2. 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. âService Science, Management, Engineering, and Design (SSMED): An Emerging
Discipline â Outline and Referencesâ, International Journal of Information Systems in the Service
Sector, 1(3), 2009.
Kwan 2012 2
3. Service System Worldview1
Service
Customer
Provider
Service
Experience
A Service System and Its Entities
1Kwan, S. K. & Min, J. H. (2008) âAn Evolutionary Framework of Service Systemsâ.
Presented at the International Conference on Service Science, Beijing, China, April 17-18.
Kwan 2012 3
4. A Service System Network
Service Service Interactions
System A
Service
System B
Service Service
System E System C
Service
System D
Service
System F
Kwan 2012 4
5. A Service Supply Chain
Service Service Interactions
System A
Service
System B
Service Service
System E System C
Service
System D
Service
System F
Kwan 2012 5
6. Service System Worldview
Employees &
Stockholders
Community
Service
Customer
Provider
Service
Partners
Experience
Service System Competition
Society
Kwan 2012 6
7. Service System Worldview
Service Management
Fitzsimmons & Fitzsimmons Employees & Capacity
Stockholders & Manpower
Planning,
Community Training
Service
Customer Facility
Location
Provider
& Design
Service
Partners
Experience
Social
Networking Competition
Competitive
Market Customer Service Strategy
Society Segmentation Flow & Concept Operating
Service Realized Strategy
Delivery
Kwan 2012 7
8. Value Co-Creation Through Value Propositions
Employees & Value
Stockholders
Community
Value Service
Value Customer
Provider
Value
Service
Partners
Experience
Service System Competition
Society
Kwan 2012 8
9. Stages in Customer Empowerment
in Value Co-Creation1
Stage 1: Value Chain
Value Proposition
Focal Service
Customer Relationship Provider
Service
Experience
1 Kwan, S. K. & Yuan, S. T. âCustomer-Driven Value Co-Creation in Service Networksâ, 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 2012 9
10. Stage 2: Traditional Service Value Network
Value Proposition
Focal Service
Customer Relationship Provider
Provider
Service Partner
Experience Network
Value Proposition
cf. ICT-enabled service networks,
mobile applications, etc.
Kwan 2012 10
11. Stage 3 â Improved Value Chain
Value Proposition
Focal Service
Customer Relationship Provider
Value
Proposition
Service
Customerâs Experience
Social
Network
Kwan 2012
12. Stage 4: Customer Driven Service Value
Network
Value Proposition
Focal Service
Customer Relationship Provider
Value
Value
Proposition
Proposition
Provider
Service Partner
Customerâs Experience
Social Network
Network
cf. âResource Integratorsâ in Service Dominant Logic literature
Kwan 2012
13. Variety of Value Propositions
Maslowâs
Hierarchy
Of Needs
Service Provider
Society Hedonic
Stakeholders
Spiritual
Cultural
Community Corporal
Emotional
Employees Intellectual
FamilialâŠ.
Stockholders A point in this 3-D space is
Partners a Potential Value
Customers Proposition
Kwan 2012 13
14. Disposable
Income &
Desire for
Services
Needs
vs.
Wants
Kwan 2012 14
15. Value Propositions can also be bi-directional
Customers
Service Provider
Stockholders
Partners
Community
Employees
Customers
Partners
Service Provider
Society
Service Provider
Society ?
Community
Employees
Stockholders
Partners
Customers
Kwan 2012 15
16. Value Proposition Model (VPM)
Starting with the Service System
Service
Customer
Provider
Service
Experience
Kwan 2012 16
17. VPM â a common example
Service
Customer Value Proposition
Provider
Customer
Service
Experience
Service
Customer
Experience
Service
Experience
Kwan 2012 17
18. VPM â individuals and community
Service
Customer Value Proposition Provider
Community/
Social
Customer Network A Shared
Experience
Service
Experience
Service
Experience
Customer
Service
Experience
Kwan 2012 18
19. VPM â individuals and Facebook community
Service
Customer Value Proposition Provider
Community/
Social
Customer Network A Shared
Experience
Service
Experience
Service
Experience
Customer
Service
Experience
Kwan 2012 19
20. VPM â service provider partners
Service
Customer Provider
Value
Proposition
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Value Proposition Vendor
Kwan 2012 20
21. VPM â partnerâs acquistion of customer
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Customer Acquisition Strategy
Service Vendor
Experience
Kwan 2012 21
22. Those ads will say the userâs friends
likes the brand, adding a social
context that Facebook says will
make the ads 80% more likely to be
remembered.
⊠leveraging the connections
among its 850 million usersâŠ
Ads produced $31.5 billion in
revenue in 2011âŠ
Kwan 2012 22
23. Example 1 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Vendor
Kwan 2012 23
24. Example 2 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Service Experience
Service
Experience Experience
Service Vendor
Vendor
Experience
Kwan 2012 24
25. Example 3 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Service Experience
Service
Experience Experience
Service Vendor
Vendor
Experience
Kwan 2012 25
26. Example 3 of 4 (continued)
Cost of acquiring subscribers:
2099 $2.52
2011 $5.23
Kwan 2012 26
27. Example 4 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Service Vendor
Experience
Kwan 2012 27
29. Value Systems and Value Dimensions
Providerâs Value System
ï
ï ï ï
ï
ï
ï
ï
ï·
ï· ï· ï· Opportunities for
ï· ï· Value Co-Creation
ï·
Customerâs
â Value System
â â â
â â
â â
His Customerâs Value System FP8
Kwan 2012 29
30. Variety of Value Propositions
Maslowâs
Hierarchy
Of Needs
Service Provider
Society Hedonic
Stakeholders
Spiritual
Cultural
Community Corporal
Emotional
Employees Intellectual
FamilialâŠ.
Stockholders A point in this 3-D space is
Partners a Potential Value
Customers Proposition
FP10
Kwan 2012 30
31. Constructing a Value Proposition
The Customer
have a lot of VPâs
to choose from.
Accepted Value Proposition = Service Level Agreement?
Kwan 2012 FP7 31
32. A Hierarchy of Value Propositions
An Service Providerâs Value Proposition can be made up of a recursive set of
sub-Value Propositions that could be realized by partners.
<VP> = <vp> | <vp><VP>
A Service Provider can also offer different Value
Propositions for a variety of Service Offerings.
Kwan 2012 32
33. A Customerâs Choice of Service
A Service Providerâs Promised Value:
Service Components Based on the
Customerâs own
A Customerâ Choice Function: expectations
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34. A Customerâs Realization of Value
FP6
Degree of completion
Actual Benefits
Quality Assessment
A Customerâs
Realized Value
(value in use):
could be
more
complex Co-Production Service Process
Service Provider and Customerâs
His Partnersâ +
Contributions
Contributions
FP9 Kwan 2012 34
35. Constructing Value Propositions:
Customers and Service Providers
Sc,R,M
too
Connecting Components of a Value
Proposition to a Service Providerâs KPIâs
through Feedback
Kwan 2012 35
38. Service Pattern 1 â Single Service Episode
Customer Instantiation
of the Service
Experience at a
particular point
VP0
In time
SE0
Focal
Relationship
Time
SP0
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
Kwan 2012 38
39. Pattern 2 â Continuous Service over a Period of Time
Customer
VP0
SE0
Time
SP0
Kwan 2012 39
40. Service Pattern 3 â Service in Parallel
Customer
VP0
Se0
Se1
Se2
Time
Instantiation of the Service
SP0 SP1 SP2 Experience at a particular point
In time
Kwan 2012 40
41. Pattern 3 â Continuous Service with
Occasional Service Episodes
Customer
VP0
Se1 Se2
Se0
Time
SP0
Kwan 2012 41
42. Pattern 4 â Service provided by more than
one Partner Service Providers
Customer
VP0
SE1 SE2 SE3
SE0
Time
SP0 SP1 SP2 SP3
VP1
VP3
SE4
SE6
VP2
SE5
Kwan 2012 42
48. Example of Value Proposition
A Class Syllabus (2)
One of many
MIS Electives
offered in Fall 2011
Course
Description
Course -
Learning
Objectives
3 Credit Hours
Kwan 2011
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49. Example of Value Proposition
A Class Syllabus (3)
Reputation &
Accreditation
âPoweringSiliconValleyâ
Prerequisites &
Required Texts
Kwan 2011 49
50. Example of Value Proposition
A Class Syllabus (4)
Required Texts,
Rules &
Policies
Class
Procedure
Kwan 2011 50
51. Example of Value Proposition
A Class Syllabus (5)
Grading Criteria
Student
Evaluations
(Faculty KPI)
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52. Example of Value Proposition
A Class Syllabus (6)
Guest Lecture
(Partner)
Service
Episodes
Service
Components
Kwan 2011 52