Service Business Model Research Articles

A Quest for Fit: Interplay of Service Market Strategy and Business Model Innovation

Product providers have increasingly embraced services alongside their product offerings in order to improve performance. Yet, it remains unclear how this change in the market strategy and the underpinning innovation in the business model – the activity system design –jointly create value. Relying on 12 case studies of product providers that shifted to providing highly sophisticated service offerings – outcome-based contracts – we derive theoretical propositions regarding the interplay of service market strategy and business model innovation on value creation. The product providers we studied report two interdependent changes that they pursue to secure the required fit; they evolve the market strategy from pure products to outcomes so as to achieve a better fit with the client’s needs and to grow the service business. In parallel, they ‘open up’ their business models to maintain the internal activity system’s fit with their core competencies while relying on ecosystem partners for activities outside the pr...

The Routinization of Paradox Management: Managing Recurrent Tensions in Dual Business Models

The objective of our study is to uncover the micro-processes of managing repeated episodes of tensions occurrence between product and service business model. By contrasting 10 national subsidiaries, we find that whereas the unsuccessful subsidiaries pursue a bargaining process to tension management that preserves the dualism between the two business models, the successful subsidiaries upgrade from an initial synergistic process to a subsequent routinized process of tension management, which allows them to move towards a duality. Rather than bargaining for compromises between diverging interests, the successful subsidiaries engaged in promoting common overarching goals, resolving the conflict of interest, and promoting the identification of synergies. As trust in the success of the synergistic process grows, organizational members begin to learn how to resolve conflicts without their leader’s active mediation. They jointly generate and implement routines for the proactive identification of latent tensions, which enables them to identify further synergies, reinforce the mutual trust, and increasingly maintain duality between the dual business models. Our main contribution to the business model literature is a process perspective of managing dual business model tensions, which (a) shifts the literature's focus from the prior solution perspective to a process perspective; (b) replaces the one-off solutions by longer-term evolutionary processes including the emergence of routines to address recurrent tensions; and (c) shifts the focus from formal structural (and reactive) solutions to managerial (and proactive) actions required to address business model tensions. This routinization of paradox management can lead to less salient tensions and long periods of duality.

To buy the system or to buy the service: the emergence of a solar service model in Thailand

Thailand has experienced a rapid increase in utility-scale solar PV investment (>1 MWp), while the growth of investment in smaller-sized rooftop PV systems is far behind. Due to the continuous decline in PV module costs and the discontinued support in the form of feed-in tariffs, the market is gradually transitioning to installations for the purpose of self-consumption. The main barrier for market expansion is the high upfront costs of solar PV systems. Rather than buying the system, new business models are offering customers to buy the service from solar PV systems instead. The Solar PPA model is an emerging solar service business model in Thailand. This model eliminates the investment cost and operating risks for the customer. This paper takes on the view of a commercial-sized customer to compare the options between the Buying Model and the Solar PPA model. From the customer's viewpoint, the cost of electricity generation, or the levelized cost of electricity (LCOE), under the Solar PPA model is more attractive. The results show an LCOE of 4.82 THB/kWh (0.14 USD/kWh) for the Solar PPA model, 9.56% less than buying the system at 5.28 THB/kWh (0.16 USD/kWh). The Solar PPA model also proves to be a more attractive option in most sensitivity cases. This paper discusses conditions under which the model is feasible and recommends that the design of future support schemes for solar PV self-consumption should enable the expansion of innovative business models, including the Solar PPA model and other third-party ownership models.

Service modularity and architecture – an overview and research agenda

PurposeServices are highly important in a world economy which has increasingly become service driven. There is a growing need to better understand the possibilities for, and requirements of, designing modular service architectures. The purpose of this paper is to elaborate on the roots of the emerging research stream on service modularity, provide a concise overview of existing work on the subject, and outline an agenda for future research on service modularity and architecture. The articles in the special issue offer four diverse sets of research on service modularity and architecture.Design/methodology/approachThe paper is built on a literature review mapping the current body of literature on the topic and developing future research directions in service modularity and architecture.FindingsThe growing focus on services has triggered needs to investigate the suitability and implementation of physical-product-focused modularity principles and theories in service contexts, and to search for principles/theories that enhance services. The expanding research stream has explored various aspects of service modularity in empirical contexts. Future research should focus on service-specific modularity theories and principles, platform-based and mass-customized service business models, comparative research designs, customer perspectives and service experience, performance in context of modular services, empirical evidence of benefits and challenges, architectural innovation in services, modularization in multi-provider contexts, and modularity in hybrid offerings combining service and tangible product modules.Originality/valueNine areas are recommended for further research on service modularity and architecture. The introductory piece also discusses the roots of service modularity and provides an overview of current contributions.

Optimal planning of swapping/charging station network with customer satisfaction

Key to the mass adoption of electric vehicles is the establishment of a sufficient battery service infrastructure network on the basis of customer behavior and psychology. Motivated by EV service infrastructure network design under the battery leasing/electric car sharing service business models, we present an electric vehicle battery service network design problem considering a customers satisfaction related to “range anxiety” and “loss anxiety”. The problem is formulated as a linear integer programming model under deterministic and fuzzy scenarios. A Tabu Search heuristic combined with GRASP is proposed to efficiently solve the problem. Finally, we conduct parametric analysis on real-world road networks.

Using Information Resources to Innovate Service Business Model

With large data, cloud computing, the Internet + these new information technology concepts, many companies or scholars have begun to pay attention to information technology business model innovation. They spend a lot of manpower, material and financial resources to build a new information technology, but most people have ignored the information resources themselves. This paper introduces the concept of information resource and service business model, and illustrates the specific flow of information resources promote business model innovation. Finally, the case of Wechat Business and Didi Taxi is used to illustrate how information resources promote business model innovation. Enterprises or the masses can learn the value of information resources through these cases.

Budgetary Stewardship, Innovation and Working Culture: Identifying the Missing Ingredient in English and Welsh Local Authorities’ Recipes for Austerity Management

AbstractDrawing on fieldwork with 70 local authorities in England and Wales, this paper builds on previous studies of austerity management by highlighting the importance of organisational cultures to achieving strategic objectives. It finds that, in line with their prevailing ‘belief system’ of budgetary stewardship, local authorities in both countries are holding down input costs to deal with austerity. However, the scale of funding cuts means that this strategy is unlikely to be successful over the longer term. Instead, they need greater freedom to generate revenue, in order to facilitate innovation and develop more sustainable business practices and service models.

Service transitions of product-centric firms: An explorative study of service transition stages and barriers in Germany's energy market

Although there is a rich body of empirical research that uses specific service offerings (e.g. product-related and customer-related services) as proxies for the extent of servitization, the results are inconsistent. We investigate service transitions from an innovation management and resource-based perspective, assessing the service transition stages through the service offering type, service innovativeness and the extent of invested internal and external resources. We use a qualitative approach based on interviews of managers from 19 energy utilities in Germany and complementary longitudinal secondary data. We identify three service transition stages: 1) service initiation, 2) service anchoring and (3) service extension. The findings indicate that firms concurrently experiment with different service offerings and that their services' innovativeness steadily increases during service transition. We contribute to servitization research by identifying barriers in each of the service transition stages that prevent product-centric firms from achieving a higher service transition stage. While in the service initiation stage, firms may face strategy-related barriers, these are often followed by implementation-related barriers in the service anchoring stage and market-related barriers in the service extension stage. To overcome strategy-related barriers, our results indicate that firms should balance their product-oriented and service-oriented business model and can benefit from developing a clear strategic intent with relevant service offerings. We further find that implementation-related barriers can be overcome by establishing a service-specific innovation process. To overcome market-related barriers, the findings indicate that firms should integrate customers and external partners in the service innovation ecosystem

서비스 연구 프레임워크 관점에서의 향후 연구과제

서비스학은 현대 경제에서 그 중요성이 강조되는 가운데, 서비스 연구의 가치와 필요성은 점점 높아지고 있다. 그동안 다양한 관점에서 연구되어 온 서비스연구를 하나의 프레임워크로 통합하여 서비스연구 프레임워크가 제안된 이후 서비스연구의 방향성이 정립되어 연구의 성장기반이 마련되었다. 그러나 제4차 산업혁명시대의 도래 등 현대경제사회 환경은 크게 변화하고 있으며, 서비스에 대한 심화된 체계적인 연구 강화가 더욱 필요하게 되었다. 이에 본 연구는 기존 프레임워크상의 서비스학 연구 분야를 세부적으로 분석하여, 구체적으로 서비스학이 '무엇을' 연구하여 서비스학의 지평을 넓혀갈 수 있을지를 제시하였다. 서비스학의 본질적 관점에서 모형의 개발에 관한 연구, 연구 주제의 편협성을 탈피하기 위한 서비스 혁신, 서비타이제이션, 서비스 인퓨션, 서비스 솔루션, 서비스 디자인 레버리지 등의 영역에 대한 개괄적인 접근도 중요할 것이다. 또한 미래 서비스 발전의 근간을 형성하는 데 기여할 수 있는 서비스 테크놀러지의 활용에 관한 서비스학적 연구 및 비즈니스 모델의 개발이나 혁신적인 기업의 새로운 가치 창출에 이용하는 방안 등으로 연구주제로 확대할 필요가 있다. 이러한 연구 결과를 통해 서비스학 연구의 심화와 확장에 기여할 수 있을 것이다. The importance of service science is emphasized in the modern economy, and the value and necessity of service research still increasing. Since the service research framework was proposed, it has been studied from various perspectives and incorporated into one framework--service research. The direction of service research has been established and a new baseline of research has been established. However, the modern economic and social environment could be described as a new era, the Fourth Industrial Revolution has changed drastically. More and more systematic research on services has become necessary. Therefore, this study analyzed the field of service research in the existing framework. The study suggested how service research could broaden the horizon of service research by studying the 'what'. To do this, we analyzed recent service research trends by themes. We also identified the shortcomings of previous studies about service, and suggested directions and research themes for future research. Based on this study we developed a general approach to the creation of new models from the viewpoint of service science. The authors were also able to develop a general approach to areas such as service innovation, service inference, service solution, and service design leverage. In addition, it is necessary to extend service research and business model to the utilization of service technology. This approach could contribute to forming the basis of future service development, and to utilize social media to create new value of innovative company. The results of this study could contribute to deepening and expanding service research.

Predictive maintenance: strategic use of IT in manufacturing organizations

A combination of big data and predictive analytics orchestrated through the Internet of Things (IoT) offers many opportunities for researchers in Information Systems, Operations Management and Strategy to look at old problems in new ways, and to identify completely new research areas. While there is much hype, little research has been conducted that informs companies about how to profitably integrate the IoT with strategic or operational processes. This paper views the IoT through the lens of predictive maintenance -- the use of real-time data and predictive analytics algorithms to dynamically manage preventive maintenance policies. These are being used by numerous manufacturing organizations to transition from product-oriented to service-oriented business models. In particular, we analyze optimal preventive maintenance policies in an environment where equipment is subject to a deterioration, which shifts it from its initial, fully-productive state, having a specified, age-dependent failure rate to a less-productive or deteriorated state, having a different, presumably higher, age-dependent failure rate. The deterioration, itself, is a random process.

Innovating Managed Services Business Models

Objective: Business Model Innovation approaches in service business model context are not adequately studied in the extant literature and there is a clear need for extension of different business model typologies for innovating service business models. Principal aim of this study is to explore how service business model archetypes can be explained as a business model representation such as Business Model Canvas, particularly what the term managed services really mean. Also, it is intended to add clarity to current business model innovation approaches in providing managed services, especially business process services in a service value chain. This will prompt further research to address related implications of networked business model setup and information technology as an enabler in managed services context. Methods/Statistical Analysis: Established framework of Business Model Canvas from extant literature and recent trends in business model representations that cover digitally enabled service business models are compared and contrasted. In line with service dominant logic, approaches for management and optimization of key resources and key activities are used as basis of stacking up different service business model archetypes. Service value chain and network business model implications are emphasized for further differentiating the innovation approaches in managed services business models. Findings: Among various business model design tools and representations, service business models can be better represented as a business model canvas with special emphasis on how key resources and key activities are managed and optimized in a service value chain. Digital enablement with the use of IT and/or cloud infrastructure shall act as accelerators for effective business model innovation in service context. Service business models shall be categorized as a stack of service offerings such as outsourced services, resource outsourcing, professional services, BPO/ITeS, managed services and Business Process As A service (BPaaS). services currently mean to only manage IT services but there is new paradigm of Managed Business Services which is emerging. Applications/Improvements: Suggested findings of this paper and the identification of broad types of service offerings, which clearly differentiate managed services from other service models, can be applied in practice. This approach shall bring in more consensuses about understanding of managed services business models among practitioners and researchers.

INNOVATION STRATEGY TO IMPROVE THE COMPETITIVENESS OF MICRO, SMALL, AND MEDIUM ENTERPRISES OF BANDAR LAMPUNG BANANA CHIPS

Innovation is needed by micro, small, and medium enterprises to grow and develop into large businesses. However, that innovations are limited by existing constraints such as limited number of employees, total assets, total revenues and total budget for innovation. Human resources or the entrepreneur is known to be an important factor in improving the performance and innovation of SMEs or UMKM. This research aims to formulate strategies given the constraints of innovation, human resource capacity and opportunities for innovation in improving competitiveness. The analytical method used is confirmed method, the evaluation model of structural equation modeling (SEM) and the analytic hierarchy process (AHP). The analysis showed an effect of human resources amounting to 0.761 on the settlement of the constraints and influence of 0.806 to successful innovation. The main obstacle that have to be resolved are human resources, promotion, managerial finance and administration, location, and marketing. The innovation that most influence in purchasing decisions and according to the ability of SMEs are service innovation, organization, business model, supply chain, and marketing. The best strategy formulation that can be done in improving the competitiveness of businesses are participation in exhibitions and entrepreneurship seminars, technical assistance, training and the online marketing promotion, as well as the provision of machinery and appropriate process equipment. Keywords: innovation, competitiveness, structural equation modeling, analytic hierarchy process

Crowdsourcing based Timeline Description of Urban Emergency Events using Social Media

Crowdsourcing is a newly emerging service platform and business model in the Internet. Analysis and description about urban emergency events, e.g., fires, storms and traffic jams are of great importance to protect the security of humans. Recently, social media feeds are rapidly emerging as a novel platform for providing and dissemination of information that is often geographic. In this paper, in order to describe the timeline of real-time urban emergency events, the new web mining task timeline description (TD) is proposed. Firstly, the related information of an urban emergency event is extracted from Weibo messages. Secondly, the valid message including the semantic or spatial information is detected in this step. Thirdly, detected valid messages are used to build the TD. Case studies on real datasets show the proposed model has good performance and high effectiveness in the analysis and description of urban emergency events.

Potentials of the Asset Administration Shell of Industrie 4.0 for Service-Oriented Business Models

The ongoing integration of information and network technologies into the production process leads to cyber-physical system (CPS), specifically designed for industrial purposes. CPS provide a bi-directional information flow between products, machines and top-floor systems, thus enabling the instant adaptation of each process to external and internal conditions. Thereby they offer a high potential to obtain flexible manufacturing systems for custom tailored products at the efficiency level of mass production. Furthermore the functionality and adaptability of future production systems can be considerably improved, thus accommodating service-oriented business concepts. These additional services often include remote accessibility of CPS for monitoring, diagnosis and control over existing networks. With those services the machine-availability can be significantly increased. Further services include data analytics, Internet market places and additional options to meet the customer demands.For the realization of a consistent information flow, the interoperability between the different components has to be guaranteed. Therefore one important goal of current CPS-related research is to develop new standards and platforms for the network communication. To overcome this problem, the German high-tech strategy Industrie 4.0 aims at creating binding standards for the interfaces of all components. A major step towards the standardization was made by defining an administrative shell for each component, which is a framework for the middleware between the existing machines and external networks. This contribution offers an insight into the current developments of Industrie 4.0, focusing on the standardization of CPS, communication technologies and business models.

Business Models of the Circular Economy as Mechanism of Sustainable Development Achievement

This article is devoted to the substantiating of business models as a modern mechanism of sustainable development achievement used in the circular economy. The paper considers three models of circular economy development. Such business models support the practical implementation of closed cycles and involve product and service offering forms which link the result of business activity to the effective resource usage. Application of service business model based on specific examples is analyzed. Prospects for using the model are represented in the article.

An analysis of open source GIS software business models and case studies

In this paper, we try to draw implications by analyzing both the prospective business models and case studies of advanced oversea enterprises which are performing a successful business in the field of open source GIS software. First, we can classify the business models of open source software into 12 types including service support, consulting, dual licensing, etc. According to our analysis, the service and support business model takes the highest percentage in the business of open source GIS software, and consulting does the second highest, and then dual licensing in the order. Second, we selected and analyzed two companies such as “Boundless” and “Azavea” that are performing the business most successfully in the field of open source GIS software. By analyzing these two companies, we obtained some common grounds and implications as follows: first, proactive activities in the community of open source software are needed to make the business model successful. Second, the companies that are relatively weak in technology capability have a tendency of creating revenue by developing and selling the solution-based products. Third, the companies that have high level of technology capability can generate revenue by developing and selling various kinds of products by adding the company owned technology to the enterprise software which has developed in the open source project. Fourth, successful companies have a business strategy which provide the necessary solutions through a collaboration with the companies that have a specific technology or a key solution.

Online Product Support Forums: Customers as Partners in the Service Delivery

Organizations increasingly provide service to their customers via an online product support forum in which service delivery is partially delegated to an active community of users. Through an analytical model, we examine the relationship between askers' impatience, award and cost structure and types of questions attempted by the users towards characterizing how a firm should effectively manage such an innovative business model for service. Our results establish that the rate of firm's participation can steer users responses among the available question types, and that users' rate is unimodal in firm's rate up to a point where a very actively responding firm essentially discourages any participation of the users into its forum. Finally, from the practical perspective of managing customer support, our analysis offers rules of thumb on the extent to which firms should delegate service to a large online community of users, contingent on the incoming demand for service and available staffing level.

Workload-based multi-task scheduling in cloud manufacturing

Cloud manufacturing is an emerging service-oriented business model that integrates distributed manufacturing resources, transforms them into manufacturing services, and manages the services centrally. Cloud manufacturing allows multiple users to request services at the same time by submitting their requirement tasks to a cloud manufacturing platform. The centralized management and operation of manufacturing services enable cloud manufacturing to deal with multiple manufacturing tasks in parallel. An important issue with cloud manufacturing is therefore how to optimally schedule multiple manufacturing tasks to achieve better performance of a cloud manufacturing system. Task workload provides an important basis for task scheduling in cloud manufacturing. Based on this idea, we present a cloud manufacturing multi-task scheduling model that incorporates task workload modelling and a number of other essential ingredients regarding services such as service efficiency coefficient and service quantity. Then we investigate the effects of different workload-based task scheduling methods on system performance such as total completion time and service utilization. Scenarios with or without time constraints are separately investigated in detail. Results from simulation experiments indicate that scheduling larger workload tasks with a higher priority can shorten the makespan and increase service utilization without decreasing task fulfilment quality when there is no time constraint. When time constraint is involved, the above strategy enables more tasks to be successfully fulfilled within the time constraint, and task fulfilment quality also does not deteriorate.

RAPTOR CODE BASED SECURE STORAGE IN CLOUD COMPUTING

The end of this decade is marked by a paradigm shift of the industrial information technology towards a pay-peruse service business model known as cloud computing. Cloud data storage redefines the security issues targeted on customer’s outsourced data. To ensure the correctness of users’ data in the cloud, we propose an effective and flexible distributed scheme with two salient features, opposing to its predecessors. By utilizing the homomorphic token with distributed verification of raptor coded data, our scheme achieves the integration of storage correctness insurance and data error localization, i.e., the identification of misbehaving server(s).Using this new scheme it further support security and dynamic operations on data block. Our result shows that, our proposed model provides a secure storage for data in cloud.

Collaborative Business Service Modelling in Knowledge-Intensive Enterprises

Nowadays, knowledge-intensive enterprises, which offer knowledge-based products and services to the market, play a vital role in the knowledge-based economy. In the global networked age, collaborative business services have raised as one of the most important knowledge-intensive services that help enterprises to gain the competitive advantage. These services greatly depend on the ability to use network architectures to collaborate efficiently with business partners. This paper introduces the KB-CBSM (Knowledge-Based Collaborative Business Service Modelling) approach, which aims at providing a conceptual foundation for modelling effectively and improving incrementally collaborative business services in knowledge-intensives enterprises. The paper begins by presenting the necessity and principles of the KB-CBSM approach. Next, it presents the conceptual foundation that consists of three levels: Service value creation network, Service system and Service levels. The paper continues with a discussion and review of the relevant literature and ends with the conclusion and suggestions for further research.