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Using Information Technology
to Improve Customer Service:
Evaluating the Impact
of Strategic Opportunities
Gabriele Piccoli
Luis D. Anglada
Richard T. Watson
ABSTRACT. Little guidance exists in the literature with respect to the
search for and evaluation of opportunities to use advanced Information Tech-
nology to enable outstanding customer service. In this article, the authors in-
tegrate existing frameworks to contribute to fill this void. The authors
synthesize the Customer Service Life Cycle (CSLC) and the Customer Rela-
tionship Change Spectrum (CRCS). CSLC analysis is designed to produce
idea generation and to support the creative process of identifying opportuni-
ties for IT investment in support of customer service. The CRCS enables
managers to evaluate the organizational impact of proposed innovations. The
Gabriele Piccoli is affiliated with the School of Hotel Administration, Cornell University,
Ithaca, NY 14850 (E-mail: gp45@cornell.edu).
Luis D. Anglada is affiliated with Expedia, Inc./Travelscape, 13810 SE Eastgate Way,
Suite 400, Bellevue, WA 98005 (E-mail: luisang@expedia.com).
Richard T. Watson is affiliated with The University of Georgia, Terry College of Busi-
ness Administration, Brooks Hall, Athens, GA 30602-6273 (E-mail: rwatson@terry.uga.
edu).
The authors would like to thank their colleagues Roy Alvarez and Richard Moore
for their help in developing some of the examples presented here.
Journal of Quality Assurance in Hospitality & Tourism, Vol. 5(1) 2004
http://www.haworthpress.com/web/JQAHT
© 2004 by The Haworth Press, Inc. All rights reserved.
Digital Object Identifier: 10.1300/J162v05n01_02 3
ARTICLES
combined framework offers an integrated planning framework spanning idea
generation and feasibility analysis that should provide useful to both re-
searchers and practicing managers. [Article copies available for a fee from The
Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address:
<docdelivery@haworthpress.com> Website: <http://www.HaworthPress.com>
© 2004 by The Haworth Press, Inc. All rights reserved.]
KEYWORDS. IT-enabled customer service, customer service life cy-
cle, IT-driven change
INTRODUCTION
With the advent of the Internet and a host of advanced Information
Technologies (IT) that take advantage of this global network infrastruc-
ture, the role of technology as an important strategic weapon has solidi-
fied (Feeny, 2001). A thorough understanding of IT and its impact on
business strategy is a prerequisite for business success. While many
authors write about using IT, particularly the Internet, to gain a competi-
tive advantage, few offer systematic approaches to identifying opport-
unities. Therefore, fundamental questions are often left unanswered.
How can managers ensure that they have thoroughly searched for all po-
tential opportunities? What breakthroughs may have been overlooked
by a poorly executed search strategy? How can managers critically
evaluate the impact of potential initiatives on the organization and its re-
lationships with customers? The Customer Service Life Cycle (CSLC)
(Ives and Learmonth, 1984; Piccoli et al., 2001) is a framework that pro-
vides guidance to managers planning the strategic uses of technology in
support of customer service. The Customer Relationship Change Spec-
trum (CRCS) (O’Hara et al., 1999) is a framework that identifies IT-in-
duced levels of change and provides guidance for managing it.
In this article, we combine these two frameworks to provide an inte-
grated planning tool, encompassing idea generation and evaluation, to
aid researchers and managers in evaluating the role of advance informa-
tion technology in support of customer service. This article is organized
as follows: We first briefly discuss the CSLC and the CRCS frame-
works. We then provide arguments in support of merging the two and,
through the analysis of examples from the hospitality industry, we illus-
trate the combined framework. We conclude with some recommenda-
tions to managers and professionals who are faced with the challenge of
managing this change.
4 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
CUSTOMER SERVICE LIFE CYCLE
The CSLC is a framework for creative idea development and strategic
IT planning. CSLC analysis has a long tradition in information systems
literature since Ives and Learmonth (1984) first conceptualized how tech-
nology can create value by supporting customer service (Feeny, 2001;
Ives and Mason, 1990; Ives and Vitale, 1988). The CSLC describes the
relationship between an organization and its customers in four major
phases (see Figure 1). Using examples, the CSLC shows how IT is used
or could be used to support customers’ needs and create value for custom-
ers. The recent popularization of the Internet has created an easily acces-
sible and relatively affordable link between the firm and its customers,
and has provided increasing opportunity for application of the CSLC per-
spective (Cenfetelli and Benbasat, 2002; Feeny, 2001; Gonsalves et al.,
1999; Piccoli et al., 2001).
Typically, the complete life cycle of interaction between customers and
the organization can be broken down in four main phases (see Table 1): re-
quirements, acquisition, ownership, and retirement (Piccoli et al., 2001).
As customers move from one phase to the next, a firm has the opportu-
nity to leverage IT to streamline the relationship, simplify the customer’s
Piccoli, Anglada, and Watson 5
Requirements
Acquisition
Ownership
Retirement
FIGURE 1. The Customer Service Life Cycle
role, increase convenience or reduce cost, and generally use IT to im-
prove customer service, thereby locking customers in with outstanding
IT-enabled customer service (Feeny, 2001). The CSLC framework pro-
vides a tool for identifying opportunities and strategic options. But the
CSLC does not provide any basis for evaluating the magnitude of change
that proposed innovations entail. In the remainder of this article, we dis-
cuss the Customer Relationship Change Spectrum (CRCS), a framework
that complements the CSLS by providing the basis for evaluating the im-
pact of IT innovation and for developing strategies to cope with the
change. In the next section we introduce the framework. We then de-
scribe brief cases of innovative uses of IT to support customer service and
categorize them using both the CSLC and the CRCS. We conclude the ar-
ticle with directions for management engaging in IT innovation.
CUSTOMER RELATIONSHIP CHANGE SPECTRUM
To understand how advanced IT, and the Internet in particular, can
impact the relationship between an organization and its customers, we
rely on the notion of socio-technical systems (Bostrom and Heinen,
1977a; Bostrom and Heinen, 1977b; Land and Hirschheim, 1983;
Mumford, 1996; Mumford and Weir, 1979). A socio-technical system
is comprised of four highly interrelated components: people, organiza-
tions, tasks and technology. These are organized in two interrelated sub-
systems: the technical system and the social system (Bostrom and
Heinen, 1977a; Bostrom and Heinen, 1977b). We define both the orga-
6 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
TABLE 1. Primary Customer Service Life Cycle Phases
Phase Definition
Requirements
The customer realizes the need for a specific product or service and
specifies its attributes.
Acquisition
The customer orders, pays for, and takes possession of the product or
begins to receive the service.
Ownership
The customer has the product or is receiving the service and must deal
with issues involving its efficient and effective use.
Retirement
The customer is disposing of the product or is terminating the service. He
may begin to think of buying again, leaving the service source, trading in
or returning the old product, evaluating the total cost of ownership, or
managing the after service interaction (e.g., managing reward programs,
renegotiating contracts).
nizations partaking in a transaction, and the organization’s relationship
with its customers as socio-technical systems.
The social system is comprised of people and organizational struc-
tures. The people dimension is characterized by the attitudes, skills, and
values of individuals in the organization or in the customer organization.
Organizational structures emerge on the basis of reporting and communi-
cation configurations, workflow patterns, and authority. The technical
system is defined by technology and tasks. Technology represents any ar-
tifact adopted to solve a problem or perform an organizational task. Tasks
are the value adding steps that are performed by the organization to pro-
duce its outputs, products, and services (see Figure 2).
As the four dimensions in the socio-technical system interact with
one another, they shape the relationship between the organization and
its customers. That is, they determine what tasks will be performed by
the organization, what roles customers will assume in these interac-
tions, what technologies are used to interface between the organization
and the customer, what organizational structures are developed, and so
on. A variation in one of these variables produces systemic changes that
reverberate throughout the relationship and must be carefully managed
(Dewar and Dutton, 1986; O’Hara et al., 1999). The basic premise of
the CRCS framework is that different technological innovations have a
different magnitude of impact on the system dimensions. Following a
terminology introduced by Zuboff (1988), we identify three levels of
Piccoli, Anglada, and Watson 7
Social System Technical System
Structure Technology
People Task
Automate
Informate
Transform
FIGURE 2. Customer Relationship Change Spectrum (Adapted from O’Hara
et al.,1999)
change that follow the introduction of IT innovations: automate,
informate and transform (see Table 2).1
These three levels of change are incremental, meaning that higher or-
der change incorporates lower order change. In the remainder of this
section we discuss each one in turn, focusing on the dimension of the
systems that are affected by the introduction of technology.
Automate
The simplest order of change ensuing from the deployment of advanced
IT is automation (Zuboff, 1988). The automate level of change involves
technology and task (Figure 2, dotted line). Typically, a technological inno-
vation is introduced that changes how a given task is completed. The task
already exists, but through the introduction of technology it can be per-
formed more efficiently or more conveniently (O’Hara et al., 1999).
For example, many banks have recently taken advantage of the
Web as a customer interface, and allow their customers to perform a
number of transactions through their Web browser. The tasks per-
formed are not new and were previously executed through a touch-
tone phone interface. What has changed though is the manner in
which the task is now performed. The innovation seeks to achieve ef-
ficiency while providing higher convenience and more choice to the
customer. A similar example, pertaining to the hospitality industry,
is the recent testing of wireless checkout by many hotels. Rather than
checking out using the common television-based interface, custom-
ers are able to approve and charge their folio directly using any com-
patible wireless device. The task, independent checkout, is not new,
but through the introduction of IT, the manner in which it is per-
formed has been improved.
8 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
TABLE 2. Degrees of Change in the Customer Relationship Change Spectrum
Change Levels Definition
Automate
Changes how an established task is performed through the introduction
of technology.
Informate
The role of the people performing the task changes, as well as the manner
in which they interact with technology.
Transform
The organizational structure changes. Reporting structures and authority
hierarchies are modified, new tasks are introduced, and the manner in
which technology is selected, developed and managed changes.
Informate
The second order of change, which incorporates the first one, is
dubbed informate (Zuboff, 1988). Informate level changes cause a dis-
ruption in the interaction between people and technology, and people
and the task (Figure 2, dashed lines). Thus, when the introduction of
technology leads to informate level change, the manner in which the
task is accomplished is altered (automate level change). But more im-
portantly, the people that perform the task are affected by the change–
either their role is modified or the individuals performing the task
change altogether. Finally, the way people interact with technology also
undergoes modification (O’Hara et al., 1999). These changes occur as a
consequence of substantial information intensity brought about by the
information technology introduced (Zuboff, 1988).
The most recurrent examples of IT enabled informate level change
involves customer self-service. As hotel brands have realized the poten-
tial of the Internet as a distribution channel for their inventory, they
have built booking engines and branded portals that customers can di-
rectly access to procure hotel stays. Customers can now find informa-
tion on properties and rates, price different stay scenarios, book their
stay, automatically store special requests and preferences, check their
guest history and frequent guest programs, and perform a host of other
tasks. Not only has the manner in which the task is performed changed
(automate level change), but the individuals performing the task are
now different (the customer rather than the hotel associates). The way
these individuals interact with technology has also changed; they now
have direct access to the hotel’s booking engine through the Web, rather
than using the telephone to contact the property or the call center.
Transform
The third and most radical level of change is dubbed transform
(Zuboff, 1988). Transform level change incorporates both automate and
informate level change, and it causes a disruption in the organizational
structures of the business connected with the change (Figure 2, solid
lines). Most radical customer service technologies are likely to affect
organizational structures by way of changes in communication patterns,
reporting structures, and workflow arrangements. Over and above
lower level changes, transform implies an interaction among the organi-
zation and its task, technology, and people. The interaction between
structure and technology is substantiated by a change in the way the or-
Piccoli, Anglada, and Watson 9
ganization selects, uses, and manages technology. The interaction be-
tween the organizational structure and the people generally results in a
change in the reporting and authority structure of the organization. A
flatter or more permeable organizational structure usually emerges after
the technology implementation. The interaction between the organiza-
tional structure and tasks manifests itself in a novel way of task accom-
plishment or a new set of tasks (O’Hara et al., 1999).
Examples of innovations that bring about transform level change are
fairly complex. As hotel operators are renewing their efforts to better
serve customers by developing a deep understanding of their needs and
preferences, Customer Relationship Management (CRM),2enabled by
recent advances in IT, has emerged as the appropriate tool. National ho-
tel chains have particularly compelling reasons for developing compre-
hensive CRM initiatives designed to capture customer data at every
customer touch point and disseminate it to all the properties affiliated
with the brand.3Technological barriers to achieving such a level of
comprehensive data gathering and dissemination have fallen with the
widespread adoption of networks based on Internet technology and the
Application Service Provider (ASP) model.4CRM initiatives in hospi-
tality constitute an example of transform level change that deeply af-
fects the organizational structure.
With large scale centralized CRM initiatives, technology is centralized
at the brand level, rather than being internally managed at each individual
property. Thus, assessment regarding purchase, design, and deployment
of new technology, data collection, and data formatting decisions are no
longer taken at the property level. It should be noted that these decisions
affect the technology and information that will be central to operations at
the property level. Thus, this change in organizational structure has a di-
rect impact on each property.
The relationship between structure and task is also radically impacted.
For example, housekeeping personnel may receive customized informa-
tion regarding how a specific room should be prepared (e.g., what pillows
to use, what mix of drinks to make available in the minbar, desired tem-
perature) based on a triangulation of information extracted from the Prop-
erty Management System (PMS) and the customer profile database.
Finally, the relationship between structure and people changes as well,
likely resulting in a flatter managerial structure. For example, front line em-
ployees may now access comprehensive customer data and, on the basis of
such information, may be empowered to react to unusual events that took
supervisor intervention before. As a consequence, the technology-based
10 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
innovation, large scale CRM, has stimulated a flattening of the organiza-
tional structure and the empowerment of front line employees.
INTEGRATING THE CSLC AND CRCS ANALYSES
Customer value, as originally defined, represents an “overall assess-
ment of the utility of a product based on perceptions of what is received
and what is given” (Zeithaml, 1988). This definition stresses that cus-
tomer value is a measure of the perceived trade-off between what cus-
tomers must contribute (e.g., money, time, effort) and what they receive
in return (e.g., quality, convenience) when using a particular product
(Heskett et al., 1997).
A core product and service (i.e., what the firm sells) is generally ac-
companied by a host of supplementary services (Lovelock, 1994). These
supplementary services, the complementary customer service activities
that enable the customer to obtain the core product or service, are now
recognized as an important component of customer value and a critical
determinant of competitive advantage (Bharadwaj et al., 1993; Lovelock
and Yip, 1996). Because many of these supplementary services are infor-
mation based or otherwise supported by information systems, technology
is often their key enabler (Lovelock and Yip, 1996). The literature pro-
vides many examples of firms that have been able to improve customer
service through investment in IT and the appropriate design of informa-
tion systems supporting service (Karimi et al., 2001). However, the iden-
tification of opportunities for using IT and the consequent investment in
technology are conditions necessary, but not sufficient, to improve ser-
vice (Brown and Stange, 2002; Karimi et al., 2001). Instead, firms are
urged to evaluate how IT innovations they adopt align with and impact
tasks, the people performing the tasks, and their organizational structure
(Reich and Benbasat, 2000). In other words, successful IT-based innova-
tion is predicated on the ability of the firm to understand and manage the
degree of IT driven change the innovation creates.
CSLC analysis is designed to produce idea generation and to support the
creative process of identifying opportunities for IT investment in support of
customer service (Piccoli et al., 2001). Yet, CSLC analysis is silent to the
implementation requirements of innovation. By combining the creative po-
tential of the Customer Service Life Cycle (CSLC) framework and the
evaluative role of the Customer Relationship Change Spectrum (CRCS),
we offer an integrated planning framework spanning idea generation and
feasibility analysis. The combined framework, depicted in Figure 3, en-
Piccoli, Anglada, and Watson 11
ables management to generate innovative strategies that integrate IT with
the organization’s customer relationship strategy. It helps the organization
to systematically explore the complete space of potential projects rather
than remaining captive of a few cells. In particular, it avoids an undue focus
on the automate sector, where opportunities are most easily envisioned.
Another advantage of integrating the two analyses is that it allows
firms to balance their portfolio of IT-enabled customer service innova-
tions under investigation and development. Since different IT innova-
tions lead to different magnitudes of change, and the consequent need for
management attention (O’Hara et al., 1999), managing innovations as a
balanced portfolio, rather than as independent initiatives, is likely to max-
imize their chances of successful implementation and the firm’s payoff.
ILLUSTRATIVE CASES
In this section, we illustrate how the combined framework allows re-
searchers or managers to categorize IT-based customer service innova-
tions based on the phase of the CSLC they impact and the degree of
12 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
Automate
Informate
Transform
FIGURE 3. Combined CSLC and CRCS Frameworks
change they engender. Thus, we have selected examples from the hospi-
tality industry that identify cases when various levels of change–auto-
mate, informate and transform–occur at each phase of the customer
service life cycle–requirements, acquisition, ownership and retirement.5
This combination is quite powerful because managers find frameworks
useful (Argyres and McGahan, 2002) and cases are stimulating because
humans frequently learn by modeling the behavior of others (Bandura,
1977). We scanned recent issues of hospitality technology magazines
(Hospitality Upgrade and Hospitality Technology), as well as hospital-
ity technology newsletters, in search of in-depth stories of recent IT-
based innovations. We then categorized the innovations and selected
examples that best illustrated our proposed framework. Note that it is
not our purpose in this article to formally validate or test the combined
framework, but to simply illustrate its ability to organize a wide array of
innovations so as to allow managers and researchers to identify oppor-
tunities and evaluate their potential impact. Future research should for-
mally demonstrate the superiority of the integrated framework for
identifying potential applications.
Automate
CSLC Phase: Requirements–Lindblad Expeditions
Lindblad Expeditions uses its Web site to provide customers with de-
tailed information about its expeditions. This same information was
previously available in paper-based brochures. Using Internet technolo-
gies, customers can now conveniently and thoroughly evaluate the com-
pany’s portfolio of offers. They can watch video clips of past journeys,
and read logs of expeditions in progress.
While the task performed by the customer has not changed, information
gathering and evaluation of Lindblad Expeditions’ offers, the manner in
which the task is accomplished has been modified by the introduction of
technology.
CSLC Phase: Acquisition–Papa John’s
Papa John’s International uses Internet technologies to support its
immediate customers–the company’s current and potential franchi-
sees–during the acquisition phase by simplifying the process of obtain-
ing a franchise. Rather than completing a paper-based application form,
potential franchisees have the option of completing the application on-
Piccoli, Anglada, and Watson 13
line at Papa John’s website and quickly initiate the application process.
By using technology, Papa John’s simplifies the customer’s acquisition
process, increases its exposure, and the number and quality of applica-
tions it receives.
CSLC Phase: Ownership–Amerisuites
Amerisuites employs its Intranet to maintain online versions of its
most recent operations, marketing, and training manuals. Selected fran-
chisees and their employees access them online on an as-needed basis.
Moreover, Amerisuites headquarters can issue messages alerting its
customers, the franchisees, of changes in the online reference material.
Since the material is in electronic format, the customer can take advan-
tage of the search and ordering capabilities typical of the medium.
Amerisuites eliminates the costs associated with expensive printing
and postage because the documentation can be easily accessed and
printed by franchisees when needed. More importantly, it can better
serve its customers by simplifying the ownership phase. The underlying
tasks, distribution and use of standard franchise documentation, has not
changed.
CSLC Phase: Retirement–TGI Fridays
TGI Fridays is testing technology from Jtech Communications, Inc.
to enhance customer service during the retirement phase of the CSLC.
Using an electronic comment card system, restaurateurs automate the
traditional paper-based customer survey. When patrons finish dining
and request the check, they are presented with an Electronic Comment
Card survey unit. The server asks the customers to take a few moments
to complete a survey. The device queries guests with a series of ques-
tions that prompt them to rate everything from the service they received
to the atmosphere of the restaurant. The device captures and downloads
guest comments automatically to a database.
Informate
CSLC Phase: Requirements–Zagat
Zagat uses its web page to publish reviews and provide information for
more than 20,000 restaurants on such dimensions as quality of food,
décor, service, and cost. Customers can use this information to select a
14 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
restaurant that matches their interests and taste. The company has aug-
mented the information traditionally distributed through paper-based res-
taurant guides. It now enables restaurant customers to rate their restaurant
experiences on-line and retrieve information about others’ experiences.
In so doing, Zagat has changed the role of its customers, making them
part of the rating procedure. Customers are no longer only users of infor-
mation, but also expert judges of the dining experience.
CSLC Phase: Acquisition–Marriott
Like many other hospitality enterprises, Marriott has developed its
own bookable Web site to enable customers to independently make reser-
vations in any of its affiliated hotels. Enabling customers to self-serve
their needs through the Web site changes the manner in which the task of
making a reservation is accomplished (automate level of change). Instead
of calling a travel agent or a hotel directly, customers can use the Internet
to make the reservation themselves. But, more importantly, the individu-
als who perform the task are no longer reservation staff or travel agents,
but the guests themselves. The technology with which the customer inter-
acts to perform the task has also changed from telephone, or fax, to
Marriott’s Central Reservation System (CRS), accessed through a Web
interface.
CSLC Phase: Ownership–Planet Smoothie
Planet Smoothie, the franchiser of fruit beverage stores, maintains an
Intranet-based discussion forum where franchisees can ask questions,
discuss issues or problems, and share ideas. This use of Intranet technol-
ogy alters the organizational role of current franchisees–Planet Smoothie
customers–and the way they interact with technology. Before the imple-
mentation of the online forums, franchisees managed the information
gathering process via telephone, fax, or personal contact on a one-to-one
basis with the franchiser. Now, instead of just asking questions and re-
ceiving individual responses, franchisees answer questions and discuss
issues with other franchisees, thereby assuming the role of knowledge
creators in the franchise network. The system also allows the participants
in the franchise network to set up sessions to discuss issues or problems
and share ideas. More experienced franchisees become trainers for newer
ones and, through these sessions, augment the standard training material.
Piccoli, Anglada, and Watson 15
CSLC Phase: Retirement–American Express
American Express’ interactive travel procurement product, AXI
Travel, enables corporate employees to independently book travel and
entertainment through the corporate Intranet. More importantly, AXI
Travel provides support to corporate travel managers by automatically
enforcing travel policies and collecting extensive information about
each transaction. In the retirement phase, when corporate clients are
evaluating and accounting for travel and entertainment services, AXI
Travel enables travel managers to run extensive reports. Among other
things, they can analyze the total spent with each provider (e.g., airline,
hotel), evaluate average room rate or airline ticket price for different
geographical markets, determine the cost of bookings out of policy, and
audit what departments or employees are mostly responsible for these
bookings. The introduction of the technology induces a role shift for
travel managers, who no longer focus mainly on booking reservations,
but instead concentrate on analyzing the wealth of data recorded by the
system to streamline the process, create savings, and negotiate better
rates with travel suppliers.
Transform
CSLC Phase: Requirements–Priceline.com
Hotels that have joined the Priceline.com distribution network are
taking advantage of Priceline’s patented “demand collection system.”
This system allows perspective hotel guests to specify the price they are
willing to pay for the product that best suits their needs while remaining
flexible on other dimensions of their stay (e.g., brand, exact location).
Hotels that use the Priceline.com demand collection system are better
able to serve the price sensitive, brand insensitive, segment of the poten-
tial customer base because they provide such customers with a booking
choice that is best suited to their idiosyncratic preference set. In order to
do so, the hotels need to create available inventory and set prices in the
system operated by Priceline.com. They also receive a number of de-
tailed reports regarding activity and unfulfilled demands for their inven-
tory. These reports allow the hotel to effectively use the demand
collection system and maximize revenue on that inventory.
The introduction of Priceline’s demand collection system in the hotel
engenders extensive change. First, because the demand collection sys-
tem is not developed and maintained by the hotel, decisions and control
16 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
over the technology are no longer internal. Second, a new set of tasks
and decision processes must be designed to effectively use the demand
collection system and the extensive reports it produces (e.g., examine
historical unfulfilled demand, optimize Priceline rates, reconcile the
channel data with general revenue management forecasts). Finally,
large hotels might need to create new positions. More importantly, the
profile of the revenue management position within the organization’s
hierarchy grows and revenue mangers strengthen their position as deci-
sion makers with respect to room rates and availability.
CSLC Phase: Acquisition–eProcurement
The hospitality industry’s eProcurement solution providers have en-
countered considerable difficulty in achieving projected levels of adop-
tion. One of the reasons for such difficulty is that eProcurement imple-
mentations require a transform level of change, the most radical kind. In
both the hotel and restaurant industries, eProcurement solutions enable
online ordering of operational and non-operational supplies. The ePro-
curement intermediary hosts these solutions, therefore all decisions re-
garding the development and management of the technology are
outsourced. Moreover, the technology provides line level employees
with the tools and information necessary to order and acquire the prod-
ucts they require. Hotels and restaurants can empower line level person-
nel to make purchasing decisions and order supplies. These employees
may bypass the purchasing department and place the order directly on
the system with preferred suppliers. Thus, the introduction of the tech-
nology leads to a flattening of the organizational structure and a differ-
ent workflow in the adopting organization.
CSLC Phase: Ownership–Wyndham ByRequest
Wyndham Hotels and Resorts uses data warehousing applications
and the Internet to allow customers enrolled in its frequent guest pro-
gram, Wyndham ByRequest, to configure rooms to their liking. Using a
Web based interface, prospective guests create a very detailed profile of
their preferences (e.g., upper or lower floors, near or far from the eleva-
tor, preferred pillows and drinks). This information, combined with his-
torical guest stay data, is then used to enhance future stays at any
Wyndham property.
The changes introduced by this technology deployment center
around the organizational structure at each property in the Wyndham
Piccoli, Anglada, and Watson 17
system. Firstly, decisions regarding purchase, design and deployment
of new technology, data collection and data formatting are no longer
taken at the property level. Secondly, new tasks and a modified work-
flow are needed to deliver the consistent level of personalization prom-
ised to prospective guests. For example, housekeeping no longer pre-
pares rooms in a standard fashion, but receives customized information
regarding how each room should be readied. Finally, the technology
supports a leveling of the organization’s hierarchy and of the reporting
structure. Because front line employees have access to the comprehen-
sive customer information, they may be empowered to handle customer
needs directly without supervisory intervention. The introduction of the
technology promotes a flattening of the organizational structure and
supports the transfer of decision making to front line employees.
CSLC Phase: Retirement–Enterprise Systems
In the hospitality industry, as in many other industries, information
systems have developed in response to unique information needs and in
support of specific departments. As a result, many departments use in-
dependent systems that don’t share data. One example of this problem is
the limited transfer of data between the PMS and sales and catering ap-
plications. This lack of integration hinders the delivery of outstanding
service to groups during retirement. For example, groups that visit the
property recurrently could be provided with reports detailing actual oc-
cupancy, spend per visitor, meeting room expenditures, food and bever-
age expenditure, and the likes.
To solve the lack of integration, hospitality firms are turning to enter-
prise systems based on a single comprehensive data repository. The in-
troduction of such a system can improve customer service, but it entails
transform level change that must be effectively managed. First, the indi-
vidual divisions no longer have responsibility and control over the se-
lection and management of the technology (i.e., the independent sys-
tems), but systems selection and administration becomes a concerted ef-
fort. More importantly, the organizational structure, hierarchy, and re-
ward systems need to be reconfigured. For example, if individual
divisions are rewarded on the basis of their contribution to overall prof-
itability, conflict is likely to occur. Therefore, once the integrated enter-
prise system is introduced, the reward system must be reconfigured to
focus on total profitability. This reconfiguration may result in one divi-
sion being subsumed under the other, or in the creation of a super-ordi-
nate authority.
18 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
The grid depicted in Table 3 summarizes the above example, placing
them in the quadrant that they represent.
WHAT SHOULD MANAGEMENT DO?
We have melded the CSLC and the CRCS models into a coherent
framework and we have provided a number of hospitality industry ex-
amples to illustrate the key concepts of the combined framework. This
new tool for “seeing opportunities” enables managers to quickly evalu-
ate current and future initiatives, and gauge the breadth of their organi-
zational impact.
Understanding the typical challenges that accompany IT implementa-
tion forewarns management. Knowing which level of change it is at-
tempting to implement guides management in the selection of the
appropriate individuals to shepherd the change, to predict what level of
disruption and uncertainty should be expected, to determine who will be
affected by the change both internally and externally, and to identify
those individuals who should participate in particular elements of the
change process. Most importantly, the change spectrum spotlights the po-
tential for channel conflict and turf wars. We speak to these challenges in
turn, addressing each of the three levels of change respectively.
Piccoli, Anglada, and Watson 19
TABLE 3. Exemplars Grid: The Grid Summarizes the Innovators and Their Use
of Technology
Automate Informate Transform
Requirement Lindblad Expeditions:
Multimedia Web-based
brochures
Zagat:
Web-based
public customer ratings
of dining experience
Hotels using Priceline:
Demand collection
system for rooms
distribution
Acquisition Papa John’s
International:
Online
franchise application
forms
Marriott:
On-line rooms
distribution and reward
program management
eProcurement solution
providers:
Online
ordering of supplies
Ownership Amerisuites:
Intranet
based operations,
marketing, and training
manuals
Planet Smoothie:
Intranet-based
franchisee discussion
forum
Wyndham International:
Web-based preferences
configuration
Retirement TGI Fridays:
Electronic
diner comment cards
American Express:
Intranet-based travel
and entertainment
procurement system
Enterprise Systems
Users:
Integrated
systems allowing for
accurate reporting
Automate
Automate level change calls for the implementation of new technol-
ogy to perform an existing task more easily, conveniently, timely, and
efficiently. The limited scope of this change makes it comparatively
easy to manage. Generally, both management and the users broadly un-
derstand how the technology will change the manner in which the task is
performed and the relative advantages and potential risks of its intro-
duction. Since the tasks themselves are not changed (i.e., only the man-
ner in which they are accomplished is impacted) and the role of the
people performing them is only marginally affected, the rationale and
the major implications of change are easily grasped by those involved.
Justification of automation level change is also fairly straightforward, as
the cost savings are readily calculated. There is relatively little disrup-
tion of both internal and inter-organizational business processes and op-
erations.
While automate does not directly affect people’s roles in a transac-
tion, it does create the need for some retooling. For example, hotels that
roll-out wireless enabled checkout through guest owned devices such as
cell phones and PDAs often leverage existing remote self-checkout sys-
tems. What has changed is the interface. A procedure that used to be
carried out through a TV-based interface is now performed through
PDAs. Thus, there is no disruption of internal operations, or in the
guest’s role, as the individual in charge of the checkout procedure.
Nonetheless, both customers and employees must be educated about the
new service and must be trained on the specific functionalities and pro-
cedures of task accomplishment.
Automate calls for very little senior management sponsorship and in-
volvement. Given the fairly straightforward nature of the change, and
the limited impact on the organization and people, front line managers
are likely best suited to head the change effort with the support of appro-
priate information systems specialists. The marketing function should
head the customer education effort.
Informate
Informate level change has its strongest influence on the people di-
mension of the socio-technical system. It has more far reaching implica-
tions than does automate and requires more intensive management.
Furthermore, where the goal of automate is essentially cost saving,
informate has higher order objectives, such as increasing market share
20 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
and customer service. Thus, the financial outcomes are more uncertain
and justification is more difficult. The decision to proceed with an
informate project should be made by a general manager who can visual-
ize the full ramifications of the change.
Those affected can include the organization’s employees as well as
customers, and the employees of customer organizations. The first
change that must be effectively managed is the interaction between the
people, their tasks, and the technology. When people’s roles are modi-
fied, inertia and resistance to change typically arise and appropriate
change management procedures must be deployed to overcome opposi-
tion.
For example, PMS vendors are pushing wireless extensions that en-
able front desk personnel to leave their station and check-in guests as
they make their way to their assigned room. This seemingly small
change may prove distressing to employees who are required to aban-
don the familiar grounds of their station, where they have ready access
to their colleagues. If management fails to recognize and acknowledge
potential problems, informate initiatives may fail. Ideally, managers
should realize the potential impact of an informate change and take
proactive steps to lessen transitional problems. For example, in the case
of remote check-in, equipping remote employees with a two way radio
link to the front desk may be the appropriate solution. When the intro-
duction of the new technology results in customers taking on new roles,
they must be educated in the completion of these new tasks. Customers
must be trained, and possibly offered incentives, to undertake tasks pre-
viously fulfilled by employees.
A less apparent, but nonetheless very important, implication of
informate is the reaction of those who lose their role to the customer.
These may be internal employees or external business partners. As air-
lines allow customers to book tickets directly over the Web, both travel
agents and call center employees are displaced. Management must an-
ticipate the reactions of incumbent employees and partners who find
their roles usurped by customers.
While automate is fairly straightforward and calls for very little man-
agerial involvement outside of the technology and marketing functions,
Informate necessitates greater managerial attention. When people’s
roles change and they are possibly displaced, senior management will
need to devise role migration strategies and implement formalized
changed management programs.
Piccoli, Anglada, and Watson 21
Transform
Transform level change, with the goal of implementing new business
models and changing the fundamental conduct of commerce, has the
most disruptive impact on the organization and its relationship with cus-
tomers. Changes in communication patterns, reporting structures, au-
thority, and workflow arrangements follow transformation. Given the
complexity and far reaching implications of transform projects, CEO
involvement is usually crucial for successful implementation. The high
level of uncertainty as to the financial return further complicates trans-
form level change. Often, firms are motivated to transform when the old
business model is clearly failing and competitors are outperforming
them. It is not easy to gain the support and harness the energy for trans-
form, unless a firm faces a crisis. Superior CEOs have the ability to
foresee the need to transform and lead the charge before the need for
radical change is evident to many.
The introduction of large-scale CRM initiatives by hotel brands, for
instance, may lead to changes in the industry structure and the relation-
ship between the brands, operators, and owners. One foreseeable out-
come is that management companies will be pressured to focus their
portfolio on a limited number of flags. Such structural change may also
deeply affect how tasks are accomplished at the property level. For ex-
ample, rather than maintaining computer systems and producing deci-
sion support reports in house, the properties may outsource their
computing infrastructure and access externally produced reports. Se-
nior management must then proactively evaluate how to most effec-
tively migrate to the new organizational structure. They must also
evaluate potential partnerships and foresee how the organization will
interact with these partners.
Championship by the top management team is necessary both for sig-
naling purposes and to provide the necessary political impetus to com-
plete the transition. Changes in organizational structure are in fact likely
to engender political battles and resistance by those whose authority and
political influence is diminished. It is often the case that when transform
is executed, existing reward systems are outdated and unless rebuilt can
undermine the success of the initiative. For example, an important com-
ponent of CRM initiative is lead sharing. During customer acquisition,
customer information and leads are shared across channels so that, irre-
spective of the touch point used, the customer receives a seamless sell-
ing experience that increases the chances of successful acquisition. For
team selling and lead sharing to be successful, the organizational culture
22 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
must be one of teamwork and success sharing. Hence, the reward sys-
tem must be redesigned to encourage and reinforce this culture.
FURTHER ACTION
In this article, we combined two original models, the Customer Ser-
vice Life Cycle (CSLC), and Customer Relationship Change Spectrum
(CRCS), to create a cohesive framework for systematically searching
for opportunities to use IT to improve customer service. We advocate
the use of this model during strategic planning to guide brainstorming
and to focus attention to each of the cells identified in Table 3.
Our usual approach is to break a group into subgroups of three to five
people and give each group the responsibility to search for opportunities
in particular cells (e.g., one subgroup might generate ideas for ac-
quire/automate and retire/transform) so that the group collectively cov-
ers the entire grid. We provide each group with a clear goal as there is
considerable research to show that explicit instruction improves group
brainstorming (Watson et al., 1988). Groups are designed for a diversity
of experience and organizational roles in order to mitigate groupthink
(Janis, 1971) and improve group productivity (Schweiger et al., 1986).
Each subgroup is asked to present its three best ideas to the group so that
a list of 36 possible uses of IT to improve customer service is produced.
From this list, the group needs to select a portfolio of projects. We sug-
gest the following guidelines:
•The bulk of the selected projects are automate level change. These
should provide, with relative quickness, efficiency gains that are
precisely measurable;
•A moderate number of projects generally fall in the informate
category. These are harder to implement, the benefits are less
discernible, and the risk is somewhat higher than automate pro-
jects;
•Typically, only one or two transform projects are identified.
These high-risk, and potentially high-return, initiatives require
considerable managerial resources and disrupt organizational
status quo. These projects have the highest potential to improve
effectiveness and profitability, but they are often difficult to suc-
cessfully complete because of the commitment of managerial tal-
ent required.
Piccoli, Anglada, and Watson 23
CONCLUSION
In this article we have combined two original frameworks, the Cus-
tomer Service Life Cycle (CSLC), and Customer Relationship Change
Spectrum (CRCS), to create a cohesive framework for planning and
evaluation of advanced IT deployment in support of customer service.
To aid readers in applying the framework, or use it in their own re-
search, we have used examples to clarify concepts and to stimulate
imagination. We have also provided guidelines on how to put together a
portfolio of customer service improvement projects that considers the
balance of risk and return and the availability of managerial attention.
NOTES
1. The term “informate” was coined by Zuboff (1988) to explicitly identify the pro-
cess by which some information technologies, by increasing the amount of information
that employees must use and manage, spur a redefinition of job roles as well as employ-
ees skills, attitudes and abilities.
2. We define Customer Relationship Management as a comprehensive IT enabled
organizational strategy that focuses the organization on providing outstanding individ-
ualized customer service.
3. National hotel chains have a particularly strong incentive to sponsor chain-wide
CRM initiatives because such initiatives are designed to foster consistent service deliv-
ery across properties and have the potential to strengthen the overall value of the brand
(see Piccoli et al. (forthcoming) for a discussion of CRM in the hospitality industry).
4. Application Service Providers (ASP) are businesses that provide standard soft-
ware in a hosted environment. User organizations do not need local software copies
running on their infrastructure but can remotely access the applications running on the
provider’s servers.
5. Please note that our model is a flexible general framework, but printed media is
not. Given the speed of change in technologies, and the relatively slow publication pro-
cess, some examples can quickly become outdated. We urge you not to focus on the ex-
amples themselves and their current viability, but on their illustration of the frame-
work.
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SUBMITTED: 07/22/02
REVISION SUBMITTED: 12/01/02
ACCEPTED: 01/11/03
26 JOURNAL OF QUALITY ASSURANCE IN HOSPITALITY & TOURISM
