Research Highlights - April 2020

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How can you use the findings from the latest research studies to improve your performance and the performance of your organization?  We’ll provide the highlights and key ideas you won’t get anywhere else.

Research shows that not all types of service firms are equally suited to automation.

The temptation for businesses to use artificial intelligence and other technology to improve performance, drive down labor costs, and better the bottom line is understandable. But before pursuing automation that could put the jobs of human employees at risk, it is essential that business owners take careful stock of their operations.”  That’s the conclusion of researchers at Rensselaer Polytechnic Institute published in a special issue of the Journal of Service Management on “AI and Machine Learning in Service Management.”

The researchers go on to say, “AI has the potential to upend our ideas about what tasks are uniquely suited to humans, but poorly implemented or strategically inappropriate service automation can alienate customers, and that will hurt businesses in the long term.”

The choice to use automation or AI needs to be a strategic decision. If a business competes by offering a substantial amount of human interaction or has a range of service offerings that change from client to client, the company will have a lower success rate in replacing human professionals with AI technologies. On the other hand, businesses that limit customer choice and interaction will see greater success if they choose to automate.

Business leaders considering a switch to AI-based automation must carefully examine their strategies for managing knowledge resources. Before companies invest in AI, they need to understand whether replacing human judgment and interaction with digital technologies and algorithms is a strategically sound idea.

Like any form of knowledge, AI, and all forms of service automation have their place, but managers need good models to know where that place is.

Furthermore, the researchers determined that in businesses where trust and reputation are critical factors in building and maintaining a client base, people will be more likely to be effective than automated technologies. Conversely, in...

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