privacy1. These two advantages are hinged on the fact that time and control is important to customers during service provision [13]. Ubiquitous computing could enhance delivery of multi-service simultaneously. Even though, IT in general has achieved these advantages to certain extent, the proliferation of ubiquitous computing will drastically improve all these advantages. Using the four characteristics of services, I now illustrate how ubiquitous computing could affect the service provision.

4.1. Intangibility Since service can only be experienced, ubiquitous computing could affect customers’ experience by improvement of the timeliness of delivery with provision of the best services possible irrespective of the location of the customers. With ubiquitous computing, it would be easier to associate service with people than with location since a provider could immediately know the location of the customer and contact the nearest provider to respond to the need of 1

On the assumption of ethical behavior of service provider and reasonable control over the activities of hackers

the customer. Similarly, a customer could access numerous service providers and information sources. Thus a customer will have unlimited choices of services and providers at almost zero searching cost. We have witnessed possible impact of ubiquitous computing in the application of Internet, where service could be delivered at lower cost, faster, and where location of service providers become less relevant.

4.2. Inseparability (of production and consumption) With the awareness of location of customers, the location of business will shift to wherever the customer is located and remote service provision will further blur the line between production and consumption. Ubiquitous computing increases the chance of customers’ participation in service provision, although the interaction may primarily be with non-human agent. According to Weiser [40] “Ubiquitous computers… reside in the human world and pose no barrier to personal interactions. If anything, the transparent connections that they offer between different locations and times may tend to bring communities [customer and provider] closer together”. Ubiquitous computing provides customers with choice of medium of interaction, a customer could immediately locate the next available service provider and have array of means of contacting them: via phone, email, or face-to-face. The provider will also be able to instantly recognize the need of the customer and offer timely assistance. Building relationship with customer has been claimed to be difficult with IT since it is better done face-to-face [13][24]. Ubiquitous computing could, however, allow customers to interact with their service providers selectively in most easy and painless way. This could strengthen the providers’ ability to build strong relationships with customers. Ubiquitous computing could improve awareness, accessibility and responsiveness, all factors that are essential in establishing and maintaining a relationship [17].

4.3. Perishability Since ubiquitous computing could enable a provider to determine the momentary need and location of customer, the management of demand could be handled effectively. It would not be difficult for the provider to immediately know that the customer may not be able to keep an appointment and the rescheduling would not be difficult with the diary of the customer available to the service provider. Although security and privacy might be affected, there

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has been a suggestion on the way it could also be resolved. Fano and Gershman [17] suggest that the issue of privacy will create a new business opportunity in privacy management. Provision of service heavily depends on availability of information and it affects the way demand can be managed. Weiser [40] summarizes what could happen with ubiquitous computing and how perishability nature of service may be affected: When almost every object either contains a computer or can have a tab attached to it, obtaining information will be trivial: "Who made that dress? Are there any more in the store? What was the name of the designer of that suit I liked last week?" The computing environment knows the suit you looked at for a long time last week because it knows both of your locations, and, it can retroactively find the designer's name even if it did not interest you at the time.

4.4. Heterogeneity Since service vary in standard and quality from one provider to the next or from one occasion to the other [5], ubiquitous computing will enhance customer’s ability to choose the best provider at the cost they could afford. Service providers will no longer be able to take advantages of customers’ ignorance of alternatives and this could altogether redefine service delivery [17]. This could force service providers to become more responsive knowing the extent of competition and options available to customers. While the present state of mobile computing could enable customers to easily choose their service provider and compare cost, ubiquitous computing also enables providers to locate potential customers and approach them directly with their needs.

5. Conclusion and Future Research Direction In this paper I explore the impact of ubiquitous computing on service provision. The fundamentals of service, service experience and quality, and dimensions of service quality were reviewed. Using the characteristics of service i.e. perishability, heterogeneity, inseparability and intangibility, an analysis of the ways ubiquitous computing could affect these characteristics and the customer’s experience were presented. The main limitation in this discussion is in the lack of examples suitable for each characteristic. This limitation is due to the difficulty of imagining a future scenario where all the phenomena are not well known. However, there have been some

general examples in literature [17][40]. Also, the current discussion is too general without focus on any particular ubiquitous computing applications or a specific service. A further study is required to investigate the impact of a particular ubiquitous computing on a type of service in a given context. The discussions in this paper contribute to the prospect of ubiquitous computing application in service industry and a basis for future studies. It presents a background for a proposed longitudinal study on ubiquitous computing with specific interest in public service provision in developing countries. According to Lyytinen and Yoo [27][28], studying ubiquitous computing entails studying something that does not yet exist and that researchers need to find ways to study personal issues at a global level. While they carefully considered issues from individual to inter-organizational levels and recognized the need to think about them globally, yet, like most new research issues in information systems, they seem to assume universal and even stage of computing globally. Whereas, many of the issues they highlighted are very relevant in most high income countries where there is high mobility, digital convergence and mass scale adoption of the accompanied services, they neglect the fundamental problems in developing countries where many basic indirect issues need to be resolved before the issues that are directly connected to ubiquitous computing could be addressed. This informs my choice of developing countries where there are still several issues that need to be resolved especially as they relates to provision of basic infrastructure like telecommunications, banking and education, all which are essential for IT-enabled service. Starting with mobile computing, it will be possible to study how public services are being developed and changing over a period of time with advances in information technology. This can provide a good complement to the current interest in e-government services and management.

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