As the hype surrounding GPT-4 peaks we must focus beyond, remarks Timo Seppälä and Tomasz Mucha in their new column.
The ever-progressing digitalization of the economy and society is unlocking new opportunities for organizations, especially those engaging in services. The presently advancing technological capabilities indicate that we might be in the middle of a transformation of the service processes that can be likened to the advent of mass production in the 1940s.
Based on recent advances and developments in artificial intelligence, digital platforms, and blockchain systems, we are witnessing the emergence of new digitalization phenomena of metahuman systems, artificial intelligence platforms, and meta-organizations. Jointly, these forces are shaping now, or will be in the near future, the service activities of organizations around the world.
These new approaches to organizing the work of individual people, organizations, and institutions enable mass hyper-personalized services and mass servitization – new types of high variety and high-volume service processes. Artificial intelligence applications like search and recommendation engines, and artificial intelligence platforms such as Google Maps, Chat GPT and GPT-4 can be perceived as early manifestations of the ongoing transformation.
Already in the present day, applications and platforms such as these can be adopted in a wide range of downstream tasks, thus enabling personalized service experiences for audiences of one. While increasing the value of service offerings, mass hyper-personalization and mass servitization also have the potential to increase the productivity of service operations across different industry sectors, especially in the context of knowledge-intensive work.
To understand the role of mass hyper-personalization and mass servitization, we need to consider them in the context of existing service processes. Three service process types are typically defined in research: professional services (high variety and low volume), service shops (medium variety and medium volume), and mass service (low variety and high volume).
Confined by these definitions and the technological constraints of the past, relatively little attention has been dedicated to high variety and high-volume service provision. It is this type of service process, however, where we see the greatest untapped opportunity for improving service sector productivity in the future.
We characterize mass hyper-personalization as an efficient, dynamic, and high-volume process of targeting, designing, and delivering customized service experiences for an audience of one, based on a set of unique criteria, e.g., by using foundation models that are prompted or fine-tuned with user-specific / organization-specific data.
The path that is leading the service sector in the direction of mass hyper-personalization has been paved by the recent advances in digital technology –AI and blockchain systems – and the associated new ways of organizing economic activity – digital platforms and smart contracts.
Servitization is typically depicted as a process of building revenue streams for company operations from services. Building on established conceptualizations of services, research on the digitalization of services has contributed to our understanding of how segmentation, customization, and servitization can impact firm productivity, and the process of how those changes take place. Digitalization enables the customization of services more productively than before.
However, the existing research on servitization has not sufficiently addressed the wide variety and high-volume aspects of digital services. While servitization has always included technological aspects, digital technologies have recently attracted increasing attention in this stream of literature. This has resulted in the recognition of digital servitization where digital tools are the fundamental drivers in shifting a firm’s business model from product-centric to service-centric
We predict that the next stage in digital servitization is mass servitization, which we define as a universal high-volume transformation process of shifting from a product-centric business model to a service-centric approach by embedding learning, autonomy, and human interaction capabilities into emergent product-service bundles.
For more on this topic in our forthcoming article on 28th April, 2023 “Seppälä, T., Mucha, T. & Mattila, J., Beyond AI, Digital Platforms and Blockchain Systems: Digitalization Unlocks Mass Hyper-Personalization and Mass Servitization” and book “The Fifth Wave: BRIE-ETLA Collection of Articles“.