Japan Institute for Design Promotion, December 21st, 2011, Tokyo, Japan

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 Japan Institute of Design Promotion (JIDP) December 21st, 2011, Tokyo, Japan

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

Service Design Basics –from System to Business Modeling

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

2

Abstract

This presentation looks at service design from a modeling perspective that incorporates system thinking, design thinking, and business thinking. This approach provides an avenue of integration across different disciplines and roles in the service design process. A desirable outcome of this integration would be more effective information and knowledge management from design to engineering of service systems.

3Kwan 2011

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. “Service Science, Management, Engineering, and Design (SSMED): An Emerging Discipline – Outline and References”, International Journal of Information Systems in the Service Sector, 1(3), 2009.

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

4Kwan 2011

5

ServiceSystem A

ServiceSystem B

ServiceSystem C

ServiceSystem D

ServiceSystem E

ServiceSystem F

Service Interactions

5

Kwan 2011

A Service System Network

ServiceExperience

ServiceProvider

Customer

Society

Community

Competition

Partners

Service System

Employees &Stockholders

Service System Worldview

6Kwan 2011

ServiceExperience

ServiceProvider

Customer

Society

Community

Competition

Partners

Service System


Value

Value

Governance

Value

7

Value

Value Co-Creation Through Value Propositions

Kwan 2011

ServiceExperience

ServiceProvider

Customer

Society

Community

Competition

Partners


Service System Worldview

8

MarketSegmentation

ServiceConceptRealized

CustomerFlow &ServiceDelivery

OperatingStrategy

FacilityLocation& Design

Capacity& Manpower

Planning,Training

CompetitiveStrategy

SocialNetworking

Kwan 2011

Service ManagementFitzsimmons & Fitzsimmons

9

InformationTechnology

Platform

Service Provider’s Back Stage Support

BackStage

Processes

FrontStage

ProcessesFront Stage

Service Computing(e.g., SOA)

Service Systems, Computing, and IT Services1

1 Kwan, S. K. & Hefley, B., “Service Systems”, 2008.

ITSM – Management of the Processesand Infrastructure of IT Services

Kwan 2011

Service System Design (1)

10Kwan 2011

CustomerServiceSystemDesign Service

SystemEngineering

From:

To:

Service System Design (2)

11Kwan 2011

CustomerServiceSystemDesign Service

SystemEngineering

SystemThinking

DesignThinking

BusinessThinking

A Multi-disciplinary Approach

Knowledge Management –maintaining integrity of information and

knowledge throughout the lifecycle

12Kwan 2011

Design Thinking – some sources

Stickhorn & Schneider

13Kwan 2011

Business Model

Osterwalder & Pigneur

14

Customer

ServiceExperience

ServiceProvider

Stage 1: Value Chain

FocalRelationship

Value Proposition

Stages in Customer Empowermentin Value Co-Creation

5Kwan, 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.

Kwan 2011

15

Stage 2: Traditional Service Value Network

Customer

ServiceExperience

ServiceProvider

Value Proposition

Provider PartnerNetwork

FocalRelationship

Value Proposition

Kwan 2011

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

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

ic

Environm

ental

Societal

Social

Political

Kwan 2011

Intrinsic

Maslow’sHierarchyOf Needs

18

HedonicSpiritualCulturalCorporal

EmotionalIntellectualFamilial….

Functional

19Kwan 2011

Maslow’s Hierarchy of Needs

Disposable Income &Desire forServices

Needsvs.

Wants

20

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

21

ServiceExperience

ServiceProvider

Customer

Value Proposition Model (VPM)Starting with the Service System

Kwan, S.K., Müller-Gorchs, M. (2011). "Constructing Effective Value Propositions for Stakeholders in Service System Networks," Proceedings > Proceedings of SIGSVC Workshop . Sprouts: Working Papers on Information Systems, 11(160). http://sprouts.aisnet.org/11-160

Kwan & Müller-Gorchs 2011

22

ServiceExperience

ServiceProvider

Customer

ServiceExperience

Customer

ServiceExperience

Customer

Value Proposition

VPM – a common example


23

ServiceExperience

ServiceProviderCustomer

ServiceExperience

Customer

ServiceExperience

Customer

A SharedExperience

Community/Social

Network

Value Proposition

VPM – individuals and community


24

ServiceExperience


ServiceExperience

Customer

ServiceExperience

Customer

A SharedExperience

Community/Social

Network

Value Proposition

VPM – individuals and Facebook community


25

ServiceExperience


ServiceExperience

Customer

Value Proposition

ServiceExperience

Vendor

ValueProposition

ServiceExperience

VPM – service provider partners


26

ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

VPM – partner’s acquistion of customer


27

ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

Example 1 of 4


28

ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

VendorService

Experience

Example 2 of 4


29

ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

VendorService

Experience

Example 3 of 4


30

ServiceExperience


ServiceExperience

Customer

ServiceExperience

Vendor

ServiceExperience

ServiceExperience

Example 4 of 4


31

Foundational Premises of Service Dominant Logic

MicroeconomicConsiderations


32

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

ic

Environm

ental

Societal

Social

Political

Intrinsic

Maslow’sHierarchyOf Needs

33

HedonicSpiritualCulturalCorporal

EmotionalIntellectualFamilial….

FP10

Functional


34

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

FP7VP Service Level Agreement?

Recursive


35

A Customer’s Choice of Service

A Customer’ Choice Function:

A Service Provider’s Promised Value:

Based on the Customer’s own

expectations


36

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


37

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


38

Amazon.comBookcloseout_us

nengland4

theBookGrinder

Customer

Example: E-Commerce


39

Customer

Amazon.comSP0

Bookcloseout_usSP1

theBookGrinderSP2

negland4SP3

S0

S4

S1

S5

S2

S6

S3

Se0

Se1

Se2

Se3

SE0

SP4

VP0


40

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


41

Customer

SE0

SP0

Time

VP0

Pattern 2 – Continuous Service over a Period of Time


42

Customer

Se0

SP2

Time

VP0

Se1

Se2

SP1SP0Instantiation of the Service

Experience at a particular point In time

Service Pattern 3 – Service in Parallel


SE0

43

Customer

Se0

SP0

Time

Se1 Se2

VP0

Pattern 3 – Continuous Service with Occasional Service Episodes


SE0

Kwan & Müller-Gorchs 2011 44

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

45Kwan 2011

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

45

Integrate withForesight and Innovation Method

© Cockayne and Carleton

Knowledge Managementfor Service System Design

& Engineering

Kwan 2011

Foresight and Innovation Method

Service System Framework& Service System Networks

Business Model, Value Propositions& Service Patterns


46

47Kwan & Müller-Gorchs 2011 47Kwan & Müller-Gorchs 2011

Foresight and Innovation Method

BPMN

UML – Use Cases

Story Boards

UI Prototyping

Service Blueprint

MANGA

WorkSystem


ProcessChain

NetworkDiagram

Looking for the right tools to

connect to the next

stage

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]

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

Service Design Basics –from System to Business Modeling

FinPresented at the Japan Institute of Design Promotion (JIDP)

December 21st, 2011, Tokyo, Japan

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