Web Breeds Services Apart-But How to Get Them Right?

Abstract

Since the recognition of IT as a source of competitive weapon—the links to customers and suppliers as the main artillery—the emphasis has been on early movers. But when viewed from the vantage point of the market, i.e., the efficiency of services, the heroic efforts and temporary success of the pioneers appear more like an episode of a survival game as opposed to a brutal war that would lead to the acquisition of new territories. The exciting part of the process—the attack with new weapons—has been exercised but without any deliberate strategy to ensure subsequent productivity and administrative stability. This chapter reiterates some experiences since the mid-80s when the technological dominance pursued by the companies often led to staggering investments never to be recovered. We use an established business model to outline the paths for evolutionarily sound development. The model of Services and Channels is used to illustrate the premises of a balanced diffusion of IT into different services. The main message is that the application of IT creates opportunities to diverge the existing services into new types of channels. This breeding process creates new generations of services, some of which add value to the customers and some destroy the profits of more conventional competitors. We are particularly interested if the Internet as an open network has had (or will have) any different impact on the services and channels than did the dedicated ICT. For illustration, we use some of the service innovations described in this book, which also provide prime examples of more detailed mechanisms by which the new services have been organized. The assumption is that the different types of services differ inherently by the integration and coordination of the service relationships. We propose a framework for analyzing the mechanisms of integration and coordination of service processes, including different scope (the parties involved) and media (joint routines, shared resources and common interests) that contribute to such mechanisms. We conclude that the validity of the model of Services and Channels extends well into the era of the internet, but also that the correct application of the model calls for better understanding of the mechanisms of integration of channels and coordination of services.