Some views on the Future of Services Research

Alistair Sutcliffe

Visiting Professor,UCL Interaction Centre,

University College, London

CSR, Manchester, Nov 10th 2011

Presentation Outline

1. Service Science Paradigms- Rental-Access and the Domain Theory

2. Modelling Service Systems- lessons from Complex Adaptive Systems theory

3. Services and Customer Engagement- some ideas from User Experience research

4. IT – Services research agenda

Theme 1Frameworks and paradigms

• Design patterns for service systems

• Abstract models of service systems

• IT support

- IT as the core service ‘product’ e-services- IT as facilitator for the design and running of service systems

Service Systems-Conceptual Frameworks

IHIP (Kotler 2003, Pride and Ferrell 2003)

Intangibility, Heterogeneity, (variability)Inseparability,Perishability,

Rental Access Model (Lovelock & Gummesson 2004)

Physical act on Person, Physical act on Object, Mental act on person,Information Processing

Services are ‘rented’ and ‘experienced’

Services are composedand co- experiencedProvider- Consumerrelationship

Services as transient actsand resourcesAccess not ownership

An Abstract Model of Services ?

• Object Hiring Applications (Domain Theory, Sutcliffe 2002)

return

request

deliver

Supplier-owner

client

ooo

service/resource

• Object Allocation- search & access control- search and matching customer needs and service properties- access control permissions

• Accounting Object Transfer- payment transactions, micro payments

• Object Composition- service aggregation (orchestration)

But some servicesare consumed and notreturned

IT Opportunities ?

• Allocation- search and matching- strong Computer science interest, but is there anything new ?- data mining, intelligent search, constraint based search, ultimately depends on semantic knowledge (acquisition bottleneck)

• Accounting- payment- done deal…. micro payment systems, security etc.

• Composition- orchestration, service composition @ run time- strong computer science interest, but ultimately depends on standards…..services field is moving too quickly for standards- evolutionary computing optimisation for composition trade offs-- loose coupling of service interfaces

Object Hiring Family-design patterns ?

Object Hiring

Physical resource rental

Virtual resourcerental

Agent services rental

Knowledge services

Physical services

RoomsCarsDressBooks

Computer gamesInternet accessE-resources

ManagementDesignEducationAnalysisForecasting..

Health careHair dressingTraining- skills

IT Research Opportunities

Design &Development of E-services

Search& matching

Billing &Payment

Composition& Orchestration

LooseCouplingDataExchange Design

Methods & supporttools

Management& creativitysupport

Community& Social orchestration

Socialrecommenders

Theme 2Applying Social Psychology to

Service Systems

• Service systems are socio-technical systems

• Services involve collaborations between people (small groups) and organisations (small and large)

• The problem involves coordinating people and inter-organisational relationships

• Small group theory (Arrow et al 2000) is appropriate for small scale service collaborations

Globaldynamics

Localdynamics

Emergent properties:cohesion-integrityeffectiveness- goalsmanage conflictsatisfy membersprocess information

Networks of Agents,Tasks, Tools

Small Group ModelArrow et al (2000) Small groups as complex systems

Knowledge Skills AbilitiesValues Beliefs AttitudesPersonal Cognitive Behavioural styles

Agents

influences

Application to Service Systems

Quality criteria to assess viability of service alliances

• cohesion-integrity- shared goals, coordination mechanisms ?

• effectiveness- processes in place to achieve service delivery ?

• manage conflict- trust and governance, negotiation procedures ?

• satisfy members- cost –benefit analysis for all stakeholders, motivation analysis- short and long term alliances

• process information- IT support and coordination between partners

Design processes to support the above criteria- CSCW and CMC technology

Shared Awareness and coordination

Types of Group

externalorganiser

no externalorganiser

organisations

members

teams,task forces,

crews

ad hoctask groups

social clubs,societies

socialfriendships,

clans

concocted groupsnatural formation

mode of formation

goals

• Crews –set roles for each member/partner

-patterns for different service domains (see earlier Domain Theory)

• Group formation – external organiser

- service brokers, matching process

• Group formation- social process

- build on social media, configure service e-communities- creativity support- facilitate exchange of service success stories

• Method support

- checklist for building service alliances- management guidelines

Application to Service Systems

Formation

Organisation

Operation

Senescence

Optimisation

Designphase

Reviewphase

New members

Group Life Cycle

Formationphase

• Method support & management guidelines

• Formation phase- partner selection- motivation analysis- goal, learning, self esteem, altruism- KSA analysis- Knowledge Skills Abilities-VBA analysis- Shared Values

•Design Phase- governance, trust of procedures ?- coordination processes, shared awareness ?- monitoring performance

• Review Phase- monitoring against targets- negotiating change- termination procedures (governance)

Application to Service Systems

Transaction Cost theory (Williamson 1980)

• Socio-Economic theory of markets and Inter-Organisational Relationships

• Predicts governance in IORs according to the nature of transactions

• Transactions categorised according to value and frequency

• Transaction costs are associated with managing the relationship- governance- coordination- management

17

Key components of the theory

• Transactions rated for value & frequency- predicts governance

– High coupling - capital goods or high-value assets• High-level approval & control hierarchy

– Medium coupling – retail/wholesale products • Less control but still for exceptional items

– Low coupling-routine purchase of supply/services• Little scrutiny- market transactions

• Risks related to relationship type

18

Relationship Selection Model

Type of Goods / services

value frequency supply risk supply cost

Transaction type

m arket short term contr act long term contr act hier archy

m aturity of m arket number of suppliers

tr ansaction costs

negoti aton contr act set up workflow coordin ation

determines

influences

GovernanceTrustProcedureLegal contacts

Applying TC theory to services

• High Value, low volume- Architecture, Design, e.g. ARM microprocessorsARM does have close relationships with its customers- chip manufacturersbut no take over (yet).

• Medium Value, and volume- consultancy, e.g. AccentureRelationship can be long lasting but no formal governance

• Low value, high volume- hairdressing, personal care servicesmarket style transactions

Conclusions- maybe TC theory is less applicable to Services – more specialised so less advantage for vertical integration ?

Applying TC Theory to Services

• Physical act on Person, e.g. healthcare, lifestyle services, medium to low governance , short to long term relationships

• Physical act on Objecte.g. rental – hire services, medium to low governance, short term

relationships

• Mental act on Person,e.g. entertainment, education, low to medium governance,

• Information Processinge.g. marketing surveys, data analysis, low governance, transient goods

Conclusion: For services it is not only the nature of the transaction that counts but also the duraction of the anticipated relationships (e.g. education alumni)

Theme 3.Services and Customer Experience

Some motivation – Service Dominant Logic (Vargo & Lusch 2006, 2008)

• FP6 The customer is always a co-producer The customer is always a cocreator of value.

• FP7 The enterprise can only make value propositions

• FP8 A service-centered view is customer oriented and relational • FP9 Organizations exist to integrate and transform microspecialized

competences into complex services that are demanded in the marketplace

• FP10 Value is always uniquely and phenomenologically determined

Principles of CE (customer engagement)(Roderick et al 2011)

• FP1. CE reflects a psychological state, which occurs by virtue of interactive customer experiences with a focal agent/object within specific service relationships

• FP2 CE states occur within a dynamic, iterative process of service relationships that

co-creates value

• FP3 CE plays a central role within a nomological network of service relationships • FP4 CE is a multidimensional concept subject to a context- and/or stakeholder-

specific expression of relevant cognitive, emotional, and behavioral dimensions • FP5 CE occurs within a specific set of situational conditions generating differing CE

levels

So are you much the wiser about CE ???

Applying Cognitive Theoryto CE

• Consumer attitudes and behaviour towards services involve judgement and decision making

• So let’s apply psychological theory of human decision making, e.g.

- Klein (1980) Theory of Reasoned Action- Payne et al (1993), Adaptive Decision Making

• These theories tell us that human judgement is(a) influenced by context and the decision task(b) goes through difference phases over time(c) depends on the link between decision criteria and the context/task

Judgement -Decision makingProcess

Users’ backgroundKnowledge/

trainingCulture

Context& task

PreferenceIntentionsBehaviour

Criteria usability content aesthetics reputation customisation Criticality of decision

Strategies

Theory of UI quality judgement(after Payne et al 1993, Adaptive Decision Maker)

Hartman, Sutcliffe & de Angeli, 2008, Towards a theory of user judgment of aesthetics and user interface quality. TOCHI15(4), 15-30.

• UX in the wide

-Experience throughout the Product life cycle -Initial contact (aesthetics)-Use (functionality, content)-Customisation-Support

• UX in the small (interaction, engagement)

-Presence- user as interactor

-Immersion in the interactive world

-Flow and engagement in the interactive world

-Social presence

Components of User Experience

Cost Benefit

Need /Specificity

Engagement and Attractiveness- Manchester framework:

Contentservices

ReputationTrust

Customis-ability

Aesthetics

Engagement

Usability

DesignQuality

Flow Interaction

High levelimpression

Interactiveexperience

Customer experience- short term

Emotionalreaction

Behaviouralresponse

Reflection

Initial encounter

Value perceptionBrandAppearance

Service acceptance

Value assessmentAdaptationCustomisationOwnership

Service trial

Value appreciationUtilityMotivational satisfaction

Life span of Customer experience- longer term

Initial Experience

Mid term Experience

LateExperience

Value perceptionBrandAppearanceAestheticsInteraction

Value appreciationMotivational satisfactionUtilityInteraction

Value growthLearningAdaptationCustomisationOwnershipTrust

QoS Quality of Service Relationship

CE- Implications for Service Marketing

• Value proposition- need to select the criteria appropriate for the service- Physical act on Person- interaction, flow - experience- Physical act on Object- utility, value- Mental act on Person- interaction, flow - experience- Information Processing- utility, value

• Evolution of the value proposition will vary with type of service- acts on person will need to change and adapt more than acts on objects

• Value proposition has to overcome the hump of indifference

Learning-adoption effort

Value reward & motivation

Implications for Services Marketing-2

• Value proposition needs the promise of change for long term relationships

• Rate of change and customisation is a delicate balance

change/ learning effort

Value reward

Change points

• For longer term CE - relationships {trust} is important as well as the service {experience}- co creation in experience - co creation in design more involvement but more cost

Design co-creation effort

Service research Priorities(from Ostrom et al 2010)

1. Fostering Service Infusion and Growth,2. Improving Well-Being through Transformative Service3. Creating and Maintaining a Service Culture- CAS Small group theory 4. Stimulating Service5. Innovation, Enhancing Service Design, and Optimizing Service-Domain Patterns,

Transaction cost theory, Small group theory6. Networks and Value Chains. Domain Patterns, Small group theory 7. Effectively Branding and Selling Services, User Experience JDM theory8. Enhancing the Service Experience through Cocreation, User Experience JDM

theory9. Measuring and Optimizing the Value of Service. User Experience JDM theory

Services Research Priorities- IT

1. Building business models for new service technologies (e.g., smart services, cloud computing)- Domain patterns

2. Accelerating adoption and acceptance of new, service oriented technologies User Experience JDM theory

3. Capturing and delivering service-oriented information for real-time decision making- Self adaptive systems and requirements monitoring

4. Enabling and accelerating mobile commerce and productivity for consumers and employeesSelf adaptive systems and requirements monitoring

5. Enhancing online privacy and security of information and assets to protect service consumers, employees, companies, and society

6. Using the service system paradigm to drive innovation7. Enabling agility and integration through service oriented architecture and service

platform. Domain patterns

Conclusions

• Services Science or SSME (misnomer!) is an applied, multi disciplinary field (see Maglio 2003 and others}

• It is therefore very similar to Human Computer Interaction- as a design discipline- draws on other foundational disciplines (psychology, sociology, computer science, management science)

• It differs by being a composite of - marketing, organisational design, & management

• To mature Service Systems Science needs (a) to be grounded in, and apply, more basic theory(b) apply knowledge from related disciplines rather than re-inventing the wheel.

Any questions ? and some references for the curious

Lovelock CH, Gummesson E (2004) Whither services marketing? In search of a new paradigm and fresh perspectives. Journal of Service Research 7(1):20-41.

Lovelock CH, Wirtz J (2007) Services marketing: People, technology, strategy (6th edition). Prentice Hall, Upper Saddle River.

Lusch RF, Vargo SL (2006) The service-dominant logic of marketing: Dialog, debate, and directions. M.E. Sharpe, Armonk.

Vargo SL, Lusch RF (2008) Service-dominant logic: Continuing the evolution. Journal of the Academy of Marketing Science 36(1):1-10.

Amy L. Ostrom, Mary Jo Bitner, Stephen W. Brown, et al (2010), Moving Forward and Making a Difference: Research Priorities for the Science of Service. Journal of Service Research 2010 13: 4

Sutcliffe, A. G. (2002). The Domain Theory: Patterns for knowledge and software reuse. Mahwah NJ: Lawrence Erlbaum Associates.

Sutcliffe, A. G. (2009). Designing for user engagement: aesthetic and attractive user interfaces. In Carroll, J.M. (Ed), Synthesis lectures on human centered informatics. San Rafael CA: Morgan Claypool.

Sutcliffe, A. G., & Lammont, N. (2002). The Planet method for designing relationships in B2B e-commerce. Proceedings: Hawaii International Conference on System Sciences, Hawaii 7-10 January 2002, (pp. 2739-2748). Los Alamitos CA: IEEE Computer Society Press.

Sutcliffe, A. G., & Lammont, N. (2001). Business and IT requirements for B2B e-commerce. International Journal of New Product Development & Innovation Management (Dec/Jan), 353-370.

35

Selecting appropriate relationships

Frequency

Risk

H

M

L

hierarchy/LT contract

LT contract

ST contract

hierarchy

H

M

L

H

M

LLT contract

hierarchy

hierarchy

H

M

LLT contract

LT contract

H

M

L

H

M

L

H

M

L

H

M

L

H

M

L

LT/ST contract

ST contract

market

H

M

Value

ST contract

Frequency

hierarchy/ LT contract

LT contract

market

ST contract

ST contract

ST contract

ST contract

market

market

market

H

M+L

H

M+L

any risk

L

Risk

Risk

Risk

Risk

Risk

Risk

Risk

Frequency

ST = short term LT = long term