Service providers often have to construct networks of partners to fulfill service obligations to customers. We introduce an integration service quality gap that represents the difference between customer service quality expectation and perceived service quality in his service journey in a service system network. The integration service quality gap is incorporated with traditional service quality gaps to form a more complete treatment of service quality metrics in such an environment.

1. Stephen K. Kwan
Lucas Professor of Service Science
Lucas Graduate School of Business
San José State University
San José, CA, USA
stephen.kwan@sjsu.edu
Karlsruhe Service Research Institute
Karlsruhe Institute of Technology
Presented at
Karlsruhe, Germany
peter.hottum@kit.edu
INFORMS Annual Meeting
Peter Hottum
San Francisco, November 9-12, 2014
1

2. 2
Service providers often have to construct networks of
partners to fulfill service obligations to customers.
We introduce an integration service quality gap that
represents the difference between customer service
quality expectation and perceived service quality in
his service journey in a service system network. The
integration service quality gap is incorporated with
traditional service quality gaps to form a more
complete treatment of service quality metrics in such
an environment.

3. 3
Kwan, SK, Hottum, P (2014) Maintaining Consistent Customer
Experience in Service System Networks, Service Science, Vol. 6, No. 2,
pp. 1-12. (Presented at 2013 Naples Forum)
Kwan SK, Hottum P, Kieliszewski CA (2012) Moving from B2X to
B2X2Y value propositions in service system networks. Presentation at
the 1st International Conference on the Human Side of Service
Engineering, July 24, San Francisco.
Kwan SK, Müller-Gorchs M (2011) Constructing effective value
propositions for stakeholders in service system networks. Sprouts:
Working Papers Inform. Systems 11:Article 160.
Freund L, Kwan SK (2010) Co-production process quality management
for service systems. Presentation at the 19th Frontiers in Services
Conference, June 10–13, Karlstad, Sweden.

4. Customer
VPS VPP VPP
Customer’s
Social
Network
VPC VP: Value Proposition
Service
Experience
Service
Provider
Focal Relationship
Provider
Partner
Network
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 the Service Economy series, Springer, 2010.
4

5. 5
Composition of a Value Proposition (1)
VP = [SE,B,C,P,Q,Sc,R,M,FR]
Benefits
Costs
Quality
Probability
of Success
Performance
Metrics
Stakeholders’
Roles
Schema for Data
Exchange
Service Experience
will
do
will
do
for +$
will
not
do
Failure
Recovery

6. 6
Composition of a Value Proposition (2)
VP = [SE,B,C,P,Q,Sc,R,M,FR]
“Our service will provide such and such experience
which will result in certain benefits to you. It will cost $.
We have a good reputation and will be capable to
perform the service successfully and with high quality.
We will exchange data about each other in a particular
format. We will perform the service based on the
agreeable upon criteria and you will also be expected to
perform in a certain manner in order to co-create value as
intended. You will be able to measure our performance
and vice versa. In case of service failure, we will perform
certain procedure to restore service.”

7. 7
Traditional Service Quality Gap Model
From Fitzsimmons & Fitzsimmons 6th ed Figure 6.3
original by Uttarayan Bagchi.

8. 8
Causes of Gaps
Promoted Inflated Expectation
Expectation
G5 = Service Quality Gap
Communication
Marketing
Research
Customer’s
Assessment
Management’s
G4
Service Provider’s
Assessment
Perceived
Customer
Expectation
Service
Design Spec.
Service
Delivered
G1
G2
G3
Service
Received
Design
Conformance
Service
Quality
Realistic Expectation
Created by
Value Proposition
VPC

9. Customer
VPS VPP VPP
Customer’s
Social
Network
VPC VP: Value Proposition
Service
Experience
Service
Provider
Focal Relationship
Provider
Partner
Network
9

10. 10
Customer Service Journey
with Multiple Service Providers over Time (1)
Service Episodes in Sequence
Time
Service Episodes in Parallel
Multiple Providers
In a Service Episode
10

11. Value Propositions
in a Service System Network
Customer
(C)
Provider
(B)
VPc
The question is:
Do the Service Episodes
add up to the entitled
Service Experience?
Provider
(B)
Customer
(C)
SE
……….
S: Service Components
Se ≈ S?
Se: Service Episodes
Customer Service Journey
Delivered by Partners/Subcontractors
11
VP
VPP Derivatives

12. 12
VP
VP1 VP2 VP3 …VPK
VP’s to K
Partners/
Subcontractors
S1S2…. S2S3…. S1S4….
Service Components
to be delivered
Example:
University
College
Department
Major
Concentration
Course
Offering
Value Proposition Derivations (1)

13. Created
Customer Expectation
Service Episodes in Parallel
13
Customer Service Journey
with Multiple Service Providers over Time (2)
Service Episodes in
Sequence
Time
Multiple Providers
In a Service Episode

14. 14
SE” = SE  η1
to communicate SE to partners
 η2
ηij= p(S’j|Si)
an “Information System”
 η3
 η4
  ηK
example of
perfect
S
S
information S’
1
1
1
1
S’
1
0
1
.25 .75
example of
imperfect information,
noise due to
Marschak (1968) “quasi-garbling”
Marschak & Radner (1972)
Value Proposition Derivations (2)

15. Value Proposition Derivations (3)
What causes the “quasi-garbling” phenomenon?
• Information (part of the VP) was not passed on deliberately
– pricing, IP, etc.
• There are multiple partners/subcontractors and they are not
made visible to each other
• Practice of “flipping”
• Practice of derivatives – unable to reconstruct original VP
and identify responsibility
15

16. 16
Inflated Expectation
Causes of Gaps
Communication
Marketing
Research
Design
Customer’s
Assessment
G4
G1
G2
G3
Service Provider’s
Assessment
G5 = Service Quality Gap
Conformance
Service
Quality
Realistic Expectation
Created by
Value Proposition
VPC
Service
Delivered
Service
Received
G0 Integration
“quasi-garbling”
caused by
VP Derivations
VPP

17. Created
Customer Expectation
Service Episodes in Parallel
17
Customer Service Journey
with Multiple Service Providers over Time (3)
Service Episodes in
Sequence
Time
Multiple Providers
In a Service Episode

18. 18
Future Research on these Approaches:
1. Derive “loss-less” Value Propositions for
partners/subcontractors. Would it be possible to re-construct
the original VP from the sub-VP’s?
1. Measure the quality of the customer service experience
based on individual service episodes, service components,
partner/subcontractors, as well as the whole experience.
Would it be possible to measure the “Integrity Quality
Gap”: Se ≈ S caused by multiple service providers in the
experience?

19. Stephen K. Kwan
Lucas Professor of Service Science
Lucas Graduate School of Business
San José State University
San José, CA, USA
stephen.kwan@sjsu.edu
Karlsruhe Service Research Institute
Karlsruhe Institute of Technology
Presented at
Karlsruhe, Germany
peter.hottum@kit.edu
INFORMS Annual Meeting
Peter Hottum
San Francisco, November 9-12, 2014
19