CITE: "Salminen, J. (2014). Digital Services – How Are They Different? In Proceedings of International Conference on Business, Information, and Cultural Creative Industry (ICBIC14), Taipei, Taiwan, 6–8 August." Download paper: http://jonisalminen.com/wp-content/uploads/2018/08/digital-services_taipei.pdf

1. Digital Services
How are they different?
Joni Salminen Turku School of Economics Aug 6th,
2014

2. Why study services?
 Important part of post-industrial economy
at a global scale, e.g.
• 71.2% of GDP in Finland (2012)
• 69.2% in Taiwan (2009)
 Two trends:
• As developing countries develop, their
economic structure gears towards services
• Industrial firms want to expand their
offering through servitization/service
infusion

3. Digital services
 Dominate communication, online
shopping, payments, etc.
 More and more services are offered
digitally to cut cost and increase efficiency
of distribution
 …but is there anything special about
digital services compared to traditional
services?

4. The study
 Very simple purpose: try to compare
digital and traditional services with the
IHIP model
 See what
• Is the same
• Is new
• …and perhaps understand digital service
better.

5. IHIP model (e.g., Parasuraman, Zeithaml, Berry, 1985)
 Characteristics of (human touch) services:
 Intangible; cannot be touched
 Heterogeneous; cannot be of standard quality
 Inseparable; production cannot be separated
from consumption
 Perishable; cannot be stored.
 Has received a lot of criticism from services-
focused scholars, but the most important for
this study is that the model was made prior to
digitalization and therefore does not
necessarily capture critical aspects of digital
services.

6. The results
Characteristic Applicabl
e
Explanation
Intangible Yes Even more than physical services
that often include a strong
servicescape component
Heterogeneous No Due to digital delivery, they are
standardized; quality can be kept
Inseparable No Digital services are on-demand;
moreover, the service quality can be
verified before delivery
Perishable No No; resources are on-demand and
scalable, the service is always stored
in local memory or cloud.

7. Conclusions
 Because IHIP is a poor fit, a better model for
digital services is proposed.
 The IHIS model:
• intangibility; intangible and consume a
minimal number of physical resources
• high technology; require little or no human
intervention (thus similar to self-service)
• invariance; identical & consistent by
measurable quality
• scalability; much more scalable due to digital
distribution (no need to consider time, place, or
labor).

8. Why does it matter? (aka
implications)
 (Digital) labor is being more and more
replaced by digital automatization
 There are known and unknown issues:
self-service; combining humans and
automatization, etc.
 Services marketing research focus more
attention to this area with high growth
potential for businesses!

9. Thanks for listening
Relating to digital marketing research
collaboration, contact me at:
• joni.salminen@tse.fi
• (Joni Salminen)