Marketing Strategy
in Service Business
- amegaro@unisa.it -
Programme
• Marketing and Service Marketing: an overview
• Marketing plan
• Complexity management
• New marketing strategies approaches: Relationship Marketing
and Many-to-Many network; Experiential marketing;
Unconventional marketing
• New marketing vision: Service Research - from S-D logic &
Service Science to service ecosystems & service systems
• Technologies as Decision Support Systems for marketing
strategies
Case studies
Examples
Project work
Agenda: Lesson 4
• Value co-creation
• S-D logic & service ecosystems
• Service Science & service systems – smart service systems
Examples
Value co-creation
4.1
G-D logic, the past
G-D logic describes production and exchange phases as
essential elements of business and economy; it
substains that production and distribution of tangible
goods are the main purposes of an organization.
G-D logic is closely linked to the neoclassical economy,
for which actors are rational, companies are aiming at
maximizing profit and customers at maximizing utility.
G-D logic, the past –
«producer vs. consumer»
Probably one of the most harmful conceptualization
of G-D logic is the contrast between “producerconsumer”,
with this implication: some actors (ex.
companies) “produce” (create) value (value-added),
while others (es. consumers) “consume” (destroy)
that value (value-destroyers).
G-D vision of producers and
consumers
SUPPLIER PRODUCERValue chain
Value and product
distribution
Exchange of money
with goods
CONSUMER
What about value?
• What is value?
• When can we say that something (a product, a
process, a relationship) has elements of value?
• And for whom?
Nothing can be attributed in a completely objective
way unless confirmed by a personal evaluation.
• Value is something that cannot be standardized,
imposed, duplicated.
• Anything that has value for an actor (a person, a
customer, a supplier, a company, the community) may
not have it for a different actor.
• Value is something subjective, variable in time,
influenced by the values ​​possessed by each one, by
external contingencies, by trends of the moment, by
changing needs over time.
What about value?
Value represents what you are willing to give “in
return”.
In order to obtain something valuable for someone,
one can be willing to give up a large number of
resources (time, money, work done, or other
elements), even important ones.
This trade-off is related to value.
What about value?
The production and supply of any product and/or
service therefore represents only a first phase of the
value generation process
Value proposition (potential value)
What about value?
This process must be completed downstream of a
simple proposition by an equally important process
of “confirmation”, which can be realized through
the purchase, collaboration, mutual satisfaction of
a need by the recipient of the offer
Value-in-use (actual value)
What about value?
The consumer, historically seen as a destroyer of
value (because after the process of consumption
and use the product no longer presents value), is
more than a simple actor of value creation: the
consumer is a fundamental figure for the very
definition of value of products he decides to buy.
Value co-creation
What about value?
Specifically, value is given by consumers’ choices/preferences, by
customer use of the purchased product (value-in-use) and
benefits from the connected service.
Value is function of the specific context in which the consumer is
(value-in-context) and for this reason it may change in the time
and in the space.
The focus of decision making and a new interpretation of value
co-creation have to be both internal (resources improvement)
and external (collaborative relationships).
About value creation
Individuals are the key players in the co-creation process,
combining resources coming from different market
sources (organizations and other actors), private sources
(themselves, friends, family, etc.) and public
(governmental and community institutions , etc.).
This does not mean that human actors are not influenced
by organizations and other structures. People create
organizations and structures that in turn are influenced
and controlled.
The centrality of human
factors
• Prahalad and Ramaswamy, 2003, 2004a, 2004b: value cocreation
improves the experience of consumption and use by
stimulating innovation on the service side and on the
product side;
• Vargo and Lusch, 2008: value co-creation is a general
concept that embraces every event in the theoretical and
practical dynamics in the relationship between companies
and customers, contributing to the emergence of value
through interaction (interaction between the actors).
Value co-creation
Value co-creation
Value co-creation is the phenomenon through
which value is now thought to be realized,
disseminated and enjoyed among the actors
involved in its generation process, meaning
value above all as a common benefit
(sometimes also collectively), obtained only
thanks to the intense collaboration between the
parties.
Value co-creation
Production Co-creation
Customers are hence crucial for
product enrichments and are thus
addressed as prosumers; they are
considered fundamental for
competitive advantages. The value
creation process involves clients in
a personal consumption process,
considering them as real strategic
value co-creators, thus suggesting
that firms may be the integrators
and managers of necessary
resources for the benefit of
competitive behaviour.
Co-creation advantages –
viewed by observers
Production Co-creation
Static
elements
Dynamic
elements
Value
creation
elements
Value co-
creation
elements
Co-creation advantages –
viewed by observers
“business-to-business” (B2B)
“business-to-consumer” (B2C)
“consumer-to-consumer” (C2C)
“Actor-to-actor” (A2A)
FROM TO
Co-creation advantages –
viewed by observers
Dal Mercato Col MercatoVerso il Mercato
“Matter in Motion”
Management dei
Clienti e del Mercato
Collaborazione con Clienti
e Partner per creare e
sostenere il valore
Management of
Customers and Market
Collaboration with Customers
and Partners to create and to
substain value
To the Market From the
Market
With the
Market
Evolution of the relationship
with the market
Value creation processes suggest a change of roles and
relevance dimensions.
Clients do not acquire value directly from product
purchases but they derive it from products’ use,
transformation and consumption; a firm doesn’t
autonomously create value for clients, but can only offer
value propositions that clients may choose, experiencing
them and transforming them into value through use.
Why value?
•the consumer is no longer seen exclusively as a target (value
destroyer);
•companies may only make their own proposal (value
proposition);
•consumers are considered active players of production (value cocreator)
within a complex system of service delivery (service
system);
•consumers may benefit not only from the products purchase, but
also from the process, use and consumption of the products
(value in use), because they are active (participant) in the value
generation process;
•decision making is heavily influenced by value co-creation
process, in fact the co-creative purpose, shared with customers,
supports the sustainability of their value proposition.
Value co-creation insights
Co-creation fundamentals:
• An active role for all the actors (decision makers)
involved, including end-users (final customers);
• a constant collaboration, multi-directional, multi-forms,
multi-part;
• a development of reticular relationships;
• a continuous release of resources by everyone;
• strategic sharing of information and objectives.
Value co-creation insightsValue co-creation insights
Co-creation involves:
• A growing mutual satisfaction;
• a better result than that achieved by
working independently;
• greater sustainability of the offer, given the
convergence of purposes.
Value co-creation insights
Supplier Producer Consumer
Value
Distribution
Value
of the supply-chain
Value
of co-production
Value co-creation insights
Value co-creation for
competitiveness
Value co-creation takes place when a potential resource becomes an
effective specific benefit, it implies the active multi-actor contribution,
so it may be considered as a dynamic flow of interactions among
different actors possessing critical resources and the desire to reach
collective mutual satisfaction
‘Harmony’ between actors can be understood as a fusion of listening
skills, considerations, dialogues qualify competitiveness in business by
value co-creation phenomena.
Service-Dominant Logic
4.2
Service Research
In the past, according to classical perspective,
«extractive» sector was considered primary,
«manufacturing» sector as secondary and
what remains was usually considered as
«services», named «tertiary», because it can
not be classified in the previous categories
(i.e. consulting context, transportation, waste
management, other utilities).
G-D logic, the past –
«services=service industry»
Directs
Products
(output)
Goods
(tangibles)
Indirects
(Goods)
Service
(Processes and
applied
competences)
Services
(Intangibles)
Service-oriented new economy
paradigm (change in perspective)
Services = intangible products
Products
Goods
Services
Service
Direct
Indirect
Goods
Money
G-D Logic
S-D Logic
There are No “Services” in S-D Logic
Service = process of using one’s
competences for the benefit of some
parties (The application of knowledge and
skills)
Service transcends “goods and
‘services’”
Clarifications: Service vs. Services
S-D logic
• Service-Dominant (S-D) Logic is a mindset for a
unified understanding of the purpose and nature
of organizations, markets and society.
• The foundational proposition of S-D logic is that
organizations, markets, and society are
fundamentally concerned with exchange of service
- the applications of competences (knowledge and
skills) for the benefit of a party.
In S-D logic the main purpose of an enterprise is to serve
itself by serving others, integrating its internal resources
with others available from public and market sources and
to create additional resources to be applied for the
benefit of other actors (individuals, family, companies,
etc.).
Service opportunities change because the available
resources continuously change.
S-D logic and centrality of
«Market-ing»
S-D logic
S-D logic is inspired by the fundamentals of network theories
and is focused on:
- new value «generation» processes,
- modern (entrepreneurial) interactions,
- new forms of network integration of resources,
in the attempt to set a closer approach to current marketer
specifications and more adhering to reality, and developed
around a new service idea.
Goods-services Continuum
Goods and service represent
neither a dichotomy nor a continuum
Change of Perspective
SDL
“is concerned with the vertical
relationship between service
and goods,
rather than the horizontal
difference
between services and goods”
(Vargo and Lush, 2008:29)
Goods
(tangibles)
Services
(intangibles)
Products
Indirect
(goods)
Direct
Services
The Service Dominant Logic (SD logic) represents a
theoretical proposal mainly related to marketing studies
that highlights the change of perspective compared to
traditional interpretative models (defined as a whole
Good Dominant Logic - GD logic), more focused on the
importance of goods and characterized by the historical
difference between goods and services.
S-D logic - Definitions
Innovative contributions: Service
The S-D logic defines the service as:
«Application of skills through actions,
processes and performance aimed at
producing a benefit for themselves and for
third parties, directly or indirectly
connected».
Innovative contributions: the
goods-service relationship
The set of resources available to a company,
consisting of specialized skills and adequate
knowledge are key elements for success and
survival (FP1).
In practice, the service represents the general
case of which the good can be considered a
particularity, "it is the service that is always
exchanged".
Innovative contributions: service
exchange
The S-D logic interprets the condition of exchange
differently (FP2), asserting that its intrinsic nature is
exclusively linked to service, no longer understood as a
marginal or functional element. The goods do not
represent the only object of transaction, rather they
appear as an instrumental element (appliance) for the
supply (provision) of the services themselves, observed
as the real protagonists of the interactions and
agreements between the parties of an exchange.
Innovative contributions:
exchange purpose
The authors use the term "service" always singular to
better reflect the purpose of producing a benefit to a
recipient and differentiate this indication from the
concept of simple unit of output implicit in the
expression in the plural (services), proper to the G-D
logic.
Ultimately, even when a customer purchases a physical
product, he essentially buys (and above all benefits)
the service directly connected to it.
Innovative contributions:
Knowledge and Resources
The SD Logic privileges the importance of
intangible resources, and in particular of
knowledge, as a competitive factor (FP4),
considering that physical resources and often
inert (defined as operand) imperatively require
certain intangible and much more dynamic
activities (defined operant), related to them, in
order to be made usable and really useful.
Innovative contributions:
the indispensability of the Service
The S-D logic explains that the price of all
products (value-in-exchange) only represents
the provision of a "priceless" experience linked
to the interconnected service; even the first (the
product) could not even exist without the
second (the service). Companies only have the
opportunity to make their own value
proposition to offer in the market (value
proposition).
The value is determined by the final consumer
(FP6), by his / her choices / preferences, by the
way in which he / she makes use of the
purchased product (value-in-use) and benefits
from the connected service.
Value is also a function of the specific context in
which the consumer is located (value-in-context)
and this can also vary in time and space.
Innovative contributions:
Value
The international scientific community,
stimulated effectively by the perseverance of
the authors Steve Vargo and Bob Lusch (recently
deceased) has shared a new vision on the
"service", according to which an innate sense /
need always emerges for all organizations to "do
something" (provide a service) "for" and above
all together "with" other parts, completely
modifying the supplier (supplier) / customer
(user) relationship.
International Accreditation
FPs and Axioms
The authors have produced different
representations of their theory and synthesized in
10 fundamental points (foundational premises FPs),
then became 11. From these fundamental
premises, thought has recently evolved towards the
definition of 4 Axioms, from which numerous other
authors have been inspired for a new interpretation
of the commercial, managerial and strategic logics
of our economy.
Axioms & Foundational Premises
(FPs) of S-D Logic
The Axioms of the S-D logic
A1
• Service is the fundamental basis of the exchange.
A2
• Customer is always value co-creator.
A3
• All the economic and social actors are resources integrators.
A4
• Value is always uniquely and phenomenologically determined
by the beneficiary.
S-D logic: today – «Axiom n.1»
The first axiom is based on the application of
operant resources for the benefit of another
actor.
The service is always exchanged with another
service, which implies that:
1. Goods are devices to provide a service,
2. All companies are service companies,
3. All economies are service economies.
“A1 (FP1) Service is the fundamental basis of
exchange.”
Company
Actor
Customer
Actor
The second axiom is opposed to the G-D logic, which
sees the company as the only creator of value; the value
is always co-created through the interaction of the
actors, both directly and through the goods.
[E.g. A doctor who provides patient with a service cocreates
value with him, never independently, and the
drug (a good) given by the doctor is seen as a device to
facilitate the provision of the service and the co-creation
of value.]
S-D logic: today – «Axiom n.2»
“A2 (FP6) Value is always co-created by multiple actors,
including the beneficiary.”
Actor ActorActor/
Beneficiary
Actor/
Beneficiary
The third axiom shows how the integrable resources
come from a multiplicity of sources: private sources (eg
oneself, friends, family), market sources (ie from other
actors, through barter or economic exchange) or from
public sources (ie access collective from community and
government sources) or, more likely, through the
provision of services from different sources, often at the
same time.
S-D logic: today – «Axiom n.3»
Actor ActorActor/
Beneficiary
Actor/
Beneficiary
“A3 (FP9) All social and economic actors are resource
integrators.”
Resource
Integrator/
Beneficiary
Resource
Integrator/
Beneficiary
Resource Integration
(operant) resources are both source and outcome of
service-for-service exchange.
The fourth axiom of the S-D logic reflects the
generic nature of the actors and reinforces the
idea that the value is phenomenological.
Particular attention was paid to the choice of the
phenomenological word, rather than "empirical",
because the second term often evokes something
similar to a Disneyworld event - always positive,
pleasant and so on.
S-D logic: today – «Axiom n.4»
Service-for-service exchange
Not only the barter may clarify
the “service-for-service
exchange”: even exchanging
something for money means
that each actor is providing
other actor with a service.
Goods appear as instrumental
tools (appliance) for the supply
(provision) of services.
A2A
The FP9 implies a network structure for value creation, it
requires a move from a single-minded concern with restricted,
pre-designated roles of “producers”/ “consumers,” “firms”/
“customers,” etc. to more generic actors—that is, to an actorto-actor
(A2A) orientation.
The A2A orientation implies several things:
• First, it confirms that value creation takes place in networks,
since it implies that the resources used in service provision
typically, at least in part, come from other actors, as specified
in FP9;
• Second, it implies a dynamic component to these networks, since
each integration or application of resources (i.e., service) changes
the nature of the network in some way. This in turn suggests that a
network understanding alone is inadequate and that a more
dynamic systems orientation is necessary.
• Third, it suggests the existence of mechanisms to facilitate all of this
resource integration and service exchange through the coordination
of actors. As in Vargo and Lusch (2011), acknowledgement and
understanding of the existence and role of institutions, those
routinized, coordinating mechanisms of various types, and
institutional arrangements, assemblages of interdependent
institutions, become essential to understanding value cocreation.
A2A
Resource integration
3. All social and economic actors are resource
integrators.
 The context of co-creation is a network of
networks
 What we really do as individuals, organizations,
families etc. is getting resources through service
exchange and integrate them in a unique way.
1.Service2.Co-creat.3.Res.Int.4.Value5.Institut.
3. All social and economic actors are resource integrators
Attore AttoreAttore/
Beneficiario
Attore/
Beneficiario
Resource
Integrator/
Beneficiary
Resource
Integrator/
Beneficiary
Resource integration
Operant resources are both source and outcome of service-for-service exchange. Resource
Integrators
Resource integration
Human knowledge and skills, cultural and social resources usually
intangible and dynamic which act on operand resources to create
value and competitive advantage.
Natural or economic resources usually tangible and static which
require some alterations to assume value.
They represent the distrIbution mechanisms of service.
OPERANT RESOURCES
OPERAND RESOURCES
The sinergy deriving from user’s, provider’s (and each member’s)
personal resources gives birth to a unique result, superior to the
simple sum of the single individual contributions.
Resource integration
Operant resources are resources capable of
acting on other resources to create value (under
suitable circumstances).
Knowledge and skills which can be used in
action to create value, such as the ability to
find, extract, refine, shape and use gold.
Resource integration
Operand resources are static resources on which
an action is necessary for achieving value. Goods
(devices) are operand resources.
A natural resource, such as gold, is an example
(operand resource). The gold must be found,
extracted, refined, shaped and used (operant
resources).
Resource integration
S-D Logic Axiom n.5
A5 Value cocreation is coordinated through actorgenerated
institutions and institutional arrangements
Institutions provide the glue for value cocreation
through service-for-service exchange
• Institutions: humanly devised rules, norms, and
beliefs that enable and constrain action and make
social life predictable and meaningful
• Institutional arrangements: higher-order sets of
interrelated institutions
Institutionalization
Two main enablers and coordination mechanisms of value cocreation
(strictly interconnected):
The two enablers permit to perform activities and exchange in a
«natural» and «coordinated» way in line with the rules
determined a priori.
rules, norms, meanings,
symbols, practices and
agreement that govern actor’s
collaboration
interdependent assemblages of
institutions: essential
facilitators for value co-creation
in markets and society
FP11: Institutions and
institutional arrangements
INSTITUTIONS INSTITUTIONAL ARRANGEMENTS
“Humans create institutions to coordinate their
behaviours " (Barile et al., 2016).
Luca Carrubbo – Brno 2017
Service Ecosystems
“relatively self-contained, self-adjusting system[s] of
resource-integrating actors connected by shared
institutional logics and mutual value creation through
service exchange”
Lusch and Vargo (2014, p. 161)
Starting from the «social shift» of SDL (11 FP), Vargo and Lusch
proposes a new conceptualization of networks based on the
transcending and systems perspective of service
Value co-creation involves complex networks of actors and
supply chains (rather than dyads)
THEN, new multi-actor models are required to reread the
mechanisms for competitive advantage
Luca Carrubbo – Brno 2017
Service Ecosystems
Luca Carrubbo – Brno 2017
Service Ecosystems: an example
Luca Carrubbo – Brno 2017
INSTITUTIONS
Service Ecosystems: main dimensions
IT and ICTs based platforms that make
exchanges more efficient and accelerate
innovation
RESOURCE
INTEGRATION
Coordination mechanisms for exchanges based
on preexisting shared rules (socially and
commonly accepted) that act as enablers of
resource integration
Exchange of resources occurring in the
multiple interactions between actors (from
pre-delivery, design to post-delivery)
Set of common values that guide the
attainment of shared purposes for each actor
TECHNOLOGY
VALUE
PROPOSITION
Luca Carrubbo – Brno 2017
Service Ecosystems: main concepts
The service ecosystem is an autonomous and self-regulating system
based on a network of interacting actors stratified and nested
within three ecosystem levels: micro, meso and macro.
Actors collaborate and integrate resources according to
agreements, sharing mutual interests, with the aim of pursuing a
collective well-being through the pursuit of the individual wellbeing
of each actor.
The purpose of the service eco-system is to pursue a condition of
individual well-being that can contribute to the pursuit of general
well-being.
Luca Carrubbo – Brno 2017
Service Ecosystems: main concepts
The functioning of the service ecosystem depends on the
institutions. Institutions are emerging social practices that
modify human behavior, not established and preestablished
structures to manage human action, but tacit
rules, symbols, meanings, tacit “rules of the game”, which
regulate the interactions between actors.
The set of institutions makes up the institutional
agreements, or provisions, that favor coordination
between the different levels of the eco-service system.
All actors seek resource densities to improve the
viability of their system, integrating resources, cocreating
value and determining value uniquely and
phenomenologically from their perspective and
context.
The role of marketing and other business disciplines:
go beyond the vision of actors as consumers,
producers, companies and government agencies and
to consider them in an actor-centric and value-centric
way.
Service Ecosystems: main
implications in terms of marketing
Main Insights
emerging inputs and outcomes (new value) can foster value
co-creation and innovation
Value Co-
Creation
Innovation
Co-
evolution
Viability
outputs can act as a basis for the constant renewal of values
and innovation that leads to co-evolution and viability over
time
Service Science, Management,
Engineering and Design
4.3
Computer Science Service Science
What is the link?
Service Science, Management, Engineering
and Design
The Science Service, Management, Engineering and
Design (SSMED) by IBM Corporation as a project of
the Almaden Research Center, involved hundreds of
researchers in the world trying to promote a new
discipline to meet the most important themes
emerging: the study of service systems.
Service Science management, engineering and design (SSMED)
Aim: to combine and to apply computer science, operational
research, industrial engineering, management and social
sciences to find the most appropriate organizational model to
support the emergence of value
The founders: Spohrer and Maglio (2008)
• Multidisciplinary research stream that studies the implications
emerging from the new management approach to service
• Unifying framework for service design, delivery and evaluation that
aims at developing the capabiliteis required by service economy;
• Introduced after company’s shift from a good-logic to a service
centered perspective
Service Science
Always looking for service innovation, service science
would combine organization and human understanding
with business and technological understanding to:
(1) explain the origins and growth of service systems;
(2) solve fundamental problems such as how to invest
optimally to improve service productivity and quality;
(3) produce unique service professionals and service
scientists
Service Science
Many disciplines have accumulated knowledge
relevant to understanding a service system, each
focusing on different aspects of the overall
system.
For instance, organization theory focuses on
structures, rules, and incentives to create
effective groups of individuals.
Service Science
• Service is related to value cocreation
among actors.
• Adopting a Service view improves
positive interaction between
entities in reticular system.
• Service co-creation involves many
actors within a dynamic process.
• Service exchangers need evolving
expertises and competencies.
Service is an ever complex issue to deal with.
Service Science
The service-dominated economy has been multisectoral
and transdisciplinary. This makes difficult to define a new
kind of discipline that could be considered really “cross
and unifying”. There are important academic debates on
how to describe the implications of service concept
characterizations both for basic and applied research.
Service Science focuses on a new and updated service
concept, on the study of service systems and on the
recent conceptual and interpretative development of
smart service systems.
Service Science, Management,
Engineering and Design
Service Science, Management, Engineering and Design (SSMED), proposes several
prospects of investigation and embraces many fields of interest and application.
• In terms of Science, it investigates what service systems are and how they really
evolve, focusing on the active role of the people employed in them, of knowledge, of
shared information, and of technologies, as well as on the importance of the active
participation of the services’ users (the demand) in the production process (offer);
• In terms of Management it investigates possible solutions for implementing
evaluation of efficiency, sustainability reports, and systemic interaction within
service systems;
• In terms of Engineering it is responsible for developing new technologies for the
processes of detection, measurement, and dissemination of information-essential
for sharing in the contemporary process of value-generation;
• In terms of Design it seeks to deepen the appropriate configuration techniques for
the proper structuring of service systems.
Service Science, Management,
Engineering and Design
SSMED Key Concepts
Value-Co-creation
Entities
(Systems)
Interactions
(Networks)
Outcomes
(Value Changes)
Value Proposition
Based Interactions
Governance Mechanism
Based Interactions
Access Rights
Measures
(Rankings)
Resources
Stakeholders
(Roles)
win-win
lose-lose win-lose
lose-win
Source: www.ibm.com
Technology
5
1
9 25
27
14
28
10
26
24
8
4
2
3
6
7
11
12
13
15
16
17
18
19
20
21
22
23
Technology
1990 - 2004
1960 - 1990
Prima del 1990
1900 - 1960
16. Organization Theories
17. Operations Research
18. Systems Engineering
19. Management Science
20. Games theories
14. Information Science
15. Human Resource Management
21. Industrial Engineering
22. Marketing
23. Management Psychology
24. Business Administration
25. Economics
26. Law
27.Sociology
28.Formation
2. Activities and management of services
1. Science and Information Systems
3. Services engineering
4. Marketing of services
5. Social Complexity
6. Computational economy
7.Organizational theories
8. Management of innovation
9. Experimental economics
10. AI & Games
11. Management and Information Systems
12. Computer Supported . Work (CSCW)
13. Business Support Systems
Service systems are value-creation networks composed of
(Bryson et al. 2004; Maglio et al. 2006):
• People
• Organizations
• Technology
• Shared information
Service Systems
• promote real-time relationships and accelerate up colearning
processes in many fields (e.g. smart services in the
energy sector, transport, etc.).
• come from systematic methods, continuous learning, data
collection, innovation, social responsibility and network
governance, and all the operations that benefit from the
application of new technologies.
Service systems: value-co-creation configuration of people,
technology, value propositions connecting internal and
external service systems, and shared information able to
create and deliver value to providers, users and other
interested entities, through service.
SPOHRER, MAGLIO, BAILEY AND GRUHL (2007)
(1) Service Systems: definition
The aim of service system is to
use its own resources and the
resources exchanged with
other actors to improve its
own and other’s well-being
Service
systems
SSMED Foundations Main Focus
Resources: Everything that has a name and is useful can be viewed as a resource Useful instrumentsfor
activities
Entities: Some complex resource configurations can initiate actions, and these are
called service system entities (or just entities, or sometimes just service systems)
Openness of evolving
systems
Access rights: dealing with the social norms and legal regulations associated with
resource access and usage.
Supra-Systemsrelevance
Value Co-creation Interactions: Also known as value-proposition-based interaction
mechanisms
Jointprocess within Service
Systems
Governance Interactions: Intuitively, governance mechanisms are a type of valueproposition
between an authority service system entity and a population of
governed service system entities
Common finality,internal
andexternal equilibrium
Outcomes: When service system entities interact, value-co-creation is only one of
the possible outcomes.
Valueintendedin an
extendedway
Stakeholders: The four primary types of stakeholders are customer, provider,
authority, and competitor
Contextual influencesand
self-regulation
Measures: The four primary types of measures are quality, productivity,
compliance, and sustainable innovation
Up to now only qualitative
Networks: Also known as service system networks, service systems entities interact
with other service system entities (normatively) via value-propositions
Networked embeddedness
Ecology: Also known as service system ecology, the macro-scale interactions of the
populations of different types of service system entities
Service Ecosystems
Luca Carrubbo – Brno 2017
value-co-creation configurations,
resources integrators,
knowledge-based,
capable of enabling connections and interaction,
with the aim of reaching desired outcomes,
simply, always, an operative application,
any number of elements, interconnections, attributes,
and stakeholders interacting in a co-productive
relationship.
… a Service System is basically composed of heterogeneous
entities, interacting with each other with specific purposes
5
(2) Service Systems: definition
Service System definitions Authors Year
Service systems represent value co-creation configuration of people, technology, value propositions connecting internal
and external service systems , and shared information (e.g., language, laws, measures, and methods), like an assemblage
of unites entities by some form of regular interaction or interdependence.
Spohrer, Maglio, Bailey
and Gruhl
2007
Service Systems can simply be a software application, or a business unit with an organization, from a project team, a
business department, a global division; it can be a firm, institution, government agency, town, city or nation; it can also be
a compostiion of numerous collaboratively connected service systems within and/or across organizations.
Qiu, Fang, Shen and Yu 2007
Service Systems act as resource integrators, understandable in terms of elements of a work system, within the
organization and through the network enduring resource specialization, those operand and operant, such as knowledge,
skills, know-how, relationship, competences, people, products, money, etc.
Spohrer, Anderson, Pass
and Ager
2008
Every service systems is both a provider and client of service that is connected by value propositions in value chains, value
networks, or value-creating systems.
Vargo, Maglio and Akaka 2008
A service system is any number of elements, inteconnections, attributes, and stakeholders interacting in a co-productive
relationship that create value, in which principal interactions take place at the interface between the provider and the
customer.
Spohrer, Vargo, Maglio
and Caswell
2008
A service system primarly relates to customer-provider interactions as well as open system with it being capable of
improving its own state and the one of another system though acquiring, sharing, or applying resources, with the aim of
creating a basis for systematic service innovation.
Golinelli 2008
Service systems are a complex interplay betwwen form and customer that form an open system which needs to be
designed using the techniques of viable systems and systems dynamics, in which both parties are focused on achieving
outcomes.
Ng and Maull 2008
Service systems can be divided into “front stage” (about provider/customer interactions) and “back stage” (about
operational efficiency) and service performance relies on both of them, putting people (customers and employees),
rather than physical goods, in the centre of its organizational structure and operations. The smallest service system is a
single person; the largest one is represented by the global economy. A service system essentially is a social-technical
system, focusing on engineering and delivering services using all available means to realize respective values for both
provider and customer.
Qiu 2009
Service systems can be represented as real networks, in which the same entities combine their streghts through direct
and indircet connectivity, as they are oriented toward enduring competitiveness and daily intercations with other external
interdependent service systems.
Polese 2009
Luca Carrubbo – Brno 2017
«A service system is any number of elements,
interconnections, attributes and stakeholders interacting in a
co-productive relationship that create value, in which the
principal interactions take place at the interface between the
provider and the customer»
The different definitions
Spohrer, Vargo,
Maglio and
Caswell, 2008
«A service system primarily relates to customer-provider
interactions as well as open system with it being capable of
improving its own state and the one of another system
though acquiring, sharing, or applying resources, with the
aim of creating a basis for systematic service innovation»
Golinelli, 2008
«Service systems can be represented as real networks, in
which the same entities combine their strengths through
direct and indirect connectivity, as they are oriented toward
enduring competitiveness and daily interactions with other
external interdependent service systems»
Polese, 2009
The concept derives from systemic vision and network theory
(Richardson, 1972; Normann and Ramirez, 1993; Castells,
1996; Capra, 2002)
Service Systems: origins
entity emerging from a specific structure (organzationalphysical
equipment) thanks to interactions among all system’s
members (Barile, 2013).
Aim: survival through the acquisition (and the exchange) of
knowledge from the other systems situated in the context
which leads to the creation of new knowledge.
Since value co- creation is centred on knowledge exchange to
acquire mutual benefits, system is the most adequate
configuration for companies aiming at acquiring sustainable
competitive advantage.
System
Luca Carrubbo – Brno 2017
• “complex of interacting elements” (Von Bertalaffy, 1956)
• “an entity that is adaptable for the purpose of surviving in its changing
environment” (Beer, 1975);
• “entity which is a coherent whole” (Ng, Maull and Yip, 2009)
From Systems Theory
Composed of many part (Parsons, 1965), boundaries,
connections and different relationship with relevant
stakeholders based on the sharing of critical and
influential capabilities
sub-systems focus on the analysis of relationships
among its own internal components while suprasystems
focus on the connections between the analysis
unit and other influencing systemic entities in their
context (Golinelli, 2005)
SYSTEM
Actors &
connections
SUB-SYSTEMS
SUPRA-SYSTEMS
Today, service systems represent an emerging issue in economic
research, all-encompassing many specific topics (innovation,
smart cities and communities) and even quality, traditionally
related to technologies and processes
MAIN REFERENCES:
ALTER, S. (2008)
SPOHRER, J., VARGO, S.L., MAGLIO, P.P, CASWELL, N. (2008)
Service Systems
Reinterpretation of service design, service supply and fruition, in
which multiple active actors synergistically participate in the
value co-creation process, which is characterized by resourcesharing
and common finality.
Service Science, Management,
Engineering and Design
SSMEDProcesses and
Business
Models
People
and
Culture
Science and
Technology
Information
Organizations: interconnected systems entities
sharing the same value system.
(1) Service Systems: ORGANIZATIONS
A Service system is composed of a network of organizations
carrying out integrations of multiple resources in order to
achieve reciprocal benefits for all the stakeholders.
Every member of the system has its own interests and pursues
specific aims. Thus, managers should seek to harmonize the
differing needs of each subject in an attempt to satisfy the
stakeholder’s demands and, at the same, the well-being of the
system. Individual
objectives
System’s
Goal
Human factor is essential to balance the
needs of all the stakeholders.
(2) Service Systems: PEOPLE
Knowledge is the real added value to foster value co- creation,
since this process is grounded of the exchange of internal and
external (contextual) competencies and resources
In a market based on intangibilities, service delivery does not
represent only economic exchange, but can be undesrtood as the
result of the integration of the specialized skills of each member.
Customers can help firm to improve service starting from service
design, by sharing their capabilities and creativity.
ICTs: opportunities for providers and consumers to
exchange resources, fostering the sharing of value
propositions at intra- and inter-organizational level
(3) Service Systems: TECHNOLOGY
The diffusion of new technologies and platforms (community,
forum, blog, social network) can enhance the interactions among
stakeholders, with an increase in stakeholder engagement.
Users can make comments and judge service quality, providing
organizations with suggestions on the improvement of the
offering.
The more the social and relational capital grow, the more the
knowledge exchanged intensifies.
The possibility to transfer every kind of information in real time
permits users to play a predominant role in business decisionmaking
and service improvement
(4) Service Systems: INFORMATION
Through technology and ICTs co- creators can
constantly share flows of information, increase
their knoweldge, strenghten relationships and
modify their behaviors to pursue common goals.
The combination of the 4 elements of service systems
(organizations, people, technologies and information) allows to
create value through the implementation of a networked system
in which companies, institutions, organizations and users share a
systematic flux of information and know-how, which can be
managed in an efficient way thanks to technology
Service System as Value Network
People
Shared
Information
Organizations
Technology
Luca Carrubbo – Brno 2017
iterative, interactive, instrumented, interconnected, intelligent
S.M.A.R.T.: Specific, Measurable, Agreed, Realistic and Timely
(More measurement data, More networks, More learning and adaptation)
Smart traffic
systems
Smart water
management
Smart energy
grids
Smart
healthcare
Smart food
systems
Intelligent
oil field
technologies
Smart regionsSmart
weather
Smart
countries
Smart supply
chains
Smart cities
Smart retail
Source: www.ibm.com/think
Complex Service Systems
Luca Carrubbo – Brno 2017
Complex Service Systems, as smarter systems improve
quality of life,
creating more opportunities for win-win interactions:
resulting in measurable resource access & valuecocreation
for multiple stakeholders.
Complex Service Systems
There is an increasing demand for ‘smart service systems’ based upon
ICT, to create a basis for systematic and sustainable service innovation
in complex environment.
Smart Service Systems
S.M.A.R.T.: Specific, Measurable, Agreed, Realistic and Timely
(More measurement data, More networks, More learning and
adaptation)
I. Smart service is the application of specialized competences,
through deeds, processes, and performances that are enabled
by smart products.
II. Smart service systems are service systems in which smart
products are boundary-objects that integrate resources and
activities of the involved actors for mutual benefit.
SSS concerns several elements interacting with each other and
working together for a common final goal, through smart
solutions.
Smart service systems need to be understood as complex,
open, and dynamic sociotechnical systems.
Smart Service Systems
Luca Carrubbo – Brno 2017
Smarter Food
Making retail smarter
Iterative, interactive, instrumented, interconnected, intelligent
(More measurement data, More networks, More learning and adaptation)
Smarter Products
Smarter Planet
Service Science vs S-D logic
SPOHRER, J., ANDERSON, L., PASS, N., AGER, T. (2008)
SPOHRER, J. MAGLIO, P.P., BAILEY, J., GRUHL, D. (2007)
VARGO, S.L., LUSCH, R.F., WESSELS, G. (2008)
• Relational approach to business
• Focus on resources (RBV)
• Many-to-many logics to business
behaviour
Similarities with SDL
Differences with SDL
• Practical approach
• Technological- Informational focus
• Smart vision on planet
• Measurement of service and
systematic search for innovation
and continuous improvement
Service Innovation
Service Research approach
Innovation does not happen when a new product is introduced
into a market or a new service provided (traditional
perspective) but when its introduction determines new
practices and institutionalized solutions to co-create value
among the players.
Institutionalization, understood as maintenance, disintegration,
change of institution, is the process underlying innovation
(Vargo et al., 2015), useful for solving problems, developing
new forms of knowledge and also implementing new and more
effective ones. technological components starting from value
co-creation processes (Akaka et al., 2017).
Service Innovation
Service Research approach
Innovation implies a necessary coordinated action
between people and technologies: service systems are
focused on humans and they become smart when
humans, through technologies, are able to optimize their
actions and operations.
Service depends on people, human behavior, human
cognition, human emotions and needs, acting with
technology in order to create value that can be shared.
Technology has the "task" of allowing effective use of data
and optimizing the interactions between actors that make
up the service system as a whole.
Service Innovation
Service Research approach
In recent years, technological advances have allowed the
creation of several products that can potentially be
considered smart as potentially capable of promoting the
co-creation of value within smart service systems.
The technological advances appear relevant and
(potentially) innovative as they are able to favor better
integrations of resources among the actors operating
within systems which, it can be argued, are characterized
by continuous and systematic interactions between actors
mediated by technology.
Antonietta Megaro
amegaro@unisa.it
THANK YOU.
Questions? Comments?