Service Value Creation Research Articles

Product biographies in servitization and the circular economy

This paper questions the assumption in much of the marketing and product-service literature that products can be treated as stable platforms for the delivery of services. Instead, it uses the notion of the product biography to argue that products are chronically unstable, both physically and institutionally, and focusses on the managerial and institutional effort required to temporarily stabilise and qualify products for exchange or service value-creation. The context of the circular economy, which presents particularly acute challenges of qualification, is used to stimulate insights into how the product biography approach can inform the servitization debate. In particular, the circular economy perspective emphasises the need to see products as qualified by and constitutive of a distributed network, rather than defined once and for all by their producer, and points to entrepreneurial opportunity in the moments of transition between singularised, unique specimens and general, commodified, manageable objects – and vice versa. The wider and multiple product biographies occasioned by the circular economy also lead to reconfiguration of networks, as new potential valuations give rise to new entrepreneurial spaces.

Emerging Digital Frontiers for Service Innovation

This paper examines emerging digital frontiers for service innovation that a panel discussed at a workshop on this topic held at the 48th Annual Hawaii International Conference on System Sciences (HICSS). The speakers and participants agreed that that service systems are fundamental for service innovation and value creation. In this context, service systems are related to cognitive systems, smart service systems, and cyber-physical systems and depend on the interconnectedness among system components. The speakers and participants regarded humans as the central entity in all service systems. In addition, data, they saw personal data in particular as key to service systems. They also identified several challenges in the areas of cognitive systems, smart service systems, cyberphysical systems, and human-centered service systems. We hope this workshop report helps in some small way to cultivate the emerging service science discipline and to nurture fruitful discussions on service innovation.

IT-Enabled Information-Intensive Services

In information-intensive services (IISs), information interactions have a significant effect on service-value creation. Recent innovations in IT have facilitated the creation of various types of IT-enabled IISs (IT-IIS) in which IT is essential for information interactions. The authors introduce the generic composition of the IIS value-creation system, then view this system from an IT-oriented perspective to propose classifications for various IT-IIS types. This knowledge serves as a basis for designing new IT-IISs. The authors also conducted two IT-IIS design case studies.

Service Value Creation Capability Model to Assess the Service Innovation Capability in SMEs

SMEs need to innovate in services in order to survive and to create value. Service SMEs are facing the challenge of offering their customers continuously improved or completely new services and hence require service innovations to achieve and sustain competitive advantage. We used service value creation capability to assess service innovation capability of SMEs. Service value creation capability is a holistic approach which consists of Strategic capability, Managerial capability, Organizational capability and Adaptive capability to transform an SME into a value creation SME. It offers an overview of service value creation capability and activities against which service SMEs can critically reflect their service innovation performance. Our research primary focus is to explore and to find the relationship of service value creation capability with service innovation capability and to assess the service innovation by using a proposed model for service value creation capability. The model is empirically validated in Danish and Turkish SMEs to identify the correlation between the service value creation and service innovation through an integrated service value creation capability model analysis. The empirical data analysis reveals that there is strong positive correlation between the SME's service innovation capability and service value creation capability (strategic capability, managerial capability, operational capability and adaptive capability).

Call for Papers—Service Science Special Issue: Multi-actor Value Creation in Service Innovation

Collaborative value creation builds on orchestrated social action among the different stakeholders involved. In service innovation, joint value creation calls for specific network leadership and resource integration capabilities, because advanced service entails complex configurations of people, technologies, organizations, and shared information. Hence, mutually beneficial outcomes may be difficult to achieve within such configurations through traditional approaches to innovation. Previous research in service has emphasized the cocreation of value. It has improved our understanding of the constituents of value in both business and consumer settings. However, the cocreation of value becomes more complex as the number of participants in the cocreation activity increases. Therefore, we would like to encourage you to submit research articles on collaborative value creation in service to this special issue, focusing especially on the questions of multi-actor value creation associated with innovation in service. This special issue explores the perspectives on joint value creation in both consumer business and business-to-business contexts, placing special emphasis on multi-actor service systems. In particular, we encourage attention to the processes, practices, means, and challenges of value creation in service innovation. This special issue calls for both conceptual and empirical research investigating the topic using multiple methodological approaches.

Information Service Blueprint: A Service Blueprinting Framework for Information-Intensive Services

Information-intensive service (IIS) is a type of service in which information interactions have the most effect on service value creation. Recent innovations of information and communication technology have created various types of IISs, and the literature argues that IIS should be a research priority in this information economy. This research proposes a new service blueprinting framework specialized to IISs, called the Information Service Blueprint. The framework user can succinctly capture the big-picture and key points of the complex IIS process in question by blueprinting an IIS. The Information Service Blueprint has served as a basis for blueprinting IISs in IIS design projects with industry and government. An experiment to compare the Information Service Blueprint with the conventional service blueprint also confirms its utility for blueprinting IISs. This research would serve as a basis for analyzing and designing IISs.

Logistics Service Providers and Value Creation Through Collaboration: A Case Study

Logistics service provider (LSP) strategy and value creation is a cooperative endeavor. The study focuses on how LSPs create value by taking advantage of being connected and exploring the presence of various forms of interdependence. Using a single case study and a framework addressing network externalities and the concept of value logic interaction, we identify three types of collaborative value creation; distributive, functional and systemic. Whereas the fundamental logic of the LSP is mediation in terms of performing a distributive service, it is also subject to externalities in its functional and systemic value creation initiatives. LSPs are thereby portrayed as strategic entities dealing with a set of interdependencies in order to facilitate value creation in their networks. These firms need a rather advanced understanding of different types of economies and forms of collaboration to succeed. The study also associates different types of LSPs with the identified types of collaborative value creation.

Exploring Multi-Actor Value Creation in IT Service Processes

Organizational information technology (IT) needs are served through increasingly complex configurations of people, technologies, organizations, and shared information. Ideally, an organizational IT service is valuable for both the providers and users of systems and solutions. However, mutually beneficial outcomes may be difficult to achieve within the configurations through which IT services are delivered. We suggest that analyzing stakeholder interplay in IT service processes helps us to understand how information systems (IS) organizations can be leveraged to co-create business value. Through a qualitative empirical inquiry, we explore IT service realization in two case organizations. Through our analysis we find that value creation builds on orchestrated social action among the different stakeholder groups involved. Joint value creation in IT service processes hence calls for specific network leadership and resource integration capabilities from the IS organization. The paper enriches the current understanding of business value creation in IT services by infusing the service logic with traditional IT management perspectives. The findings highlight that the extent to which the IS organization can learn to facilitate the interaction between the essential actors in an ‘IT service system’ and leverage user-perceived value throughout the service process will ultimately determine its success or failure.

SMEs and Knowledge-Based Innovation Networks

The hierarchical structure of the conventional organization form was inadequate for the shift towards the customization of product development and global linkages of product markets. In particular, high-tech industry characteristics are short product cycles and rapid market changes. Therefore, network systems defined by long-term relationships are essential to innovation and networks offer a competitive advantage, in terms of innovations. In the era of knowledge economy, high-tech firms are facing dynamic competitive and rapid changes in global marketplaces. They have to emphasize the creation, accumulation, diffusion, transferring and application of knowledge to accelerate product, service and process innovation and value creation to meeting the needs of customers. Therefore, the main research problem for the study is “why should, and how can, companies create and operate knowledge-based innovation networks for value creation and to meeting the needs of customers?” The integrated model can be an easy-to-follow innovation model for high-tech SMEs to address when adopting knowledge-based innovation network. This helps to ensure that the essential determinants and approaches for innovation processes. In other words, from sources of innovation, open innovation, cooperation innovation to innovation network for implementation/commercialization.

What is being exchanged? Framing the logic of value creation in financial services

Financial service providers are facing a major paradigm shift. The understanding of what eventually constitutes customer value is being extended; economic value as the sole core of exchange is a far too limited perspective in contemporary competition. To address this emerging shift, the purpose of this study is to reframe the logic of value creation in financial services. As a result, a tentative framework for value creation logic in financial services is developed and discussed. On the basis of the framework, financial service providers should not limit their attention and resources to the exchange process, but identify innovative value-creating mechanisms through which they could contribute to the customer value actualization process. Our tentative framework (i) offers financial service providers guidance on which innovative value-creating mechanisms would enable them to participate in their customers’ value actualization process; (ii) shows how a product becomes a channel for a service, specifically a solution possessing value in the customer’s routine processes; (iii) illustrates that researchers and service providers should develop their understanding of customers beyond the traditional loan, insurance and/or investment product orientation.

The value of health and wellbeing: an empirical model of value creation in social marketing

Purpose– The purpose of this paper is to investigate the role of multiple actors in the value creation process for a preventative health service, and observe the subsequent impact on key service outcomes of satisfaction and customer behaviour intentions to use a preventative health service again in the future.Design/methodology/approach– An online self-completion survey of Australian women (n=797) was conducted to test the proposed framework in the context of a free, government-provided breastscreening service. Data were analysed using Structural Equation Modelling (SEM).Findings– The findings indicate that functional and emotional value are created from organisational and customer resources. These findings indicate that health service providers and customers are jointly responsible for the successful creation of value, leading to desirable outcomes for all stakeholders.Practical implications– The results highlight to health professionals the aspects of service that can be managed in order to create value with target audiences. The findings also indicate the importance of the resources provided by users in the creation of value, signifying the importance of customer education and management.Originality/value– This study provides a significant contribution to social marketing through the provision of an empirically validated model of value creation in a preventative health service. The model demonstrates how the creation and provision of value can lead to the achievement of desirable social behaviours – a key aim of social marketing.

Accounting change and value creation in public services—Do relational archetypes make a difference in improving public service performance?

Abstract Evidence points out that the outcome of accounting change in local governments is not simply a matter of ‘corporate’ resource investments and change management activities to accounting system replacement. This paper examines the link between such corporate-level interventions and the patterns of value creation at street-level. It emphasizes a resource- and capability-driven approach to explore processes and consequences of an ‘embedded agency’-effect assigned to the street-level rationale of public service improvement. Considering a logic chain of cause-and-effect sequences, the data analysis provides evidence that corporate and street-level interventions are unique dimensions to signify the multiple patterns of accounting change in local governments. The supplementary effect of cross-functional relationships is also distinguished, considering the relational archetype as a mechanism to explain the emerging outcome state. Recognizing the distinction and the sequential effects of relational archetypes induces a refined typology of accounting change according to its processes and outcomes in local governments. The analysis is based on a comparative case study design to explore accrual accounting introduction in six German municipalities.

Design to learn: customizing services when the future matters

Internet-based customization tools can be used to design service encounters that maximize customers' utility in the present or explore their tastes to provide more value in the future, where these two goals conflict with each other. Maximizing expected customer satisfaction in the present leads to slow rates of learning that may limit the ability to provide quality in the future. An emphasis on learning can lead to unsatisfied customers that will not only forego purchasing in the current period, but, more seriously, never return if they lose trust in the service provider's ability to meet their needs. This paper describes service design policies that balance the objectives of learning and selling by characterizing customer lifetime value as a function of knowledge. The analysis of the customization problem as a dynamic program yields three results. The first result is the characterization of customization policies that quantify the value of knowledge so as to adequately balance the expected revenue of present and future interactions. The second result is an analysis of the impact of operational decisions on loyalty, learning, and profitability over time. Finally, the quantification of the value of knowing the customer provides a connection between customer acquisition and retention policies, thus enhancing the current understanding of the mechanisms connecting service customization, value creation, and customer lifetime value.

Experience Sharing Service Value Co-Creation Model (ESSVC) and Its Application to Korean Language Service

In this paper, the authors propose a service value creation model based on sharing service experience. Experiences for services still remain in customers’ brain or heart after the services are finished. Their main aim is to share customers’ experiences and find suitable service by analyzing information shared after service providing. In the proposed model, the direct service field and the indirect service field are prepared. In the indirect service field, customers share their service experience by using Information Technology (Web2.0, Social Network). Suitable services can be found by analyzing information in the indirect service field. The effectiveness of this new model is demonstrated through its application to Korean language education during a 14week period.

The dynamics of service productivity and value creation: a service life cycle perspective

Due to the complexity of service productivity, the extant research on the topic is scarce. Hence, there is a need for additional studies on the interdependencies of service productivity and value co-creation as well as on the development of a service life cycle model and its impact on service productivity. This paper addresses these research gaps by analysing how services should be engineered and managed to increase service productivity. It also addresses the interaction effects during the service delivery phase and the co-creation of value between service providers and customers. Case studies which were conducted in machinery industry settings evidence the applicability of the conceptual service life cycle model and demonstrate how to measure, manage and optimise service productivity in dynamic systems. The findings show that it is crucial to analyse value co-creation throughout the service process in order to increase and measure service productivity. It is also essential to consider the characteristics of the service life cycle on service productivity. Finally, implications for service companies are discussed.

Non-industrial Private Forestry Service Markets in a Flux: Results from a Qualitative Analysis on Finland

Previous research on European forestry service markets is scarce and mainly focused on analysing external market environment and modelling of timber selling behaviour of non-industrial forest owners (NIPFs). In this study, we aim to create a broader understanding about business perspectives of forestry service markets covering the whole array of market and institutional based services offered to the NIPFs in case of Finland. The more specific empirical objective of the paper is to describe market drivers and underlying challenges in existing and potential service business models based on the concepts of service-dominant logic and dynamic capabilities. Using a qualitative approach and 22 thematic expert interviews in service organisations, we strive to analyse the drivers and opportunities for creating new services within the NIPF market and also build insight in possible barriers for new service value creation. According to our results, the ongoing structural changes offer new opportunities to change traditional mindsets and search for new types of offerings that support the renewal of this traditional forestry sector. As one of the major barriers for new innovations we identified the dominant role of established organisations securing their current positions, mainly driven by the forest industry timber procurement needs. From a managerial perspective, the changing institutional base of the current service organisations may facilitate new innovative business start-ups in addition to enhancing the strategic capabilities and competitiveness of the established firms in Finnish forestry sector.

A Service Value Creation Model Based on Sharing Service Experience and its Application to Korean Language Education

A Service Value Creation Model Based on Sharing Service Experience and its Application to Korean Language Education

Online value creation in small service businesses: the importance of experience valence and personal values

Perceived value is of great interest in current marketing research. However, in the area of Internet as a shopping channel of small businesses, there has been little analysis of customer perceived value and its determinants. This paper examines two little analysed aspects of value creation, experience valence and personal values. The analysis of data from a survey of tourism service purchase shows that experience valence, in terms of relevant information, ease of use and customer service, clearly influences perceived value after the online shopping experience. In contrast, only personal values of sense of security and sense of accomplishment influence perceived value.

Service purchasing and value creation: Towards systemic purchases

The aim of this paper is to clarify the problematic issues of the procurement of service bundles and their value potential for business customers. Creating customer value is an essential aspect of service provision given the need to find new strategic options with value potential in supply chains and networks. In the paper we review the results of a recent survey on value creation in service bundles. We address two research questions concerning the characteristics of value creation in service purchasing, and the correlation between procurement strategies and the creation of value for customers. In order to find answers we carried out a survey among customers of the case company. From the responses we identified various customer segments. In order to explore the buying behavior of the different customer groups we conducted analyses of statistical variance between the clusters. According to the results, there was significant variation in almost all the selected variables. In the following we focus on the study design and the results, and discuss the findings.

Managing Intellectual Capital in Non-Profit Elderly Care Organizations

The management of intellectual capital (IC) is considered as a highly promising approach for non-profit organizations (NPO). However, lack of in-depth understanding about the issue and practical tools to support management persists. IC research in the case of NPO’s is still rather generic and conceptual. This paper makes a contribution by describing the practices of IC management in this particular context. The paper describes one possible approach to recognize the key intangibles of non-profit organizations. This approach was applied in three case organizations in order to illustrate the significance of IC from the viewpoint of value creation in services. More generally, the paper illustrates first, the necessity to concretize the strategic perspectives of IC management and second, the need for measurement tools that enable the monitoring of IC.