Service Business Model Research Articles

Regularity-driven bus operation: Principles, implementation and business models

Service reliability is a key determinant of public transport performance. In the context of high-frequency urban lines, irregular service results with long waiting times, bunched vehicles, long delays, uneven passenger loads, poor capacity utilization and higher operational costs. Field experiments were conducted in Stockholm, Sweden, in order to test the feasibility and implications of a regularity-driven operation scheme designed to mitigate bus bunching and facilitated by a real-time control strategy. This paper investigates alternative service indicators and business models that could best support the long-term implementation of operation geared towards better regularity performance. A paradigm shift towards regularity-based service evidently requires the consideration of a series of measures along the service chain as it involves a paradigm shift in production planning, operations, control center and performance monitoring.

A Novel Categorization of Industrial Services - Analysis of Service Offerings of Manufacturing Companies

IntroductionService infusion has profoundly changed the scope of business opportunities for modern industrial companies. Whether or not a company is in the service business is not the question, but rather, what is the share of services as opposed to products. An iconic example of servitization is the jet engine manufacturer Rolls Royce whose service sales exceed the sales of the original equipment, and the company has constantly developed new service solutions and business models. This evolution has been depicted by Levitt (1972), Berry and Parasuraman (1991), Vandermerwe and Rada (1988), Bitner et al. (1997), Baines et al. (2009), and Kuzca and Gebauer (2011), among others.There are financial, strategic and marketing benefits for the supplier side in extending the service portfolio. For customers, the growing trend of focusing on core competences increases demand for more and more comprehensive services. However, the transition from a products manufacturer to a full scale service partner is difficult for most suppliers and thus there are fewer success stories than could be predicted despite the anticipated benefits. This 'service paradox' has been discussed by Gebauer et al. (2005) and Neely (2008). The difficulties revolve around the required change in logic towards a more customer centric orientation and developing the particular processes and structures required by a service organization.The Servitization ChallengeThe central terminology in this research is related to servitization literature. Servitization refers to the shift in industrial markets for manufacturers to offer more and more services as a part of their core offering (Vandermerwe & Rada, 1988). Services according to a narrow view are intangible assets that are performed instead of produced as a contrast to tangible and produced products (Baines et al., 2009). From a wider perspective services include also bundles or product-service systems that consist of both tangible and intangible components. Solutions are bundles that create value to customers and are more than sums of their parts (Cova and Salle, 2008; Guiltinan, 1987).The servitization transition process and management challenges have been discussed by Oliva and Kallenberg (2003), Gebauer et al. (2005) and Kindstrom and Kowalkowski (2009). Required new managerial activities are clearly linked with a servitizing company's ability to develop new services, service offering design and a new service-oriented business model (Gebauer et al., 2005, 2009; Baines et al., 2009; Kindstrom, 2010). A major managerial challenge for a manufacturing company is to implement a systematic process and structures for services development. As services initially have been developed and sold ad hoc for different customers, a more comprehensive or strategic service portfolio management has straggled. The extension of the service portfolio should focus on the more intangible services, and bundles of services, with more consideration on customer relationship and customer processes, which makes service development process even more complex compared with the directly product related development of spare parts or maintenance services.One of the problems relating to servitization strategy implementation is that service categorizations remain often too theoretical for the use by companies, and many companies have no clear picture of their service offering (Baines et al., 2009). Most companies have a fragmented service division due to historical reasons of adding the services to product categories. Many services also have evolved from very simple add-on services to complex contracts but are still managed in the same way. Due to this evolutionary service development most industries also lack standardized terminology that makes comparing offerings between companies much more difficult. Kindstrom and Kowalkowski (2009) argue that many manufacturing companies have a number a services in their portfolios, but they are unstructured and often supplied free of charge to increase product sales. …

Toward A Full Implementation of the Operation and Support Subsystem (OSS) in IMS Networks

Recently, mobile operators all over the world are facing big challenges on the decreasing of the revenues from its traditional killer-applications like SMS/MMS and even voice services. The challenges come from a new trend of services called OTT (Over The Top). These OTT services provide the mobile users with flexible, convenient and more importantly free means to do their daily multimedia communication needs and seamlessly without any border so that operators couldn’t be just simply block it, but in opposite, need to find solutions to compete against it. Because of that, nowadays, more and more operators choose to deploy the standard RCS (Rich Communication Suite). RCS is a set of rich features communication services developed on top of IMS framework. Although there have been tremendous efforts to develop the architecture and protocols for IMS, which is a key technology of the NGN, it is far from being widely deployed. There are many reasons for that unpopularity (of IMS commercial deployment), namely, the lacking of clear business model for IMS-based services, no big difference between IMS-based services and SOA (Service Oriented Architecture) services, lack of the true demands for features that IMS based services have, etc... However, one of the most important reason that till now not many researchers have pointed out and addressed it, is about the OSS (Operation and Support Subsystem) functions. The lacking of OSS clearly defined functions and interfaces make the difficulties for operators and even equipment manufacturers to collect the pay back for any big scale IMS deployment for their networks. This paper presents our proven that IMS can provide the killer applications with blending features like mash-up and readily equipped with the intelligent charging and policy control functions. That may partly help to speed up the deployment process of IMS in real networking environment.

Chemical Leasing business models and corporate social responsibility.

Chemical Leasing is a service-oriented business model that shifts the focus from increasing sales volume of chemicals towards a value-added approach. Recent pilot projects have shown the economic benefits of introducing Chemical Leasing business models in a broad range of sectors. A decade after its introduction, the promotion of Chemical Leasing is still predominantly done by the public sector and international organizations. We show in this paper that awareness-raising activities to disseminate information on this innovative business model mainly focus on the economic benefits. We argue that selling Chemical Leasing business models solely on the grounds of economic and ecological considerations falls short of branding it as a corporate social responsibility initiative, which, for this paper, is defined as a stakeholder-oriented concept that extends beyond the organization's boundaries and is driven by an ethical understanding of the organization's responsibility for the impact of its business activities. For the analysis of Chemical Leasing business models, we introduce two case studies from the water purification and metal degreasing fields, focusing on employees and local communities as two specific stakeholder groups of the company introducing Chemical Leasing. The paper seeks to demonstrate that Chemical Leasing business models can be branded as a corporate social responsibility initiative by outlining the vast potential of Chemical Leasing to improve occupational health and safety and to strengthen the ability of companies to protect the environment from the adverse effects of the chemicals they apply.

SERVICE BUSINESS MODEL AND SERVICE INNOVATIVENESS

Service innovativeness has been hailed as a key success factor in being able to differentiate a new service from its competing offerings. In spite of a number of literatures suggesting the impact that a service business model can have on service innovativeness, no comprehensive and empirical study has examined the relationship between the distinctive design themes of a service business model and service innovativeness. This paper fills the research gap by conducting a series of pilot tests and then the subsequent questionnaire survey on top service firms in Taiwan. Results based on 211 responding service firms indicate that the novelty-centred business model has a U-shaped effect on service innovativeness, while the efficiency-centred business model has an inverted U-shaped effect on service innovativeness. Theoretical and managerial implications of these key findings are discussed.

Excess Baggage? Regulatory Heritage in New Contexts

The evolution of regulation of, on and even by the Internet clearly demonstrates the influence of ‘cultures of regulation’ on interventions and the ‘fitness’ of technological and behavioural innovations. These cultures – and the associated stovepipes - complement the formation of conventions of service provision, investment, business models and enterprise coordination, individual (customer or end-user) behaviour and technology development. This leads to punctuated equilibrium; each period’s gaps and slack create the conditions for the next phase. These phases are not simply defined by adoption of new models or regulatory tools; instead they are marked by often dramatic changes in: the allocation of power and flow of information among government, business and civil society; the participants in each domain and the objectives or challenges to which they pay attention; and the effects of laisser-faire policies. This suggests at least two reasons why it is no longer sufficient to respond to new challenges as they come along. At crucial moments, change may be too fast or complex for effective response. More importantly, the information needed to identify governance challenges and to formulate, assess and implement interventions (or decide that no response is possible) may be unobtainable, impossible to interpret or unreliable. Especially on the Internet, where almost everything can be observed but very little may be worth the effort of collection and analysis, these twin problems of informational complexity and endogeneity may call for approximate (rather than light-touch) forms of intervention, principles-based and reliant on self-organisation to a much greater extent than even today’s ‘smart regulation.’This paper combines evidence from the coevolution of advanced telecom-based services and new forms of regulation with a simple model of strategy choice in a complex adaptive network to develop a framework for adapting regulation to an environment in which networked information is faster and more extensive, by taking into account the persistence of regulatory cultures and their influence on the way new problems are recognised and dealt with.For instance, a formerly dominant model of telecom regulation combined a technological focus (e.g. efficient use of spectrum and network capacity) and an economic perspective based on natural monopoly regulation (e.g. of network infrastructures) and the ex-ante economic efficiency of competition (e.g. regulatory approximations to Ramsey pricing and facilitated entry) with limited societal regulatory objectives (e.g. Universal access/service and discrimination in favour of local call access). This was reasonably well-adapted to telephony and analogous binary content exchange services (e.g. Fax). Indeed, the forms of ‘slack’ it created facilitated the emergence of new services, technologies and business models, especially Internet-based services focused on content access and distribution. This gave rise to the period of ‘converged regulation’ either around content and communication (UK’s OfCom, with its additional heritage of societal content regulation and extended vertical market power concerns) or network industries (Germany’s BNetzA, with its additional attention to network and cross-network externalities and to system resilience). These in turn led to different architectures and models for e.g. network provisioning, QoS and access pricing and to different ways of tackling new issues associated with this change e.g. privacy, DRM and net neutrality. At the same time, existing regulatory tools (e.g. spectrum allocation processes and licence forms) began to change. Further changes now in train (linked to e.g. the Internet of (sensor and actuator) Things and computer-based financial trading) are forcing redefinition of terms like QoS and privacy, and causing fundamental metaphors to shift from content to interaction, from informed consent to emergent or herd behaviour and from ‘prudential’ (entity-based) to ‘macroprudential’ (structure-based) market surveillance and intervention. The paper defines a modelling and evidence framework for policy formulation and assessment.

A visual language and environment for enterprise system modelling and automation

ObjectiveWe want to support enterprise service modelling and generation using a more end user-friendly metaphor than current approaches, which fail to scale to large organisations with key issues of “cobweb” and “labyrinth” problems and large numbers of hidden dependencies. MethodWe present and evaluate an integrated visual approach for business process modelling using a novel tree-based overlay structure that effectively mitigate complexity problems. A tree-overlay based visual notation (EML) and its integrated support environment (MaramaEML) supplement and integrate with existing solutions. Complex business architectures are represented as service trees and business processes are modelled as process overlay sequences on the service trees. ResultsMaramaEML integrates EML and BPMN to provide complementary, high-level business service modelling and supports automatic BPEL code generation from the graphical representations to realise web services implementing the specified processes. It facilitates generated service validation using an integrated LTSA checker and provides a distortion-based fisheye and zooming function to enhance complex diagram navigation. Evaluations of EML show its effectiveness. ConclusionsWe have successfully developed and evaluated a novel tree-based metaphor for business process modelling and enterprise service generation. Practice implications: a more user-friendly modelling approach and support tool for business end users.

Steering Manufacturing Firms Towards Service Business Model Innovation: Embracing Indicators that Reflect Market Performance

Increasingly, manufacturing firms are turning to services as a new way of creating and capturing value. Despite the potential benefits, evidence suggests that many new product-service providers struggle to deploy service activities effectively, not least because they fail to reflect the presence of service activities in their performance management systems (PMS). This paper reports the results of an in-depth case study, which examines how manufacturers can steer the transition towards services. Our findings suggest that manufacturing firms need to emphasize two separate but related dimensions of the market performance of service activities: 'service adoption', reflecting the proportion of customers who purchase the manufacturer’s services, and 'service coverage’, signaling the range of service elements or the comprehensiveness of the service contract that customers opt for. These two indicators, reflecting service market performance, should be supplemented with a 'complementarity index’ designed to disclose whether the relationship between products and services is reinforcing or substitutive. This is particularly important, since a common concern expressed by manufacturers is that increasing their service activities may cannibalize their product activities. Combined, these indicators allow manufacturing firms to deploy a service-based business model in an integrated and sustainable manner.

Constructing a sustainable service business model

Purpose – The purpose is to conceptually construct a service-dominant (S-D) logic-based integrated product service system (IPSS) business model. Design/methodology/approach – The model is constructed through literature reviews and inferences. Findings – IPSS model is in compliance with the ten fundamental premises of S-D logic as well as conforming to triple bottom lines of sustainability. Research limitations/implications – To convert a firm from goods-centric model to service-centric IPSS model is not easy. There are quite a few challenges to be overcome. Practical implications – There are many successful cases adopting service-centric business model. The key success factors are to be identified in the future studies. Originality/value – It is the first paper discussing the sustainability of IPSS model and its relationship with S-D logic.

Factors influencing the shaping of shared services business models

Purpose– Shared services are often viewed as a single type of business model but in reality, shared services can be organized in different ways. The goal of this research is to understand the factors influencing the shaping of shared services business models.Design/methodology/approach– Inductive case oriented research is conducted by investigating three different types of shared services arrangements using Al-Debei and Avison's unified framework for business models.Findings– A total of 12 different factors were identified that influence the shape of shared services business models including the path dependency, legal/regulatory driver, customer orientation, target segment, strategic importance, ICT/business orientation, IT governance structure, change strategy, degree of outsourcing, integration potential, economic rationale and the business value.Research limitations/implications– The level of customization and standardization can influence the potential benefits that can be gained from bundling services and it is important to understand the factors that influence this dimension.Practical implications– The appropriate configuration of these factors can be helpful to design shared services arrangements with a balanced degree of standardization and customization. The choices regarding the configuration of these factors could result in a more or less effective functioning business model and could influence the governance processes and mechanisms that need to be put in place.Originality/value– There is no prior research that addresses the shared services business model from a holistic perspective and this research provides a first conceptual model for shared services business models.

Developing Customized Innovative Business Models for Shape Memory Technology

Due to ongoing globalization, manufacturing companies are increasingly facing new challenges for which new business models are required. Nowadays, just selling products is not sufficient to provide customer value and thus to stay in business. In order to stay competitive, the integration of services can be a solution. Therefore, an approach is presented which integrates products and services into a new service-oriented business model. The development of the approach is based on an extensive literature research and emphasizes new aspects about business models. The example of a result-oriented business model for shape memory technology based on the results of qualitative interviews has been chosen to illustrate this approach.

"Patent Acquisition Services: A Market Solution to a Legal Problem, or Nuclear Warfare?"

We study the novel business models of patent acquisition services and assess their implications for intellectual property markets and patent litigation. Through qualitative case studies and descriptive analyses of patent and litigation data, we find that the recent innovations in the area of defensive patent acquisition business models are indeed distinct from the more offensive models and from practicing entities’ strategies in the markets for intellectual property. There are also substantial differences between the defensive business models themselves, in particular, depending on their for-profit vs. non- profit objectives, and public vs. private ownership. In the patent and litigation data, defensive acquisition services stand out particularly in terms of the higher quality of their patents and their impact on the settlement and timing of lawsuits. We finish by discussing the broader context of the patent wars, and how defensive patent acquisition business models may endogenously evolve or be forced to change through competitive and regulatory pressure. We conclude that in the IP industry, business models are an essential dimension of competition.

A Proposal to Support the Value Proposition in Product Oriented Service Business Model of Product Service Systems

The product service system offers opportunities for companies by introducing new ways of offering value to the customer. Thus, the value proposition needs to take into account uncertainties and tangible and intangible assets in an integrated way leading to more complex decisions. To address these decisions, the study proposes the application of scenarios with real options considering the most suitable financial performance indicators. This research followed the design research methodology. As a result, the proposal considers three scenarios: optimistic, moderate and pessimistic, each showing three possible real options: to expand, to abandon and to defer the incorporation of the service.

Servitization: Disentangling the Impact of Service Business Model Innovation on Manufacturing Firm Performance

Servitization: Disentangling the Impact of Service Business Model Innovation on Manufacturing Firm Performance

Beats Music: A New Subscription Streaming Service Business Model Takes the Stage

Beats Music: A New Subscription Streaming Service Business Model Takes the Stage

Motorcycle Taxi Service in Vietnam – Its Socioeconomic Impacts and Policy Considerations

Motorcycle taxis have been emerging in developing countries, especially developing Asian countries, as an informal public transport service. It could provide a fast, flexible, and cheap transport service to the general public. At the same time, it may also be main sources of income for the urban poor. Unfortunately, wider socioeconomic and environmental impacts of the service have never been understood fully. Regulations on the service have been lacking as well. This study aims to understand the main characteristics of the service, explore its broader impacts, and identify its possible roles in the future urban transport system. Questionnaire surveys were conducted in Hochiminh City, Vietnam in 2012 that covered 400 users, 100 operators or drivers, and 20 stakeholders. Based on the results, the study suggests necessary changes in the service business model and regulatory measures to improve the image and the quality of the service.

An Efficient Cluster Authentication Scheme Based on VANET Environment in M2M Application

Wireless and mobile sensor network technologies in M2M (machine to machine) are rapidly applied to our real life. Thus, in near future, advanced wireless and mobile sensor network in M2M application will be major key factor of the future generation convergence network which is based on the state of the application. It is expected that smart machines will appear as new business service model with other machines. Most numerous researches within M2M sectors are carried out in intelligent vehicle sector integrated with IT technology. Intelligent vehicle section shows severe changes in position between vehicles and has numerous large scales of networks in its components; therefore, it is required to provide safety by exchanging information between vehicles equipped with wireless communication function via VANET (vehicular ad hoc network) and fixed apparatus at roadside regarding the status of road. In this paper, we proposed cluster authentication scheme that mutually authenticates between vehicles by composing vehicle movement as cluster configuration architecture. We have successfully included the establishment of secure channels, the detection of replay attacks, mutual cluster authentication, prevention of vehicle identity fabrication, and secure distribution of provisional session key.

Steering Manufacturing Firms towards Service Business Model Innovation

Increasingly, manufacturing firms are turning to services as a new way of creating and capturing value. Despite its potential benefits, many new product-service providers struggle to deploy service activities effectively, not least because they fail to reflect the presence of service activities in their performance management systems. This article reports the results of an in-depth case study, which examines how manufacturers can steer the transition towards services. It shows that manufacturing firms need to emphasize two separate but related dimensions of the market performance of service activities: “service adoption,” reflecting the proportion of customers who purchase the manufacturer's services; and “service coverage,” signaling the range of service elements or the comprehensiveness of the service contract that customers opt for. These two indicators, reflecting service market performance, should be supplemented with a “complementarity index” designed to disclose whether the relationship between products and services is reinforcing or substitutive. When combined, these indicators allow manufacturing firms to deploy a service-based business model in an integrated and sustainable manner.

Dynamic stakeholder interaction analysis: Innovative smart living design cases

In order to become more innovative, companies that operate in the Smart Living domain increasingly initiate and participate in networked business environments that transcend industry boundaries. Inter-organizational collaboration is often characterized by conflicting strategic interests and incoherent operational business processes and procedures. Although many scholars and practitioners use stakeholder analysis to gain insight into the actors’ relationships and interactions, existing literature on stakeholder analysis focuses mainly on high-level strategic analysis, often limited to a conceptual and static understanding of stakeholder interests. In this paper, it is argued that a ‘true’ understanding of stakeholders can be achieved by looking at their interactions and interdependencies at a more detailed level. This study uses a conceptual framework from the service innovation and business model domain, the VIP framework, to extend stakeholder analysis by including an analysis of their dynamic interactions and processes. The qualitative evaluation of the framework’s application in illustrative design cases shows that this extension provides additional insights into stakeholders, and their potential operational conflicts and critical dependencies. By making these conflicts and interdependencies explicit, products and services are potentially easier to implement and commercialize.

Exploration of a mobile service business model for electric vehicle charging stations

The automotive industries have developed electric vehicles (EVs) to reduce environmental problems and to increase future profits. Given that EVs require more charging time and charging stations, addressing convenience issues regarding obtaining energy for EVs is a key approach in increasing the desirability of these vehicles. Therefore, this study proposes a mobile service model for an electric vehicle charging station (EVCS). The research methodology used in this study is based on Gowin’s Vee model. The grounded theory and expert questionnaires are used to explore the proposed integration model for mobile commerce and EVCS. This model considers four domains, namely, service, technological, organizational, and financial domains, as well as 19 factors. The results of this study can provide guidance to governments, corporations, and the transport industry in creating an innovative service model for new charging stations for EVs. Future research would include the application of the proposed intelligent environment concept to charging stations.