lecture in the iminds-smit vub service science lecture series

UGentMIS research group (http://www.mis.ugent.be)Department of Business Informatics and Operations Management May 13, 2014

Understanding Service Science through Conceptual Modeling

Geert PoelsProfessor of Management Information Systems

Academic member of the Center for Service Intelligence

UGentMIS research group (http://www.mis.ugent.be)Department of Business Informatics and Operations Management 2

Contents

The context Purpose and principles of Service Science

The problem How to conceptualize service to facilitate inter-disciplinary

research? How to achieve a shared understanding of service

concepts? The solution approach

Conceptual modeling of service concepts based on descriptive theories of service system


Context: Service Science

Why is it needed?What is it (and what is it not)?How is it different from other service research

disciplines?

Let’s start with creating a common understanding of the topic of interest..


Growing importance of service sector

Agriculture -> Manufacturing -> Services Shift in % of GDP Shift in % of employment Both developed and developing countries (though

generally slower for the latter) + many services in disguise in industry/construction

(= ‘servitization’) E.g., from producing/selling jet engines to

operating/maintaining the engines and charging airlines for propulsion usage (= ‘propulsion as a service’ )


Need for service (system) innovation

Increasing scale, complexity, and connectedness of service systems Globalisation and technology drivers Urbanisation and aging population Environmental awareness and sustainability Increasing demand for service quality/productivity

Rising demand for service innovation How to invest in service systems to sustainably improve

key performance indicators? How to develop new service offerings, together with

creative value propositions and improved service systems?


Knowledge to inform service innovation

Better understanding of service systems is required What are the architectures of service systems? How can service systems be understood in terms of a small number

of building blocks that get combined to reflect the observed variety?

How might architectures and building blocks help us understand the origins, lifecycles and sustainability of service systems?

How can service systems be optimised to interact and co-create value?

Why do interactions within and between service systems lead to particular outcomes?


Need for service research

Service research (& development) is lagging behind Until early 80ties research dominated by product-centric

concepts and theories Despite service sector accounts for > 2/3 GDP and jobs,

investment in services < 1/3 R&D spending Service research is strongly fragmented

Service marketing Service operations Service management Service HRM Service sourcing Service pricing

Service economics Service engineering Service design Service computing Service innovation Service business models

Healthcare services Nursing services Hospitality services Human services Transformative services …


Product over service

Illustration: Business Eng. studies @UGent Product(ion)-related courses

• Production Technology, Operations Management, Materials Science, Advanced Production Management, Supply Chain Management, Total Quality Management, …

Service-related courses• Managing Service Organizations


Need for a systemic view

Without a clear understanding of the domain and how it relates to existing theories, knowledge will continue to be fragmented Specialisation remains important, but one shortcoming is

that each discipline tends to focus on particular configurations of resources

The key to understanding service systems is not just to examine one aspect of service but rather to consider service as a system of interacting parts

The hard work of creating an integrated theory that spans many disciplines has not been done.


Distinctive object of study

Structur

e

• Service System

Behaviour

• Value Co-Creation

“The service system is the basic abstraction of Service Science.”

“Service Science is the study of value co-creation phenomena.”


Landmarks in history of Service Science

2004 IBM calls for systematic approach to service research and education Driven by its own transformation from a hardware

manufacturer to a service business (offering ‘solutions’ instead of technology)

Driven by expected future shortage of adaptive innovators, i.e., professionals with knowledge and skills required for service innovation (= ‘T-shaped professional’)

2007 launch of SSME at Cambridge symposium 2012


Need for knowledge integration

Service Science, Management, and Engineering (SSME) is an integrative service research discipline Distinct field looking for a deeper level of knowledge

integration We have pieces of knowledge today, but they are not

integrated into a unified whole. Service Science provides motivation, methods and skills for integration.

Holism instead of reductionism in the approach to study service => Service Science as a specialisation of Systems Science


Looking for a foundational theory

Creating a truly integrated theory of service systems Developing a normative view on how service systems can

be described and their behaviour explained Discovering underlying principles of complex service

systems and the value propositions that interconnect them Address grand research challenges that span multiple

disciplines Providing structure and rigour for building a widely

accepted and coherent body of knowledge to support innovation in service systems


Fundamental and applied research

Nature of Service Science theory? Descriptive Explanatory (and predictive) Prescriptive (and applicable)


Not just a fancy name for..

Given its foundational principles, Service Science is not Service-Oriented Computing (SOC), Service-Oriented

Architecture (SOA), Service-Oriented Software Engineering (SOSE)

Service-Oriented Business Architecture (SOBA), Service-Oriented Enterprise Engineering (SOEE)

• i.e., the application of SOC, SOA and SOSE to business and organisational design (similar to the design of IT infrastructures and software applications)

Multidisciplinary research in service management


“As a distinct interdisciplinary field, Service Science needs an idiosyncratic and unifying paradigm to provide identity and discriminate it from its many contributing but separate service research disciplines”

“Chief among the challenges that lay ahead is the challenge of developing a shared vocabulary that can be used across disciplines to describe the great variety of service systems”

The problem: common understanding


Underlying worldview

Service-Dominant

Logic

Systems thinking

Study of value co-creation

phenomena in service systems


Common understanding?

Service System

Worldview

Service Dominant

Logic

Service Quality

Gap Model

Unified Services Theory

ServiceSystem

Framework

Work System Theory

GeneralServiceModel

DEFINITION OF

CONCEPTS?

RELEVANCE OF

CONCEPTS?

COMPLETENESS OF CONCEPTS?


But what is service?

“An act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything.”

“A provider-client interaction that creates and captures value.”

“Value-creating support to another party’s practices.”

“The application of specialized competences (knowledge and skills) through deeds, processes and performances for the benefit of another entity or the entity itself.”

“Acts performed for the benefit of others.”


“A change in the condition of a person, or a good belonging to some economic entity, brought about as a result of some other entity, with the approval of the first person or economic entity.”

“A time-perishable, intangible experience performed for a customer acting in the role of a co-producer.”

“A simultaneous or near-simultaneous exchange of production and consumption transformation in the experience and value that customers receive from engagement with providers, and intangibility in that goods are not exchanged.”


“A service is an economic resource as it is viewed as valuable by some agent and can be transferred between agents”

“Service is a complex temporal entity consisting of a service commitment and a service process”

“A service is generally implemented as a course-grained, discoverable software entity that exists as a single instance and interacts with applications and other services through a loosely coupled (often asynchronous), message-based communication model.”


Other confusion

Service system Services are exchanged between service systems Services are exchanged within service systems

Value co-creation Co-production based on individual customer inputs Overlap in time/space of provider and customer activities Provider facilitates value creation by customer

Service exchange Benefits for one party, reciprocity in the exchange Benefits for both parties within same service


A solution approach: conceptual modeling

Conceptual model Model of the concepts and their relations pertaining to

some domain of interest As a representation of the domain a conceptual model

serves the purposes of abstraction and visualisation It helps in understanding and analysing the domain (and

can act as a design for socially constructed domains)

Our thesis: conceptual modelling helps clarifying definitions of Service Science concepts and show how they are interrelated


Towards a conceptual framework

Clarify concepts using descriptive theories that offer a comprehensive view of service

Build a conceptual model (for the moment just as a concept map) that includes and combines concepts from the different theories, and identifies cross-theoretical relations between concepts, but without integrating the theories themselves“Instead of assuming that particular definitions are right or wrong, it is more useful to assume each definition makes sense from a particular viewpoint or in a particular context”


Nature of theory (Gregor, MISQ 2006)


Theories of service

Service-Dominant Logic Marketing / philosophical basis of Service Science Focus on customer benefits creation

Unified Services Theory Operations Management Analyzing efficiency and quality of service production

process


Work system metamodel (Work System Theory) Information Systems (but transdisciplinary) Systemic view of service within organisational context Operational model for analyzing form, function and

environment (from systems engineering perspective) Resource-Service-System model (based on REA

ontology) Accounting (Information Systems) Focus on economic exchange of service Analyzing various business aspects of service systems


Service-Dominant Logic

IHIP characterization of services, providing basis for separate service research disciplines, is deficient

Service-Dominant Logic = counter-movement All economic exchange is exchange of service for service Service is application of competences for benefit of

someone else Both goods and services (in traditional sense) can be used

in this act Benefits are determined by the service beneficiary in

terms of value-in-use and value-in-context


Foundational premises of Service-Dominant LogicFP1: Service is the fundamental basis of exchange.

FP2: Indirect exchange masks the fundamental basis of exchange.

FP3: Goods are a distribution mechanism for service provision.

FP4: Operant resources are the fundamental source of competitive advantage.

FP5: All economies are service economies.

FP6: The customer is always a co-creator of value.

FP7: The enterprise cannot deliver value, but only offer value propositions.

FP8: A service-centered view is inherently customer oriented and relational.

FP9: All social and economic actors are resource integrators.

FP10: Value is always uniquely and phenomenologically determined by the beneficiary.


Concept map


Unified Services Theory

Focus on service production process Distinguishes service and non-service production

processes (>< Service-Dominant Logic) Service process is a production process in which each

individual consumer provides significant inputs Operational implications address challenges unique

to service processes (due to presence of consumer inputs)

Value extraction is performed by consumers in consumption process


Concept map


Integrated concept map


Work system metamodel

Work system A system in which human participants and/or machines

perform work (processes and activities) using information, technology, and other resources to produce specific products/services for specific internal and/or external customers

Service An act performed to produce outcomes for the benefit of

others Most work systems are service systems


Concept map


Resource-Service-System model

Service-Dominant Logic interpretation of the Resource-Event-Agent (REA) model of economic exchange Economic exchange results from the economic reciprocal

actions (called economic events) of independent entities (called economic agents) that provide each other the resources that they control (called economic resources)

Economic resources = operant/operand resources Economic event = service Economic agent = service system entity Reciprocity relation = service exchange


Concept map


Conceptual clarification?

Service Service as process (SDL, WSM, RSS)

• Application of competences for benefit of others (SDL, RSS)• Operant resources acting upon operand resources

(SDL, RSS)• Acts to produce outcomes for benefit of others (WSM)

Service production process• Individual consumer inputs required (UST)


Value co-creation Overlap in time/space of provider and consumer

activities (WSM) – optional for service Integration of provided resources (SDL, RSS)

• Required for service• But, does not imply overlapping activities

Co-production in service process / service system activities Customer participant - optional (WSM) Consumer input to process required, but must not be

consumer himself (UST)


Service system Everything needed to perform service (WSM) Contains service process (UST) consisting of activities

(WSM, RSS) Employed by service system entity, which can be a

resource controlled by a service supra-system (RSS) Service Exchange

In scope (SDL, RSS) versus out scope (WSM, UST) Intention of mutually beneficial value co-creation (RSS)

UGentMIS research group (http://www.mis.ugent.be)Department of Business Informatics and Operations Management May 13, 2014

Back-up slides


T-shaped professional


Principle of interdisciplinary research

SSME accepts disciplinary barriers between academic fields and service research disciplines, but aims at building bridges between them


Not by multidisciplinary research aimed at embracing all relevant service research disciplines


Not by multidisciplinary research focused on a selected set of core elements of existing service research disciplines


But by interdisciplinary research attempting to create new knowledge to bridge existing service research disciplines, based on transdisciplinary and crossdisciplinary collaboration.


concept definition

multidisciplinary Creation of new knowledge that adds to multiple existing disciplines, where the knowledge of individual disciplines is seen as separate and additive to each other

interdisciplinary Creation of new knowledge that bridges, connects, or integrates individual disciplines

transdisciplinary Transcending or extending beyond the knowledge of existing disciplines

crossdisciplinary Knowledge of one discipline is used as a lens through which another discipline is studied


The Service System worldview

• Service System Entity• Resource

• Focal resource• Access Right• Service System Ecology• Interaction

• Value proposition based• Governance mechanism based

• Outcome• Measure• Stakeholder


Useful for framing research challenges

How to represent work in service systems and measurequality, productivity, compliance and innovation?


How does an ecology of service system entities evolveto remain efficient, effective and viable?What are the dynamics and laws that governnetworks of service system entities?


Which interaction episodes result in the favourableoutcome of mutual value co-creation?How to design service processes in order to minimizethe chance of unfavourable outcomes?


How to design profitable and sustainable service business models?How to strategically source the right resources for such business models?How to develop the right service culture and mindset for successful service business?

lecture in the iminds-smit vub service science lecture series

Presentations & Public Speaking

service illustration

service qualityproductivity

service organizations

service intelligence

aspect of service

service research disciplines

improved service systems

service system innovation