Structure of the thesis

The thesis is comprised of eight chapters. In the introductory chapter we present the motivation for the thesis, the scope and the overall and particular objectives of the research, the research methodology and the expected overall contribution.

In chapter two we provide a review of the state of the art with regard to the major research issues in this thesis in the areas of service research in information systems and in business management and marketing. In the third chapter we develop a framework for the study of service systems that is based on the concept of service value. In chapter four we develop two conceptual models that depict a global/ ecosystemic perspective and the user’s perspective on service value. In chapter five we provide a categorization of the different types of customer participation in joint value activities for the development of the business offering. In chapter six we elaborate on the user’s perspective on service value and provide the User-Service-Technology model for the analysis and design of services. Chapter seven discusses the research outcomes and implications, as well as the insights and potential uses of the research outcomes. Chapter eight provides the conclusions, the overall contribution of the thesis, as well as the research limitations and opportunities for future research.

Figure 1.1: Structure of the Thesis

Chapter 2. State of the art analysis

2.1 State of the art in service information systems

In this chapter we analyze briefly the state of the art in service information systems with respect to the objectives and the major research topics of the thesis. At the beginning we overview the different approaches about the concept of service in research in information systems. We proceed with the analysis of the key concepts, the current state of research and the challenges that arise in the fields of service science and service system engineering, which are two major research streams in the area of service research in information systems.

We analyze the concept of service value in research in service information systems and identify the research challenges and limitations. We review approaches and issues about the analysis and design of service systems, especially with concern to the user’s perspective in the analysis and design process. The chapter ends with an overview of the characteristics of mobile services as an area that favors the development of the user’s perspective in the analysis and design of service systems.

2.1.1 The concept of service in information systems

The concept of service has evolved into a key concept in information systems research (Rai and Subnamurthy, 2006). But different scientific communities use the terms ‘service’ with different meanings and interpretations. In general, business scientists regard services as business activities and as business offerings to the customers, while computer scientists regard services as software components (e.g. Web services). Baida, Gordijn and Omelayenko (2004) analyze the different perspectives of the term in business, in information systems and in computer science, and they propose some clarifications. They suggest that ‘service’ refers to business services as regarded in business management, i.e. business activities that bring some benefit to the customer; ‘e-service refers to an electronic and online ‘e-service or to business functionalities that are delivered online; ‘web service’ refers to the software components that can be invoked over the Internet to execute specific processes and tasks.

Cardoso, Voigt and Winkler (2008) provide a similar distinction and explanation.

Preist (2004) uses the terms ‘concrete service’ and ‘abstract service’ to make the distinction between a business service that provides value to the customer and the required capability to provide it, respectively. The concrete service has a direct economic meaning, while the abstract service is the capacity to perform something of value, in the context of some domain of application. In a similar way, Giron et al. (2010) discuss about ‘softwarenabled internet services’ as e-services that are used by users in their life practices and ‘software-based internet services’ as computing services that support the operation of service systems.

In information systems, the term e-service combines elements from both the business and the software perspective and is described as business functionality that is delivered through electronic media (Baida, Gordijn and Omelayenko, 2004). The emphasis is on the modeling and the formalization of the actual service and value that is exchanged with the customer. Rust and Lemon (2001)

define e-services as ‘information service’, because information is the primary value exchanged. Others consider the most critical is the way the e-services are delivered, through electronic networks (Rust and Kanan, 2003) or the execution of software algorithms (Hofacker et al. 2007). Rowley (2006) suggest that the key characteristics of e-services are the use of ICT. Quite common in the literature is the relationship between services to self-services, because e-services are enabled by information systems and are quite often executed by the customers themselves (e.g. Dabholkar, 1996).

In computer science, service orientation has been established as a new computing paradigm and a Service Oriented Architecture (SOA) describes service systems as software components and applications that exchange information/ resources as services (Papazoglou and Van Den Heuvel, 2007).

Many authors conclude that an interdisciplinary approach is required to understand how services should be conceived, designed, delivered, and supported. Pistore et al. (2009) suggests that, even though computer science, information systems and business management make different interpretations of the concept of service, they must share a common vision for the use of computing resources in the operations of information systems that provide real world services. Rai and Sambamurthy (2006) advocate the development of such interdisciplinary approaches and outline research opportunities for innovation in the new service economy environment. Service science was proposed as a new, multidisciplinary research field with the purpose of providing a deep understanding of how to innovate in the service-based world (Chesbrough and Spohrer, 2006). Service systems engineering stresses the need for knowledge that realizes the ‘service thinking’ and regards service systems as socio-technical systems that enable value co-creation (Böhmann, Leimeister and Möslein, 2014).

2.1.2 Service science

Service science was proposed recently as an emerging, multidisciplinary research field for the discovery of the underlying logic of service systems, the deep understanding of services and the development of knowledge for the boost of service innovations (Chesbrough and Spohrer, 2006; Spohrer, Gregory and Ren, 2010). It aims at the establishment of shared research frameworks and a common research language by integrating knowledge from business sciences, engineering, computer sciences and other related fields and focusing on service as the key theme and value co-creation as the central phenomenon of service systems (Spohrer, Dermikan and Krishna, 2011). Hence, service science combines human, business and technological understanding to explain how service systems interact and evolve to co-create value (Maglio and Spoher, 2013).

The service science approach is base on ten foundational concepts, namely:

resources, entities, access rights, value co-creation interactions, governance interactions, outcomes, stakeholders, measures, networks and ecology (Maglio et al., 2009). These foundational concepts define the ‘service systems worldview’ as the view that the world is made up of service systems that interact via value propositions to cocreate-value (Spohrer and Kwan, 2009).

Spohrer and Maglio (2010) single out service systems and value co-creation as the two most fundamental concepts of service science, with the one referring to the basic entities in service-based environments and the other to the basic action that take place in the interaction between service systems. The service system is the basic unit of analysis for service science. A service system is a dynamic value co-creation configuration of resources, including people, organizations, shared information (language, laws, measures, methods), and technology, all connected internally and externally to other service systems by value propositions (Maglio et al. 2009). Using a less technical language, Spohrer, Demikan and Krishna (2011) describe service systems as complex business and societal systems that create benefits for customers, providers, and other stakeholders, and include other human-made systems that enable access to resources and capabilities such as transportation, water, food, energy, communications, buildings, retail, finance, health, education, and governance.

Value co-creation is "the primary object of study in service systems” and “service science is the study of value-cocreation phenomena” (Spohrer and Maglio, 2010). The concept of value co-creation expresses the idea that value is created through interaction and mutually beneficial relationships, within and among service systems. Service systems engage in three main types of value activities (Maglio and Spohrer, 2013): they propose value, they accept value proposals and they realize value proposals. From a technical perspective, a value proposition can be viewed as a request from one service system entity to others to run a procedure or an algorithm; from a business perspective, value proposition design is a systematic search process that providers can perform to achieve business model innovation (e.g. improve existing offerings, create new offerings, or reconfigure their ecosystems) (Maglio and Spoher, 2013).

Regarding the concept of value co-creation, service science adopted the theoretical background of SD logic (Maglio and Spohrer, 2008). However, it is a question if service science has functionally introduced SD logic into its cognitive system, or it simply reproduces some concepts (Alter, 2013; Guarino, 2013). For instance, the mainstream service science literature does not formalize the concept of value and the process of value co-creation. Service science is also under criticism (Vargo and Akaka, 2009) for mixing together SD logic and traditional economic and marketing concepts (e.g. orientation towards production principles, such as added value, emphasis on transactions and value in exchange, use of price as an indication of value, etc.), which is speculated to be the ‘majority approach’ in service science research (Spohrer, Demirkan and Krishna, 2011). Alter (2013) considers that the genuine use of the concepts of service value and value co-creation is a major challenge for the development of service science.

In sum, service science recognizes the need to introduce business and value concepts in the study of service systems, however it does not analyze explicitly and does not formalize the concept of value and the process of value co-creation. Hence, service science provides general insights, but only limited guidelines for the design of service systems that elaborate on the concept of service value. The need for the development of conceptual models that explain the concepts of service value is important.

2.1.3 Service systems engineering

Service systems engineering aims at the systematic design and development of service systems as socio-technical systems that enable value co-creation (Böhmann, Leimeister and Möslein, 2014; Böttcher and Fähnrich, 2011). Major research objective is to advance design knowledge on service systems that enhance the collaborative and contextualized value creation. Key concepts are the value proposition that is offered to the customer and the opportunities for value co-creation with the customer.

Research on service systems engineering is based on three premises (Böhmann, Leimeister and Möslein, 2014): a) the conceptualization of service as being contextual and collaborative, b) the role of ICT to enable the development of new and innovative service systems, and c) the advancement of knowledge on models, methods, and artifacts that enable or support the engineering of service systems. Key challenges for service science engineering are in the areas of: a) service architectures, which enable the development of novel business models, platforms and cyber-physical systems, b) service systems interactions, which enhance the collaboration and contextualization of service value, and c) resource mobilization with ubiquitous information systems.

Brenner et al. (2014) analyze the ubiquity of information systems and technologies that people experience today in all areas of their lives. They suggest the digitalization of life puts the individual at the center of future investigations and demands a radical repositioning with regard to how information systems are planned, designed and operated. Believing that the digital user provides a new design perspective in business and information systems engineering, Brenner et al. (2014) propose ‘user, use and utility research,’ as a new area of research that is devoted to the study of the digital user and harnesses knowledge from disciplines such as design, engineering, computer science, psychology, and business management/ marketing. The key research subjects for the study of the user, use and utility are: a) strategies, business models, and data in the digital world, b) processes and structures for the digital user, and c) systems, software, and IT infrastructure.

2.1.4 The concept of service value

Certain SOA approaches extend their attention beyond the technical details and computing functions and include concepts of real world services and service value. The OASIS Reference Model (RM) for SOA (OASIS, 2006) regards service as an interaction process that provides real world effects. However, interactions and real world effects are defined in terms of computing operations (e.g. exchange of messages, invoked actions, return of information, or change of the state), not human requirements. The exchange of some type of value is implied, but the concept of value is not included. The OASIS Reference Architecture Foundation (RAF) for SOA (OASIS, 2012) expands SOA-RM with additional concepts, in particular the concepts of SOA ecosystem and the social structure that underlies the relationships between participants in a service system. These concepts match to the recent evolution of SD logic (Vargo and Lusch, 2016). The SOA ecosystem provides the context within which real world entities (i.e. persons and business organizations) conduct their activities, supported by information systems. The service in SOA is described as the

mechanism that connects a SOA-based system functions and capabilities with the needs and objectives of real world entities. The social structure refers to the relationships between real world entities and the social context in which they operate. This way, a SOA could become a paradigm for the exchange of value between real world entities. In sum, even though a SOA-based system is essentially an IT system, it operates in a SOA ecosystem and therefore aims to support the operations of real world entities.

The Unified Service Description Language (USDL) aims to describe the business, operational and technical parameters of services that take place

“across the human-to-automation continuum” (Oberle et al., 2013). The concept of service is externally focused on interactions between consumers, providers and others, aiming at the creation of ‘external value’. However, the business aspects in USDL are limited to legal and pricing issues only; the concept of value is not further analyzed.

In the literature we can find several examples of service architectures that put additional layers on top of the typical SOA stack model in order to signify the relationship between the computing processes and the real world phenomena.

Usually it is the business layer, which refers to business processes and the requirements that originate from the business operations (e.g. in Erl, 2005). With regard to service systems, Weigand et al. (2009) propose a Service Layer Architecture and suggest service design should begin at the business level, by identifying real world services and analyzing the economic value that derives through exchanges – then proceed stepwise to the system design and the computing level. Fragidis and Tarabanis (2008) extended the typical SOA model with the business layer and the customer layer in an effort to introduce the interests and concerns of the customer in the composition of services.

Dahanayake and Thalheim (2012) add a conceptual model for IT-based service systems. However, the customer perspective in all these efforts is scarce – and if it exists, it refers to business-to-business relationships along the supply chain (e.g. in Ordanini and Pasini, 2008). The concept of value, when it is used, is commonly related to pricing mechanisms or cost-benefit relationships and addresses the needs of exchanging services in SOA-based systems.

Service systems modeling provides concepts and formalized meta-models for describing service systems in a precise way (Böttcher and Fähnrich, 2011). In this area, Alter has worked extensively on the conceptual modelling of service systems and service value. He proposed a metamodel for the analysis and design of service systems (Alter, 2012), which is based on the work systems theory (Alter, 2013) and emphasized on the business/ managerial aspects of service systems. The metamodel is based on eight premises about the concepts of service, service system, customer, co-production, co-creation of value, etc.

Alter adopts certain concepts from SD logic, especially the ones related to the concept of service, but he challenges others, including the concept of value co-creation itself (he regards value co-co-creation is a matter of service design). He includes explicitly the concept of value for the customer and distinguishes between a ‘service work system’, that produces/ co-produces a service, and a

‘customer work system’, that creates or co-creates value for the customer.

Ferrario and Guarino (2009; 2012) provided a service ontology that describes services, actors and interactions in a social context. The relationship to the service science and the SD logic is discussed in Guarrino (2013). Services are considered as commitments and activities with spatiotemporal characteristics that are related to actual circumstances and the experiences of the actors. The service system is composed of three main components: the service commitment, the service process, and the service value exchange (in Guarrino (2013) it is named “service value co-creation”). The service value exchange (co-creation) refers to activities occurring at the customer’s side and involves two symmetric value flows, from the provider to the customer and vice versa. But these value flows describe a cost-benefit relationship, rather than a win-win situation, as it would be required from the idea of value co-creation.

In the literature we can find some other ontologies for service systems. Fragidis and Tarabanis (2011) proposed an ontological foundation of SD logic that is based solely on concepts of the SD logic literature; in their work they examined the completeness and correctness of the conceptual background of SD logic from a logical point of view and they suggested conceptual improvements. Onto-Sys (Mora et al., 2011) is based on fundamental concepts from service science (based on Spohrer and Kwan, 2009); a service system is comprised of two sub-systems (a service facilitator/ provider and a service appraiser/ user) that pursue the co-generation of service. In an effort to reconcile the business and software perspectives of service, the Unified Service Ontology (Weigand et al., 2009) described service as an economic resource that encapsulates functional capabilities that derive from system resources. The OBELIX service ontology (Akkermans et al., 2004) refers to real-world services and analyzes the creation of service bundles, composed of service elements, that can satisfy (complex) customer needs; note that service bundling here is different from Web Service composition. E3-service (De Kinderen et al., 2013) is based on OBELIX and focuses on the perspective of the customer for service exchanges – but the concept of value itself is not a part of the ontology (the term ‘consequence’ is used instead).

Some other works suggested conceptual and business models for service systems. Poels (2010) proposed the Resource-Service-System model that describes service exchanges between service systems based on the principles of services science and SD logic; the concepts of value and value co-creation are discussed, but they are not depicted in the proposed models. Bergholtz, Andersson and Johannesson (2010) describe value co-creation as an economic event between two or more agents that contribute their own resources/

capabilities. Stanicek and Winkler (2010) describe the structure of service systems and service interactions with the use of goal-driven methods in order to relate services to value propositions and to customer goals. Hocova and Stanicek (2010) elaborate on this work to describe two types of service systems:

‘prime service systems’ that create benefit for the client and ‘dual service

‘prime service systems’ that create benefit for the client and ‘dual service