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Reduced labor costs

Technology can reduce labor costs in services in two ways. First, it can be used as a total replacement for labor. In addition, technology can provide support to existing labor. thereby increasing labor productivity  As an example. automatic teller machines (ATMs) in banks are a total substitute for the traditional bank teller for many routine operations, but cost only a fraction of what a teller costs. Therefore. bank customers should be encouraged to use ATMs when conducting certain type or transactions.

Organizations also can use the Internet to reduce labor costs. The Massachusetts Registry of Motor Vehicles is now online, which allows motorists with speeding tickets to pay their fines over the Internet without having to appear in person, which was the previous norm. Increased u e of the Internet in this manner also will reduce long lines at Registry locations
and hopefully reduce its annual operating expenses ' A note of caution is necessary, however, when contemplating the introduction of totally automated services. First. as we have noted already, there are some segments of the market that are not totally comfortable with using automation. In addition, while automation can usually do a good job performing routine transactions, there are often complex and highly customized transactions that can be resolved only with the customer interacting directly with a knowledgeable employee. Technology in the form of automation also can be used in service operations to perform
repetitive, time-consuming tasks. The use of technology in this manner cannot only increase worker productivity, but also reduce or eliminate errors. At the same time, it ensures the delivery of a more consistent product to the customer. In some instances, technology also can increase performance in the form of faster service. For example, in many fast-food restaurants, the timed drink dispensers do not require servers to stand by the beverage machine holding the button. Instead, a quick push of the
button begins the flow of a specific amount of beverage, permitting the server to assemble the rest of the order while the drink is being poured. Other examples of technology being used in fast-food operations include a conveyor belt broiler at Burger King restaurants that ensures a consistently cooked hamburger, again without the worker being continuously present during the cooking operation. and deep fat fryers with timers that automatically lift the french fries out of the oil when they have finish head cooking. Technology in the form of computerized order-entry device es allow waiters and waitresses to place orders in the kitchen without having to walk across the restaurant. Instead of having to make two trips to the kitchen=-one to place the order and another to pick it up when it has been cooked-waitstaff are now only required to make a single trip to pick up
the food when it is ready.