Writing in Forbes recently, David Yarnold asks once again the perennial question: Why Does Customer Service Suck?
He makes the same argument many others have, that an excessive focus on short-term cost savings leads many companies to make bad decisions which hurt them in the long run. He also points out (which I don't see often enough) that it isn't technology per se which is the problem, but the way technology is used. Technology can enhance customer service, or get in the way.
To which I would add, cost isn't necessarily related to the quality of customer service either. There are many situations where customers prefer self-service provided that the self-service meets the customer's needs, is implemented well, and it's the customer's choice as to whether to self-serve or talk to a person.