Difference between revisions of "Fundamentals of Services"
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A Service System is defined by its value co-creating chain in which stakeholders (customers, suppliers, authority, and competitors) must work in open collaboration to deliver consistently high quality service according to the business goals, service goals, and customer goals. A value propositions can be viewed as a request from one service system to another to run an algorithm (the value proposition) from the perspectives of multiple stakeholders according to culturally determined value principles. The four primary stakeholder’s perspectives are customer, provider, authority and competitors; Figure 2 below depicts value calculations from multiple stakeholder perspectives: | A Service System is defined by its value co-creating chain in which stakeholders (customers, suppliers, authority, and competitors) must work in open collaboration to deliver consistently high quality service according to the business goals, service goals, and customer goals. A value propositions can be viewed as a request from one service system to another to run an algorithm (the value proposition) from the perspectives of multiple stakeholders according to culturally determined value principles. The four primary stakeholder’s perspectives are customer, provider, authority and competitors; Figure 2 below depicts value calculations from multiple stakeholder perspectives: | ||
| − | + | [[File:SSE_FOS_Fig2.png|600px|Value Calculation From Different Stakeholders’ Perspectives]] | |
Figure 2. Value calculation from different stakeholders’ perspectives. | Figure 2. Value calculation from different stakeholders’ perspectives. | ||
Revision as of 01:25, 5 August 2011
Services are activities that cause a transformation of the state of an entity (people, product, business, and region or nation) by mutually agreed terms between the service provider and the customer. “Individual services are relatively simple, although they may require customization and significant back-stage support (e.g., database, knowledge management, analysis, forecasting, etc.) to assure quality and timely delivery. Product services are also relatively straightforward, as product specifications, performance standards, quality control, installation guidelines, and maintenance procedures require good communication and understanding between providers and users.
Business services are complex; some may involve intensive negotiations, work process alignment, quality assurance, team collaboration and service coproduction. Regional and National services are even more complex, as they may affect policy, custom regulations, export permits. Local business practices, logistics, distribution, and other such issues” [Chang 2010]
The service and/or set of services developed and accessible to the customer (consumer or enterprise) are enabled by a Service System. A Service System is defined as “a dynamic configuration of resources (people, technology, organizations and shared information) that creates and delivers value between the provider and the customer through services” [IfM 2008]
Service Science
Service Science is emerging as an interdisciplinary approach for the understanding of Service Systems, their value propositions and governance mechanisms. A Service System is a System Of System with many stakeholders (customer, authority, providers, competitors, etc.) requiring that the supplied service be managed coherently.
Service Systems stakeholders may or may not interact to create a particular service value chain to be delivered with a particular objective [Spohrer and Maglio 2010]. Service system entities dynamically configure four type of resources (people, technology/environment infrastructure, organizations/institutions and shared information/symbolic knowledge) to define formal service systems or informal service systems. In the case of formal service systems the interactions are contracted through Service Level Agreements (SLA); informal service systems can promise to reconfigure resources.
SLAs are written contracts between and among service systems entities as well as the legal system for enforcing the contracts. The study of informal service systems contains the study of relationships (communications, interactions and promises) between service systems and social systems, cultural norms and beliefs, as well as political systems that can maintain those relationships.[Spohrer and Kwan 2009]
The resources are either physical or non-physical and have rights or no rights. See Figure 1 below.
Figure 1. Service System Resources
Service Value Chain
Service Level Agreements (SLAs) and policies specify the conditions under which Services System entities reconfigure access rights to resources by mutually agreed value propositions. Current management frameworks typically focus on single Service System entities interfaces. They neither use SLAs for managing the implementation and delivery of services, nor do they recognize/support the fact that many services may be composed of lower-level services, involve third-party providers, and rely on a possibly complex business/IT stack and Technology stack [CoreGRID, 2007]. While SLAs are mapped to the respective customer requirements; policies are provider-specific means to express constraints and rules for their internal operations. These rules may be independent of any particular customer [Theilmann 2009].
In Service Systems we describe the service value chain in terms of links among the entities; value is then created and delivered in terms of e-Services: Business-to-Business (B2B), Business to Consumer (B2C), Business to Government (B2G), Government-to-Business (G2B), Government-to-Government (G2G), Government-to-Consumer (G2C), etc. The emerging service interacts or “co-produces” with their customer via the World Wide Web (www) as compared to the physical environment in which the traditional or bricks-and-mortar service enterprises interact with their customers.
As discussed by Chesbrough [Chesbrough 2011], Tien [Tien and Berg 2003], and Hipel [Hipel, et. al. 2007], the services sector requires information as input, involves the customer at the production/delivery stage, and employs mostly qualitative measures to assess its performance, i.e., technology-intensive services are “information-driven, customer centric, e-oriented, and productivity-focused”. [Chang 2010] defines these features as:
• Information Driven. The creation, management, and sharing of information is crucial to the design, production and delivery of services.
• Customer Centric. Customers are generally co-producer of the services, as in the case of self-service. Customers require a certain degree of self-adaptation or customization, and customers must be satisfied with the rendered services.
• E (electronics) Oriented. Services are becoming more e-oriented. Thus, e-access, e-commerce, and e-customer management are crucial to e-services.
• Productivity-Focused. Both efficiency and effectiveness are important in the design, delivery, and support of services.
• Value-Adding. Services need to add value to the target clients. For profit-seeking service companies, the value so produced assures their profitability. For non-profit service entities, it reinforces the goodness of its policy.
A Service System is defined by its value co-creating chain in which stakeholders (customers, suppliers, authority, and competitors) must work in open collaboration to deliver consistently high quality service according to the business goals, service goals, and customer goals. A value propositions can be viewed as a request from one service system to another to run an algorithm (the value proposition) from the perspectives of multiple stakeholders according to culturally determined value principles. The four primary stakeholder’s perspectives are customer, provider, authority and competitors; Figure 2 below depicts value calculations from multiple stakeholder perspectives:
Figure 2. Value calculation from different stakeholders’ perspectives.
From [Spohrer 2011] with permission
From an engineering point of view the service and business goals are an entry point to analyze the Business architectures (including organization and processes) needed which in turn demand the IT and Technology Architecture alignments to achieve the goals. From a Systems Engineering methodology we then need to identify Service Systems entities that could participate in the service delivery (people, organizations, technologies, processes).
Service System Entities
(Spath and Fahnrich 2007) defined a service meta-model comprised of nine entities:
• Customers: customer features, customer attitudes, customer preferences
• Goals: business goals, service goals, customer goals, enterprise culture goals
• Inputs: physical, human beings, information, knowledge, currency, constraints
• Outputs: physical, human beings, information, knowledge, currency, waste
• Processes: service provision, service operations, service support, customer relationships, planning and control, call center management
• Human Enablers: service providers, support providers, management, owner organization (enterprise)
• Physical Enablers: owner organization (physical), buildings, equipment, furnishings, location
• Informatics Enablers: information, knowledge, procedures and processes, decision support, skill acquisition
• Environment: physical factors, economic factors, technological factors, social factors, ecological factors, legal factors
Thus, a service or service offering is created by the relationships among Service System entities (including information flows) through business processes into strategic capabilities that consistently provide superior value to the customer. If we were to represent the service as a network diagram then the entities will represent the nodes and the links will represent the relationships between nodes.
Figure 3. Service Systems Network Diagram
Service System Hierarchy
But systems are part of other systems that are expressed by systems hierarchies [Skyttner, 2010] to create a multilevel hierarchy and thus the Service System is composed of Service Systems Entities that interact through governance and management rules to create different type of outcomes in the context of four primary stakeholders: the customer, the provider, the authority, and the competitors with the purpose to provide improved customer interaction and value co-creation. Examples of Service Systems entities are a business enterprise, a nation, or in its simplest form a person (consumes and produces services).
Vargo points out that “the normative function of service systems is to connect people, technology and information through value propositions with the aim of co-creating value for the service systems participating in the exchange of resources within and across the systems” [Vargo and Akaka 2009].
Using the hierarchical approach Spohrer conceptualizes an ecosystem at the highest level in which a Service System is an entity. We extend this concept to create the Service System hierarchy as described in Figure 4 below [Spohrer 2011]; [Maglio and Spohrer 2008]; [Maglio et al. 2010].
Figure 4. Service System Hierarchy
Service System Attributes
The fundamental attributes of a Service System include togetherness, structure, behavior and emergence (Chapter 2.2). As mentioned in the SSE introduction today’s global economy businesses are very competitive and a Service System may be very competitive in a given environment at a given time (the business space) and the Service System’s trajectory should be well controlled as time goes [Qiu 2009] since services are real time in nature and are consumed at the time they are co-produced [Tien and Berg 2003].
The Service System should evolve and adapt to the conditions within the business space in a manner to ensure that the customized service behaves as expected. This adaptive behavior of Service System implies that its design must be truly trans-disciplinary:
They must include techniques from social science (i.e., sociology, psychology, and philosophy) and management (i.e., organization, economics, and entrepreneurship). As a consequence Systems, Man and Cybernetics (SMC) must expand their systems (i.e., holistic oriented), man (i.e., decision-oriented), and cybernetics methods to include and be integrated with those techniques that are beyond science and engineering. [Hipel et al. 2007]
References
Citations
Chang C.M. 2010. Service Systems Management and Engineering, Creating Strategic Differentiation and Operational Excellence. John Wiley & Sons, Inc. ISBN 978-0-470-42332-5.
Chesbrough, H. 2011. Open Services Innovation: Rethinking Your Business to Grow and Compete in a New Era. Jossey Bass. ISBN-10: 0470905743; ISBN-13: 978-0470905746.
CoreGRID. 2007. Using SLA for Resource Management and Scheduling - A Survey. Technical Report 0096. www.coregrid.net/mambo/images/stories/TechnicalReports/tr-0096.pdf. accessed on June 4th 2011.
Hipel, K.W., Jamshidi, M.M., Tien, J.M., and White, C.C. 2007. The Future of Systems, Man, and Cybernetics: Application Domains and research Methods. IEEE Transactions on Systems, Man, and Cybernetics-Part C: Applications and Reviews 37 (5): 726-743.
IfM 2008. University of Cambridge Institute for Manufacturing (IfM) and International Business Machines (IBM) “Succeeding through service innovation: A service perspective for education, research, business and government”, April 2008, ISBN:978-1-902546-65-0
Maglio, P., Kieliszewski C., and Spohrer, J. 2010. Handbook of Service Science. Springer. 1st Edition. ISBN-10: 9781441916273; ISBN-13: 978-1441916273.
Maglio P. and Spohrer, J. 2008. Fundamentals of Service Science. Journal of the Academy of Marketing Science 36 (1): 18-20. DOI: 10.1007/s11747-007-0058-9.
Qiu, R. 2009. Computational Thinking of Service Systems: Dynamics and Adaptiveness Modeling. Service Science 1 (1): 42-55.
Skyttner, L. 2006. General Systems Theory: Perspectives, Problems, Practice. World Scientific Publishing Company. 2nd Edition. ISBN-10: 981256389; ISBN-13: 978-9812563897.
Spohrer, J.C. 2011. Service Science: Progress & Directions. International Joint Conference on Service Science. Taipei, Taiwan.
Spohrer, J. and Kwan, S.K. 2009. Service Science, Management, Engineering, and Design (SSMED): An Emerging Discipline-Outline & References. International Journal of Information Systems in the Service Sector 1(3).
Spohrer, J. and Maglio, P. P. 2010. Service Science: Toward a Smarter Planet, in Introduction to Service Engineering (eds G. Salvendy and W. Karwowski), John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9780470569627.ch1.
Theilmann, W. and Baresi, L. 2009, Multi-level SLAs for Harmonized Management in the Future Internet. Towards the Future Internet - A European Research Perspective. Tselentis et al. (Eds.). IOS Press. Doi:10.3233/978-1-60750-007-0-183.
Tien, J,M. and Berg, D. 2003. A Case for Service Systems Engineering. Journal of Systems Science and Systems Engineering 12 (1): 13-38. Spath, D. and Fahnrich, K.P. 2007. Advances in Services Innovations. Springer-Verlag. ISBN – 10 # 3-540-29858-4.
Vargo, S.L. and Akaka, M.A. 2009. Service-Dominant Logic as a Foundation for Service Science: Clarifications. Service Science 1 (1): 32-41.
Primary References
Spath, D. and Fahnrich, K.P. 2007. Advances in Services Innovations. Springer-Verlag. ISBN – 10 # 3-540-29858-4.
Additional References
All additional references should be listed in alphabetical order.