Towards a Framework of Influence Factors for Value Co-Creation in Service Systems

KIT – University of the State of Baden-Württemberg and

National Laboratory of the Helmholtz Association

KARLSRUHE SERVICE RESEARCH INSTITUTE (KSRI)

www.kit.edu

www.ksri.kit.edu

Towards a Framework of Influence Factors for Value Co-Creation in Service Systems

International Conference on Exploring Service Science 1.5. in Porto

Peter Hottum, Axel Kieninger and Peter Brinkhoff | 5th Feb 2015

These slides are based on the IESS 1.5

proceedings paper of the same name and

published online under the Creative Commons:

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

Karlsruhe Service Research Institute

www.ksri.kit.edu

2

Provider Consumer

Services are more and more provided in partnerships…

The current notion of service is characterized by the value co-creation that occurs

continuously between two ore more partners.

Value Co-creationPartner Partner

Shift from

one-way and one-time transactions

to bilateral continuous relationships

between value partners

Based on: Hottum & Howahl (2011)

Partner

Partner

Out of these bilateral relations

further service systems are arising

05/02/2015 Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

Karlsruhe Service Research Institute

www.ksri.kit.edu

3

Services are more and more provided in partnerships, but…

In business practice, service contracts are often designed for service quality, and not for

co-creation aspects or customer satisfaction.

Providers are faced with the problem, that they are not able to estimate the evoked

customer satisfaction, because it depends heavily on the customer involvement.

It is therefore difficult for a provider to articulate value propositions to its customers, that

will meet their requirements and abilities.

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

We need to establish […] a framework for

understanding how service systems operate

and interact before we can develop a

normative service science for what decision

makers of service systems should do.

Vargo, Maglio and Akaka (2008)

Karlsruhe Service Research Institute

www.ksri.kit.edu

4

Topics

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

1

2

3

Introduction and Motivation

Research discussion

Deriving a co-creation framework

4 Reflection of the approach in the light of service science

05/02/2015

5 Conclusion and Outlook

Karlsruhe Service Research Institute

www.ksri.kit.edu

5

There are discrepancies between service science (theory) and

daily service business

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

In service science, the concept of value co-creation3 in service systems1 is widely accepted.

How can a framework of influence factors for value co-creation

in service systems be derived?

In real world… In Service Science…

Service providers and customers define

frameworks and safeguards for future

service interactions in contracts

Service providers and customers build a

service system1

These contracts often are based on

provider’s value proposition towards the

customer2

Service providers and customers are acting

as partners

In those contracts a certain service quality

and further conditions for the provision are

stipulated

Providers and customers commonly create

(co-create) value3

Sources: 1Spohrer et al. (2007), 2Kwan & Hottum (2014), 3Vargo & Lusch (2004)

Karlsruhe Service Research Institute

www.ksri.kit.edu

6

The essential influences on co-creation can be derived from

service science

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

IP

Influence of the provider

and his network

IC

Influence of the customer

and his network

Influence

categories

Sources: 1Spohrer et al. (2007), 2 Von Bertalanffy (1972).

Service

Encounter

CustomerService

provider

In Service Science an “organization (service provider) beneficially performs for and with

another (service client)”.1

A service system has a “systems exchanging matter with environment, as every ‘living’

system does”.2

SE

Influence of the

Service Environment

Karlsruhe Service Research Institute

www.ksri.kit.edu

7

The essential influences on co-creation can be derived from

service science

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

IP

Influence of the provider

and his network

IC

Influence of the customer

and his network

Because provider and customer are seen as equal partners from a service system

perspective1, the describing attributes should be comparable.

While providers operate increasingly interlinked with other partners2, especially end-

customers are not always part of further economic systems. Whereas B2B customers

are always involved in further ecosystems, end-customers may act on their own.

Influence

categories

Sources: 1Payne et al. (2007), 2 Kwan & Hottum (2014).

SE

Influence of the

Service Environment( )

Karlsruhe Service Research Institute

www.ksri.kit.edu

8

The essential influences on co-creation can be derived from

service science

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

IP

Influence of the provider

and his network

IC

Influence of the customer

(and his network)

I T I T

Info

rma

tio

n

Se

rvic

e

Te

chn

olo

gy

Info

rma

tio

n

Se

rvic

e

Te

chn

olo

gy

The exchange of information forms the basis of value co-creation. Therefore, we define

information as influence factors for IP and IC.

Since the exchange of information increasingly depends on information and

telecommunication technology (ICT) we introduce ‘Service Technology’ (as the

underlying infrastructure) as factors, accordingly.

Influence

categories

Influence

factors

SE

Influence of the

Service Environment

Karlsruhe Service Research Institute

www.ksri.kit.edu

9

The essential influences on co-creation can be derived from

service science

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

IP

Influence of the provider

and his network

IC

Influence of the customer

(and his network)

P R C RI T I T

Info

rma

tio

n

Pe

rso

nn

el

Re

sou

rce

s

Se

rvic

e

Te

chn

olo

gy

Info

rma

tio

n

Coopera

tion

Re

sou

rce

s

Se

rvic

e

Te

chn

olo

gy

Further influence factors could be obtained from the initial service system components

“people, technology, other internal and external service systems, and shared

information”.1

Materials of the partners and physical aspects of further service systems are added as

‘resources’. As further supporting service systems on the customer’s side are not

mandatory, the provider’s factor ‘personnel’ is contrasted with the customer’s

‘cooperation’.

Influence

categories

Influence

factors

Source: 1Spohrer et al. (2007) .

SE

Influence of the

Service Environment

Karlsruhe Service Research Institute

www.ksri.kit.edu

10

The essential influences on co-creation can be derived from

service science

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

Influence

categories

Influence

factors

IP

Influence of the provider

and his network

IC

Influence of the customer

(and his network)

SE

Influence of the

Service Environment

P R C R LI T I T E Rl

Info

rma

tio

n

Pe

rso

nn

el

Re

sou

rce

s

Se

rvic

e

Te

chn

olo

gy

Info

rma

tio

n

Coopera

tion

Re

sou

rce

s

Se

rvic

e

Te

chn

olo

gy

En

viro

nm

ent

Layo

ut

Re

lation

ship

“Service encounter environments are purposeful environments […], spatial layout and

functionality of the physical surroundings are particularly important”.1 Besides

emphasizing ‘environment’ itself, also ‘layout’ as an additional influence factor was

added to the framework.

To complete - the involvement of the customer by the provider and their ‘relationship’ is

important for the value co-creation.2Sources: 1Bitner (1992), 2Habryn et al. (2010).

Karlsruhe Service Research Institute

www.ksri.kit.edu

11

Reflecting the framework of influence factors for value co-

creation in the light of service science

Influence of the Provider (IP)

(I) Information

(P) Personnel

(R) Resources

(T) Infrastructure Technology

Influence of the Customer (IC)

(I) Information

(C) Cooperation

(R) Resources

(T) Infrastructure Technology

In. of the Service Environment (SE)

(E) Environment

(L) Layout

(Rl) Relationship

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

Literature I P R T I C R T E L Rl

Grönroos (1984) x x

Parasuraman et al. (1988) x x x

Woodside et al. (1989) x x x

Bolton & Drew (1991) x

Danaher & Mattsson (1994) x x x x

Liljander & Strandvik (1995) x x x x

Dabholkar et al. (1996) x x x x

De Ruyter et al. (1997) x x x x x

Lusch et al. (1992) x x x

Brady & Cronin (2001) x x x x

Grönroos & Ojasalo (2004) x x x x

Johnston & Jones (2004) x x x

Füller & Matzler (2008) x x x

Lee (2011) x x x x x

Yi & Gong (2013) x x x x x

Xu & Huang (2013) x x x x x

Jaakkola & Alexander (2014) x x x x x x x

provider customer

analysis based on 18 studies between 1984-2014 using on the review approach by Webster & Watson (2002)

service

environment

Karlsruhe Service Research Institute

www.ksri.kit.edu

12

Reflecting the framework of influence factors for value co-

creation in the light of service science

Influence of the Provider (IP)

(I) Information

(P) Personnel

(R) Resources

(T) Infrastructure Technology

Influence of the Customer (IC)

(I) Information

(C) Cooperation

(R) Resources

(T) Infrastructure Technology

In. of the Service Environment (SE)

(E) Environment

(L) Layout

(Rl) Relationship

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

Literature I P R T I C R T E L Rl

Grönroos (1984) x x

Parasuraman et al. (1988) x x x

Woodside et al. (1989) x x x

Bolton & Drew (1991) x

Danaher & Mattsson (1994) x x x x

Liljander & Strandvik (1995) x x x x

Dabholkar et al. (1996) x x x x

De Ruyter et al. (1997) x x x x x

Lusch et al. (1992) x x x

Brady & Cronin (2001) x x x x

Grönroos & Ojasalo (2004) x x x x

Johnston & Jones (2004) x x x

Füller & Matzler (2008) x x x

Lee (2011) x x x x x

Yi & Gong (2013) x x x x x

Xu & Huang (2013) x x x x x

Jaakkola & Alexander (2014) x x x x x x x

service

environmentprovider customer

analysis based on 18 studies between 1984-2014 using on the review approach by Webster & Watson (2002)

Karlsruhe Service Research Institute

www.ksri.kit.edu

13

Conclusion and Outlook

By using insights from service science theory and a literature review, a framework of

influence factors for value co-creation could be derived and reflected.

The basic structure of the framework with the influence categories and the identified

influence factors are generally applicable to service settings with customer contribution.

For providers, however, the understanding of those influencing factors, especially of

customers’ abilities and willingness to contribute to value co-creation, are essential to

formulate value propositions, which meet customers’ requirements.

The framework could help service practitioners as well as service researchers to identify

leading aspects of value co-creation for their specific case.

Framework of Influence Factors for Value Co-Creation in Service Systems

Peter Hottum

05/02/2015

Thank you for

your attention!

Peter Hottum

Karlsruhe Institute of Technology (KIT)

Karlsruhe Service Research Institute (KSRI)

Englerstr. 11, D-76131 Karlsruhe, GERMANY

Phone: +49 (0) 721 608 – 45771

Fax: +49 (0) 721 608 – 45655

Email: [email protected]