SIGSVC 2011

Dr. Stephen K. KwanProfessor, Service Science

Management Information SystemsCollege of Business AdministrationSan José State University, CA, USA

http://www.sjsu.edu/ssme

Contact: [email protected]

Presented at the AIS SIGSVC Workshop December 3rd 2011, Shanghai, China

Download these slides at: http://www.slideshare.net/StephenKwan

Constructing Effective Value Propositions for Stakeholders in Service System Networks

Mercè Müller-GorchsKarlsruhe Service Research Institute

Karlsruhe Institute of TechnologyKarlsruhe, Germany

http://creativecommons.org/licenses/by-nc-sa/3.0/us/

ServiceExperience

ServiceProvider

Customer

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.

Service System Worldview1

2Kwan 2011

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ServiceSystem A

ServiceSystem B

ServiceSystem C

ServiceSystem D

ServiceSystem E

ServiceSystem F

Service Interactions

3

A Service System Network

Kwan 2011

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ServiceSystem A

ServiceSystem B

ServiceSystem C

ServiceSystem D

ServiceSystem E

ServiceSystem F

Service Interactions

4

A Service Supply Chain

Kwan 2011

ServiceExperience

ServiceProvider

Customer

Society

Community

Competition

Partners

Service System

Employees &Stockholders

Service System Worldview

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ServiceExperience

ServiceProvider

Customer

Society

Community

Competition

Partners

Service System

Employees &Stockholders

Value

Value

Governance

Value

6

Value

Value Co-Creation Through Value Propositions

Kwan 2011

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Customer

ServiceExperience

ServiceProvider

Stage 1: Value Chain

FocalRelationship

Value Proposition

Stages in Customer Empowermentin Value Co-Creation

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.

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Stage 2: Traditional Service Value Network

Customer

ServiceExperience

ServiceProvider

Value Proposition

Provider PartnerNetwork

FocalRelationship

Value Proposition

Kwan 2011

cf. ICT-enabled service networks,mobile applications, etc.

Stage 3 – Improved Value Chain

Customer’sSocial

Network

Customer

ServiceExperience

ServiceProvider

Value Proposition

FocalRelationship

Value Proposition

Kwan 2011

Stage 4: Customer Driven Service Value Network

Customer’sSocial

Network

Customer

ServiceExperience

ServiceProvider

Value Proposition

FocalRelationship

Value Proposition

Provider PartnerNetwork

Value Proposition

Kwan 2011

cf. “Resource Integrators” in Service Dominant Logic literature

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Stages of Customer Empowerment

12

34

Sta

keho

lder

s

Service Provider

Society

Community

Employees

Stockholders

Partners

Customers

A point in this 3-D space is a Potential Value

Proposition

Value Dimensions

Variety of Value Propositions

Econom

icE

nvironmental

Societal

SocialP

olitical

Kwan 2011

Intrinsic

Maslow’sHierarchyOf Needs

HedonicSpiritualCorporalEmotionalIntellectual

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Maslow’s Hierarchy of Needs

Disposable Income &Desire forServices

Needsvs.

Wants

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Value Propositions can also be bi-directional

Service Provider

Society

Community

Employees

Stockholders

Partners

Customers

Ser

vice

Pro

vide

r

Soc

iety

Com

mun

ity

Em

ploy

ees

Sto

ckho

lder

s

Par

tner

s

Cus

tom

ers

?

Kwan 2011

Partners

Service Provider

Customers

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ServiceExperience

ServiceProvider

Customer

Value Proposition Model (VPM)Starting with the Service System

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ServiceExperience

ServiceProvider

Customer

ServiceExperience

Customer

ServiceExperience

Customer

Value Proposition

VPM – a common example

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ServiceExperience

ServiceProviderCustomer

ServiceExperience

Customer

ServiceExperience

Customer

A SharedExperience

Community/Social

Network

Value Proposition

VPM – individuals and community

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ServiceExperience


ServiceExperience

Customer

ServiceExperience

Customer

A SharedExperience

Community/Social

Network

Value Proposition

VPM – individuals and Facebook community

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ServiceExperience


ServiceExperience

Customer

Value Proposition

ServiceExperience

Vendor

ValueProposition

ServiceExperience

VPM – service provider partners

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ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

VPM – partner’s acquistion of customer

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ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

Example 1 of 4

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ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

VendorService

Experience

Example 2 of 4

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ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

VendorService

Experience

Example 3 of 4

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ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

Example 4 of 4

24Kwan & Müller-Gorchs 2011

Foundational Premises of Service Dominant Logic

MicroeconomicConsiderations


Customer’s Value System

Provider’s Value System

Opportunities forValue Co-Creation

His Customer’s Value System

★

★

★★★★★

★

Value Systems and Value Dimensions

FP8

Stages of Customer Empowerment

12

34

Sta

keho

lder

s

Service Provider

Society

Community

Employees

Stockholders

Partners

Customers

A point in this 3-D space is a Potential Value

Proposition

Value Dimensions

Variety of Value Propositions

Econom

icE

nvironmental

Societal

SocialP

olitical

Kwan & Müller-Gorchs 2011

Intrinsic

Maslow’sHierarchyOf Needs

26

HedonicSpiritualCulturalCorporal

EmotionalIntellectualFamilial….

FP10


Constructing a Value Proposition

Metrics

Rules

Schema

Quality

Probability of Success

Costs

Benefits

Service Experience

The Customer have a lot of VP’s

to choose from

FP7Service Level Agreement?


A Customer’s Choice of Service

A Customer’ Choice Function:

A Service Provider’s Promised Value:

Based on the Customer’s own

expectations


A Customer’s Realization of Value

A Customer’s Realized Value:

Customer’s Contributions

Service Provider andHis Partners’ Contributions

Co-Production Service Process

Co-Creation of Value

FP6

FP9

An Example


Constructing Value Propositions:Customers and Service Providers

Connecting Components of a Value Proposition to a Service Provider’s KPI’s

through Feedback

Sc,R,Mtoo


Amazon.comBookcloseout_us

nengland4

theBookGrinder

Customer

Example: E-Commerce


Customer

Amazon.comSP0

Bookcloseout_usSP1

theBookGrinderSP2

negland4SP3

S0

S4

S1

S5

S2

S6

S3

Se0

Se1

Se2

Se3

SE

SP4

VP0


Customer

SE0

SP0

Time

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

FocalRelationship

VP0

Instantiationof the Service

Experience at aparticular point

In time

Service Pattern 1 – Single Service Episode


Customer

SE0

SP0

Time

VP0

Pattern 2 – Continuous Service over a Period of Time


Customer

Se0

SP2

Time

VP0

Se1

Se2

SP1SP0Instantiation of the Service

Experience at a particular point In time

Service Pattern 3 – Service in Parallel


Customer

Se0

SP0

Time

Se1 Se2

VP0

Pattern 3 – Continuous Service with Occasional Service Episodes


Customer

SE0

SP0

Time

SE1 SE2

SP1 SP2

SE4

SE5

SP3

SE6

SE3

VP1

VP2

VP3

VP0

Pattern 4 – Service provided by more than one Partner Service Providers


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 withForesight and Innovation Method

© Cockayne and Carleton

Knowledge Managementfor Service System Design

& Engineering

Kwan & Müller-Gorchs 2011Kwan & Müller-Gorchs 2011

Foresight and Innovation Method

Service System Framework& Service System Networks

Value Propositions& Service Patterns


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40Kwan & Müller-Gorchs 2011 40Kwan & Müller-Gorchs 2011

Foresight and Innovation Method

BPMN

UML – Use Cases

Story Boards

UI Prototyping

Service Blueprint

MANGA

WorkSystem

Service System Framework& Service System Networks

Value Propositions& Service Patterns


ProcessChainNetworkDiagram

Dr. Stephen K. KwanProfessor, Service Science

Management Information SystemsCollege of Business AdministrationSan José State University, CA, USA

http://www.sjsu.edu/ssme

Contact: [email protected]

Presented at the AIS SIGSVC Workshop December 3rd 2011, Shanghai, China

Download these slides at: http://www.slideshare.net/StephenKwan

Constructing Effective Value Propositions for Stakeholders in Service System Networks

Mercè Müller-GorchsKarlsruhe Service Research Institute

Karlsruhe Institute of TechnologyKarlsruhe, Germany

Fin

http://creativecommons.org/licenses/by-nc-sa/3.0/us/

Kwan 2011 42

Example of Value PropositionA Class Syllabus (1)

Kwan 2011 43


One of many MIS Electives

offered in Fall 2011

3 Credit Hours$$

CourseDescription

Course -Learning

Objectives

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Reputation &Accreditation

“Powering Silicon Valley”

Prerequisites &Required Texts

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Required Texts,Rules &Policies

ClassProcedure

Kwan 2011 46


Grading Criteria

Student Evaluations

(Faculty KPI)

Kwan 2011 47


Service Episodes

Service Components

Guest Lecture(Partner)

SIGSVC 2011

Business

Transcript of SIGSVC 2011