Constructing Effective Value Propositions for Stakeholders in Service System Networks1                                    ...
Some DefinitionsService Science is short for ServiceScience, Management, Engineering and Design (SSMED1).Service Science i...
Service System Worldview1                                                                 Service             Customer    ...
A Service System Network        Service   Service Interactions       System A                                  Service    ...
A Service Supply Chain        Service   Service Interactions       System A                                  Service      ...
Service System Worldview                                 Employees &                                 Stockholders Communit...
Service System Worldview       Service Management   Fitzsimmons & Fitzsimmons               Employees &                   ...
Value Co-Creation Through Value Propositions                                 Employees & Value                            ...
Stages in Customer Empowerment                 in Value Co-Creation1                                       Stage 1: Value ...
Stage 2: Traditional Service Value Network                         Value Proposition                               Focal  ...
Stage 3 – Improved Value Chain                         Value Proposition                               Focal             S...
Stage 4: Customer Driven Service Value                     Network                              Value Proposition         ...
Variety of Value Propositions                                                                   Maslow’s                  ...
Disposable             Income &             Desire for              Services              Needs               vs.         ...
Value Propositions can also be bi-directionalCustomers                      Service Provider                              ...
Value Proposition Model (VPM)      Starting with the Service System                                Service   Customer     ...
VPM – a common example                                         Service       Customer      Value Proposition              ...
VPM – individuals and community                                             Service       Customer          Value Proposit...
VPM – individuals and Facebook community                                             Service       Customer          Value...
VPM – service provider partners                                          Service   Customer                               ...
VPM – partner’s acquistion of customer                                                         Service             Custome...
Those ads will say the user’s friends              likes the brand, adding a social              context that Facebook say...
Example 1 of 4                                            Service   Customer                                 ProviderCusto...
Example 2 of 4                                                         Service                Customer                    ...
Example 3 of 4                                                         Service                Customer                    ...
Example 3 of 4 (continued)                       Cost of acquiring subscribers:                       2099              $2...
Example 4 of 4                                                      Service             Customer                          ...
Foundational Premises of Service Dominant Logic                     Kwan 2012                    28
Value Systems and Value Dimensions                                       Provider’s Value System                          ...
Variety of Value Propositions                                                                   Maslow’s                  ...
Constructing a Value Proposition  The Customerhave a lot of VP’s to choose from.                        Accepted Value Pro...
A Hierarchy of Value PropositionsAn Service Provider’s Value Proposition can be made up of a recursive set of         sub-...
A Customer’s Choice of ServiceA Service Provider’s Promised Value:    Service Components                  Based on the    ...
A Customer’s Realization of Value                                                                            FP6          ...
Constructing Value Propositions:          Customers and Service Providers                                                S...
Example: E-CommerceCustomer            Amazon.com                                        Bookcloseout_us                  ...
VP0           Se0                 SE                                     Amazon.com                 S0                    ...
Service Pattern 1 – Single Service Episode                          Customer                         Instantiation        ...
Pattern 2 – Continuous Service over a Period of Time                      Customer                                   VP0  ...
Service Pattern 3 – Service in Parallel                      Customer                                 VP0                 ...
Pattern 3 – Continuous Service with    Occasional Service EpisodesCustomer                                       VP0      ...
Pattern 4 – Service provided by more than      one Partner Service ProvidersCustomer                                      ...
Future Directions• More on development of Value Dimensions and Measurement• More on connecting VPM with Service Provider’s...
Service System Framework& Service System Networks                            Foresight and Innovation Method    Value Prop...
Service System Framework& Service System Networks   Foresight and Innovation Method           © Cockayne and Carleton     ...
Constructing Effective Value Propositions for Stakeholders in Service System Networks1                         Dr. Stephen...
Example of Value Proposition    A Class Syllabus (1)            Kwan 2012          47
Example of Value Proposition    A Class Syllabus (2)                              One of many                             ...
Example of Value Proposition    A Class Syllabus (3)                             Reputation &                             ...
Example of Value Proposition    A Class Syllabus (4)                               Required Texts,                        ...
Example of Value Proposition    A Class Syllabus (5) Grading Criteria         Student        Evaluations       (Faculty KP...
Example of Value Proposition                    A Class Syllabus (6)Guest Lecture  (Partner)   Service  Episodes          ...
Kwan 2012   53
Environmental    Value                Kwan 2011   54
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IBM Service Science & Innovation Community of Practice 3/6/2012

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IBM Service Science & Innovation Community of Practice 3/6/2012

  1. 1. Constructing Effective Value Propositions for Stakeholders in Service System Networks1 Dr. Stephen K. Kwan Professor, Service Science Management Information Systems College of Business Administration San José State University, CA, USA http://www.sjsu.edu/ssme Contact: stephen.kwan@sjsu.edu 1Kwan, S.K., Muller-Gorchs, M. (2011). "Constructing Effective Value Propositions for Stakeholders in Service System Networks,” Proceedings of SIGSVC Workshop. Sprouts: Working Papers on Information Systems, 11(160). http://sprouts.aisnet.org/11-160 Presented to the IBM Service Science & Innovation Community of Practice March 6th, 2012 Download these slides at: http://www.slideshare.net/StephenKwan
  2. 2. Some DefinitionsService Science is short for ServiceScience, Management, Engineering and Design (SSMED1).Service Science is concerned with the study of Service Systems. cf. Computer Science is concerned with the study of Computer Systems.Service Systems are man-made complex systems designed toimprove the quality of life by co-creating value through valuepropositions among the stake-holders. 1 Spohrer, J., Kwan, S.K. “Service Science, Management, Engineering, and Design (SSMED): An Emerging Discipline – Outline and References”, International Journal of Information Systems in the Service Sector, 1(3), 2009. Kwan 2012 2
  3. 3. Service System Worldview1 Service Customer Provider Service Experience A Service System and Its Entities1Kwan, S. K. & Min, J. H. (2008) “An Evolutionary Framework of Service Systems”.Presented at the International Conference on Service Science, Beijing, China, April 17-18. Kwan 2012 3
  4. 4. A Service System Network Service Service Interactions System A Service System B Service ServiceSystem E System C Service System D Service System F Kwan 2012 4
  5. 5. A Service Supply Chain Service Service Interactions System A Service System B Service ServiceSystem E System C Service System D Service System F Kwan 2012 5
  6. 6. Service System Worldview Employees & Stockholders Community Service Customer Provider Service Partners Experience Service System CompetitionSociety Kwan 2012 6
  7. 7. Service System Worldview Service Management Fitzsimmons & Fitzsimmons Employees & Capacity Stockholders & Manpower Planning, Community Training Service Customer Facility Location Provider & Design Service Partners Experience SocialNetworking Competition Competitive Market Customer Service StrategySociety Segmentation Flow & Concept Operating Service Realized Strategy Delivery Kwan 2012 7
  8. 8. Value Co-Creation Through Value Propositions Employees & Value Stockholders Community Value Service Value Customer Provider Value Service Partners Experience Service System Competition Society Kwan 2012 8
  9. 9. Stages in Customer Empowerment in Value Co-Creation1 Stage 1: Value Chain Value Proposition Focal Service Customer Relationship Provider Service Experience1 Kwan, S. K. & Yuan, S. T. ”Customer-Driven Value Co-Creation in Service Networks”, in Demirkan, H., Spohrer, J.C.and Krishna, V. ed., The Science of Service Systems, volume in Service Science: Research and Innovation (SSRI) in theService Economy series, Springer, 2010. Kwan 2012 9
  10. 10. Stage 2: Traditional Service Value Network Value Proposition Focal Service Customer Relationship Provider Provider Service Partner Experience Network Value Proposition cf. ICT-enabled service networks, mobile applications, etc. Kwan 2012 10
  11. 11. Stage 3 – Improved Value Chain Value Proposition Focal Service Customer Relationship Provider ValueProposition Service Customer’s Experience Social Network Kwan 2012
  12. 12. Stage 4: Customer Driven Service Value Network Value Proposition Focal Service Customer Relationship Provider Value Value PropositionProposition Provider Service Partner Customer’s Experience Social Network Network cf. “Resource Integrators” in Service Dominant Logic literature Kwan 2012
  13. 13. Variety of Value Propositions Maslow’s Hierarchy Of Needs Service Provider Society HedonicStakeholders Spiritual Cultural Community Corporal Emotional Employees Intellectual Familial…. Stockholders A point in this 3-D space is Partners a Potential Value Customers Proposition Kwan 2012 13
  14. 14. Disposable Income & Desire for Services Needs vs. WantsKwan 2012 14
  15. 15. Value Propositions can also be bi-directionalCustomers Service Provider Stockholders Partners Community Employees Customers Partners Service Provider Society Service Provider Society ? Community Employees Stockholders Partners Customers Kwan 2012 15
  16. 16. Value Proposition Model (VPM) Starting with the Service System Service Customer Provider Service Experience Kwan 2012 16
  17. 17. VPM – a common example Service Customer Value Proposition Provider Customer Service Experience ServiceCustomer Experience Service Experience Kwan 2012 17
  18. 18. VPM – individuals and community Service Customer Value Proposition Provider Community/ SocialCustomer Network A Shared Experience Service Experience Service ExperienceCustomer Service Experience Kwan 2012 18
  19. 19. VPM – individuals and Facebook community Service Customer Value Proposition Provider Community/ SocialCustomer Network A Shared Experience Service Experience Service ExperienceCustomer Service Experience Kwan 2012 19
  20. 20. VPM – service provider partners Service Customer Provider Value PropositionCustomer Service Service Experience Experience Service Experience Service Experience Value Proposition Vendor Kwan 2012 20
  21. 21. VPM – partner’s acquistion of customer Service Customer Provider Customer Service Service Experience Experience Service Experience Service Experience Customer Acquisition Strategy Service VendorExperience Kwan 2012 21
  22. 22. Those ads will say the user’s friends likes the brand, adding a social context that Facebook says will make the ads 80% more likely to be remembered. … leveraging the connections among its 850 million users… Ads produced $31.5 billion in revenue in 2011…Kwan 2012 22
  23. 23. Example 1 of 4 Service Customer ProviderCustomer Service Service Experience Experience Service Experience Service Experience Vendor Kwan 2012 23
  24. 24. Example 2 of 4 Service Customer Provider Customer Service Service Experience Experience Service Service Experience ServiceExperience Experience Service Vendor Vendor Experience Kwan 2012 24
  25. 25. Example 3 of 4 Service Customer Provider Customer Service Service Experience Experience Service Service Experience ServiceExperience Experience Service Vendor Vendor Experience Kwan 2012 25
  26. 26. Example 3 of 4 (continued) Cost of acquiring subscribers: 2099 $2.52 2011 $5.23 Kwan 2012 26
  27. 27. Example 4 of 4 Service Customer Provider Customer Service Service Experience Experience Service Experience Service Experience Service VendorExperience Kwan 2012 27
  28. 28. Foundational Premises of Service Dominant Logic Kwan 2012 28
  29. 29. Value Systems and Value Dimensions Provider’s Value System             Opportunities for   Value Co-Creation  Customer’s ★ Value System ★ ★ ★ ★ ★ ★ ★His Customer’s Value System FP8 Kwan 2012 29
  30. 30. Variety of Value Propositions Maslow’s Hierarchy Of Needs Service Provider Society HedonicStakeholders Spiritual Cultural Community Corporal Emotional Employees Intellectual Familial…. Stockholders A point in this 3-D space is Partners a Potential Value Customers Proposition FP10 Kwan 2012 30
  31. 31. Constructing a Value Proposition The Customerhave a lot of VP’s to choose from. Accepted Value Proposition = Service Level Agreement? Kwan 2012 FP7 31
  32. 32. A Hierarchy of Value PropositionsAn Service Provider’s Value Proposition can be made up of a recursive set of sub-Value Propositions that could be realized by partners. <VP> = <vp> | <vp><VP> A Service Provider can also offer different Value Propositions for a variety of Service Offerings. Kwan 2012 32
  33. 33. A Customer’s Choice of ServiceA Service Provider’s Promised Value: Service Components Based on the Customer’s ownA Customer’ Choice Function: expectations Kwan 2012 33
  34. 34. A Customer’s Realization of Value FP6 Degree of completion Actual Benefits Quality AssessmentA Customer’sRealized Value(value in use): could be more complex Co-Production Service Process Service Provider and Customer’s His Partners’ + Contributions Contributions FP9 Kwan 2012 34
  35. 35. Constructing Value Propositions: Customers and Service Providers Sc,R,M too Connecting Components of a ValueProposition to a Service Provider’s KPI’s through Feedback Kwan 2012 35
  36. 36. Example: E-CommerceCustomer Amazon.com Bookcloseout_us theBookGrinder nengland4 Kwan 2012 36
  37. 37. VP0 Se0 SE Amazon.com S0 SP0 Se1 Bookcloseout_us S1 SP1 S4 SP4Customer Se2 theBookGrinder S2 SP2 S5 Se3 negland4 S3 SP3 S6 37 Kwan 2012
  38. 38. Service Pattern 1 – Single Service Episode Customer Instantiation of the Service Experience at a particular point VP0 In time SE0 Focal Relationship Time SP0 SE0 = Service Experience provided by SP0 SP0 = Service Provider of the Focal Relationship (the basis of the Value Proposition from Kwan & Yuan 2011) VP0 = Value Proposition offered by SP0 to Customer for SE0 Kwan 2012 38
  39. 39. Pattern 2 – Continuous Service over a Period of Time Customer VP0 SE0 Time SP0 Kwan 2012 39
  40. 40. Service Pattern 3 – Service in Parallel Customer VP0 Se0 Se1 Se2 Time Instantiation of the ServiceSP0 SP1 SP2 Experience at a particular point In time Kwan 2012 40
  41. 41. Pattern 3 – Continuous Service with Occasional Service EpisodesCustomer VP0 Se1 Se2 Se0 Time SP0 Kwan 2012 41
  42. 42. Pattern 4 – Service provided by more than one Partner Service ProvidersCustomer VP0 SE1 SE2 SE3 SE0 Time SP0 SP1 SP2 SP3 VP1 VP3 SE4 SE6 VP2 SE5 Kwan 2012 42
  43. 43. Future Directions• More on development of Value Dimensions and Measurement• More on connecting VPM with Service Provider’s KPI• More on Quality Dimensions and Measurement• Integrate VPM with Service System Design and Prototyping Integrate with Foresight and Innovation Method Knowledge Managementfor Service System Design & Engineering © Cockayne and Carleton Kwan 2012 43
  44. 44. Service System Framework& Service System Networks Foresight and Innovation Method Value Propositions & Service Patterns © Cockayne and Carleton Kwan 2012 44
  45. 45. Service System Framework& Service System Networks Foresight and Innovation Method © Cockayne and Carleton Process Chain Network Diagram UI Prototyping UML – Use Value Propositions Cases & Service Patterns BPMN Work System MANGA Story Service Blueprint Boards Kwan & Müller-Gorchs 2011 &Müller-Gorchs 45
  46. 46. Constructing Effective Value Propositions for Stakeholders in Service System Networks1 Dr. Stephen K. Kwan Professor, Service Science Management Information Systems College of Business Administration San José State University, CA, USA http://www.sjsu.edu/ssme Contact: stephen.kwan@sjsu.edu Fin Presented to the IBM Service Science & Innovation Community of Practice March 6th, 2012 Download these slides at: http://www.slideshare.net/StephenKwan
  47. 47. Example of Value Proposition A Class Syllabus (1) Kwan 2012 47
  48. 48. Example of Value Proposition A Class Syllabus (2) One of many MIS Electives offered in Fall 2011 Course Description Course - Learning Objectives 3 Credit Hours Kwan 2011 $$ 48
  49. 49. Example of Value Proposition A Class Syllabus (3) Reputation & Accreditation “PoweringSiliconValley” Prerequisites & Required Texts Kwan 2011 49
  50. 50. Example of Value Proposition A Class Syllabus (4) Required Texts, Rules & Policies Class Procedure Kwan 2011 50
  51. 51. Example of Value Proposition A Class Syllabus (5) Grading Criteria Student Evaluations (Faculty KPI) Kwan 2012 51
  52. 52. Example of Value Proposition A Class Syllabus (6)Guest Lecture (Partner) Service Episodes Service Components Kwan 2011 52
  53. 53. Kwan 2012 53
  54. 54. Environmental Value Kwan 2011 54

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