On Formalization of the Concept of Value Proposition

Abstract

This paper presents an original description and a semi-formal definition of the concept of a value proposition, which has been so far used in service science rather intuitively. Our approach is based on utility functions and conceptual modelling techniques. The proposed semi-formalization can be exploited to describe services from the point of view of their (potential) utility for their clients. This description can be used especially to organize a service portfolio in an enterprise in a better way, aid in computer-assisted service composition/decomposition, and provide additional criteria for indexing services in a service brokering task. In order to be able to describe a value proposition more accurately, we present a semi-formal definition of the concept of a service system. We perceive a value proposition as the main input taken into account by a future service client when evaluating whether or not to become the client of the service proposed by a service provider. A value proposition itself is modelled as a collection of values which indicate the extent of “how much” a given service behaves according to a given set of service characteristics. The presented approach is illustrated on the example of a concrete service. [Service Science, ISSN 2164-3962 (print), ISSN 2164-3970 (online), was published by Services Science Global (SSG) from 2009 to 2011 as issues under ISBN 978-1-4276-2090-3.]