Presentation prepared for the Doctoral Consortium at the Art and Science of Service conference, June 8th, 2011.

1. Service Systems, Service Networks, and Value Co-Creation Dr. Stephen K. Kwan Professor, Service Science Management Information Systems College of Business Administration San José State University, CA, USA http://www.sjsu.edu/kwan_s Contact:stephen.kwan@sjsu.edu Prepared for Doctoral Consortium Art and Science of Service Conference June 8th, 2011

2. 2 Kwan 2011 A Framework for Service Science and Some Research Challenges Some Definitions Service Science is short for Service Science, 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 to improve the quality of life by co-creating value through value propositions 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.

3. Service Science is a Big Tent (for every variety of disciplines) Service Operations Marketing Management Quality Supply Chain Human Factors Design Innovation Engineering Systems Computing Economics Arts Science “Service Science is just ___<name your discipline>____” General Systems Theory A Service System is Complex OR/IE MS Information Science (i-schools) MIS Economics & Law Game Theory Anthropology & Psychology Organization Theory CS/AI Multiagent Systems 3

4. Service System Worldview1 Service Provider Customer Service Experience A Service System and Its Entities 1Kwan, 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. 4 Kwan 2011

5. 5 A Service System Network Service System A Service Interactions Service System B Service System E Service System C Service System D Service System F Kwan 2011 5

6. 6 A Service Supply Chain Service System A Service Interactions Service System B Service System E Service System C Service System D Service System F Kwan 2011 6

7. 7 Example: Purchases from Amazon.com Kwan 2011

8. Example: Purchases from Amazon.com Service Supply Network Customer Amazon.com Bookcloseout_us theBookGrinder USPS nengland4 USPS USPS “transparent” service provider Not being evaluated USPS Kwan 2011 8

9. 9 Kwan 2010 Example: Quality of Service Supply Chain Example from Dan Pritchett

10. Service System Worldview Employees & Stockholders Community Service Provider Customer Service Experience Partners Competition Service System Society 10 Kwan 2011

11. Service System Worldview Service Management Fitzsimmons & Fitzsimmons Employees & Stockholders Capacity & Manpower Planning, Training Community Service Provider Customer Facility Location & Design Service Experience Partners 11 Social Networking Competition Competitive Strategy Service Concept Realized Customer Flow & Service Delivery Market Segmentation Operating Strategy Society Kwan 2011

12. Value Co-Creation Through Value Propositions Value Employees & Stockholders Community Service Provider Customer Value Value Value Service Experience Partners Competition Service System Governance Society 12 Kwan 2011

13. 13 Service Systems, Computing, and IT Services1 Service Provider’s Back Stage Support Information Technology Platform Back Stage Processes Front Stage Processes Front Stage ITSM – Management of the Processes and Infrastructure of IT Services Service Computing (e.g., SOA) 1 Kwan, S. K. & Hefley, B., “Service Systems”, 2008. Kwan 2011

14. 14 Kwan 2011 Formulation of Value = Benefit / Cost Better Off From: Customer Value = (Results + Process Quality ) / (Price + Customer Access Costs) Heskett et all 1997 To: Harvey 2005 To:

15. 15 Stages in Customer Empowerment in Value Co-Creation Stage 1: Value Chain Value Proposition Customer Service Provider Focal Relationship Service Experience 5 Kwan, S. K. & Yuan, S. T. ”Customer-Driven Value Co-Creation in Service Networks”, to appear 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. Kwan 2011

16. 16 Stage 2: Traditional Service Value Network Value Proposition Customer Service Provider Focal Relationship Provider Partner Network Service Experience Value Proposition cf. ICT-enabled service networks, mobile applications, etc. Kwan 2011

17. 17 Kwan 2011 Example of Service Value Network Service System/Network 1. People 2. Technology 3. Shared Information 4. Organizationsconnected by value propositions from Jim Spohrer

18. Stage 3 – Improved Value Chain Value Proposition Customer Service Provider Focal Relationship Value Proposition Customer’s Social Network Service Experience Kwan 2011

19. 19 Example of Customer Driven Service Value Network Their Friends TV Programs Ad’s and “Buy Me” Target Audience Illustration from: Vascellaro, J. A. “Video’s New Friends”, The Wall Street Journal, February 28, 2008. Product Placements Kwan 2011

20. 20 Taking Advantage of Social Networks Kwan 2011

21. Stage 4: Customer Driven Service Value Network Value Proposition Service Provider Customer Focal Relationship Value Proposition Value Proposition Provider Partner Network Customer’s Social Network Service Experience cf. “Resource Integrators” in Service Dominant Logic literature Kwan 2011

22. 22 Variety of Value Propositions Maslow’s Hierarchy Of Needs Value Dimensions Service Provider Society Community Employees Stockholders Partners Customers Intrinsic Hedonic Spiritual Corporal Emotional Intellectual Social Societal Environmental Political Stakeholders Economic A point in this 3-D space is a Potential Value Proposition 1 2 4 3 Stages of Customer Empowerment Kwan 2011

23. 23 Kwan 2011 Maslow’s Hierarchy of Needs Disposable Income & Desire for Services Needs vs. Wants

24. 24 Service Provider Society Community Employees Stockholders Partners Customers Value Propositions can also be bi-directional Customers Partners Service Provider Service Provider Society Community Employees Stockholders Partners Customers ? Kwan 2011

25. 25 Example: Andrea Cocchi, “Innovation by Intermediation”

26. 26 Example: JinluanRen “Innovation in … CMMB” CBBM for Subscription Fees, Value-added Service Customer CBC Provider Partner Network CBBM Service Experience License and Fees Ericsson Advertisers, Elec. Comm. China Mobile TeleComm. Companies Kwan & Yuan 2010

27. 27 * energy usage * Carbon dioxide/methane emissions * other emissions * water pollution * waste to landfill * hazardous substances * natural resources * water * biodiversity * local environment Example: Mark Stein “Sustainable Procurement in the UK Public Sector” Strategic Directions Service Provider Society Community Employees Stockholders Partners Customers Stakeholders Environmental Political Economic Societal Social * energy usage * Carbon dioxide/methane emissions * other emissions * water pollution * waste to landfill * hazardous substances * natural resources * water * biodiversity * local environment 1 2 4 3 Stages of Customer Empowerment * employment, diversity, education * health * community * developing world supply chains Kwan & Yuan 2010

28. 28 * energy usage * Carbon dioxide/methane emissions * other emissions * water pollution * waste to landfill * hazardous substances * natural resources * water * biodiversity * local environment Example: Peter Ward “SMS for Life, ……” Strategic Directions Service Provider Society Community Employees Stockholders Partners Customers Stakeholders Environmental Political Economic Societal Social Roll Back Malaria 1 2 4 3 Stages of Customer Empowerment Kwan & Yuan 2010

29. 29 Kwan 2011 Simple Service System Service Provider Customer Service Experience

30. 30 Kwan 2011 Serving Multiple Customers Service Provider Customer Value Proposition Customer Service Experience Service Experience Customer Service Experience

31. 31 Kwan 2011 A Shared Experience for a Community/Social Network Service Provider Customer Value Proposition Community/ Social Network Customer A Shared Experience Service Experience Service Experience Customer Service Experience

32. 32 Kwan 2011 An Example of a Community/Social Network Service Provider Customer Value Proposition Community/ Social Network Customer A Shared Experience Service Experience Service Experience Customer Service Experience

33. 33 Kwan 2011 Creating a Service Network with a Partner Service Provider Customer Value Proposition Customer Service Experience Service Experience Service Experience Service Experience Vendor Value Proposition

34. 34 Kwan 2011 Partner Providing Service Service Provider Customer Customer Service Experience Service Experience Service Experience Service Experience Vendor Service Experience

35. 35 Kwan 2011 Example of a Service Network Service Provider Customer Customer Service Experience Service Experience Service Experience Service Experience Vendor

36. 36 Kwan 2011 Example of a Service Network Service Provider Customer Customer Service Experience Service Experience Service Experience Service Experience Service Experience Vendor Vendor Service Experience

37. 37 Kwan 2011 Example of a Service Network with Multiple Stakeholders Service Provider Customer Customer Service Experience Service Experience Service Experience Service Experience Service Experience Vendor Vendor Service Experience

38. 38 Kwan 2011 Another Example of a Service Network with Multiple Stakeholders Service Provider Customer Customer Service Experience Service Experience Service Experience Service Experience Vendor Service Experience

39. 39 Kwan 2011 Service Dominant Logic (SDL)

40. 40 Kwan 2011 Stakeholder’s Value System Provider’s Value System            Opportunities for Value Co-Creation     Customer’s Value System ★ ★ ★ ★ ★ ★ ★ ★ His Customer’s Value System

41. Kwan 2011 41 Work in Progress

42. Kwan 2011 42 Work in Progress

43. Kwan 2011 43 Work in Progress

44. Kwan 2011 44 Work in Progress

45. Kwan 2011 45 Work in Progress More to come – what about decomposing quality assessment?

46. Service Systems, Service Networks, and Value Co-Creation Dr. Stephen K. Kwan Professor, Service Science Management Information Systems College of Business Administration San José State University, CA, USA http://www.sjsu.edu/kwan_s Contact:stephen.kwan@sjsu.edu Prepared for Doctoral Consortium Art and Science of Service Conference June 8th, 2011