Service Innovation in Consumer-Centric Information Systems:
A Socio-Technical Perspective
DISSERTATION
of the University of St. Gallen,
School of Management,
Economics, Law, Social Sciences
and International Affairs
to obtain the title of
Doctor of Philosophy in Management
submitted by
Benjamin Spottke
from
Germany
Approved on the application of
Prof. Dr. Walter Brenner
and
Prof. Dr. Jan vom Brocke
Dissertation no. 4803
Digitaldruckhaus GmbH, Konstanz 2018
The University of St. Gallen, School of Management, Economics, Law, Social Sciences
and International Affairs hereby consents to the printing of the present dissertation,
without hereby expressing any opinion on the views herein expressed.
St. Gallen, May 22, 2018
The President:
Prof. Dr. Thomas Bieger
Acknowledgements I
Acknowledgements
This thesis is the result of my journey at the Institute of Information Management at
University of St.Gallen in Switzerland, which started end of 2014. In these years of
intense studying many people contributed substantially to make this thesis happen.
First and foremost, I thank Prof. Dr. Walter Brenner for his personal support, his
supervision of my thesis, and for providing the great working environment that made
this research possible. I also thank Prof. Dr. Jan vom Brocke for his willingness to co-
supervise my thesis, as well as his encouragement and inspiration in doctoral seminars
and personal exchanges in St. Gallen and Vaduz. I would like to express my special
appreciation to Dr. Jochen Wulf, senior lecturer and research fellow at the Institute of
Information Management, for our stimulating and rewarding collaboration, and for his
guidance and engagement in our joint research projects.
For their untiring organizational advice and support, I would like to thank Barbara
Rohner, Dr. Jochen Müller, Dr. Peter Gut and Susanne Gmünder. With the help of these
colleagues, I could safely navigate through the organizational matters and traditions that
shape the unique culture of our Institute. Much of my research was inspired by the close
collaboration with industry partners. I am especially grateful to Andi Maier and Fiorenzo
Maletta from AXA Winterthur, and Wolfgang Zimmermann from Migros
Genossenschaftsbund. These partners have constantly challenged my assumptions and
provided vital feedback to progress my research.
I feel privileged to have worked with fantastic colleagues at our Institute. My special
thanks go to Alexander Eck, who inspired and challenged much of my research into
productive directions. Many others have helped me finding my way through the process.
In particular, I would like to express my gratitude to Prof. Dr. Robert Winter, and Prof.
Dr. Kazem Haki for their advice and for reliably pointing to areas of improvement in
my research. Much of my experience was shaped by my fellow PhD students. I am
especially grateful to Dr. Rieke Bärenfänger, Dr. Sabine Berghaus, Christian Dremel,
Tuomo Eloranta, Jennifer Hehn, Manuel Holler, and Emanuel Stöckli for the countless
constructive and encouraging discussions.
Finally, I wish to thank my family and friends for encouraging and supporting me
throughout this dissertation and, of course, Renske van Giffen, who has motivated and
helped me in ways I could never have imagined.
St.Gallen, January 2018 Benjamin Spottke
Table of contents III
Table of contents
Acknowledgements ........................................................................................................ i
Table of contents .......................................................................................................... iii
List of abbreviations ................................................................................................... vii
List of figures ................................................................................................................ ix
List of tables .................................................................................................................. xi
Abstract ....................................................................................................................... xiii
Kurzfassung ................................................................................................................. xv
Part A ............................................................................................................................. 1
1 Introduction ............................................................................................................. 1
2 Thesis structure and research results ................................................................... 3
3 Discussion and future research .............................................................................. 9
4 Reference overview of articles in this thesis ....................................................... 13
4.1 Consumer-Centric Information Systems: A Literature Review and Avenues
for Further Research ....................................................................................... 13
4.2 A Socio-Technical Approach to Study Consumer-Centric Information
Systems .......................................................................................................... 14
4.3 What Companies Can Learn from the Videogame Industry for the Design of
the Digital Customer Experience: An Analysis of the Platform Steam ......... 15
4.4 Service Innovation in Social Networking Services: A Resource Integration
Perspective on Facebook ................................................................................ 16
Part B ........................................................................................................................... 17
I Consumer-Centric Information Systems: A Literature Review and Avenues
for Further Research ............................................................................................ 17
I.1 Introduction .................................................................................................... 18
I.2 Foundational theory ....................................................................................... 20
I.3 Research methodology ................................................................................... 22
I.4 Organizational objectives of customer centricity .......................................... 23
I.5 Characteristics and antecedents of CCIS ....................................................... 27
IV Table of contents
I.6 Conclusion and further research .................................................................... 30
II A Socio-Technical Approach to Study Consumer-Centric Information
Systems ................................................................................................................... 31
II.1 Introduction .................................................................................................... 32
II.2 Theoretical foundation ................................................................................... 34
II.3 Methodology .................................................................................................. 38
II.4 The case of Steam: illustration of research model and research design ........ 42
II.5 Acknowledgements ........................................................................................ 45
III What Companies Can Learn from the Videogame Industry for the Design of
the Digital Customer Experience: An Analysis of the Platform Steam ........... 47
III.1 Einleitung und Motivation ............................................................................. 48
III.2 Steam als führende Plattform der Videospieleindustrie ................................ 50
III.3 Datenerhebung und Analyse .......................................................................... 51
III.4 Gestaltungsebenen digitaler Plattformen und ihre Bedeutung für die Digital
Customer Experience bei Steam .................................................................... 52
III.5 Illustration der Handlungsempfehlungen in Automobil-, Unterhaltungs- und
Versicherungsbranche .................................................................................... 59
III.6 Zusammenfassung und Ausblick ................................................................... 62
III.7 Danksagung .................................................................................................... 62
IV Service Innovation in Social Networking Services: A Resource Integration
Perspective on Facebook ...................................................................................... 63
IV.1 Introduction .................................................................................................... 64
IV.2 Related research and conceptual basis ........................................................... 67
IV.3 Methodology .................................................................................................. 73
IV.4 Facebook case findings .................................................................................. 82
IV.5 Task-centered service innovation................................................................... 83
IV.6 Technology-centered service innovation ....................................................... 89
IV.7 Structure-centered service innovation ............................................................ 95
IV.8 Discussion ...................................................................................................... 99
IV.9 Conclusion ................................................................................................... 104
Table of contents V
IV.10 Appendix 1: Chronology of the Facebook Newsfeed ................................ 105
IV.11 Appendix 2: Typologies of resources ......................................................... 109
References .................................................................................................................. 111
Publication list of the author .................................................................................... xvii
Curriculum vitae ........................................................................................................ xix
List of abbreviations VII
List of abbreviations
CCIS Consumer-Centric Information System
HMD HMD Praxis der Wirtschaftsinformatik
ICIS International Conference on Information Systems
IS Information systems
IT Information technology
IWI-HSG Institute of Information Management, University of St. Gallen
PhD Doctor of Philosophy
RQ Research question
S-D Service-dominant
SNS Social Networking Service
S-T Socio-Technical
List of figures IX
List of figures
Figure 1. Overview of thesis structure and constitutive articles ................................... 3
Figure 2. Research model of a consumer-centric IS ..................................................... 5
Figure 3. Components and interrelationships of socio-technical systems .................. 20
Figure 4. Characteristics and antecedents of CCIS..................................................... 27
Figure 5. Research model of a consumer-centric IS ................................................... 36
Figure 6. Chronology of key events in the history of Steam ...................................... 43
Figure 7. Entwicklung aktiver Accounts und verfügbarer Spiele auf Steam ............. 50
Figure 8. Resource integration model and main theoretical constructs ...................... 70
Figure 9. Newsfeed and exemplary features ............................................................... 79
Figure 10. Data-driven innovation mechanism............................................................. 87
Figure 11. Technology propulsion mechanism ............................................................ 92
Figure 12. Social debugging mechanism ...................................................................... 97
List of tables XI
List of tables
Table 1. Bibliographic information for Article I ....................................................... 13
Table 2. Bibliographic information for Article II ...................................................... 14
Table 3. Bibliographic information for Article III .................................................... 15
Table 4. Bibliographic information for Article IV .................................................... 16
Table 5. Bibliographic information for Article I ....................................................... 17
Table 6. Results of the literature search .................................................................... 23
Table 7. Organizational objectives of consumer centricity ....................................... 24
Table 8. Bibliographic information for Article II ...................................................... 31
Table 9. Steps in within-case analysis ....................................................................... 41
Table 10. Illustrative results of within-case Analysis ................................................. 44
Table 11. Bibliographic information for Article III .................................................... 47
Table 12. Overview of results ..................................................................................... 58
Table 13. Bibliographic information for Article IV .................................................... 63
Table 14. Data analysis ................................................................................................ 77
Table 15. Coding of involved resources on feature level ............................................ 81
Table 16. Task-centered service innovations in the Newsfeed ................................. 105
Table 17. Technology-centered service innovations in the Newsfeed ...................... 107
Table 18. Structure-centered service innovations in the Newsfeed .......................... 108
Table 19. Typology of resources involved in task-centered innovations .................. 109
Table 20. Typology of resources involved in technology-centered innovations ...... 110
Table 21. Typology of resources involved in structure-centered innovations .......... 110
Table 22. Comprehensive publication list with participation of the author .............. xvii
Abstract XIII
Abstract
In the past two decades, a number of powerful technology giants created consumer-
centric information systems (CCIS), which provide services that are integral to our
everyday life. The well-known providers, amongst them Facebook, Alphabet, Amazon,
or Steam, to name a few, share an important characteristic: they put the individual
consumer and her needs at the center of all undertakings; that is, they promote the
paradigm of consumer centricity. While an emerging body of literature recognizes CCIS
as a novel type of information system (IS), and increasing attention is paid to the nascent
stream of service innovation in the digital age, we know little about how to conceptualize
consumer centricity in IS, and how service innovations in these IS are generated.
This thesis, which consists of four articles, studies service innovation in CCIS. The first
article draws on the marketing and IS literature to operationalize consumer centricity. It
conceptualizes socio-technical system alignment as antecedent of consumer centricity
in IS. The second article advances a CCIS model by conceiving consumer centricity of
an IS as a latent trait that is reflected by three indicators (need orientation, value
cocreation, relationship orientation). It also includes a short case study and traces three
mechanisms to enhance consumer centricity. The third article investigates the video-
gaming platform Steam, and develops recommendations for the analysis and design of
CCIS. The results emphasize the importance of consumer resources in CCIS. The fourth
article, an in-depth case study of Facebook, proposes the resource integration model as
an empirically-grounded, theoretical model to explain how resource integration of
consumers and provider is generative of service innovation and accounts for the
dynamic and emergent nature of service innovation in the digital world. Its application
in the case context uncovers three service innovation mechanisms: data-driven
innovation, technology propulsion, and social debugging. The results suggest that
service innovation in CCIS relies significantly on a provider’s ability to engage,
facilitate, and leverage the resources and resource integration of its consumers.
This thesis contributes to theory by (1) providing a socio-technical model of CCIS, (2)
uncovering mechanisms that enhance consumer centricity, and (3) by explaining how
service innovations are generated in CCIS. It explicitly considers the role of consumers
in generating innovations and, thereby, it contributes to (4) ongoing research on digital
innovation and digital ecosystems. For practicioners, the thesis holds implications on
the analysis and design of CCIS, and how to think about service innovation in the digital
age.
Kurzfassung XV
Kurzfassung
In den letzten zwei Dekaden haben einige Technologiegiganten konsumentenzentrische
Informationssysteme (CCIS) geschaffen, die integraler Bestandteil unseres Alltags sind.
Bekannte Anbieter wie Facebook, Alphabet, Amazon, oder Steam, um Einige zu
nennen, haben eine Gemeinsamkeit: Sie stellen den Konsumenten und seine Bedürfnisse
in den Mittelpunkt aller Unternehmungen, d.h. sie folgen dem Paradigma der
Konsumentenzentrizität. Obwohl die wissenschaftliche Literatur CCIS als neuen Typ
Informationssystem (IS) anerkennt und auch Forschung um Serviceinnovation im
digitalen Zeitalter verstärkt beachtet wird, wissen wir wenig wie Konsumentenzentrizi-
tät in IS zu verstehen ist und wie Serviceinnovationen in diesen Systemen entstehen.
Diese Dissertation untersucht Serviceinnovation in CCIS. Artikel I operationalisiert
Konsumentenzentrizität auf Basis der Marketing- und IS Literatur. Die Ausrichtung
sozio-technischer Systemkomponenten wird als Voraussetzung für Konsu-
mentenzentrizität in IS konzeptualisiert. Artikel II entwickelt ein CCIS Modell, das
Konsumentenzentrizität als Eigenschaft eines IS versteht und durch drei Indikatoren
erfasst. In einer kurzen Fallstudie der Videospiel-Plattform Steam werden drei
Mechanismen identifiziert, die Konsumentenzentrizität erhöhen. Artikel III untersucht
Steam detaillierter und erarbeitet Empfehlungen für die Analyse und Gestaltung von
CCIS. Die Erkenntnisse heben die Bedeutung von Konsumentenressourcen in CCIS
hervor. Artikel IV schlägt das Ressourcenintegrationsmodell als ein empirisch
begründetes, theoretisches Modell vor, welches erklärt wie Serviceinnovationen durch
Ressourcenintegration von Konsument und Anbieter generiert werden. Hierdurch wird
das dynamische und emergente Wesen von Serviceinnovationen im digitalen Zeitalter
erfasst. Die empirische Anwendung des Modells identifiziert drei Serviceinnovations-
Mechanismen (Datengetriebene Innovation, Technologievortrieb und Soziale
Fehlerbehebung). Die Ergebnisse zeigen, dass Serviceinnovation in CCIS signifikant
von der Fähigkeit eines Anbieters abhängt, Konsumenten und deren Ressourcen
einzubringen, zu befähigen und zu nutzen.
Die Dissertation trägt zur Theorie bei, indem sie (1) ein sozio-technisches CCIS Modell
entwickelt, (2) Mechanismen identifiziert um Konsumentenzentrizität zu erhöhen und
(3) erklärt, wie Serviceinnovationen in CCIS generiert werden. Die Arbeit expliziert die
Rolle des Konsumenten für Serviceinnovationen und trägt dadurch (4) zur Forschung
an digitaler Innovation und digitalen Ökosystemen bei. Für Praktiker enthält die Arbeit
Hinweise für die Analyse und Gestaltung von CCIS und liefert Denkanstösse zur
Serviceinnovation im digitalen Zeitalter.
Part A: Introduction 1
Part A
1 Introduction
Research motivation
In the past two decades, a number of powerful technology giants created consumer-
centric information systems (CCIS) which provide services that became integral to our
life. For example, Facebook has evolved from an organized collection of personal
profile pages of a few hundred students to the world’s most popular social networking
service. As of January 2018 over 2 billion active consumers and ranges amongst the
most valuable firms in the world. There are many more examples of information systems
that attract vast numbers of consumers and that have tremendously changed our
everyday life, e.g., how we socialize (Facebook, Snapchat, Instagram), communicate
with others (WhatsApp, WeChat, Facebook Messenger), search for news and
information (Google, Wikipedia), consume music and video content (Spotify,
YouTube), purchase video games (Steam), or other goods (Alibaba, Amazon).
The firms behind these prime examples share an important characteristic: they put the
individual consumer and her needs at the center of all undertakings, that is they promote
the paradigm of consumer centricity (Shah et al. 2006).1 Following this organizational
approach, they develop consumer-centric information systems by aligning the systems’
main components to satisfy consumer needs, e.g., through on-demand configuration and
personalization of provided services (Liang and Tanniru 2006).
The emergence of CCIS, as a new type of information system (IS), poses a novel socio-
technical phenomenon that challenges the existing body of knowledge in many new
ways, of which three are outlined here.
First, consumers, as focal actors in CCIS, differ from organizational IS users. They adopt
systems voluntary and their system use is guided by individual will and emotion
(Tuunanen et al. 2008). Consumers choose their activities, roles and relationships freely
and are not only driven by economic considerations (Wagner and Majchrzak 2006).
While the idea of consumer centricity in IS is commonplace, its conceptualization is
1 The term consumer centricity is employed throughout this thesis to narrow the discussion towards a certain type of customer, namely an individual human being in her private surroundings.
2 Part A: Introduction
often vague (Alter 2008, p. 461). Extant IS literature describes characteristics of IS
associated with consumer centricity (Huang and Rust 2013; Liang and Tanniru 2006;
Pan and Pan 2006; Reich and Benbasat 1990; Tuunanen et al. 2008; Tuunanen et al.
2010), but there is a paucity of research about the antecedents of consumer centricity,
which limits our ability to understand these information systems.
Second, CCIS challenge our thinking about service innovation and how value is
generated in consumers’ personal social contexts. The digitized consumer, his data trace
and technology resources are the starting point, and not the end, for novel configurations
of the value chain (Brenner et al. 2014, p. 56). This becomes even more important when
considering that consumers nowadays operate powerful personal information and
communication technologies which are critical resources in CCIS (Baskerville 2011;
Yoo 2010). Thus, research on how providers leverage those consumer resources is
valuable to advance our understanding of service innovation in CCIS.
Third, CCIS providers need to constantly seek to innovate their services as the default
mode of operation, not as the exception (Mesaglio and Hotle 2012). Consumers not only
expect providers to adapt services to their ever-changing needs, but when interacting
digitally, they often create new data, which has recently been labelled as the most
valuable resource in the world (The Economist 2017). The constant generation of data
creates new potentials for innovation (Yoo et al. 2012). This demands new contributions
that theorize service innovation as a dynamic process in which actors constantly
contribute and integrate their resources to create value and to generate novel resources,
as opposed to conceiving service innovation as a one-time process with clear beginning
and end (Barrett et al. 2015; Lusch and Nambisan 2015; Nambisan et al. 2017).
Research objective
Given these challenges, the motivation of this thesis is then to explore service innovation
in CCIS as a novel socio-technical phenomenon. To frame this work the overall research
goal is formulated as follows:
This research aims to conceptualize consumer centricity in information systems and to
explain how service innovations in these systems are generated on the basis of
consumers’ and provider’s resource integration.
The thesis is particularly focused on enhancing our understanding of CCIS and how
service innovations are generated through resource integration. Thus, it contributes to
the knowledge base on CCIS and service innovation in the digitial age.
Part A: Thesis structure and research results 3
2 Thesis structure and research results
The research objective is addressed through four research questions of which each is
addressed in a dedicated article (cf. Figure 1). To accommodate for the research process
and the novelty of the phenomenon, the thesis comprises conceptual and empirical work.
Figure 1. Overview of thesis structure and constitutive articles
RQ1: How can consumer centricity be operationalized as characteristics of information systems and which antecedents lead to consumer centricity of IS?
TitleConsumer-Centric Information Systems: A Literature Review and Avenues for Further Research (ICIS 2015).
Method Conceptual literature review of #21 marketing publications on consumer centricity.
ResultOperationalization of three generic objectives of consumer centricity in IS;IS model of socio-technical component alignment; six hypotheses as antecedents.
Article I
RQ2: What mechanisms align the socio-technical components of an IS towards consumer centricity?
TitleA Socio-Technical Approach to Study Consumer-Centric Information Systems(ICIS 2016).
Method Case study research.
ResultImproved IS model of socio-technical component alignment. Case study research design, including identification of three cases (Steam, Facebook, YouTube). 3 mechanisms socio-technical component alignment.
Article II
RQ 3: What can companies learn from the video game industry for the design of the digtial customer experience?
TitleWhat Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam (HMD 2017, in German)
MethodCase study analysis of Steam video-gaming platform. Analysis of six major changes in the development of Steam between 2003 and 2016.
ResultNine recommendations for designing of the digital customer experience in consumer-centric IS. Illustrative application within three settings: automobile industry, TV streaming, and a digital platform for car repairs.
Article III
RQ 4: How do provider and consumers integrate their respective resources in social networking services to generate service innovations?
TitleService Innovation in Social Networking Services: A Resource Integration Perspective on Facebook (paper aiming at top IS journal).
MethodExploratory, interpretative case study of Facebook. In-depth analysis of 51 service innovations generated between 2004 and 2017.
ResultThe resource integration model to explain service innovation in SNS;Three service innovation mechanisms: data-driven innovation, technology propulsion, and social debugging.
Article IV
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4 Part A: Thesis structure and research results
This thesis embraces socio-technical (S-T) system theory (Bostrom and Heinen 1977)
as a reference framework. It provides a comprehensive foundation to describe socio-
technical systems which is simple, extensive, sufficiently well-defined, anchored in
extant theory, and that can be easily extended with other categories to obtain rich
vocabulary (Lyytinen and Newman 2008). As such, the S-T framework allows to
capture CCIS from a holistic, inclusive and nuanced perspective that appears useful for
the structuring and analysis of selected IS and the innovation of services they enable.
The first part of the research project conceptualizes consumer centricity in information
systems (RQ 1), and develops the theoretical foundation upon which further research
can be conducted (RQ 2). Following the review and synthesis of the knowledge base,
the empirical research focuses on exploring how the S-T framework could inform the
analysis and design of CCIS (RQ 3), and how service innovations are generated based
on the integration of social and technical resources of consumer and provider (RQ 4).
The following research summary is structured along the four research questions.
RQ 1: How can consumer centricity be operationalized as characteristics of information
systems and which antecedents lead to consumer centricity of information systems?
The first research question aims to provide a conceptual foundation for this thesis. To
this end, Article I presents a literature review that examines how the concept of
consumer centricity in marketing can be built upon to operationalize consumer centricity
in information systems. Turning to the marketing discipline makes sense, because
scholars of the domain have debated the objectives and transformational activities
related to consumer centricity for decades (Kumar 2015; Levitt 1960). The review
focuses on literature that defines consumer centricity with the goal to understand the
“phenomenon as a whole, its meaning and its relationships” (Rowe 2014, p. 243). The
data collection and analysis follows a systematic process in which 21 publications are
identified, selected and analyzed (Webster and Watson 2002). Following an iterative
process of open, axial and selective coding (Glaser and Strauss 1967; Strauss and Corbin
1990), three generic objectives of consumer centricity are identified and labelled as need
orientation, value cocreation, and relationship orientation.
In the next step, a model of a consumer-centric IS is developed based on the socio-
technical framework. It suggests that the four constitutive system components – task,
technology, structure and actor – can be aligned towards a specific goal (Bostrom and
Heinen 1977; Hester 2014; Leavitt 1964a; Lyytinen and Newman 2008; Orlikowski
2000), which is consumer centricity in this research. The objectives of customer
Part A: Thesis structure and research results 5
centricity from marketing are then generalized as characteristics towards which the
components of a consumer-centric IS are aligned and six hypotheses are derived on
alignment capabilities as antecedents of consumer centricity.
Within the thesis, Article I provides an initial operationalization of consumer centricity
in IS and it offers a theoretical foundation of socio-technical component alignment for
further studying consumer-centric information systems.
RQ 2: What mechanisms align the socio-technical components of an IS towards
consumer centricity?
The second research question seeks to identify mechanisms that are designed into IS
with the purpose to increase consumer centricity. To this end, Article II elaborates a
socio-technical approach to study consumer-centric IS and advances the theoretical
model proposed in Article I. Figure 2 indicates four social and technical system
components, their alignment relationships, and consumer centricity as the outcome of
component alignment. The model focuses on the consumer as single most relevant actor
and conceives consumer centricity as a latent trait of an IS. Consumer centricity is then
evaluated against three reflective indicators, i.e., the degree of need orientation, value
cocreation and relationship orientation.
Figure 2. Research model of a consumer-centric IS
Article II proposes an exploratory, multiple case study design to identify mechanisms
and to test hypotheses on the alignment of task-consumer, technology-consumer, and
structure-consumer relationship. Based on theory-informed criteria, the paper identifies
three extreme cases which are useful for identifying causal relationships and theory
building (Yin 2013). The cases vary in their domain, i.e., video gaming (Steam), social
networking (Facebook), and video sharing (YouTube), they are similar in their success,
6 Part A: Thesis structure and research results
and they are information rich, which makes an in-depth analysis of the case contexts and
mechanisms within these IS possible.
The application of the research model and research design is then illustrated through an
analysis of Steam, the leading platform for digital video game distribution. The case
vignette analyzes the implementation of Steam Greenlight, Steam’s Hardware and
Software Survey, and Steam’s Anti-Cheat Client. The analysis yields evidence for three
mechanisms that increase consumer centricity, namely consumer-driven collective
selection of video games, increase of transparency about consumer technology, and the
enforcement of norms.
In this dissertation, Article II paves the way for further research. First, it puts forth the
concept of a consumer-centric IS as a socio-technical system. Second, it provides an
empirical research design that offers a case selection strategy and that aims to study
mechanisms that align a system towards consumer centricity. Finally, it offers a case
vignette that laid the ground for the subsequent in-depth case studies of Steam (Article
III) and Facebook (Article IV).
RQ 3: What can companies learn from the video game industry for the design of the
digital customer experience?
The third research question aims to explore and demonstrate how the socio-technical
framework can inform the analysis and design of CCIS, with a particular focus on the
digital customer experience. To this end, Article III, employs the socio-technical
framework to investigate the leading video gaming platform Steam, and to generalize
recommendations for the design of the digital customer experience.
The research in Article III employs the case study method to scrutinize six major
changes in the development of Steam between 2003 and 2016. The case analysis focuses
on how Valve, the firm behind Steam, defines and manages the task, technology and
structure components within the IS. Consistent with Articles 1 and 2, the rationale is that
system components constitute the interfacing resources by which consumers interact
digitally and experience the CCIS. In consequence, the analysis distinguishes three
layers and focuses on how Valve defines services and service portfolio (task
component), manages consumer technology (technology component), and how it
secures consumers’ trust and loyalty by embedding values and norms into the IS
(structure component).
Part A: Thesis structure and research results 7
The analysis of the Steam platform resulted in nine recommendations by which Valve
has shaped the digital customer experience within the consumer-centric IS. The
application of these recommendations is then discussed for three settings (automobile
industry, TV streaming, and a digital platform for car repairs). This illustration
demonstrates how a prime example in the video game industry can inform the design of
CCIS in other, perhaps more traditional industries.
As part of this thesis, Article III builds on the socio-technical foundation provided in
Articles I and II and establishes an empirical understanding of how digital leaders design
consumer-centric IS. The results emphasize the importance of recognizing and
integrating consumer resources, e.g., knowledge, data, and technology, as important
components of consumer-centric IS.
RQ 4: How do provider and consumers integrate their respective resources in social
networking services to generate service innovations?
The fourth research question aims to explain service innovation in social networking
services (SNS), as a particularly relevant type of CCIS. The objective of this research is
to develop an empirically based understanding of resource integration, and to explore
how the resource integration of consumers and provider in SNS is linked to the
generation of service innovations. To this end, Article IV proposes the resource
integration model as a theoretical framework with which to make sense of the activities
and reciprocal dynamics of resource integration that are emphasized in service-dominant
logic (Vargo and Lusch 2004, 2008). The model depicts two resource integrating actors,
i.e., provider and consumer, and suggests that their resource integration is generative of
service innovations (Lusch and Nambisan 2015, p. 168).
The research in Article IV adopts socio-technical (S-T) system theory (Bostrom and
Heinen 1977) as a reference framework to structure the analysis of service innovations,
as well as the involved social and technical resources of consumers and provider.
Specifically, the task, technology and structure component are employed as lenses that
flesh out three “centers of gravity” of service innovations which are labelled accordingly
as task-centered, technology-centered, and structure-centered service innovations.
The resource integration model is then applied to an explorative, interpretive case study
of Facebook with a detailed analysis of 51 service innovations generated between 2004
and 2017. The case analysis, which followed an iterative process of sensemaking, data
gathering, and gradual generalization (Klein and Myers 1999), uncovered three service
innovation mechanisms: data-driven innovation, technology propulsion, and social
8 Part A: Thesis structure and research results
debugging. Each mechanism provides insights about the social and technical resources
of consumer and provider, and how their resource integration dynamics have been
generative of service innovations in the case context. The three empirically identified
mechanisms demonstrate that service innovation in SNS relies significantly on the
provider’s ability to successfully engage, facilitate, and leverage the resources and
resource integration of consumers.
The results presented in Article IV are the outcome focused research and represent the
central result of the dissertation project. The preceding research Articles I-III were
important prerequisites for conducting this research: Articles I and II were essential for
understanding and identifying socio-technical theory and service-dominant logic as
conceptual foundation, and for identifying and justifying Facebook as a CCIS on which
rich and interesting data exists. Conducting the research in Article III helped to gain
experience in case study method and, eventually, informed the systematic collection and
analysis of data, to trace Facebook’s service innovations, and to identify and code the
involved resources and their integration. In that regard, Article IV empirically explores
service innovation in consumer-centric information systems through an in-depth case
study.
Part A: Discussion and future research 9
3 Discussion and future research
Theoretical contributions
This thesis contributes to our knowledge on service innovation in consumer-centric IS.
It establishes a socio-technical (S-T) view of consumer-centric IS, and it explains how
resource integration of consumers and provider is generative of service innovations. The
thesis makes four important contributions.
First, the CCIS model contributes an intellectual structure which puts the consumer into
the foreground of our thinking (Brenner et al. 2014) and, thereby, might be useful to
overcome the prevailing “centricity of the business-enterprise, the organization, or the
society […]” in current IS research (Baskerville 2011, p. 253). This shift is encouraged
by employing the S-T framework and by operationalizing need orientation, value
cocreation, and relationship orientation as generic objectives of consumer centricity in
IS (cf. Articles I and II). The notion of S-T component alignment also provides a novel
lens to identify mechanisms that are built into IS to increase consumer centricity. To this
end, the CCIS model can serve further empirical studies. It might also serve as a
framework to integrate related knowledge in the nascent stream of research on CCIS (cf.
Rowe 2014, p. 244).
Second, the resource integration model provides a structure with which to make sense
of resource integration as the underlying process of value cocreation and service
innovation (Lusch and Nambisan 2015, p. 168), and it accounts for the dynamic and
emergent nature of service innovation in the digital world (Yoo et al. 2012). By
embracing interfacing resources that mediate digital interactions, e.g., features,
technology, or data, the model captures how novel resources are generated and how they
manifest as innovations that are beneficial to some actor (Lusch and Nambisan 2015, p.
161). The model enhances transparency on service innovation in the digital world, which
is increasingly difficult to bound in terms of time, space, beginning, end and agency
(Nambisan et al. 2017). To summarize, the resource integration model enhances our
understanding and theorizing of value cocreation and service innovation, which
increasingly develops into a narrative of “resource-integrating, reciprocal-service
providing actors […]” (Vargo and Lusch 2016, p. 7).
Third, the research contributes three service innovation mechanisms, namely data-
driven innovation, technology propulsion, and social debugging. The mechanisms result
from blending the S-T framework into the resource integration model, which enabled a
10 Part A: Discussion and future research
nuanced understanding of innovation by differentiating task-centered, technology-
centered, and structure-centered service innovations. The mechanisms suggest that
service innovation in CCIS relies significantly on a provider’s ability to successfully
engage, facilitate, and leverage the resources and resource integration activities of its
consumers. The mechanisms might not only be useful for identifying and theorizing
about different types of service innovation, but also to sensitize research for different
types of social and technical resources.
Finally, this thesis contributes to the ongoing research on digital innovation (Yoo et al.
2010; Yoo et al. 2012) and digital ecosystems (Henfridsson and Bygstad 2013; Reuver
et al. 2017; Tilson et al. 2010; Tiwana et al. 2010) by examining and specifying
resources that are essential for innovating digital services for and with consumers. More
specifically, this thesis complements research that studied the resources and innovations
generated and integrated by providers and third-party developers (Eaton et al. 2015;
Ghazawneh and Henfridsson 2013; Gnyawali et al. 2010), by explicitly accounting for
the consumer, who is often not only a beneficiary, but also a contributor of essential
resources for service innovation.
Practical implications
This thesis also holds implications relevant for managers and practitioners.
First, the CCIS model provokes a consumer-centric view and, as such, it can be useful
to challenge a business-centric, inside-out perspective of firms who design consumer-
facing systems. The proposed model (Article II) and the analysis of the Steam platform
(Article III) demonstrate how CCIS can be analyzed based on their constitutive S-T
components. The results show how different mechanisms enhance consumer centricity
in real-world systems, e.g., by involving consumers in the collective selection and
definition of services and service portfolio, by monitoring and responding to deployed
consumer technology, or by implementing mechanisms that enact and enforce accepted
social practices. The suggestion to managers is then to think strategically about the
social and technical implications when designing IS for consumers.
Second, the Steam case analysis (Article III) and the resource integration model (Article
IV) stimulate managers to think in nuanced ways about service innovation in CCIS.
Managers should consider the resources that initially consumers provide and also those
that they continuously generate as sources of service innovation. The dynamic and
emergent perspective offered here underlines the importance to recognize service
innovation in CCIS as an incremental, continuous effort to improve, adapt and invent
Part A: Discussion and future research 11
new services to satisfy consumers’ ever-changing needs. This thinking is probably best
illustrated in the three service innovation mechanisms: data-driven innovation suggests
that managers conceive consumers' service interactions as data-generating activity upon
which service innovations can be generated. Technology propulsion suggests that
managers focus not only on the firm’s digital infrastructure, but also appraise and
facilitate consumers' abilities to integrate their technology as foundation of service
innovation. Social debugging suggests that managers reflect on the normative and
behavioral expectations of consumers and implement resources to innovate the social
structure in CCIS. The social implications of service innovations are often subtle and
difficult to assess and require a long-term strategy to align with consumers’ value and
norm expectations.
Finally, this thesis (Articles I-IV) emphasizes that leading CCIS generate data and
insights from every consumer interaction. Practitioners who are involved in the
innovation and provisioning of services in CCIS should design interfacing resources,
e.g. features, websites, or applications, in ways that drive the generatino of multifaceted
data which, e.g., can be processed, measured, and recombined for service innovation.
Limitations and future research
This thesis presents CCIS as a relevant field of IS research. The included publications
contribute knowledge and insights to conceptualize consumer-centric IS, and to explain
how service innovations are generated in these systems. Given the novelty of the
phenomenon and the early stage of extant research, this thesis has limitations that should
be addressed in future research.
First, the thesis focused on Facebook and Steam as two highly relevant consumer-centric
IS. While both cases represent rich and dynamic settings to study service innovation,
future research should consider other systems. This would add further empirical
grounding to the CCIS model, and it could strengthen the generalizability of the resource
integration model, as well as the service innovation mechanisms into other contexts. It
is reasonable to expect similar mechanisms and in other contexts. Potentially valuable
cases could stem from personalizing music and video services (e.g., Spotify, YouTube,
Netflix), promoting consumer hardware to innovate new services (e.g., Amazon’s
Alexa, Google Echo, or Virtual Reality devices), or seeking to understand how novel
services can regulate disputes and tensions between actors (e.g., Twitter, Snapchat).
Second, this thesis focuses exclusively on consumers and provider as actors in CCIS.
Future research could apply, or extend, the proposed resource integration model to study
12 Part A: Discussion and future research
the role of other actors, e.g., third-party developers, for generating service innovations
in CCIS. Such research could provide valuable insights on how the resources and
resource integration activities of these actors are generative of service innovation in
CCIS. At the same time, it could complement extant research on boundary resources
(Eaton et al. 2015; Ghazawneh and Henfridsson 2013) as it would focus on the active
resources (e.g., knowledge, skills, or capabilities) that third parties integrate in CCIS (cf.
Sarker et al. (2012) for an exemplary case study in a B2B setting).
Finally, the mechanisms identified in this thesis are at a relatively abstract level. This
suggests that nested causal paths for increasing consumer centricity and for generating
service innovations through resource integration have not been identified. Thus, the
thesis cannot claim exhaustiveness regarding the identification of mechanisms that
increase consumer centricity of an IS and that are generative of service innovation.
Future research should aim at identifying further mechanisms, e.g., by carefully
examining other CCIS, as indicated above, or by lowering the level of abstraction at
which mechanisms are studied.
Part A: Reference overview of articles in this thesis 13
4 Reference overview of articles in this thesis
This section provides the full bibliographical information of the articles included in this
thesis. They jointly address the formulated research objective and form the core part of
the thesis. Articles I to IV are presented in full in Part B.
4.1 Consumer-Centric Information Systems: A Literature Review
and Avenues for Further Research
Table 1. Bibliographic information for Article I
Title Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
Authors Benjamin Spottke, Jochen Wulf, Walter Brenner
Outlet ICIS 2015 Proceedings
Year 2015
Status Published
Abstract. While consumer centricity has been extensively discussed as a concept of
organizational transformation in the marketing domain, there is little research on its
operationalization as a characteristic of information systems and associated antecedents.
We review the marketing literature to understand generic organizational objectives of
consumer centricity which are then generalized as characteristics of consumer-centric
information systems. In a second step, we draw on socio-technical theory to
conceptualize antecedents of consumer centricity as capabilities to align social and
technical system components.
Our research contributes to the body of knowledge by theoretically deriving an
operationalization and antecedents of consumer centricity in IS research. This paper lays
the foundation for a structured review of IS literature to theorize on component
alignment capabilities as antecedents of consumer centricity. It further is the basis for
case study research to construct a nomological network for consumer-centric
information systems.
Keywords: Human-computer interaction, Information systems, IS models, IS research,
IS research agenda, IS theory, Socio-technical approach
14 Part A: Reference overview of articles in this thesis
4.2 A Socio-Technical Approach to Study Consumer-Centric
Information Systems
Table 2. Bibliographic information for Article II
Title A Socio-Technical Approach to Study Consumer-Centric Information Systems
Authors Benjamin Spottke, Alexander Eck, Jochen Wulf
Outlet ICIS 2016 Proceedings
Year 2016
Status Published
Abstract. Given the unprecedented role of digital service platforms in private life, this
research sets out to identify the mechanisms that are designed into information systems
with the purpose to increase consumer centricity. We evaluate the consumer centricity
of an information system against three reflective indicators, that is the degree of need
orientation, value cocreation and relationship orientation and conceptualize consumer
centricity as the ability to align social and technical information system components.
We employ a positivist, explanatory case study approach to test three hypotheses on
system component alignment in cases from three domains (gaming, social networking,
and video sharing). We found preliminary evidence for three alignment mechanisms that
increase consumer centricity.
With this research, we plan to contribute to the literature on consumer-centric
information systems by elaborating and empirically grounding a socio-technical
approach to study mechanisms and their joint application to increase consumer
centricity in information systems.
Keywords: Human behavior in IS, Human-computer interaction, Information systems,
IS models, IS research, Socio-technical approach, Case Study Research
Part A: Reference overview of articles in this thesis 15
4.3 What Companies Can Learn from the Videogame Industry for
the Design of the Digital Customer Experience: An Analysis of the
Platform Steam
Table 3. Bibliographic information for Article III
Title What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
Authors Benjamin Spottke
Outlet HMD Praxis der Wirtschaftsinformatik (317), Springer.
Year 2017
Status Published
Abstract. In the age of digitization the successful management of customer interactions
in the sense of a holistic digital customer experience is becoming increasingly valuable.
Technology leaders like Amazon, Apple, Facebook and Google, but also Valve as the
provider of the leading video gaming platform Steam are well known for their ability to
organize and design digital interactions between users, third parties and other actors.
This article employs the case study method to investigate the Steam platform. Based on
the analysis of Steam, recommendations for the design of the digital customer
experience are generalized. These recommendations can be applied by companies in
other industries. The study focuses on (1) the definition of services and service portfolio,
(2) the management of consumer technology, and (3) the development of trust and
loyalty by embedding values and norms within a digital platform. The elaborated
recommendations are then illustratively discussed within three settings, i.e. automobile
industry, TV streaming and a digital platform for car repairs.
This article aims to inform managers in IT service development and IT service design,
IT strategists and business architects who are responsible for the design of digital
customer experiences enabled by information systems and corresponding digital
platforms. This article contributes to theory by establishing a socio-technical lens on the
design of the digital customer experience.
Keywords: Digital Customer Experience, Digital Platforms, Service Design, Case
Study Research
16 Part A: Reference overview of articles in this thesis
4.4 Service Innovation in Social Networking Services: A Resource
Integration Perspective on Facebook
Table 4. Bibliographic information for Article IV
Title Service Innovation in Social Networking Services: A Resource Integration Perspective on Facebook
Authors Benjamin Spottke, Alexander Eck, Jochen Wulf
Outlet Research aiming at a paper in a top IS journal (e.g., Information Systems Journal)
Year 2018
Status Working paper (IWI-HSG)
Abstract. This paper explores how Facebook, the world’s largest and most successful
social networking service (SNS) provider, and its consumers generated service
innovations through resource integration. While prior research emphasizes the
importance of third-party developers, little is known about how consumers and their
resources are leveraged for generating service innovations in SNS. To this end, this
paper proposes the resource integration model as a theoretical framework that is rooted
in service-dominant logic, and that conceptualizes resource integration as the process
underlying service innovation. We apply the model to an explorative, interpretive case
study of Facebook with a detailed analysis of 51 service innovations generated between
2004 and 2017. Our analysis uncovered three service innovation mechanisms: data-
driven innovation, technology propulsion, and social debugging. Each mechanism
provides insights about the resources and resource integration dynamics of consumer
and provider, and how these have been generative of service innovations. Our findings
suggest that service innovation in SNS relies significantly on the provider’s ability to
successfully engage, facilitate, and leverage the resources and resource integration of
consumers. While the mechanisms can be used to examine service innovations in
specific contexts, the model can be specialized for studying diverse aspects of service
innovation and resource integration, which we exemplified by blending the socio-
technical framework into the case analysis. Our research offers a novel perspective on
service innovation and enhances previous research on SNS, as well as service innovation
in the digital age.
Key words: service innovation, digital innovation, social networking services, service-
dominant logic, Facebook, case study, mechanism
Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research 17
Part B
I Consumer-Centric Information Systems: A Literature
Review and Avenues for Further Research
Table 5. Bibliographic information for Article I
Title Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
Authors Benjamin Spottke, Jochen Wulf, Walter Brenner
Outlet ICIS 2015 Proceedings
Year 2015
Status Published
Abstract. While consumer centricity has been extensively discussed as a concept of
organizational transformation in the marketing domain, there is little research on its
operationalization as a characteristic of information systems and associated antecedents.
We review the marketing literature to understand generic organizational objectives of
consumer centricity which are then generalized as characteristics of consumer-centric
information systems. In a second step, we draw on socio-technical theory to
conceptualize antecedents of consumer centricity as capabilities to align social and
technical system components.
Our research contributes to the body of knowledge by theoretically deriving an
operationalization and antecedents of consumer centricity in IS research. This paper lays
the foundation for a structured review of IS literature to theorize on component
alignment capabilities as antecedents of consumer centricity. It further is the basis for
case study research to construct a nomological network for consumer-centric
information systems.
Keywords: Human-computer interaction, Information systems, IS models, IS research,
IS research agenda, IS theory, Socio-technical approach
18 Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
I.1 Introduction
The increasing adoption of consumer technology and the proliferation of ubiquitous
systems is transforming the interaction between organizations and consumers. As
consumers are seek personalized experiences (Prahalad and Ramaswamy 2004),
interaction is increasingly considered as the locus of value creation (Vargo and Lusch
2004). Without doubt, consumer interactions are strongly facilitated by information
systems and technology (Jayachandran et al. 2005; Saarijärvi et al. 2013).
Consumer-facing systems pose novel organizational challenges with regard to system
development and provisioning. For example, Gartner (2012) distinguishes information
systems by their degree of consumer engagement (low to high) and associated pace of
change (low to high) and deduce different so-called “pace-layered” application
management strategies. A focus on intra-organizational IS users does not cover
consumers, who design their individual information systems for their various purposes
(Baskerville 2011) and within their specific contexts (Lamb and Kling 2003). IS
researchers and practitioners have developed an extensive body of knowledge on intra-
organizational systems, e.g., regarding development (e.g., waterfall model, scrum) and
IT service management (ITIL). The transferability of such practices to the management
of systems with a high consumer engagement, however, is only limited (Liang and
Tanniru 2006).
The concept of customer centricity has been developed in the marketing literature and
applies to the marketing function itself (Kumar 2015; Sheth et al. 2000) or to
organizations as a whole (Shah et al. 2006). Customer centricity is often understood as
a set of transformational activities (e.g., organizational alignment or cultural change
(Shah et al. 2006)) or as organizational objectives (e.g., customer need orientation
(Lamberti 2013) or intensifying customer relationships (Kumar 2015)).
Within the IS literature customer centricity mostly refers to commercial relationships
between private customers and suppliers (Alter 2008; Pan and Pan 2006). IS research
views consumer-centric information system (CCIS) as organizational IS which “link a
company to its customers.” (Reich and Benbasat 1990). Such a perspective does not
cover the emergence of systems which are owned and operated by consumers for non-
commercial purposes (Baskerville 2011). To include such systems into our analysis of
consumer centricity, we adopt a broader definition and consider consumers as private
Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research 19
users of information systems, which may or may not engage with a commercial
organization through IS.1
Advancements in consumer technologies are considered as an enabler for increased
customer centricity (Kumar 2015). Alter (2008) associates customer centricity with an
ability to „respond to customer needs“ and notes that the “idea of customer-centricity
has become commonplace, but is often vague”. Prior literature on CCIS discusses
characteristics of information systems associated with consumer centricity (Huang and
Rust 2013; Liang and Tanniru 2006; Pan and Pan 2006; Reich and Benbasat 1990;
Tuunanen et al. 2008; Tuunanen et al. 2010). This literature, however, provides little
theory on antecedents of consumer centricity and their relation to IS characteristics.
The IS research literature acknowledges the importance to analyze the individual
consumer and her active role in defining and using an information system around her
needs. Baskerville (2011), for example, speaks of “centricity of the business-enterprise”
and is questioning if IS research has “failed to notice the individuation of IS” which are
“certainly socially constructed”. Alter (2008) also emphasizes the need to evaluate and
adjust elements of work systems to “attain the right degree of customer-centricity” and
calls for further research in this area.
To address this call, we pose the following research questions: 1) How can consumer
centricity be operationalized as characteristics of information systems? 2) Which
antecedents lead to consumer centricity of information systems? The first research
question seeks to understand consumer centricity and its meaning in the context of
information systems. The second research question aims at the derivation of the internal
capabilities a CCIS must possess.
We use the literature review method (Rowe 2014) to deduce consumer centricity
characteristics from the marketing literature. We then base our argumentation on socio-
technical theory (Bostrom and Heinen 1977; Hester 2014; Leavitt 1964b; Lyytinen and
Newman 2008; Orlikowski 2000) to regard capabilities for system component
adjustments as antecedents of consumer centricity.
1 We regularly use the term customer centricity to comply with the original terms used by cited authors. Since we imply the transferability of customer centricity concepts to the concept of consumer centricity, we use the term customer as a synonym for consumer unless stated otherwise.
20 Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
I.2 Foundational theory
Information systems are socio-technical systems and consist of a technical as well as a
social subsystem (Alter 2008; Bostrom and Heinen 1977). The technical subsystem
includes a technology component, i.e. all hardware and software used for information
processing, and a tasks component, which represents the goals of a system as well as the
way information processing is carried out (Hester 2014). The social subsystem
encompasses a structure component and the actors. Structure describes the values and
norms as well as general patterns of behavior, which govern the application of
information systems (Hester 2014). Actors include all participants within the
information system which “carry out or influence the work” (Hester 2014). The
individual components are closely interrelated as, for example, task design has an impact
on the working relationships and interpersonal behavior of actors (Bostrom and Heinen
1977). Figure 3 summarizes the components and interrelationships of socio-technical
systems.
Figure 3. Components and interrelationships of socio-technical systems
Structuration theory emphasizes the duality of structure in social systems: “Structure is
both medium and outcome of reproduction of practices. Structure enters simultaneously
into the constitution of the agent and social practices, and 'exists' in the generating
moments of this constitution.” (Giddens 1979) Orlikowski (2000) applies this thought
to the interactions of social and technical subsystems. The interactions between social
entities and technology are inherently recursive, as “users shape the technology structure
that shapes their use” (Orlikowski 2000). The neglecting of these recursive
interrelationships and the focus on the technical subsystem, in system development, is a
major source of failures in information system design (Bostrom and Heinen 1977). As
a consequence, the knowledge of how to mutually align the components of socio-
technical systems is an important precondition for information systems success.
Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research 21
Lyytinen and Newman (2008) further develop the notion of component alignment in
socio-technical systems to analyze change in organizational information systems.
Misalignment between socio-technical components introduce gaps into a system which
are defined as situations that will deteriorate or threaten the system’s performance
(Lyytinen and Newman 2008). Components of the socio-technical system become
incompatible through so called critical incidents, such as changing user behavior and
requirements, which CCIS are continuously exposed to (Moore 2011). A system’s state
of “alignment” or “equilibrium” is predominantly characterized through the absence of
gaps and misalignments. However, components of the socio-technical system must be
aligned towards a goal or purpose in order to valuate the system’s “performance”.
Prior research on CCIS mainly focusses on describing system characteristics.
Exemplary characteristics include cocreation enablement (Huang and Rust 2013),
“focusing on customers” (Pan and Pan 2006), “link a company to its customers” (Reich
and Benbasat 1990), and “provide consumers with services” (Tuunanen et al. 2008).
Tuunanen et al. (2010) identify three consumer value drivers: consumer participation,
service process experience, and goals and outcomes. Consumer participation refers to
the integration of consumers to enable value cocreation. Service process experience is
associated with providing a high degree of customer engagement. A focus on customer
goals and outcomes highlight the importance to regard different types of consumer
utility. The notion of component alignment capability as an antecedent for consumer
centricity has been scarcely addressed by literature on CCIS. As an exception, Liang
and Tanniru (2006) define a customer-centric IS as “one that is able to configure four
major components - customer, process, technology, and product/service - to satisfy a
customer need.” Configuration, according to Liang and Tanniru (2006), includes the
capturing of customer needs, an on-demand configuration of service processes, and the
customization of services. However, it remains unanswered how these configuration
capabilities contribute to customer centricity.
It is the goal of this article to theoretically derive hypotheses on antecedents of CCIS.
We draw on the model of Lyytinen and Newman (2008) and combine several ideas: (1)
Applying the idea of socio-technical system component (mis)alignment towards a goal,
which is consumer centricity in our case. (2) Transferring the idea of alignment to the
context of CCIS. (3) Utilizing the established vocabulary and descriptive elements
(components, properties and gaps) of Lyytinen and Newman.
22 Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
I.3 Research methodology
The present paper investigates how the notion of customer centricity, i.e. a concept for
organizational transformation in marketing research, can be built upon to operationalize
consumer centricity in IS research. In terms of Rowe’s (2014) typology for literature
reviews we strive to generate a deeper understanding of the concept of customer
centricity by deducing its core objectives. This review therefore focuses on articles that
define customer centricity in marketing research with the goal to understand the
“phenomenon as a whole, its meaning and its relationships” (Rowe 2014). The guiding
question is: Which organizational objectives are associated with the concept of customer
centricity within the marketing literature? The identified organizational objectives are
later generalized as characteristics of CCIS, on the basis of which antecedents of
consumer centricity are proposed.
Rowe (2014) suggests to define breadth and systematicity for literature reviews that seek
general understanding as well as the identification of gaps and future research directions.
With regard to breadth, we draw a “purposive sample” that ensures “good coverage of
topic” (Rowe 2014) but do not aim for an exhaustive review of the marketing discipline
(Vom Brocke et al. 2009). We initially searched in high ranked marketing journals that
conceptualize and explain the fundamental objectives and organizational activities of
customer centricity, as proposed by (Webster and Watson 2002). In a systematic
process, marketing journals have been searched full text for "customer centricity",
"consumer centricity", "customer orientation" and "consumer orientation" which
resulted in four relevant articles. Publications which either only enumerate or mention
consumer/customer centricity as a term amongst others, often without context or relation
to the publication itself, have been excluded from further review. This applies also to
articles that did neither conceptualize, nor define the term consumer/customer centricity.
Furthermore forward and backward searches have been conducted on the articles as
indicated in Table 6. Articles identified in this stage did not have to be published in high
ranked marketing journals but needed to meet inclusion and exclusion criteria. This
process has led to a total of 21 relevant articles which are included in the review.
Conceptual components of customer centricity have been extracted from the sample
literature through open coding (Glaser and Strauss 1967; Strauss and Corbin 1990). This
led to a first set of codes such as ‘leadership commitment’, ‘organizational re-alignment’
or ‘consumer need’. An aggregation of these codes resulted in five superordinate
categories (axial coding). Three of them were considered as organizational objectives
(consumer need orientation, value cocreation and relationship orientation) and two as
Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research 23
transformational activities which enable customer centricity within an organization
(usage of consumer knowledge and the alignment of the organization). In a third step,
we used these five categories to code the selected literature in a second iteration
(selective coding). The codes were independently allocated by a second researcher with
an inter-coder reliability of kappa=.84, which according to Viera and Garrett (2005)
corresponds to an almost perfect agreement.
Table 6. Results of the literature search
Outlet Hits Relevant References
J. of Marketing 7 1 (Kumar 2015)
J. of Consumer Research 1 0 n/a
J.of Marketing Research 1 0 n/a
J. of the Academy of Marketing Science
8 3 (Etgar 2008; Gummesson 2008b; Payne et al. 2008)
J. of Service Research 2 1 (Shah et al. 2006)
J. of Product Innovation Management
7 0 n/a
Marketing Science, J. of Applied Psychology, International J. of Research in Marketing, J. of Retailing
0 0 n/a
1st search iteration total 26 5 All above
Forward search on the identified articles in Google Scholar and Web of Science
n/a 5 (Kumar et al. 2008; Lamberti 2013; Lee et al. 2014; Tax et al. 2013; Verhoef and Lemon 2013)
Backward search on all identified articles
n/a 11 (Boulding et al. 2005; Day 2003, Gummesson 2008a, 2008b; Jayachandran et al. 2005; Payne et al. 2008; Peppers et al. 1999; Prahalad and Ramaswamy 2004; Sheth et al. 2000; Vargo and Lusch 2004; Womack and Jones 2005)
Total sample n/a 21 All above
The identified organizational objectives can be considered as generic characteristics of
customer centricity, regardless of whether they describe an organization or an
information system. Transformational activities, in contrast, directly refer to
organizational design and cannot be transferred to the information systems context.
I.4 Organizational objectives of customer centricity
The identified marketing literature conceptualizes customer centricity as activities of
organizational change and as organizational objectives related to its customer
24 Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
relationships. Exemplary organizational change activities are introducing leadership
commitment and a culture of sharing information (Shah et al. 2006), supply chain
integration (Lamberti 2013) and business unit alignment (Lee et al. 2014). These
activities are specific for organizational change and not transferrable to a general IS
context. Lee et al. (2014) exclusively focuses on activities of organizational change,
therefore no codes for organizational objectives could be assigned. A structural analysis
of the organizational objectives mentioned in the analyzed articles resulted in three
overarching objectives (see Table 7). In the following, the main themes are synthesized
and contextualized within general marketing research.
Table 7. Organizational objectives of consumer centricity
Organizational objectives
Bou
ldin
g et
al.
2005
Day
200
3
Gum
mes
son
2008
a
Gum
mes
son
2008
b
Jaya
chan
dran
et a
l. 20
05
John
son
& B
hara
dwaj
,
Kum
ar 2
015
Kum
ar e
t al.
2008
Lam
bert
i 201
3
Lee
et a
l. 20
14
Pay
ne a
nd F
row
200
5
Pay
ne e
t al.
2008
Pep
pers
et a
l. 19
99
Pra
hala
d &
Ram
asw
amy
Saa
rijä
rvi e
t al.
2013
Sha
h et
al.
2006
She
th e
t al.
2000
Tax
et a
l. 20
13
Var
go a
nd L
usch
200
4
Ver
hoef
and
Lem
on 2
013
Wom
ack
and
Jone
s 20
05
TO
TA
L
Customer Need Orientation
X X X X X X X X X X X X 12
Value Cocreation X X X X X X X X X X X X X 13
Relationship Orientation
X X X X X X X X X X X X X X 14
An organizational objective often mentioned is the satisfaction of customer needs. While
the literature on consumer centricity revolves around the core idea of adjusting value
propositions to consumer needs (Shah et al. 2006; Sheth et al. 2000), the concept of
experiential marketing underlines that consumers are human beings who want to fulfill
not only functional needs, but also pursue pleasurable experiences (Brakus et al. 2009;
Hirschman and Holbrook 1982, 1986; Schmitt 1999). Consequently, need fulfillment is
experienced not only in cognitive, rational terms, but within a complex, interrelated
system of thoughts, emotions, activities and value which are highly subjective and
idiosyncratic dimensions (Hirschman and Holbrook 1986). Firms which take on a
customer-centric perspective focus on how products and services address these
multidimensional customer’s needs. A product centric view, in contrast, focusses on
product profitability and market share (Kumar 2015). Several authors emphasize that
needs must be addressed on a small segment or even on an individual level. For example,
this means that product benefits are presented to meet individual needs (Shah et al. 2006;
Sheth et al. 2000), or that products and services are customized to increase the likelihood
Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research 25
of customer loyalty (Johnson and Bharadwaj 2005; Peppers et al. 1999; Prahalad and
Ramaswamy 2004). This paradigm demands firms to understand the need of individual
customers and the ability to activate resources and develop solutions to satisfy those
needs (Lamberti 2013), while allowing the customers to define the what, when and
where value is provided (Gummesson 2008a; Womack and Jones 2005).
The second objective of customer centricity is the notion of value cocreation (Boulding
et al. 2005; Gummesson 2008a, 2008b; Shah et al. 2006). Value cocreation is the
foundation of the service dominant logic (Vargo and Lusch 2004, 2008), a concept
which has received significant attention in marketing and service science over the last
decade. The core assumption of value cocreation is that different entities (e.g., firms,
consumers, societies) jointly integrate their operant resources (e.g., knowledge, skills
and technology) within a collaborative process (e.g., within a service offering) to
generate value (Grönroos 2008; Vargo and Lusch 2004, 2008). Value cocreation may
equally take place within service/product production (co-production), and during service
usage, the phase in which consumers perceive and ultimatively determine the value in-
use within their specific context (Etgar 2008; Vargo and Lusch 2008). In this sense value
determination is experiential, i.e. not entirely “rationalistic” (Schmitt 1999; Vargo and
Lusch 2008) and includes humanistic objectives like pleasure, joy or esthetics (Grönroos
2008; Holbrook and Hirschman 1982).
The identified literature on consumer centricity builds on this fundamental idea and
emphasizes the involvement of customers in value generation and points to the practices
of interaction and exchange within customer supplier encounters (Payne et al. 2008;
Payne and Frow 2005; Tax et al. 2013). From a marketing function perspective this
entails an involvement of customers in marketing and innovation processes, e.g., new
product development or marketing decision making (Lamberti 2013; Sheth et al. 2000).
More generally, cocreation is characterized through a collaborative dialogue that creates
personalized experiences in which the customer is allowed to co-construct the
experience according to his context (Prahalad and Ramaswamy 2004). Co-creation of
value does not necessarily happen between a customer and a firm, but might occur
within a service delivery network, i.e., multiple service providers co-create value with a
customer along his journey (Tax et al. 2013). Through the recognition and fulfilment of
customer needs, value is simultaneously created for the customer and the provider
(Boulding et al. 2005; Kumar et al. 2008; Vargo and Lusch 2004; Verhoef and Lemon
2013). If a product or service is appreciated by the customer, it is (usually) reflected in
his willingness to pay (Boulding et al. 2005; Prahalad and Ramaswamy 2004).
26 Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
The third organizational objective of customer centricity is the emphasis on relationship
orientation. Relationship orientation is addressed in relationship marketing theory
which aims at establishing, developing and maintaining long-term relationships between
customers and firms (Berry 1995; Morgan and Hunt 1994). Trust is considered as
prerequisite and foundation of relationships and it is built upon shared values, associated
behavioral norms, through social bonds between partners as well as successful past
interactions (Bendapudi and Berry 1997; Berry 1995; Day 2000; Morgan and Hunt
1994; Sheth and Parvatlyar 1995). Developed relationships significantly increase
consumers’ willingness for cooperation (Bendapudi and Berry 1997; Morgan and Hunt
1994), their loyalty and retention (Hennig-Thurau et al. 2002; Verhoef 2003; Wulf et al.
2001) and the chance of ‘word-of-mouth’ referrals (Hennig-Thurau et al. 2002).
Consumers on the other hand may enjoy more convenience and reduced risk, as well as
social benefits (e.g., feeling of familiarity) or special treatments (e.g., faster service,
discounts) (Hennig-Thurau et al. 2002).
With regard to consumer centricity relationship orientation manifests in the processes
and practices of interaction and exchange within the customer supplier relationship
which enable to identify and create further opportunities for co-creating value (Payne et
al. 2008; Payne and Frow 2005) as well as to further developing and sustaining the
relationship itself (Boulding et al. 2005; Day 2003). Lamberti (2013) remarks that
relationships need to be “mutually satisfactory” for both parties. This comes along with
a focus on relationship development, rather than individual transactions (Kumar 2015;
Shah et al. 2006). The underlying assumption is that well developed relationships
between firms and customers correlate with increased loyalty which in turn is associated
with greater profitability (Johnson and Bharadwaj 2005; Shah et al. 2006, 2006; Sheth
et al. 2000). The relations and interactions between customer and firm are the locus of
value creation and subject to the creation of a personalized consumer experience
(Peppers et al. 1999; Prahalad and Ramaswamy 2004).
Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research 27
I.5 Characteristics and antecedents of CCIS
In the following section, the organizational objectives of customer centricity in
marketing are generalized as characteristics of CCIS. The socio-technical system model
is built upon to derive hypotheses on the role of alignment capabilities as antecedents of
consumer centricity (cf. Figure 4).
Figure 4. Characteristics and antecedents of CCIS
I.5.1 Need orientation
A CCIS is need oriented when its purpose and goals (task) are aligned with the needs of
(individual) consumers. This requires consumers to skillfully apply the system to fulfill
their needs by executing tasks and conversely it requires ensuring that the CCIS defines
tasks which fulfill needs. We therefore propose H1a and H1b:
H1a (consumer-task): Enabling consumers to execute tasks and to understand their
underlying value propositions increases the consumer centricity of an IS.
Consumers need to be enabled to understand how specific tasks contribute to the
fulfilment of their needs. They further need to be capable of executing the task itself
(Lee et al. 1995). For example, training tutorials can help consumers to learn how tasks
are performed while at the same time indicating how the result of the task is linked
towards their goals.
H1b (task-consumer): Specifying tasks that aim to support the fulfilment of consumer
needs increases the consumer centricity of an IS.
The specification of tasks within CCIS refer to the definition of what a system does and
how it fulfills consumer needs (Hester 2014). The socio-technical perspective allows to
focus on instrumental and humanistic objectives (Sarker et al. 2013) which is in line
with the introduced multidimensional and holistic lens on consumer needs provided by
experiential marketing (Hirschman and Holbrook 1986). As a consequence, the
28 Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
alignment between consumers and tasks requires elicitation of needs and their
translation into actionable tasks. CCIS require interaction mechanisms through, e.g.,
social media to constantly monitor consumer needs and specify tasks accordingly
(Tuunanen et al. 2008).
I.5.2 Value Co-creation
Value cocreation is regularly facilitated by technology and therefore closely linked to
the alignment of the CCIS components consumer and technology. From a socio-
technical system perspective technology refers to the tools within an information system
(Hester 2014). From a value cocreation perspective, technology represents operant
resources that different entities (consumers, firms) integrate into the value cocreation
process (Grönroos 2008; Vargo and Lusch 2004, 2008). If consumers cannot integrate
their value foundation (e.g., technology), value cocreation becomes impossible
(Grönroos 2008). Indeed, consumers (and potentially providers) integrate technology to
perform operations that fulfill their individual needs. This can occur as contribution to
the development of an IS (co-production of an offering) or within the actual usage of an
IS (Lempinen and Rajala 2014). We therefore propose H2a and H2b:
H2a (consumer-technology): Enabling consumers to integrate technology to actively
co-create value increases the consumer centricity of an IS.
Consumers must be enabled to integrate their technology resources into the CCIS in
order to contribute to the joint value creation process. This also requires consumers to
understand, operate and accept the consumer technology and potentially other consumer
facing technology (Lyytinen and Newman 2008) relevant for value cocreation at
encounter processes. For example, a consumer must be capable to establish a secure
connection with his smartphone and use a mobile banking app to interact with his bank
(Siau et al. 2001).
H2b (technology-consumer): Ensuring adaptability to and compatibility with the
technological environment of the consumer increases the consumer centricity of an IS.
While adaptability refers to an IS’ capability to adjust an installed technological base to
new or emerging technologies, compatibility ensures that different technological
combinations work together (Hanseth and Lyytinen 2010). The technology component
as enabler for dual value creation requires that the technology component is adaptable
to and compatible with the consumers’ technological environment which might change
over time. A lack of such alignment capabilities may result in unreliable, inefficient or
Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research 29
functionally limited technologies, inadequate to support the required processes
(Lyytinen and Newman 2008). For example, the provisioning of a smartphone
messaging application on a specific mobile operating system, e.g., Apple’s iOS, will
prevent Google’s Android users from value cocreation (exchange of messages) within
the CCIS (Joorabchi et al. 2013).
I.5.3 Relationship orientation
The literature on consumer centricity has characterized relationship orientation by
sustainability, mutual satisfaction, loyalty and cocreation of opportunities in the long
term. Relationships constitute the “social” foundation in which consumers engage and
which enable collaborative creation and exchange of value. While values refer to shared
beliefs and ideals, norms specify the associated behavioral practices. These shared
values and norms are the antecedents for successful relationship orientation as they
foster trust and consumers’ willingness for cooperation (Bendapudi and Berry 1997;
Berry 1995; Day 2000; Morgan and Hunt 1994; Sheth and Parvatlyar 1995). Through
the socio-technical lens values and norms are represented by structure, which defines
the principles of behavior that consumers act upon and influence in the interaction with
or through a CCIS. Structure refers to the systems of communication, authority and
workflow (Lyytinen and Newman 2008) and is an important element in the development
of relationships. The objective of relationship orientation within a CCIS can be
addressed through the alignment of consumers and structure. We therefore propose H3a
and H3b:
H3a (consumer-structure): Ensuring consumers’ identification with the values and
norms of a system increases the consumer centricity of an IS.
Identification is defined as the “perception of similarity of values, membership and
loyalty” (Kankanhalli et al. 2005). The communication and acceptance of shared values
is significantly increasing the alignment of consumer and structure within a socio-
technical system (Hester 2014). An example for communicating shared values and
developing a consumer relationship is Google’s value statement “don’t be evil”. As a
second example, the usage of consumer data might not be accepted due to privacy
concerns if consumers do not identify with the values embodied in a system. A potential
alignment activity could be to create transparency on the usage of consumer data as well
as its benefits that are valuable for the consumer (Li and Unger 2012).
H3b (structure-consumer): Embedding values and norms in a system that consumers
identify with increases the consumer centricity of an IS.
30 Part B: Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
The normative and behavioral dimension of structure must be aligned with the values
and norms of consumers (Venkatesh et al. 2003). Systems of communication, workflow
and authority, together with norms, values and behavioral patterns (e.g., duties, roles
expectations) regulate collaboration and exchange which are the basis for developing
long term relationships. As an example, instant messaging groups on smart phones can
be created ad-hoc and allow consumers to reflect their social norms such a group
openness.
I.6 Conclusion and further research
While consumer centricity has been extensively discussed as a concept of organizational
transformation in the marketing domain, there is little research on its operationalization
as a characteristic of information systems and associated antecedents. We reviewed the
marketing literature to understand generic organizational objectives of consumer
centricity which were generalized as characteristics of CCIS. In a second step, we draw
on socio-technical theory to conceptualize antecedents of consumer centricity as
capabilities to align social and technical system components.
Alter (2008) calls for further research with regard to the “dimensions of customer-
centricity to respond to customer needs”. Our research contributes to the body of
knowledge by theoretically deriving an operationalization and antecedents of consumer
centricity in IS research.
Due to its preliminarily, this research has two limitations which we will address in our
further research: IS literature on consumer centricity needs to be included in more detail
and the theoretically derived hypotheses need to be empirically validated. We plan to
carry out an in-depth review of further IS literature to theorize on component alignment
capabilities as antecedents of consumer centricity. For example, technology acceptance
literature (such as Lee et al. (1995)) potentially provides implications on how to align
consumers and tasks (H1a) through training and education. As a second example, agile
systems development literature (Abrahamsson et al. 2009; Dingsøyr et al. 2012) might
explain the alignment of tasks to consumer needs (H1b).
We further plan to apply case study research and include different organizational and
individual information systems in a cross-case analysis (Yin 2013). The overall
objective is to validate the hypotheses on antecedents of CCIS and to construct a
nomological network for CCIS.
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 31
II A Socio-Technical Approach to Study Consumer-Centric
Information Systems
Table 8. Bibliographic information for Article II
Title A Socio-Technical Approach to Study Consumer-Centric Information Systems
Authors Benjamin Spottke, Alexander Eck, Jochen Wulf
Outlet ICIS 2016 Proceedings
Year 2016
Status Published
Abstract. Given the unprecedented role of digital service platforms in private life, this
research sets out to identify the mechanisms that are designed into information systems
with the purpose to increase consumer centricity. We evaluate the consumer centricity
of an information system against three reflective indicators, that is the degree of need
orientation, value cocreation and relationship orientation and conceptualize consumer
centricity as the ability to align social and technical information system components.
We employ a positivist, explanatory case study approach to test three hypotheses on
system component alignment in cases from three domains (gaming, social networking,
and video sharing). We found preliminary evidence for three alignment mechanisms that
increase consumer centricity.
With this research, we plan to contribute to the literature on consumer-centric
information systems by elaborating and empirically grounding a socio-technical
approach to study mechanisms and their joint application to increase consumer
centricity in information systems.
Keywords: Human behavior in IS, Human-computer interaction, Information systems,
IS models, IS research, Socio-technical approach, Case Study Research
32 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
II.1 Introduction
Enjoying Internet-based services is an integral part of our everyday life. We socialize
on Facebook, play games via Steam, and watch videos on YouTube. Today, these digital
service platforms (Lusch and Nambisan 2015) attract a large number of private users, or
consumers, who engage voluntarily and develop an emotional bond with these platforms
(Sas et al. 2009). The mentioned examples are well-crafted digital artifacts embedded
in a compatible social context: they cater to utilitarian and social needs of individual
consumers; they create a forum for collaborative dialogue; and they become more
beneficial and appealing through continued engagement. These qualities make socio-
technical systems consumer-centric (Spottke et al. 2015).
Information systems (IS) research is rooted in the workplace. Thus, systems have
traditionally been examined for their utilitarian value (Sarker et al. 2013). The
overarching question has usually been how to extract most business value from
investments in digital technologies (Agarwal and Lucas 2005). This inclination has
made IS scholars predominantly root with organizations and the people they employ,
whereas the consumer who simply wants to have a good time often has been either
ignored or marginalized (Yoo 2010). In this regard, Consumer-centric information
systems differ from organizational information systems and represent a new type of IS
(Liang and Tanniru 2006).
In this paper we propose a novel vista on the systems and companies that control these
consumer-centric information systems. Specifically, the objective of this research is to
identify mechanisms that are designed into information systems with the purpose to
increase consumer centricity. We regard consumer-centric mechanisms as interacting
processes that align socio-technical components of an information system with the
individual consumer and that cause the information system to be consumer-centric, or
organized around the consumer. The notion of socio-technical component alignment has
its roots in organizational settings (Bostrom and Heinen 1977; Hester 2014; Leavitt
1965; Lyytinen and Newman 2008; Sarker et al. 2013) but to the best of our knowledge,
it has not been applied to consumer-centric IS.
Focusing on mechanisms that foster system component alignment with the consumer
enhances existing research and has two advantages: First, it directs our attention towards
those outcomes that consumers care about, as opposed to economically relevant
outcomes for service providers. Hence, our work complements research on digital
platforms and digital infrastructures which, for example, focuses on the nature of such
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 33
digital artifacts (Kallinikos et al. 2013; Yoo 2013), on explaining how digital platforms
evolve (Hanseth and Lyytinen 2010; Henfridsson and Bygstad 2013), or on how tensions
between providers and developers are resolved (Eaton et al. 2015). Second, focusing on
mechanisms offers an analytical lens that integrates the social and technological
components. So far, research on consumer-centric IS has largely neglected the interplay
of socio-technical components. However, several publications on consumer-centric IS
have identified design activities, that we regard as mechanisms, e.g., the alignment of
service offerings toward consumer needs through personalization (Albert et al. 2004),
the modularization of technology and service architectures to align a provider’s
technology base to the consumer and her technology (Liang and Tanniru 2006;
Tuunanen et al. 2011), and the adaptation to emerging social structures within an IS to
comply with the values and norms of consumers (Wagner and Majchrzak 2006) (Pan
and Pan 2006; Wagner and Majchrzak 2006). While these authors discuss individual
mechanisms, the socio-technical model offers a lens to examine the joint application of
such mechanisms, which is at the root of consumer centricity. To frame our research,
we pose the following question: What mechanisms align the socio-technical components
of an IS towards consumer centricity?
Such a research is necessary, because the existing body of knowledge is conspicuously
silent on the specifics of consumers – and not organizational users – as actors of socio-
technical systems (Yoo 2010). To this end, we propose a research model and a case
study approach in this research-in-progress article which is suitable for identifying the
sought-for mechanisms and assessing them. With the research presented here, we
contribute to the literature on consumer centricity in socio-technical systems by
elaborating an empirical approach to identify mechanisms that increase consumer
centricity through socio-technical component alignment. To this end, (1) we apply
socio-technical systems theory to put forth the concept of a consumer-centric
information system; (2) we propose an empirical research design that aims to reveal
alignment mechanisms and their effects on consumer centricity; and (3) on a case
vignette we illustrate how the proposed model and methodological approach will help
us answering the formulated research question.
The remainder of this manuscript is structured along these lines. It concludes with a brief
reflection of main limitations and an outlook on future research.
34 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
II.2 Theoretical foundation
II.2.1 Consumer centricity and customer centricity
Customer centricity has come to be known as a synonym to “literally organize around
the customer” (Galbraith 2005 p.14). With such a vague definition in place, the term is
amenable to a broad range of interpretations and variations (Alter 2008; Shah et al.
2006). To increase clarity of the concept, we briefly introduce three main dimensions of
customer centricity commonly discussed in the marketing and IS literature, based on a
recent review of the knowledge base (Spottke et al. 2015). Turning to the marketing
discipline makes sense, because scholars of strategy and marketing have been debating
this concept for over five decades (Kumar 2015; Levitt 1960).
Moreover, we will employ the term of consumer centricity throughout this paper to
narrow the discussion towards a certain type of customer, namely an individual human
being in her private surroundings. The discussion laid out below leads us to evaluate the
consumer centricity of an IS against three reflective indicators, that is the degree of need
orientation, value cocreation and relationship orientation of an IS.
Recognizing and satisfying consumer needs is a key dimension within the consumer-
centric paradigm (Shah et al. 2006; Sheth et al. 2000). Need orientation is typically
based on information and knowledge about the preferences of individual consumers
(Peppers et al. 1999). Consumer needs are multi-dimensional and heterogeneous, that is
they encompass individual utilitarian, hedonic and social needs (Albert et al. 2004;
Schmitt 1999). In addition, they are not only experienced in cognitive, rationale terms,
but also through thoughts, emotions and activities, which are harder to detect
(Hirschman and Holbrook 1986). The degree of need orientation depends on a socio-
technical system’s ability to recognize and satisfy the multidimensional needs that are
experienced by individual consumers as part of the system.
The concept of value cocreation emphasizes the active role of consumers in value-
generating service processes (Vargo and Lusch 2004, 2008). Value is not passively
delivered to the consumer. It rather results from collaborative interactions in which
consumers and providers integrate their resources, such as skills and technologies
(Payne et al. 2008; Payne and Frow 2005). Hence, consumers are co-creators of their
experience (Prahalad and Ramaswamy 2004), their beneficiaries, and the ultimate causal
factor for any created value (Etgar 2008; Vargo and Lusch 2008). The degree of value
cocreation is reflected in how consumers are involved in the service process, e.g., the
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 35
level of resource integration and the amount of influence consumers have on service
activities (Sarker et al. 2012).
A third crucial element of consumer centricity is establishing, developing and
maintaining relationships among consumers and providers (Berry 1995; Morgan and
Hunt 1994). In order for sustainable relationships to develop, they need to be beneficial
for both parties in the long run (Lamberti 2013). Trust is regarded as the foundation of
long-term relationships, and it is built upon successful interactions, shared values and
norms, and compatible behavioral practices (Hennig-Thurau et al. 2002; Morgan and
Hunt 1994). Thus, the degree of relationship orientation depends on a system’s ability
to foster trust among participating consumers and providers, and in the continued
creation of mutual benefits through repeated interactions.
This conceptualization of consumer centricity emerged from a systematic literature
review and coding process (Spottke et al. 2016). The identified indicators are
interrelated, i.e. they can re-inforce each other, and they can occur simultaneously. For
example, personalization mechanisms aim at increasing the degree of need orientation
by adjusting a service to specific consumer preferences, thereby making interactions
more successful and, as a consequence, it deepens relationships (Huang and Rust 2013).
II.2.2 Consumer-centric information systems
Recent publications in the IS field have suggested to expand the scope of inquiry to
computing in everyday life and to the supporting artifacts and infrastructures (Yoo
2010), to account for the individuation of IT (Baskerville 2011), and to conceptualize
users as actors in their social context to better understand their technology adoption and
use (Lamb and Kling 2003; Venkatesh et al. 2012). Private users, or consumers, differ
from organizational users in important ways. Not only is system adoption voluntary and
system use guided by individual will (Tuunanen et al. 2008). Compared with
organizational users, consumers are free to choose their activities, roles and relationships
which depend on their private, individual and social contexts, i.e. they are not primarily
driven by economic considerations (Wagner and Majchrzak 2006).
An emerging body of IS literature specifies characteristics of consumer-centric
information systems and provides methodological support about how to design this type
of IS (Huang and Rust 2013; Pan and Pan 2006; Tuunanen et al. 2010; Tuunanen et al.
2011). Several studies emphasize the importance to modularize IT and service
architectures to enable flexible adaptation and reconfiguration of services (Liang and
Tanniru 2006; Tuunanen et al. 2011). For example, Albert et al. (2004) propose a
36 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
personalization process to dynamically adapt and configure a website based on
identified visitor segments. Research on consumer-centric Wikis clearly indicates the
importance of being aware of and respond to (emergent) social structures that are shaped
and enacted through practices of technology-enabled consumer collaboration (Wagner
and Majchrzak 2006). Consumer-centric IS can easily fail without mechanisms that
define, e.g., the standards and norms for collaboration, or the roles that consumers can
take, or the mechanisms for moderating social interactions (Pan and Pan 2006; Wagner
and Majchrzak 2006).
Figure 5. Research model of a consumer-centric IS
We conceptualize consumer centricity as a latent trait of an information system, the roots
of which we find in socio-technical system design. Socio-technical theory attributes a
system’s performance to the mutual alignment of four logically separated components
(Bostrom and Heinen 1977; Leavitt 1965). The research model in Figure 5 and the
hypotheses presented below are based on a previous literature review (Spottke et al.
2016) and show the system components, their alignment relationships, and the desired
outcomes of alignment. It is worth noticing that this model emphasizes the consumer as
single most relevant actor. Here, we deviate from the canonical socio-technical model
that considers all actors involved in system design and usage, such as providers,
developers, and consumers (Leavitt 1965). We regard consumer-centric mechanisms as
interacting processes that align socio-technical components of an information system
with the individual consumer and that cause the information system to be consumer-
centric, or organized around the consumer. Although extant research on consumer-
centric IS does not explicitly conceptualize socio-technical alignment mechanisms, it
suggests that personalization, modularization of architectures, and adaptation of social
structures towards consumers’ preferences, technology base and value system represent
important mechanisms to enhancing consumer centricity. In this context, the socio-
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 37
technical model offers a lens to examine the joint application of such mechanisms,
which is at the root of consumer centricity. We assume that consumer centricity is
primarily determined by those relationships in which the consumer is directly involved
(first-order effects, black arrows in Figure 5). These direct relationships are the most
pertinent ones to examine, because second-order effects affect the consumer, and thus
consumer centricity, via indirect causal changes. We therefore exclude such second-
order effects from this study.
Consumers are private individuals who perform activities (or tasks) to fulfill their
hedonic and utilitarian needs. Consumers use systems voluntarily and select their
activities freely (Wagner and Majchrzak 2006). The task-consumer relationship reflects
the capacity of system tasks to fulfill consumer needs, to enable value cocreation, and
to facilitate relationships. We argue that the task component can be aligned towards the
consumer, e.g. by implementing mechanisms that enable consumers to execute tasks or
that enable consumers to influence the task itself. Such a mechanism would for example,
enhance a system’s ability to recognize and satisfy consumer needs, or offer new
opportunities for value cocreation. We therefore hypothesize: (H1) Implementing
mechanisms that capacitate consumers to influence task design and performance
increases consumer centricity of an IS.
Technology consists of the hardware and software artifacts used within the socio-
technical system (Lyytinen and Newman 2008). In a consumer-centric IS, these
elements include consumer-controlled technology such as their private computers,
smartphones, and wearables (Liang and Tanniru 2006; Pan and Pan 2006; Tuunanen et
al. 2010). Thus, the technology-consumer relationship reflects the capacity of a system
to fulfill the technological prerequisites to integrate consumers’ technology resources,
thereby enabling them to actively co-create value, to fulfill their needs, or to build
technology-mediated relationships, e.g., by implementing mechanisms that ensure
compatibility with or adapt to consumers’ technology base. In this sense technological
adaptability refers the capability to adjust an installed technological base to new or
emerging technologies, and compatibility ensures that different technological
combinations work together (Hanseth and Lyytinen 2010). We therefore propose: (H2)
Ensuring adaptability to and compatibility with the technological environment of the
consumer increases consumer centricity of an IS.
Social structure refers to shared values and norms, as well as to behavioral practices that
govern the interactions within systems (Lyytinen and Newman 2008). For example,
existing privacy settings such as the permission to use pseudonyms, enacts certain values
38 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
and enforces specific norms within a system (Pan and Pan 2006). The consumer-
structure relationship refers to the capacity of a system to foster consumers’
identification, that is the “perception of similarity of values, membership and loyalty”
(Kankanhalli et al. 2005), with the social structure embedded in a system. We argue that
implementing mechanisms that enhance consumers’ identification fosters trust within
the relationship, and thus nurtures consumers’ willingness to collaborate in cocreation
activities. Therefore, we hypothesize: (H3) Embedding values and norms in a system
that consumers identify with increases consumer centricity of an IS.
II.3 Methodology
II.3.1 Research design
With this research we aim to identify alignment mechanisms that increase consumer
centricity within information systems. Therefore, this study involves the analysis of
socio-technical alignment activities. More specifically, we test how well the formulated
hypotheses explain mechanisms of system component alignment observed in empirical
settings.
Theory testing is often performed through quantitative research methods such as survey
instruments. However, a quantitative approach would be impractical for our purposes
because there is no unified understanding of key terms. For example, the terms
“structure”, “task” or “alignment” are not generally recognized in the context of
consumer centricity in information systems. Also, the theoretical basis to operationalize
and measure the influence of alignment mechanisms on consumer centricity is not yet
established sufficiently, and hence a qualitative research approach is favored (Benbasat
et al. 1987).
We adopt a positivist, explanatory case study approach, and do so for three fundamental
reasons. First, case studies are suitable to study context-rich socio-technical systems,
such as consumer-centric IS (Yin 2013). Second, the approach is appropriate to
understand which mechanisms are implemented and how they impact consumer
centricity (Yin 2013). Third, due to their strengths in taking context and temporal
sequence into account, case studies are useful to identify causal relationships and
thereby to test hypotheses (Dubé and Paré 2003). We study three consumer-centric
information systems in a multiple holistic case design (Yin 2013) to provide sufficient
empirical grounding and to strengthen generalizability (Benbasat et al. 1987). We
employ the proposed research model to specify the unit of analysis, namely a consumer-
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 39
centric information system, and the boundaries of our inquiry. The model also provides
a single theory approach to hypothesize on the alignment of system components
(Benbasat et al. 1987). For this study we select the leading digital video game
distribution platform (Steam), the leading social network service (Facebook) and the
leading digital video sharing platform (YouTube). Despite differing case contexts, we
expect that findings can be reproduced from case to case, that is we implement a literal
replication strategy (Yin 2013).
The case selection process is based on the principles of similarity & variation, and
information richness. The cases are similar in their exceptional success across a range
of consumer-related performance indicators. We suppose that high adoption, an
abundance of consumer-generated content, and high frequency of use, are sensible
proxies for detecting consumer centricity of an IS. For example, Steam has 125 million
active accounts, and typically 8-12 million consumers are playing video games
simultaneously every day (Valve 2016b, 2016c). Analogously, Facebook registers over
1 billion consumers per day who generate 4.3 billion “likes” (Facebook 2007). YouTube
also counts over 1 billion active consumers per day, who upload over 300 hours of video
content every minute (YouTube 2016). Consumers spend huge amounts of their time as
part of these systems in order to fulfill social and hedonic needs, such as play, social
exchange, and entertainment. They integrate their skills and technology to use the
offered services, and to engage in interactions with other consumers and with the
provider – exemplified by activities such as generating content, chatting, and rating.
According to these data, we infer the selected systems possess a high degree of consumer
centricity.
We explicitly seek for variation between cases to increase generalizability of findings.
First, the selected systems differ in their domains, namely gaming, social networking,
and video sharing. Furthermore, the socio-technical components of each system vary
with their primary purposes. For example, consumers engage with Steam to play games,
while Facebook centers around social exchange. Similarly, technology differs: in the
case of steam, consumers tend to use their gaming PCs, while Facebook and YouTube
depend much more on smartphones. As a result, we expect to empirically investigate a
broad variety of alignment mechanisms against which the hypotheses of our research
model can be tested.
Lastly, the selected cases are information rich, which allows thorough data collection
and analysis (Paré 2004). We apply four a priori criteria to assess information richness.
First, much information is published about each case and it can be obtained from
40 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
multiple sources. Second, the available data is appropriate to triangulate the perspectives
of the consumer, the provider and potentially of third parties who are involved in the
system. Third, sufficient historical data is available to study the development of the
system over time. Finally, the dimensions of consumer centricity can be described and
captured. For instance, Steam, Facebook, and YouTube enjoy extensive media
coverage, and the digital leaders controlling these systems (Valve Corp., Facebook Inc.,
Alphabet Inc.) frequently release information on crucial changes they implemented or
plan to implement. Therefore, plenty of data is available for describing key events in the
history of each system and to operationalize the dimensions of consumer centricity for
each case context.
II.3.2 Data collection and analysis
The research model guides our data collection protocol (Yin 2013). The hypotheses lead
us to focus on alignment mechanisms, the impacted socio-technical components, and
resulting changes in consumer centricity. In order to ensure quality and consistency of
obtained data and to limit the risk of bias, three researchers are engaged in data
collection. Furthermore, a case study database is established where all evidences and
their sources are filed. We collect descriptions of the system components of Steam,
Facebook and YouTube and changes of each system. These changes often affect how
consumers perceive and engage with the system, and hence are regarded to influence
component alignment. The subsequent efforts concentrate on gathering data about these
changes by drawing on multiple sources. We obtain evidence from system providers,
from public media, e.g., journals and blogs, and from engaging with the systems directly.
First, we collect data from providers which publish system and service descriptions,
help sections that explain functionality, and usage statistics. We also identified
subscriber and developer policies and system change histories as useful sources. For
example, the “Facebook Newsroom” (Facebook 2007) provides detailed descriptions of
system changes as well as (claimed) outcomes for consumers. Second, we obtain data
from publications of knowledgeable industry experts and analysts who are familiar with
one or more of the cases. This allows not only a critical assessment of provider
information, but also to understand how specific changes have been reported to impact
consumers. Exemplary sources are Harvard Business Review, Forbes.com, The
Economist, but also smaller news journals, blog entries and social media sites. These
sources help to generate and enrich the understanding of system changes, and often
include statements from consumers and provider representatives. Third, once we have
sufficient overview of each case context, we review and document how consumers
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 41
engage with the respective system, by making screenshots of relevant aspects, for
example the Steam client application and the various workflows embedded in it. We
continue with the data collection process until we are able to comprehensively describe
system changes based on multiple sources. Another criterion for ending data collection
is when information about a case consistently repeats, that is when saturation has been
reached. The collected materials are used to interpret the events during the data analysis
phase.
The purpose of data analysis is to test if the research hypotheses can explain the
empirically identified mechanisms and their outcome on consumer centricity. The
analysis follows a systematic process, separated in a within-case analysis and a cross-
case analysis phase (Yin 2013). The individual within-case analysis consists of five steps
which are summarized Table 9 and illustrated in the following section.
Table 9. Steps in within-case analysis
Steps Tasks Output
1. Define system components and explicate indicators of consumer centricity
(a) Specify relevant system components;
(b) Specify indicators of consumer centricity
IS overview, description of system components and specified indicators of consumer centricity
2. Identification of changes to the information system and their underlying forces
(a) Identify changes to the IS
(b) Develop overview of changes
(c) Assess underlying forces / drivers changes
Overview of changes and the underlying reasons why changes were performed
3. Identify impacted system components, alignment dimension and specify alignment mechanism
(a) Code data based on research model;
(b) Describe change, affected system components, mechanism and outcome for consumers
Detailed understanding of changes, mechanisms and impact on consumers’ system usage / experience
4. Identify and describe the impact of alignment mechanisms on consumer centricity
Analyze data on how alignment mechanisms impacts consumer centricity
Assessment of the causal relation between alignment mechanisms and consumer centricity
5. Test hypotheses on alignment mechanisms against results from empirical investigation
(a) Match results from empirical analysis with hypotheses derived from theory
Tested hypotheses
First, we describe the system components for each case based on a review of the
collected data and also define how the reflective indicators of consumer centricity can
be assessed in the specific case context. In the second step, we draw on multiple data
sources to develop an overview system changes. We regard system changes as the
42 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
adaptation of one or several system components (cf. Lyytinen and Newman 2008). To
gain richer insights, we also analyze the data about the circumstances and underlying
forces for each change. In the third step the elements of the research model are used to
code data, that is affected system components, alignment relations, implemented
mechanisms, and outcomes for consumers. As a result, we obtain rich descriptions of
implemented changes. In the fourth step, data are revisited to infer to which extent the
identified alignment mechanisms affects any of the three consumer centricity
dimensions before and after the implementation.
As this process includes interpretation, assessments are performed by at least two
researchers; furthermore, we require multiple supporting sources to warrant inclusion in
the analysis. Finally, in the fifth step, we test the research hypotheses against the results
from the empirical case investigation through pattern matching (Paré 2004).
Specifically, we test if the empirically studied alignment mechanisms outcomes can be
explained with the conceptually derived hypotheses of the research model.
After completion of the individual cases we perform a cross-case analysis to deepen our
understanding and to evaluate the explanatory strength of the research model by
analyzing similarities and differences between cases (Paré 2004). As we move forward
with data collection and gain an understanding of the potential similarities and
differences across the case contexts, the exact cross-case analysis procedure will be
defined in more detail.
II.4 The case of Steam: illustration of research model and research
design
We illustrate the application of the research design with an explicitly non-exhaustive
account of Steam. We apply the research model to the case vignette, summarize data
collection, and demonstrate the analysis process. We analyze the implementation of
Steam Greenlight, the Hardware and Software Survey and the Anti-Cheat Client. For
the analysis, we reviewed the Steam client update history and service descriptions to
develop the change overview, to identify alignment mechanisms and to assess their
outcomes for consumers. We corroborated these insights with media articles and
assessed the impact of changes on the dimensions of consumer centricity. The steps of
the analysis are in indicated in brackets [1]-[5].
[1a] Steam is a leading platform for digital video game distribution; it is operated by
Valve Corporation (Valve). Consumers interact with the Steam platform, as well as with
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 43
other consumers in their private realm, to play various kinds of games. The task
component describes activities such as purchasing, downloading and organizing video
games, starting game sessions, and using community functions. Technology comprises
the digital infrastructure and the Steam client software (provider technology), as well as
consumers’ gaming computers and applications (consumer technology). Structure refers
to values and norms, and behavioral mechanisms that govern the interaction between
consumers and the platform. For example, a key value in gaming is ‘fair play’, and
automated anti-cheat detection is a means to enforce this value. [1b] In the case of
Steam, an increased degree of need orientation is achieved when consumers’ demand
for new games or social features are recognized and satisfied. An increased degree of
value cocreation is achieved when consumers integrate their resources (skills and
technology) with those of the provider to enable, sustain, or enhance opportunities for
value cocreation. An increased degree of relationship orientation is achieved when
component alignment activities enhance trust among consumers, or when measures are
taken to ensure successful consumer interactions when playing games or when using
Steam.
Figure 6. Chronology of key events in the history of Steam
[2] In the second step of the analysis key events in the history of Steam are identified.
Based on the available data a chronology of key events is developed, as indicated in
Figure 6. We discuss the steps [3] to [5] for each mechanism and provide a summary of
preliminary findings in Table 10.
[3] With the introduction of Steam Greenlight, Valve replaced a slow, manual curation
process for adding new game titles to the catalog. Greenlight is a collective selection
mechanism wherein consumers vote for unpublished games, which are then approved
for publication. As Greenlight facilitates how the game catalog is expanded on Steam,
it relates to the consumer-task dimension. [4] The reviewed data suggests that Greenlight
supports need orientation, because consumers steer the system towards their
preferences. For example, on average only 15-20 games have been released per month
to the Steam catalog. After the implementation of Greenlight, the mechanism has been
used intensely and 50-100 new games are released for publication every month, leading
to a total of ~3,300 released titles between 2012 and 2016. [5] This consumer-driven
44 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
collective selection process is explained by hypothesis H1, as it capacitates consumers
to influence the task component to fulfill their needs.
[3] Valve implemented an automated Hardware and Software Survey to better
understand the variety of consumer technology configurations, and to share this
information with any interested party. On Steam, a wide range of data points and
analyses are published every month, including information on which CPUs, graphic
cards, and operating systems are popular among consumers. Implementing such survey
functionality affects alignment along the consumer-technology dimension. [4] The
survey supports value cocreation because Valve uses these insights to decide on
technology investments and to improve compatibility with consumer technologies.
Game developers use the survey to assess compatibility and performance of their games
on consumers’ PCs. [5] The survey mechanism can be explained with H2: It creates
transparency about technology and is used to ensure adaptability of the platform and
compatibility of games with consumers’ technology.
Table 10. Illustrative results of within-case Analysis
Step 5 Steps 1/2 Step 3 Step 4 Step 5
Hypo- thesis
IS change
Consumer outcome
Indication of impact on consumer centricity
Identified mechanism
Exemplary sources
Result
H1 Steam Greenlight
Consumers steer portfolio of games towards their preferences.
Need orientation.
(release of games) Collective selection
(Forbes 2012b, 2014a; Valve 2012, 2013),
(+)
H2 Hardware/ Software Survey
Enhanced compatibility of consumer technology with the platform and new games.
Value cocreation.
(support of technology related decision making)
Technology transparency
(Hoffman 2016; Hughes 2010; Valve 2016a; YouTube 2016)
(+)
H3 Anti-Cheat Client
Cheating in online games is prevented
Relationship orientation (foster trust among consumers
Norm enforcement
(Forbes 2014b; Newell 2014; SteamDB 2016; Valve 2017)
(+)
[3] Valve introduced an Anti-Cheat Client to prevent players from cheating in
multiplayer games. The Anti-Cheat Client encompasses both sophisticated heuristics to
automatically detect cheating, and a comfortable way for consumers to report potential
cheaters. Online gaming is an inherently social activity in which consumer interactions
Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems 45
are mediated by technology and also regulated through social structure. Hence, the Anti-
Cheat Client relates to the consumer-structure dimension. [4] The examined data
indicates that this change was implemented with the intention to foster trust among
consumers, to ensure successful gaming interactions and hence, to support relationship
orientation. The Anti-Cheat Client proved very effective: The average number of
banned players (cheaters) has constantly increased from 1.000-5.000 in 2004 to
150.000-175.000 in 2016, which indicates an increasing adoption of the feature. As of
early 2016, 2.8 million accounts have been blocked for cheating. [5] The introduction
of the Anti-Cheat Client is an evidence for H3: The prevention of cheating embeds the
value fair play and enforces the norm that cheaters are not allowed to participate in
gaming. Concluding remarks, limitations and further research
Our interest is to learn how mechanisms can align socio-technical systems towards
higher levels of consumer centricity. In this paper we developed a research model and
demonstrated its application illustratively. We found preliminary evidence for three
mechanisms that increase consumer centricity, namely consumer-driven collective
selection, increase of transparency about consumer technology, and enforcement of
norms. With the overall research program we aim to devise and empirically test a
concept of socio-technical alignment for consumer centricity and thereby offer a lens
that has been largely neglected in research on consumer-centric IS. We also aim to
provide knowledge for researchers on digital platforms and infrastructures who have
rarely focused on consumer outcomes. Our empirical study of consumer-centric IS
provides an artifact-oriented approach to examine the mechanisms that influence
consumers individual outcomes when using an IS. It further includes consumer
technology, that is the technology owned and operated by consumers. The research
presented here is clearly limited by its early stage. As for the final results, we expect two
major limitations. First, we need to be cautious in generalizing our results to other types
of IS. We will do so by critically reflecting potential contingencies. We also
acknowledge that we do not have direct access to non-published internal case material.
Nonetheless, we are confident to identify sufficiently information rich cases through our
case selection approach.
II.5 Acknowledgements
This research is funded by AXA Research Fund (Joint Research Initiative Program). We
thank Andreas Maier and Fiorenzo Maletta of AXA Winterthur for the constructive
exchange on the application of our model. We also thank the associate editor and the
46 Part B: A Socio-Technical Approach to Study Consumer-Centric Information Systems
two anonymous reviewers for their valuable and constructive feedback on the previous
version of this article.
Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
47
III What Companies Can Learn from the Videogame
Industry for the Design of the Digital Customer
Experience: An Analysis of the Platform Steam
Table 11. Bibliographic information for Article III
Title What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
Authors Benjamin Spottke
Outlet HMD Praxis der Wirtschaftsinformatik (317), Springer.
Year 2017
Status Published
Abstract. In the age of digitization the successful management of customer interactions
in the sense of a holistic digital customer experience is becoming increasingly valuable.
Technology leaders like Amazon, Apple, Facebook and Google, but also Valve as the
provider of the leading video gaming platform Steam are well known for their ability to
organize and design digital interactions between users, third parties and other actors.
This article employs the case study method to investigate the Steam platform. Based on
the analysis of Steam, recommendations for the design of the digital customer
experience are generalized. These recommendations can be applied by companies in
other industries. The study focuses on (1) the definition of services and service portfolio,
(2) the management of consumer technology, and (3) the development of trust and
loyalty by embedding values and norms within a digital platform. The elaborated
recommendations are then illustratively discussed within three settings, i.e. automobile
industry, TV streaming and a digital platform for car repairs.
This article aims to inform managers in IT service development and IT service design,
IT strategists and business architects who are responsible for the design of digital
customer experiences enabled by information systems and corresponding digital
platforms. This article contributes to theory by establishing a socio-technical lens on the
design of the digital customer experience.
Keywords: Digital Customer Experience, Digital Platforms, Service Design, Case
Study Research
48 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
III.1 Einleitung und Motivation
Die Gestaltung und das erfolgreiche Management der digitalen Schnittstelle zum
Kunden wird zunehmend wertvoller. Kunden und Nutzer richten viel Zeit und
Aufmerksamkeit auf digitale Plattformen und zugrundeliegende Informationssysteme
(IS), um ihren Alltag zu organisieren, um digitale Inhalte zu konsumieren und um
Bedürfnisse nach Spaß und Freude zu befriedigen. Technologieführer wie Amazon,
Apple, Facebook und Google, aber insbesondere auch Valve Corporation (nachfolgend
Valve) mit seiner Videospieleplattform Steam setzen ihre digitalen Plattformen
erfolgreich ein, um IS-gestützte Interaktionen zwischen Nutzern, Drittanbietern und
weiteren Akteuren zu organisieren (Goldbach and Benlian 2015; Lusch and Nambisan
2015). Der Begriff der Digital Customer Experience bezieht sich hierbei auf alle Phasen
des Kauf- bzw. Konsumprozesses und bezeichnet die ganzheitliche Erfahrung eines
Kunden in den digital gestützten Interaktionen mit einem oder mehreren Anbietern
(Verhoef et al. 2009). Obwohl die genannten Unternehmen unterschiedliche
Geschäftsmodelle verfolgen, wie die Platzierung von Werbeinhalten, den Verkauf und
Verleih von digitalen Produkten und Medien oder das Betreiben von digitalen
Marktplätzen, verstehen sie das erfolgreiche Management der Digital Customer
Experience als wesentlichen Erfolgstreiber für das eigene Unternehmen (Prahalad and
Ramaswamy 2004).
Die Gestaltung der Digital Customer Experience wird für Unternehmen in traditionellen
Branchen, wie z.B. der Automobil-, Finanz- oder auch Versicherungswirtschaft vor
allem aus drei Gründen relevant: Erstens erfolgen Innovationen heute vor allem auf
Ebene digitaler Produkte und Services. Deshalb ist es für Unternehmen wichtig, die
digitale Kundenerfahrung als integralen Bestandteil von Produkt- und
Serviceinnovation zu verstehen. Zweitens werden im Zuge der Digitalisierung
Kundeninteraktionen stärker durch den Einsatz von Konsumententechnologie geprägt.
Dies ist zum einen darauf zurückzuführen, dass sich Kundenerwartungen und -
präferenzen und in der Folge auch das Verhalten hin zu digitalen Interaktionen
verschiebt. Zum anderen erhöht sich auch die Verfügbarkeit und Durchdringung von
Konsumententechnologie im persönlichen Umfeld. Folglich müssen auch etablierte
Unternehmen lernen, mit einer Vielzahl von neuen Konsumententechnologie-
Konfigurationen auf Kundenseite umzugehen. Drittens werden vermehrt Drittparteien
in die Leistungserbringung und Kundeninteraktion eingebunden. Unternehmen werden
zukünftig also häufiger die Digital Customer Experience über ein
Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
49
Leistungserbringungesnetzwerk gestalten müssen anstatt sich lediglich auf die eigene
Organisation zu konzentrieren.
Die Videospieleindustrie geht mit diesen Herausforderungen seit Jahren erfolgreich um.
Die digitale Nutzererfahrung geht über das reine Spielen hinaus und umfasst Aktivitäten
wie Strategie-Diskussionen in Foren, Streamen von Spiele-Sessions auf YouTube und
Twitch, Zusammenschluss in e-Sports-Teams und -Vereinen oder auch die Modifikation
bestehender Spieleinhalte durch Fans. Videospieler stellen also eine Kundengruppe dar,
die sich bewusst und gewünscht in digitalen sozialen Interaktionen engagiert. Weiterhin
gelten Videospieler als besonders technologieaffin, nicht zuletzt da Videospiele
regelmäßig hohe Anforderungen an die eigene Hardware stellen. Vor diesem
Hintergrund stellt die Videospieleindustrie ein geeignetes Umfeld für die Untersuchung
der Digital Customer Experience dar.
Das amerikanische Unternehmen Valve ist in der Videospieleindustrie führend und hat
die Distribution von Videospielen mit der Entwicklung der Plattform Steam
revolutioniert. Steam ist seit der Gründung im Jahr 2003 zu einer hochprofitablen
Community mit über 150 Millionen Spielern herangewachsen (Forbes 2012a; Valve
2016d). Valve ist nicht nur für seine kundenorientierte Entwicklung der Plattform,
sondern auch als ein herausragendes Beispiel für die Gestaltung der Digital Customer
Experience in diesem technologisch anspruchsvollen Umfeld bekannt (Wired 2010a).
Vor diesem Hintergrund bietet die Untersuchung von Steam reichhaltige
Lernmöglichkeiten für Unternehmen. Dieser Artikel analysiert zum einen die
unmittelbare Gestaltung der Digital Customer Experience durch Valve. Zum anderen
wird aufgezeigt, wie Drittanbieter (z.B. Spieleentwickler) mit der Steam-Community
zusammengeführt werden, um das Plattformangebot besser auf die Bedürfnisse der
Kunden abzustimmen. In diesem Sinn können Unternehmen aus anderen Bereichen von
der Videospieleindustrie über die Gestaltung der Digital Customer Experience lernen.
Nachfolgend wird zunächst Steam als führende Plattform in der Videospielindustrie
vorgestellt. Nach Erläuterung der methodischen Vorgehensweise werden die sozialen
und technischen Gestaltungsebenen digitaler Plattformen, deren Bedeutung für die
Digital Customer Experience, sowie konkrete Handlungsempfehlungen vorgestellt.
Anschließend wird die Anwendung der Handlungsempfehlungen in drei anderen
Branchen beispielhaft diskutiert.
50 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
III.2 Steam als führende Plattform der Videospieleindustrie
Seit der Einführung im Jahr 2003 hat sich Steam als weltweit führende Plattform in der
Videospieleindustrie etabliert. Drei Akteure sind für Entwicklung und Betrieb der
Plattform von besonderer Bedeutung: Konsumenten von Videospielen (Spieler), Valve
als Betreiber der Plattform sowie Spieleentwickler bzw. Herausgeber von Videospielen
(Entwickler). Spieler installieren den von Valve bereitgestellten kostenlosen Steam-
Client (Client) auf ihren PCs und erhalten dadurch Zugang zum Steam-Store, der Steam-
Community und weiteren Plattform-Services. Mit dem Steam-Client können Spieler
neue Spiele einkaufen und in einer persönlichen Spielebibliothek verwalten. Darüber
hinaus können sie mit dem Client ihre Spiele starten und konfigurieren sowie weitere
Community-Funktionen nutzen. Spieleentwickler veröffentlichen ihre Videospiele im
Steam Store und können darüber hinaus Valves Application Programming Interfaces
(APIs) und Software Development Kits (SDK) nutzen, um in ihren Spielen Community-
Funktionen wie Chats oder Matchmaking anzubieten. Valve betreibt die digitale
Infrastruktur und legt den institutionellen Rahmen für die involvierten Akteure fest.
Valve definiert vor allem Governance-Mechanismen (z.B. Richtlinien, Rollenkonzepte,
Autorisierungsverfahren und Standards), legt aber auch Preismodelle und Regeln zum
Revenue Sharing fest.
Figure 7. Entwicklung aktiver Accounts und verfügbarer Spiele auf Steam
Steam hat die Gestaltung der Digital Customer Experience in der Videospieleindustrie
neu definiert. Über Steam können Entwickler interessierte Spieler einfacher als zuvor
aktiv in die Entwicklung neuer Spiele einbinden. Dies ist vor allem Valves
konsumentenzentrierter Gestaltung der Digital Customer Experience geschuldet, welche
Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
51
sich konsequent an den Bedürfnissen der Spieler-Community orientiert. Dies führt zu
einer hohen Identifikation und Loyalität der Spieler, die ihre Begeisterung für Steam
regelmäßig in Diskussionsforen oder Blogs mittteilen. Die Anzahl aktiver Spieler-
Accounts hat sich von 15 Mio. Spielern im Jahr 2008 auf über 150 Mio. im Jahr 2016
vervielfacht. Ähnlich hat sich das Angebot der auf Steam verfügbaren Spiele entwickelt.
So ist die Anzahl der angebotenen Spiele im Zeitraum vom 2009 bis 2016 von 1,000 auf
über 12,000 angestiegen (vgl. Figure 7).
Beide Kennzahlen spiegeln die erfolgreiche Entwicklung der Steam-Plattform wider
und sind nach Aussage von Gabe Newell, Gründer und Geschäftsführer von Valve,
direkt auf die Einführung von neuen Features und Services der Plattform
zurückzuführen (Wired 2010b). Weiterhin wurde festgestellt, dass Valve die Akzeptanz
und den Erfolg neuer Funktionen in Bezug auf die Digital Customer Experience
regelmässig misst und bewertet. Valve gestaltet also die Digital Customer Experience
auf Steam durch Services und Features. Diese sind Gegenstand der vorliegenden
Untersuchung und werden nachfolgend zusammengefasst.
III.3 Datenerhebung und Analyse
Die Zielsetzung der Arbeit besteht in der Identifikation, Strukturierung und
Generalisierung von Gestaltungsaspekten der Digital Customer Experience in der
Videospieleindustrie. Die vorgestellten Ergebnisse basieren auf einer Analyse der
Videospieleplattform Steam. Datenerhebung und Analyse folgen der
Einzelfallstudienmethodik nach Yin (2013). Im Rahmen der Datenerhebung wurde die
Entwicklung von Steam zwischen 2003 und 2016, d.h. die Implementierung von
Features und Services sowie die Entwicklung von Nutzerzahlen erfasst. Zudem wurden
öffentlich zugängliche Unternehmensinformationen erhoben und Publikationen von
Experten in der Spieleindustrie recherchiert. Schliesslich wurde ergänzend der Steam-
Client installiert und einzelne Features untersucht.
Die Analyse der Gestaltung digitaler Plattformen für die Kundeninteraktion folgt der
sozio-technischen Systemtheorie welche sowohl eine technische als auch eine soziale
Perspektive auf Steam ermöglicht. In der sozio-technischen Systemtheorie werden
neben den beteiligten Akteuren (z.B. Spieler, Entwickler und Valve) auch die
bereitgestellten Services, die eingesetzten Technologien sowie die handlungsleitenden
sozialen Strukturen, z.B. Werte und Normen, berücksichtigt (Bostrom and Heinen
1977). Aus der Synthese der zugrundeliegenden wissenschaftlichen Literatur ergeben
sich drei Gestaltungebenen und deren Kernfragen (Bostrom and Heinen 1977; Lyytinen
52 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
and Newman 2008), die nachfolgend eingeführt und in Bezug auf die Digital Customer
Experience vorgestellt werden. Auf Basis dieses theoretischen Rahmens werden
anschließend die Ergebnisse der Analyse von Steam präsentiert.
III.4 Gestaltungsebenen digitaler Plattformen und ihre Bedeutung
für die Digital Customer Experience bei Steam
III.4.1 Gestaltung von Services und Serviceportfolio
Die Ebene der Services bezieht sich auf die Festlegung des Serviceportfolios sowie die
Ausgestaltung der angebotenen Services. Diese Entscheidungen haben unmittelbaren
Einfluss auf die Digital Customer Experience und sollten so erfolgen, dass die
unterschiedlichen, vielseitigen und veränderlichen Kundenbedürfnisse erfüllt werden.
Dementsprechend sind Kernfragen dieser Gestaltungebene:
F1: Welche digitalen Produkte und Services sollen auf einer Plattform angeboten
werden?
F2: Wie sollen digitale Produkte und Services ausgestaltet werden?
In Bezug auf die Digital Customer Experience von Videospielern besteht eine
Schwierigkeit in der Zusammenstellung eines attraktiven Spieleportfolios. Eine weitere
Herausforderung besteht darin, Spiele so zu entwickeln, dass Spieler eine positive
digitale Erfahrung beim Spielen erleben (z.B. durch soziale Anerkennung oder Freude
am Spiel).
Dem Paradigma der kundenorientierten Gestaltung der Digital Customer Experience
folgend hat Valve hierzu Steam Greenlight implementiert. Mit Greenlight können
Entwickler Konzepte, Ideen und Vorversionen von Spielen vorstellen und zum
Ausprobieren verfügbar machen. Auf diese Weise gewinnen Entwickler Feedback von
der Zielgruppe, z.B. durch In-Game Analytics und Spieler-Kommentare, das in der
weiteren Ausgestaltung eines Spiels berücksichtigt wird. Beispielsweise enthielt eine
Vorversion des Titels “Left 4 Dead - Episode Two” detaillierte
Reportingfunktionalitäten um das Gameplay, d.h. einen wesentlichen Teil der Digital
Customer Experience, besser zu verstehen und beobachtete Probleme bereits während
der Spieleentwicklung zu berücksichtigen. Weiterhin wurde mit der Einführung von
Greenlight die manuelle und aufwendige Zusammenstellung des Spielekataloges durch
Valve durch einen kollektiven Auswahlprozess ersetzt. Spieler konnten nun für die
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Veröffentlichung eines Spiels stimmen und dadurch direkten Einfluss auf das Angebot
der Steam-Plattform nehmen.
Für Entscheider, die mit der Gestaltung der Digital Customer Experience auf
Plattformen betraut sind, ergeben sich mehrere Implikationen für die Gestaltung von
Services und des Serviceportfolios. Erstens sollten Kunden durch intelligente
Mechanismen in die Festlegung des Serviceportfolios eingebunden werden. Hierdurch
kann sichergestellt werden, dass sich das Serviceportfolio an tatsächlichen
Kundenbedürfnissen orientiert. Zweitens sollten Servicedesign und -
entwicklungsprozesse konkrete Kundenpräferenzen erfassen und durch geeignete
Feedbackmechanismen eine kundenzentrierte Serviceentwicklung ermöglichen. Zum
Beispiel ist es wichtig zu erfassen auf welche Weise bereitgestellte Services oder
bestimmte Features tatsächlich genutzt werden, um die Digital Customer Experience in
nachfolgenden Entwicklungsphasen näher an den Bedürfnissen bzw. der konkreten
Nutzung zu orientieren. Drittens verdeutlicht die Implementierung von Steam
Greenlight eine wichtige Aufgabe des Plattformanbieters. Dieser fokussiert im
Fallbeispiel auf die Bereitstellung von Mechanismen, welche den Austausch zwischen
Konsumenten und Drittparteien fördern, um die Digital Customer Experience sowohl
auf Ebene einzelner Services (Spiele), als auch der Plattformnutzung im Allgemeinen
(Steam-Plattform) am Kundenbedürfnis zu orientieren.
III.4.2 Gestaltung der Technologie
Technologie ist ein Enabler für digitale Kundeninteraktionen. Gestaltungsgegenstand
der Technologieebene sind deshalb die Hardware- und Softwarekomponenten von
Endkunden, des Plattformbetreibers oder von Drittparteien, sofern sie für die
Erbringung der angebotenen Services erforderlich sind. Diese Sicht auf Technologie ist
für die Digital Customer Experience relevant, da das Zusammenspiel der IT
Infrastruktur eines Anbieters mit vielen unterschiedlichen Konsumententechnologie-
Konfigurationen ermöglicht werden muss. Vor diesem Hintergrund sind Kernfragen der
technologischen Gestaltungebene:
F3: Wie kann Transparenz über die eingesetzte Konsumententechnologie erhöht
werden?
F4: Welche Mechanismen sind geeignet, um eine Plattform für eine Vielzahl von
Konsumententechnologie-Konfigurationen zu öffnen?
F5: Wie kann Kompatibilität und Anpassungsfähigkeit der beteiligten
technologischen Komponenten – auch langfristig – sichergestellt werden?
54 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
Bei Videospielen zeigt sich diese Problematik wenn Kompatibilität mit und zwischen
hochgradig individualisierten PC-Konfigurationen von Spielern sichergestellt sein
muss, damit diese digital interagieren können. Dies gilt zum einen für die Videospiele-
Software selbst, zum anderen ist in Multiplayer-Spielen meist eine digitale Infrastruktur
erforderlich, um Spiele zwischen unterschiedlichen Spielern zu koordinieren oder um
bestimmte Dienste zentral bereit zu stellen. Dies erfolgt entweder durch einen
Plattformbetreiber oder durch Drittparteien und wirft neben der Frage der Kompatibilität
auch die Frage der Anpassungsfähigkeit auf sich wandelnde technologische
Rahmenbedingungen auf.
Im Kontext von Steam beinhaltet Technologie auf Seite von Valve die Frontend- und
Backend-Plattform-Infrastruktur für den Betrieb von Steam. Die
Konsumententechnologie der Spieler beinhaltet u.a. den Steam-Client, Videospiele,
sowie PCs mit Betriebssystem und Netzwerkinfrastruktur. Valve hat drei Mechanismen
bzw. Maßnahmen im Client implementiert, um Anpassungsfähigkeit und Kompatibilität
der genannten technologischen Komponenten sicherzustellen: Automatisierte Patches
und Updates, die Hardware und Software Survey sowie Client-Software für
verschiedene Betriebssysteme. Der Client ermöglicht das vollautomatisierte Patchen
und Updaten per Steam von auf dem PC installierten Spielen. Mit Einführung dieser
Funktionalität stellt Valve sicher, dass Konsumenten stets die neueste Version eines
Spiels auf ihrem PC installiert haben. Darüber hinaus hat Valve eine Hardware und
Software Survey im Client implementiert und veröffentlicht eine monatliche Übersicht
über eingesetzte Konsumententechnologie (Valve 2016d). Hierbei werden detaillierte
Informationen beispielsweise zu Betriebssystem, Prozessor, Grafikkarte, Speicher,
Monitorauflösung und angeschlossener Hardware sowie Informationen zur
Softwarekonfiguration erhoben. Die Teilnahme ist anonym, freiwillig und stellt eine
wichtige Brancheninformation in der Videospieleindustrie dar. Die Ergebnisse werden
nicht nur in Valves Technologieplanung berücksichtigt, sondern informieren auch
Spieler und besonders Entwickler, die ihre Spiele auf eingesetzte Technologien bzw.
Trends abstimmen können. Nach der Einführung des Steam-Clients für Windows in
2003 hat Valve die Client Software sukzessive für Mac OS (2010), Linux (2013) und
schliesslich auch ein eigenes Linux-basiertes Steam OS veröffentlicht. Durch diese
technologische Öffnung der Plattform hat Valve digitale Interaktionsmöglichkeiten mit
Kundengruppen erschlossen, die zuvor eine nicht mit Steam kompatible technologische
Basis verwendeten.
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Die Analyse verdeutlicht, wie wichtig die Berücksichtigung von
Konsumententechnologie für die Gestaltung digitaler Interaktionen und damit auch der
Digital Customer Experience aus Sicht eines Plattformproviders ist. Hieraus folgen
mehrere Implikationen für Entscheider: Auf konzeptioneller Ebene sollten Provider
Konsumententechnologie als Ressourcen begreifen, die Kunden aktiv in die
Servicenutzung einbringen. Aus Sicht des Plattformproviders ist somit sicherzustellen,
dass Kunden ihre Technologien vor dem Hintergrund sich wandelnder
Kompatibilitätsanforderungen möglichst einfach einbringen können. Auf operativer
Ebene gilt es, die Konsumententechnologie-Konfigurationen zu verstehen und wichtige
Entwicklungen zu antizipieren. Dementsprechend können Plattformanbieter durch die
Implementierung von Monitoring-Mechanismen wie z.B. Steams Hardware und
Software Survey konkrete Erkenntnisse über die eingesetzte Technologie gewinnen und
auch in der eigenen Technologieplanung berücksichtigen. Weiterhin sollten Service-
bzw. Plattformanbieter Technologiekomponenten, auf die Kunden im Rahmen der
Servicenutzung zurückgreifen und welche im Einflussbereich des Anbieters liegen (z.B.
Apps, Websites, Client-Software, ROMs oder auch Endgeräte) so gestalten, dass diese
möglichst einfach und kostengünstig an sich wandelnde technologische
Rahmenbedingungen angepasst werden können, um digitale Interaktionen langfristig zu
ermöglichen.
III.4.3 Gestaltung sozialer Strukturen
Soziale Strukturen beschreiben die handlungsleitenden Werte und Normen
einschließlich der akzeptierten und erwarteten Verhaltensmuster und stellen damit den
institutionalisierten sozialen Rahmen, in dem sich Akteure bewegen. Bei der
Beeinflussung sozialer Strukturen geht es im Kern darum, digitale Interaktionen auf
einer Plattform so zu gestalten, dass das Verhalten der involvierten Akteure im Einklang
mit dem geltenden gemeinsamen Werte- und Normensystem steht (Lyytinen and
Newman 2008). Die Verankerung sozialer Strukturen auf einer Plattform ist zentral für
die Digital Customer Experience, da geteilte Werte und Normen als Voraussetzung für
die Entwicklung von Vertrauen und Loyalität gelten. Zentrale Fragestellungen dieser
Gestaltungsebene sind:
F6: Wie und mit welchen Instrumenten können Werte und Normen auf einer
digitalen Plattform verankert werden?
F7: Wie kann ein Anbieter auf emergente Werte und Normen eingehen?
56 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
In vielen Situationen in denen Akteure in Wettbewerbs-, Kooperations-, oder anderen
Austauschbeziehungen stehen, z.B. auch in Videospielen, sind Normen wie „Gleiche
Regeln für alle“ oder „Fair Play“ das Fundament für erfolgreiche soziale Interaktionen.
Die Vernachlässigung dieser sozialen Ebene führt leicht zu Vertrauensverlust und
schließlich zur Ablehnung eines Angebots. Dies gilt nicht nur für Interaktionen
zwischen Kunden, sondern besonders auch für Interaktionen zwischen Kunden und
einem Anbieter.
In der Analyse von Steam sind in diesem Zusammenhang vor allem die Funktionen Anti-
Cheat und Family Sharing relevant. Steam bietet Spieleentwicklern Instrumente an, um
Spielbetrug (Cheating) zu verhindern. Digitale spielerische Interaktionen werden zwar
durch Technologie ermöglicht, sind jedoch stets auch in sozialen Strukturen verankert.
Cheating wird typischerweise nicht in Situationen akzeptiert, in denen Konsumenten
mit- bzw. gegeneinander spielen. In den Nutzungsbedingungen der Steam-Plattform
etabliert Valve den institutionellen Rahmen für die Plattformnutzung und definiert
Cheaten allgemein als „Modifikationen am Spiel, deren Ziel es ist, einem Spieler einen
Vorteil zu verschaffen“ (Valve 2017). Die konkrete Umsetzung von Fair Play erfolgt
durch mehrere Maßnahmen. Erstens erfordert das Mitspielen die Akzeptanz der Steam-
Nutzungsbedingungen, durch die sich Spieler verpflichten nicht zu Cheaten oder die
Anti-Cheat Software zu manipulieren (Valve 2017). Die Nutzungsbedingungen weisen
auch auf mögliche Sanktionen hin, die, je nach Einschätzung des Schweregrades durch
Valve, von der zeitlichen Sperrung für ein Spiel bis hin zur permanenten Sperrung eines
Spieleraccounts auf der Plattform reichen. Zweitens implementiert Valve technische
Funktionen um Cheater zu identifizieren und zu sanktionieren. Hierfür wird zum einen
Valves Anti-Cheat-Software auf Spieleservern installiert, zum anderen ist der Anti-
Cheat-Client als Komponente der Client-Software auf den PCs der Spieler installiert.
Der Anti-Cheat-Client wertet Browsing-Daten und den DNS Cache auf Spieler-PCs aus,
um Auffälligkeiten zu identifizieren und im Falle eines Alarms an das Anti-Cheat-Team
von Steam zu berichten. Hierzu merkt Valves Gründer und Geschäftsführer Gabe
Newell an: „Wir arbeiten wirklich hart daran Euer [Anm.: der Spieler] Vertrauen zu
gewinnen und zu behalten“ (Forbes 2014b). Drittens können Spieler auch sowohl Cheat-
Programme als auch vermutete bzw. nachweisliche Cheater an Steams Anti-Cheat-
Team melden, welches solchen Fällen nachgeht.
Die Analyse zeigt nicht nur auf, dass die Gestaltung sozialer Strukturen wichtig für
Kundenvertrauen in digitalen Interaktionen ist, sondern weist auch auf die Vielseitigkeit
der Gestaltungsmöglichkeiten eines Providers hin. Im Fall von Steam werden mehrere
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Instrumente für die Verankerung geteilter Werte wie Ehrlichkeit und Fairness
eingesetzt: Kommunikation und Richtlinien (z.B. Nutzungsbedingungen),
technologische Maßnahmen (z.B. Anti-Cheat Software) und schließlich die Community
selbst (Selbstkontrolle). Entscheider sollten sich darüber bewusst sein, dass erstens die
Verankerung von Werten und Normen grossen Einfluss auf die Digital Customer
Experience auf einer Plattform haben kann und zweitens sehr unterschiedliche
Maßnahmen dazu in Frage kommen.
Ein weiteres Beispiel für die Gestaltung sozialer Strukturen ist die Funktion Family
Sharing. Mit Family Sharing können einzelne Spiele oder die gesamte persönliche
Spielesammlung mit Freunden und Familienmitgliedern geteilt werden. Die
Begünstigten können damit Spiele des Freundes per Steam-Client auf ihrem eigenen PC
nutzen als hätten sie sie selbst gekauft. Wie bei dem physischen Verleih von Spielen
können jedoch nicht mehrere Instanzen eines Spieles gleichzeitig genutzt werden. Die
Implementierung von Family Sharing ist eine direkte Reaktion auf das geäusserte
Kundenbedürfnis Spiele mit Freunden und Familienmitgliedern zu teilen.
Bei der Gestaltung sozialer Strukturen sollten Plattformbetreiber aufmerksam auf
Kundenbedürfnisse reagieren, die auf bestehende oder aufkommende sozialen Praktiken
zurückzuführen sind. Im Beispiel von Family Sharing standen Valves Mitarbeiter in
engem Austausch mit der Spieler-Community und konnten so das Bedürfnis, Spiele mit
nahestehenden Personen zu teilen, auf der Plattform verankern.
III.4.4 Zusammenfassung der Handlungsempfehlungen
Nachfolgend werden die Ergebnisse der Fallstudie sowie die resultierenden
Handlungsempfehlungen für Entscheider aus den Abschnitten 4.1 bis 4.3
zusammengefasst (vgl. Table 12).
58 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
Table 12. Overview of results
Gestaltungsebenen und Fragestellungen
Handlungsempfehlungen aus der Fallstudie
4.1 Services und Serviceportfolio Ziel: Services orientieren sich an Kundenbedürfnissen
F1: Welche digitalen Produkte und Services sollen auf einer Plattform angeboten werden?
F2: Wie sollen digitalen Produkte und Services ausgestaltet werden?
H1: Provider etabliert Mechanismen wie z.B. kollaboratives Filtern und Abstimmungen, um Kunden in die Definition des Serviceportfolios einzubeziehen.
H2: Kundenpräferenzen und -bedürfnisse werden durch Analyse- und Feedbackmechanismen erfasst und in Servicedesign und Serviceentwicklung berücksichtigt.
H3: Provider stellt Mechanismen bereit, um Zusammenarbeit/Austausch von Entwicklern mit Kunden zu fördern, so dass Produkt- und Serviceentwicklung am Kundenbedürfnis orientiert werden kann.
Fallstudienbeispiel: Steam Greenlight.
4.2 Technologie Ziel: Technologie ist Enabler für digitale Kundeninteraktionen
F3: Wie kann Transparenz über eingesetzte Konsumententechnologie erhöht werden?
F4: Welche Mechanismen sind geeignet, um eine Plattform für eine Vielzahl von Konsumententechnologie-Konfigurationen zu öffnen?
F5: Wie kann Kompatibilität und Anpassungsfähigkeit der beteiligten technologischen Komponenten sichergestellt werden?
H4: Provider ergreift Maßnahmen, um bestehende und zukünftige Konsumententechnologien zu erfassen und zu verstehen, z.B. durch das Monitoring von Nutzer-/Kunden-Clients.
H5: Provider stellt durch Update-Mechanismen sicher, dass Kunden ihre Technologiekomponenten dauerhaft in Service-Interaktionen einbringen können.
H6: Provider gestaltet Technologiekomponenten wie z.B. Client-Software oder Apps so, dass ein großer Anteil relevanter Konsumententechnologie-Konfigurationen kompatibel untereinander bzw. mit der Plattform sind.
Fallstudienbeispiel: Automatisierte Patches und Updates, Hardware und Software Survey, Steam Client Software.
4.3 Soziale Strukturen Ziel: Vertrauen und Loyalität durch gemeinsame Werte und Normen
F6: Wie und mit welchen Instrumenten können Werte und Normen auf einer digitalen Plattform verankert werden?
F7: Wie kann ein Anbieter auf emergente Werte und Normen eingehen?
H7: Provider versteht die Verankerung von Werten und Normen in der Servicestrategie als ein Gestaltungselement der Digital Customer Experience.
H8: Provider nutzt verschiedene Instrumente, um Werte und Normen in Serviceinteraktionen zu verankern. Hierzu zählen z.B. Richtlinien, technologisch-analytische Maßnahmen und Kontrollmechanismen durch Kunden.
H9: Provider verfolgt im digitalen Austausch mit seinen Kunden aufmerksam bestehende und aufkommende soziale Praktiken und erkennt zugrundeliegende Kundenbedürfnisse, um Services danach zu entwickeln.
Fallstudienbeispiel: Anti-Cheat Funktionalität, Family Sharing.
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III.5 Illustration der Handlungsempfehlungen in Automobil-,
Unterhaltungs- und Versicherungsbranche
Die Umsetzung der erarbeiteten Handlungsempfehlungen wird nachfolgend anhand von
typischen Problemstellungen in drei Branchen beispielhaft diskutiert: Der Automobil-,
der Unterhaltungs- und der Versicherungsbranche. Grundsätzlich können die neun
Handlungsempfehlungen vollständig in unterschiedliche Anwendungsfelder übertragen
werden. Jedes der drei Beispiele zeigt für eine ausgewählte Gestaltungsebene wie auch
andere Branchen von den erfolgreichen Praktiken der Videospieleindustrie profitieren
können. In der Diskussion werden jeweils die relevanten Handlungsempfehlungen mit
den in Tabelle 1 dargestellten Abkürzungen (H1-H9) referenziert.
III.5.1 Das Auto als digitale Plattform
Digitalisierung ist derzeit das zentrale Thema der Automobilindustrie. Nahezu alle
großen Hersteller versuchen ihre Fahrzeuge als digitale Plattform zu etablieren, um
Kunden neue digitale Services anzubieten die über reine Fahrzeugmobilität
hinausgehen. Initiativen wie „Audi Connect“, „BMW Connected Drive“ oder
„Mercedes Me“ versprechen unter anderem digitale Services zur Fahrzeugsteuerung,
Routenführung, Versicherung, für Notfallsituationen oder zur Unterhaltung.
Verglichen mit dem traditionellen Serviceportfolio eines Automobilherstellers wird
schnell deutlich, dass die Auswahl und Ausarbeitung der angebotenen Services zu einer
wesentlichen Gestaltungsaufgabe wird. Zudem ist es unwahrscheinlich, dass
traditionelle Unternehmen wie Audi, BMW oder Mercedes die nötigen Entwicklungs-
und Produktionskapazitäten besitzen, um alle Services selbst zu entwickeln bzw.
anzubieten. Eine sinnvolle Strategie für sie wird es deshalb sein, sich als
Plattformanbieter zu etablieren und stark auf die ganzheitliche Gestaltung der Digital
Customer Experience zu fokussieren.
Automobilhersteller können auf der Gestaltungsebene der Services von der
Videospielindustrie lernen. Entsprechend sollten Kunden aktiv in Auswahl und
Ausarbeitung der angebotenen Services eingebunden werden. Denkbar wäre es zum
Beispiel, Mechanismen zu implementieren, durch die Hersteller und Drittparteien ihre
Services vorstellen und Kunden über die Weiterentwicklung mitbestimmen oder sich
als Testnutzer anmelden können (vgl. H1, H2). Darüber hinaus ist die Sammlung und
Analyse von Service-Nutzungsdaten ratsam, da diese eine wertvolle Informationsquelle
60 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
über die tatsächliche Nutzung und damit die Relevanz der angebotenen Services darstellt
(H3).
III.5.2 TV Streaming auf Smart TV, mobile Geräte und Spielekonsolen
TV- und Radioinhalte werden zunehmend digital übertragen und Anbieter wie Zattoo,
Amazon oder Netflix haben sich darauf spezialisiert, Inhalte ausschließlich über das
Internet zu senden. Der Unterschied zu traditionellem Radio und Fernsehen liegt jedoch
nicht nur im Übertragungsmedium, sondern auch in der Vielzahl relevanter
Konsumententechnologien wie Smart TVs, mobile Geräte und Spielekonsolen. Hinzu
kommen neue Services wie digitales Ausleihen von Medieninhalten oder Video on
Demand.
Streaming Anbieter sollten die Gestaltung der Technologieebene als Voraussetzung für
digitale Kundeninteraktionen verstehen und besonders Konsumententechnologien als
wichtigen Einflussfaktor der Digital Customer Experience erkennen. Die in der
Fallstudie identifizierten Handlungsempfehlungen zeigen auf, wie Provider
Konsumentenendgeräte beobachten und beeinflussen können und sind auf den Kontext
von TV-Streaming unmittelbar anwendbar. Streaming Anbieter sollten die Architektur
ihrer Plattformen, insbesondere Clients und Apps, die auf Konsumentengeräten
installiert werden, mit entsprechenden Monitoring-Funktionalitäten ausstatten (H4). So
sind Informationen wie z.B. Bildschirmauflösung, tatsächliche
Datenübertragungsbandbreite und Latenzzeiten, aber auch Modellinformationen oder
Betriebssysteme kritisch für die Übertragung von Medieninhalten. Streaming
Dienstleister sind nicht nur wandelnden Kundenanforderungen an Services unterworfen,
sondern müssen sich auch auf verändernde technische Anforderungen und
Möglichkeiten auf Kundenseite einstellen. Ein Beispiel hierfür ist die Veränderung von
Bildschirmauflösungen von HD zu Full HD und derzeit 4K. Serviceanbieter sollten
neben der Erfassung also auch entsprechende Funktionalitäten zur
Softwareaktualisierung und auch zur Dokumentation von auftretenden Fehlern
implementieren, um z.B. Inkompatibilitäten von Service und eingesetzter Technologie
zu identifizieren bzw. zu beheben (H5, H6).
III.5.3 Die Plattform eines Versicherungsunternehmens für die Vermittlung von
Autoreparaturen
Die Kundeninteraktion in der Versicherungsindustrie verschiebt sich von Offline- zu
Onlinekanälen. Dementsprechend sind viele Interaktionen mit Versicherungen heute
schon vollständig digital möglich. Darüber hinaus besteht ein hoher Druck auf
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Versicherungen neue Services zu entwickeln, die über das traditionelle
Leistungsangebot hinausgehen.
Exemplarisch für diese Entwicklung steht die digitale Plattform einer Versicherung,
welche Reparaturen zwischen Autofahrern und Werkstätten vermittelt. Kunden
spezifizieren bestimmte Reparatur- oder Wartungsaufgaben und Autowerkstätten
können auf dieser Basis ein Angebot für die entsprechende Arbeit erstellen. Kunden
können dann eines der Angebote auswählen und die Werkstatt mit der Arbeit
beauftragen. Eine wesentliche Herausforderung in dem Kontext ist die Schaffung von
Vertrauen in Preisgestaltung und Qualität der zu erbringenden Serviceleistung. Diese
sind ex-ante, also vor einer Reparatur, für Kunden kaum oder gar nicht einschätzbar.
Dies birgt stets das Risiko für eine negative Kundenerfahrung, z.B. durch höhere als
ursprünglich angegebene Kosten, unvorhergesehene Aufwendungen oder schlecht
durchgeführte Reparaturen. Eine negative Kundenerfahrung schadet nicht nur dem
eigentlichen Serviceerbringer (der Werkstatt), sondern auch der Reputation des
Plattformanbieters.
Anbieter solcher digitalen Plattformen können aus dem dargestellten Fallbeispiel aus
der Spieleindustrie nützliche Erkenntnisse für die Gestaltung sozialer Strukturen
gewinnen. Zum einen sollten Anbieter Werte wie Zuverlässigkeit und Transparenz
bezogen auf Preis- und Servicequalität als wichtige Gestaltungskomponente in der
Servicestrategie definieren (H7). Hierfür bietet sich z.B. ein Bewertungssystem an.
Weiterhin sollte der Plattformanbieter mit geeigneten Instrumenten Werte und Normen
in den Serviceinteraktionen verankern (H8). Analog zur Anti-Cheat-Funktionalität bei
Steam wären mögliche Maßnahmen z.B. die Einführung einer Richtlinie, in der sich
Werkstätten beispielsweise dazu verpflichten, Kunden keine unverhältnismäßigen oder
marktunüblichen Offerten einzugeben. Eine datenorientierte Maßnahme wäre z.B. die
Erfassung von Angebotsdaten, insbesondere Preis und Umfang der angebotenen
Reparatur und ex-post die Erfassung und Berechnung der Preistreue der Werkstatt.
Schließlich ist auch ein System denkbar, mit dem Kunden gebuchte Werkstätten
bewerten oder negative Serviceinteraktionen melden können. Darüber hinaus sollte der
Plattformanbieter den Austausch mit seinen Kunden in Chats, Telefonaten oder auch
Befragungen suchen und aufmerksam für geäußerte Bedürfnisse oder
vertrauensverhindernde Funktionalitäten sein, um entsprechende Instrumente der
Wertverankerung zielgerichtet implementieren zu können (H9).
62 Part B: What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
III.6 Zusammenfassung und Ausblick
In diesem Artikel wurde ein sozio-technischer Rahmen vorgestellt, mit dem
Plattformanbieter drei Gestaltungsebenen der Digital Customer Experience analysieren
und planen können. Die Spieleplattform Steam wurde mit der Fallstudienmethode
untersucht, sodass Handlungsempfehlungen zur Gestaltung der Digital Customer
Experience abgeleitet werden konnten. Die Anwendung der Handlungsempfehlungen
wurden anschließend im Kontext von Automobilbranche, TV-Streaming Anbietern und
anhand einer Plattform für Autoreparaturen beispielhaft diskutiert.
Die Ergebnisse der Arbeit richten sich an verantwortliche Entscheider im IT-Service-
Development und IT-Service-Design, IT-Strategen und Business Architekten, die ihre
Informationssysteme und digitalen Plattformen in Hinblick auf die Gestaltung der
Digital Customer Experience entwickeln und bewerten wollen. Erstens zeigen die
erarbeiteten inhaltlichen Erkenntnisse erprobte Möglichkeiten auf, die Digital Customer
Experience erfolgreich zu gestalten. Sie folgen aus der Fallstudie und stellen eine gute
Grundlage für die Übertragung in weitere Unternehmenskontexte dar. Zweitens liefern
die vorgestellten Gestaltungsebenen einen Rahmen zur Strukturierung. Im Rahmen der
Fallstudie hat sich zum Beispiel gezeigt, dass insbesondere die Gestaltung der sozialen
Ebene, d.h. „Werte und Normen“, häufig vernachlässigt wird und größere
Aufmerksamkeit erfordert. Das Modell kann die Analyse und Planung der eigenen
Digital Customer Experience unterstützen, da es die Aufmerksamkeit des Entscheiders
nicht nur auf service- und technologiebezogene Fragestellungen lenkt, sondern auch die
Gestaltung digitaler sozialer Interaktionen hinterfragt.
III.7 Danksagung
Der Autor dankt dem AXA Research Fund Paris für die Förderung dieser Arbeit im Rahmen des Förderungsprogramms Joint Research Initiative Agile Application Management.
Part B: Service Innovation in Social Networking Services 63
IV Service Innovation in Social Networking Services: A
Resource Integration Perspective on Facebook
Table 13. Bibliographic information for Article IV
Title Service Innovation in Social Networking Services: A Resource Integration Perspective on Facebook
Authors Benjamin Spottke, Alexander Eck, Jochen Wulf
Outlet Research aiming at a paper in a top IS journal (e.g., Information Systems Journal)
Year 2018
Status Working paper (IWI-HSG)
Abstract. This paper explores how Facebook, the world’s largest and most successful
social networking service (SNS) provider, and its consumers generated service
innovations through resource integration. While prior research emphasizes the
importance of third-party developers, little is known about how consumers and their
resources are leveraged for generating service innovations in SNS. To this end, this
paper proposes the resource integration model as a theoretical framework that is rooted
in service-dominant logic, and that conceptualizes resource integration as the process
underlying service innovation. We apply the model to an explorative, interpretive case
study of Facebook with a detailed analysis of 51 service innovations generated between
2004 and 2017. Our analysis uncovered three service innovation mechanisms: data-
driven innovation, technology propulsion, and social debugging. Each mechanism
provides insights about the resources and resource integration dynamics of consumer
and provider, and how these have been generative of service innovations. Our findings
suggest that service innovation in SNS relies significantly on the provider’s ability to
successfully engage, facilitate, and leverage the resources and resource integration of
consumers. While the mechanisms can be used to examine service innovations in
specific contexts, the model can be specialized for studying diverse aspects of service
innovation and resource integration, which we exemplified by blending the socio-
technical framework into the case analysis. Our research offers a novel perspective on
service innovation and enhances previous research on SNS, as well as service innovation
in the digital age.
Key words: service innovation, digital innovation, social networking services, service-
dominant logic, Facebook, case study, mechanism
64 Part B: Service Innovation in Social Networking Services
IV.1 Introduction
Over the past decade, we have witnessed the proliferation of social networking services
(SNS) into everyday life. Consumers engage deeply and voluntarily with these services
by sharing private and public messages, photos, videos and other content (Sas et al.
2009). SNS attract billions of consumers who network and communicate with friends
and organizations. SNS providers generate profits from online advertising, based on
their in-depth knowledge of consumers’ preferences, worldviews, and technological
abilities (Gnyawali et al. 2010). While some SNS have continued to thrive over the
years, e.g., Facebook, Twitter, and YouTube, to name a few, others have forfeited
consumers’ interest, e.g., Myspace or Friendster, and eventually sunk into oblivion. SNS
providers’ insatiable hunger for growth and consumer attention, combined with a highly
competitive environment, makes service innovation a strategic imperative and
continuous obligation (Gnyawali et al. 2010).
At the same time, research on service innovation underwent a fundamental paradigmatic
shift in the digital age. Service innovation is less often viewed as the result of a single
firm that generates new offerings. Increasingly, it is understood as a collaborative
process, in which actors within an ecosystem contribute and integrate their resources to
produce something valuable (Grönroos 2008; Payne et al. 2008; Prahalad and
Ramaswamy 2004; Vargo and Lusch 2004, 2008). To this end, we adopt service-
dominant (S-D) logic and refer to service innovation as the “rebundling of diverse
resources that create novel resources that are beneficial (i.e., value experiencing) to
some actors in a given context” (Lusch and Nambisan 2015, p. 161). Consistent with
this definition, we refer to resources as anything an actor can draw on for support, e.g.,
knowledge and skills, or other physical and digital resources (Vargo and Lusch 2004).
While service innovation can be viewed from different theoretical angles (cf. Barrett et
al. 2015), S-D logic offers a conceptual foundation that centralizes on actors and
resource integration, which represents the very process of value cocreation and service
innovation (Lusch and Nambisan 2015, p. 168).
To date, there is a paucity of empirically grounded, theoretical knowledge that explains
how providers and consumers integrate their resources to generate service innovations.
Prior research has theorized how digital technologies are generative of product and
service innovations based on the recombination of resources (Yoo et al. 2012), and how
digital infrastructures are generative of innovation by enhancing availability of
resources to diverse actors (Henfridsson and Bygstad 2013; Tilson et al. 2010). The
scholarly discourse on platform ecosystems (Tiwana et al. 2010) focuses on how skilled
Part B: Service Innovation in Social Networking Services 65
third-party developers can be leveraged to generate innovations (Eaton et al. 2015;
Ghazawneh and Henfridsson 2013). Recent IS publications have empirically studied
service innovation and value cocreation in the context of enterprise systems (Ceccagnoli
et al. 2012; Lempinen and Rajala 2014; Sarker et al. 2012), inter-organizational IS (Rai
et al. 2012), and innovation alliances between firms (Han et al. 2012). These
publications suggest the importance of resource integration for service innovation. They
focus, however, on B2B environments and do not consider resource integration of
consumers. That is, little research has explicitly focused on how service innovations are
generated through resource integration, and in particular how consumers’ resource
integration is linked to it.
In SNS consumers contribute not only operational capacity and skills, but also social
and technical resources (Singaraju et al. 2016). Consumers’ role in service innovation
is also likely to be more subtle, as opposed to third party developers who invent new
applications or features. When consumers interact with SNS features, they often create
new resources, in particular data, knowledge, and skills, that can be drawn on to generate
service innovations. For example, consumers create personal data and content (Alaimo
and Kallinikos 2017; Zeng and Wei 2013), which has recently been labelled as the “most
valuable resource in the world” (The Economist 2017). Consumers also operate personal
information technology (Baskerville 2011; Yoo 2010) which, together with consumers’
operational capacity, represent resources upon which novel services can be developed.
Above all, consumers’ activities might not simply be regarded as operational, technical
resources; they also enact values and norms which contribute to the social structure
underlying collaborative relationships (Wagner and Majchrzak 2006). Consumers might
not be willing to provide their resources under all circumstances, as regular outcries
about data use, personal privacy and privacy controls in SNS suggest (Cavusoglu et al.
2016; Hoadley et al. 2010; TechCrunch 2009). Few studies account for the social and
technical resources of consumers (Arnould et al. 2006; Baron and Harris 2008;
Baskerville 2011), and research on SNS innovation emphasizes the role of SNS provider
and third-party developers (Gnyawali et al. 2010). As a result, consumer resources and
resource integration have not been linked to the generation of service innovations in
SNS. This is surprising, since SNS innovations are primarily targeted at consumers, and
conversely, the resources generated by consumers are essential for the generation of
innovations in SNS.
To address these challenges, the objective of this research is to develop an empirically
based understanding of service innovation in SNS, with a particular focus on how
66 Part B: Service Innovation in Social Networking Services
consumer and provider integrate their resources to generate service innovations. To
frame our work, we pose the following research question: How do provider and
consumers integrate their respective resources in social networking services to generate
service innovations?
We attempt to accomplish the research objective through an explorative, interpretive
case study design in the context of Facebook, the world’s largest and most successful
SNS. Facebook has a track record of service innovations and exhibits resource
integration with consumers in an extreme fashion. To capture the interactions between
consumer and provider, we propose a resource integration model that is rooted in S-D
logic (Vargo and Lusch 2004, 2008). We further employ socio-technical system theory
as a structuring framework to categorize service innovations, and accordingly, the
involved resources of consumer and provider. On this conceptual basis, we trace
Facebook’s service innovations history, analyze the involved consumer and provider
resources, and identify the resource integration processes by which service innovations
were generated in the case context. Following a process of gradual abstraction and
generalization, we identify three service innovation mechanisms, namely data-driven
innovation, technology propulsion, and social debugging. We comprehend these
mechanisms as causal structures by which consumers and provider generate service
innovations.
This article provides four contributions. First, it provides a empirically grounded,
theoretical understanding of how resource integration is generative of service
innovation. Second, it accounts for consumer resources involved in the generation of
service innovation. Thereby, we complement studies that focus on how third-party
developers generate service innovations in platform ecosystems. Third, by blending the
socio-technical framework into the model, we develop three mechanisms that add a
refined and nuanced understanding of service innovation that adds to the SNS literature.
Finally, the findings contribute to research on digital innovation and digital ecosystems
by specifying resources essential for innovating digital services for consumers. In this
regard, we respond to Lusch and Nambisan (2015) who indicated the need for
mechanisms that support the respective roles and processes related to resource
integration, as well as other IS scholars who call for more grounded research on service
innovation in the digital age (Barrett et al. 2015; Nambisan et al. 2017).
This article is organized as follows. First, we discuss related work on service innovation
and resource integration with a particular focus on SNS. We then synthesize a resource
integration model from the literature which summarizes our literature-based
Part B: Service Innovation in Social Networking Services 67
understanding to guide our empirical investigation. This is followed by a presentation
of Facebook, the selected case, and a discussion of the methodology employed in this
study. Based on our findings from data analysis, we present three mechanisms that
explain how service innovations are generated through resource integration in SNS. The
paper concludes with a discussion of findings, a reflection on contributions, limitations,
and an outlook on future research.
IV.2 Related research and conceptual basis
IV.2.1 Service innovation and resource integration
There is little doubt that information and communication technologies have a substantial
role as resources in service innovation (Barrett et al. 2015; Vargo and Lusch 2004,
2008). Prior research has theorized how digital technologies, which separate digital
content (e.g., data and information) from its physical medium (Yoo et al. 2010), enable
the generation of innovations based on the recombination of digital resources (Yoo et
al. 2012). IS researchers have also focused on digital infrastructures, which enhance the
availability of digital resources to the actors involved in service innovation (Henfridsson
and Bygstad 2013; Tilson et al. 2010). Attention has also been paid to the design and
development of platform ecosystems (Tiwana et al. 2010), and associated with it, the
capacity to leverage third-parties for service innovation through the management of
boundary resources (Eaton et al. 2015; Ghazawneh and Henfridsson 2013). In this
regard, extant IS research on service innovation theorizes on the organization of actors,
in particular platform owners and third party developers, as well as the digital
infrastructures and digital platforms, which enable the generation of service innovations.
Recent publications underlined the need for novel theorizing on service innovation in
the digital age (Barrett et al. 2015; Lusch and Nambisan 2015; Nambisan et al. 2017).
For example, Nambisan et al. (2017) notice more distributed and shifting agency in
innovation processes, because digital innovations occur increasingly through emergent
and dynamic processes which involve multiple actors (cf. Zittrain 2006; Zittrain 2008).
Innovation processes in the digital world are also less bounded in terms of time and
space (Nambisan et al. 2017). For example, the generation and availability of data
resources, combined with analytical capacity of an actor can create a plethora of
innovation opportunities (cf. Huang et al. (2016) for an example). This makes it difficult
to determine as to when a particular innovation process phase starts and/or ends
(Nambisan et al. 2017, p. 225).
68 Part B: Service Innovation in Social Networking Services
In their recent synthesis of the literature, Lusch and Nambisan (2015) offered a
broadened view of service innovation in the digital age, which is grounded in S-D logic.
S-D logic originates in marketing and service research and re-conceptualizes service as
the basis of all social and economic exchange (Vargo and Lusch 2004, 2008, 2016).
Service is defined as the “application of specialized competences (knowledge and skills)
through deeds, processes, and performances for the benefit of another actor or the actor
itself” (Vargo and Lusch 2004, p. 2). In that regard, service refers to the application of
resources (e.g., knowledge and skill) to create something beneficial for and in
conjunction with other actors (Vargo and Lusch 2008). S-D logic differentiates between
operant and operand resources. Key to the performance and exchange of services are
operant resources, e.g., knowledge and skills, which are capable of acting upon other
resources. Operand resources are passive and tangible resources upon which an act is
performed to produce something (Vargo and Lusch 2008). S-D logic regards all actors
as resource integrators (Vargo and Lusch 2004, 2008, 2016). This means, the process of
integrating resources is not only performed by a provider, but also by the beneficiary,
e.g., a consumer. In that sense, value is a result of reciprocal service exchange and based
on the resource integration of diverse actors with different roles (Grönroos and Voima
2013; Prahalad and Ramaswamy 2004; Vargo and Lusch 2004, 2008). Löbler and Lusch
(2014) provide a practical example of how a word processing software can be seen from
a service perspective. A software programmer applies his skills and knowledge (operant
resources) to generate the software (operand resource). Then, a user employs her skills
(operant resources) to use the program (operand resource), thereby generating value in
her context. From this example, it becomes clear, that services are not only exchanged
through direct interactions, but also indirectly, through operand resources, which are
conceived as distribution mechanisms (Vargo and Lusch 2004). In this regard, we define
resources that serve as the interface through which resource integration activities of
consumer and provider are mediated as interfacing operand resources. This is
particularly relevant for conceptualizing resource integration in digital services where
interactions occur through interfacing websites, software applications, or more general,
data and technology.
IV.2.2 Service innovation in social networking services
Previous research in the marketing, strategic management and the IS discipline
demonstrated the importance of service innovations in SNS (Aral et al. 2013; Gnyawali
et al. 2010; Singaraju et al. 2016). In their empirical study of 52 SNS, Gnyawali et al.
(2010) showed that providers continuously engage with consumers and third-parties to
Part B: Service Innovation in Social Networking Services 69
develop and release new features. The generation of new features represents the primary
activity of SNS providers to attract and retain users, and to stay competitive in their
market (Gnyawali et al. 2010). Following the S-D logic perspective, we conceive service
innovation in SNS as the rebundling of resources, created through resource integration
of consumer and provider. For example, consumers draw on SNS features and apply
their knowledge and skills when using it. During this activity, new data is produced that
the provider can draw on when producing a new or change an existing feature that is
then made available to consumers.
Extant research on SNS focused on the generation of social data and content by
consumers (Alaimo and Kallinikos 2017; Zeng and Wei 2013). Other studies
highlighted conditions under which consumers’ self-disclose personal information
(Chen and Sharma 2013; Tow et al. 2010), for which privacy features play a particular
role (Cavusoglu et al. 2016). Another nascent stream of research focuses on consumers’
motivation, adoption and (discontinued) use of social networks (Cheung et al. 2011;
Maier et al. 2015; Ross et al. 2009). Some publications centralized on how value is
cocreated by multiple actors (Singaraju et al. 2016), and how it might be monetized by
firms through novel revenue and business models (Enders et al. 2008; Ketonen-Oksi et
al. 2016). Very few publications provide knowledge about how new features are
developed. Such publications have remained either conceptual (Xiao and Wang 2014),
or reported on the internal processes of an SNS provider from an practitioner viewpoint
(Feitelson et al. 2013).
To date, there is a paucity of empirically grounded, theoretical knowledge that explains
how provider and consumers integrate their resources in SNS to generate service
innovations. We contend that the reciprocity and relatedness of service exchange and
resource integration, as underlined in S-D logic (Vargo and Lusch 2004, 2008), is not
explicated in the literature. By drawing on the S-T framework we explicitly account for
the social and technical resources that consumer and provider possess, which we explain
in the next section, together with the theoretical model that guided this research. The
objective of our research is then to identify and understand the causal structures, i.e.,
mechanisms, by which consumer and provider generate service innovations through
resource integration.
IV.2.3 The model of resource integration in social networking services
We propose a model of resource integration to explore mechanisms by which service
innovations are generated in SNS. Even though the importance of service innovations
70 Part B: Service Innovation in Social Networking Services
has been highlighted in prior SNS research (Aral et al. 2013; Gnyawali et al. 2010;
Singaraju et al. 2016), little attention has been paid to how resource integration of
consumer and provider is generative of service innovations. We contend that not only
the provider, but also consumers contribute resources that are essential for service
innovation.
Service innovation: The “rebundling of diverse resources that create novel resources that are beneficial (i.e., value experiencing) to some actors in a given context” (Lusch and Nambisan 2015, p. 161).
Resource integration: The processes and activities in which involved actors (e.g., consumers and poviders) employ their resources to co-create value and to generate service innovations.
Interfacing operand resources: Resources upon which an act is performed to produce an effect (Vargo and Lusch 2008) and which serve as the interface through which resource integration activities of consumer and provider are mediated (Vargo and Lusch 2004, 2008).
Operant resources: Resources that are capable of acting upon other resources to create value (Vargo and Lusch 2008). These types of resources are often intangible and active and therefore appear as actors or initiators (Lusch and Nambisan 2015).
Figure 8. Resource integration model and main theoretical constructs
Figure 8 provides definitions of the main theoretical constructs and their relationships
within the resource integration model. The model depicts resource integration as a
process in which each actor draws on interfacing operand resources to which he applies
operant resources, to produce some effect upon the interfacing operand resource. The
symmetry of the model reflects a fundamental premise of S-D logic, i.e., all actors are
resource integrators (Vargo and Lusch 2008), but does not suggest that the actors are
identical. Instead, provider and consumer perform different resource integration
activities, based on their distinct resource base.
Part B: Service Innovation in Social Networking Services 71
Against this background, we view, consistent with Lusch and Nambisan (2015, p. 168),
the activities underlying resource integration as the very process of (value cocreation
and) service innovation. Service innovation refers to the process of rebundling resources
to create novel resources. Novel resources then create new opportunities for resource
integration. The rebundling process itself, however, also occurs through resource
integration, which accords with Löbler and Lusch (2014, p. 7), who underline that “when
actors integrate resources, they often arrive at novel combinations that result in
innovative ways of doing.” That is, resource integration reflects the process by which
actors produce new resources, e.g., a new feature, that other actors can then draw on to
generate value (by integrating their resources). It is important to note that rebundling
involves diverse competences and capabilities, which we view, consistent with
Madhavaram and Hunt (2008, p. 69), as operant resources. This conceptualization of
service innovation, as a result of rebundling resources through resource integration, is
grounded in S-D logic and directs our attention at the interfacing operand resources, as
well as the operant resources of consumer and provider.
Interfacing operand resources mediate the resource integration of consumer and
provider. As such, the consumer makes use of resources generated by the provider, and
vice versa, the provider make use of resources generated by the consumer. To explore
service innovation in SNS, we contend that (new) features represent interfacing operand
resources that enable (new) social networking activities. This view is consistent with
prior publications that regard features, e.g., a personal profile, online groups, comments,
or features for sharing user created content and managing personal privacy as the
constitutive building blocks of SNS (Aral et al. 2013; Cavusoglu et al. 2016; Kietzmann
et al. 2011; Kim et al. 2010; Turel et al. 2010). While new features are typically
generated through the rebundling activities of the provider, we argue that consumers
also provide resources that contribute to the generation of service innovations. For
example, when consumers integrate resources they generate vast amounts and varieties
of data and user generated content (Alaimo and Kallinikos 2017; Zeng and Wei 2013),
and they provide personal information and communication technology (Baskerville
2011) that mediate consumers’ resource integration (Baron and Harris 2008). That is,
data and consumer technology also represent interfacing operand resources provided for
using and innovating (new) features.
Operant resources are capable of acting upon other resources to produce an effect
(Vargo and Lusch 2008). These resources are often intangible and active and therefore
appear as actors or initiators in resource integration (Vargo and Lusch 2008). Operant
72 Part B: Service Innovation in Social Networking Services
resources hold transformational capacity and ultimately, are essential for creating new
resources (Madhavaram and Hunt 2008; Moeller et al. 2013). Typical operant resources
are human beings with their specialized skills and knowledge, including the knowledge
to operate technology, as well as physical and mental skills (Lusch and Nambisan 2015).
In SNS, operant resources include the knowledge, skills, and competences that
consumer and provider possess and integrate with other resources. Extant literature has
suggested that consumers, for example, integrate not only physical and material, but also
social, cultural and physical operant resources such as relationships, sensimotor
endowment, energy, and knowledge about shared values and beliefs (Arnould et al.
2006; Baron and Harris 2008). Similarly, Maglio and Spohrer (2008) distinguish people,
technology, organizations, and information as four resource categories, and emphasize
the importance of socially constructed resources, e.g., relationships, identity and
reputation (Spohrer and Maglio 2010, p. 159). With regard to the resource integration
model and the study of service innovation in SNS, operant resources are broadly
conceptualized and sensitize this research on the knowledge, skills, and competences of
consumer and provider, involved in the generation of interfacing operand resources.
Social networking services are socio-technical systems. They offer a variety of social
activities that are enabled by information and communication technology. We therefore
adopt socio-technical (S-T) system theory (Bostrom and Heinen 1977) as a reference
framework to structure our analysis of how consumer and provider integrate their social
and technical resources to generate service innovations.
The S-T framework is an appropriate meta-framework for our purpose. It provides a
comprehensive foundation to describe socio-technical systems which is simple,
extensive, sufficiently well defined, anchored in extant theory, and it can be easily
extended with other categories to obtain richer vocabulary (Lyytinen and Newman
2008). The S-T framework extends the conceptualization of resources by providing
distinct lenses onto the phenomenon of interest.
The S-T framework recognizes four constitutive social and technical components, i.e.,
actor, task, technology, and structure (Hester 2014). Actor refers to the participants that
are involved in the system and that carry out and influence the work. Task refers to the
goals and activities of a system, and the way information is processed.
Technology refers to the hardware and software components that are used to process
information. Structure refers to systems of authority, workflow and communication, and
includes the normative and behavioral dimension of values, norms and role expectations
(Hester 2014; Lyytinen and Newman 2008).
Part B: Service Innovation in Social Networking Services 73
This paper focuses on consumer and provider as two resource-integrating actors. Their
resource integration is essential to the generation and analysis of service innovations,
and thus their activities are ingrained in the resource integration model. We employ the
remaining three S-T components, i.e., task, technology and structure as three distinct
lenses to flesh out the “center of gravity” of each service innovation. Accordingly, we
distinguish service innovations as task-centered, technology-centered, and structure-
centered.
In task-centered service innovations, interfacing operand resources are generated to
support new, or altered social networking activities, and the way how information is
processed and displayed. This applies, for example, to features that innovate the news
displayed to consumers, or how consumers can interact with news from their personal
network. This still involves actors (who perform a task), enabling technology, and social
structure, but the task is central to this perspective. In technology-centered service
innovations, interfacing operand resources are generated on the basis of new or altered
technology resources. For example, service innovations that leverage the emergence of
smartphones or virtual reality technology, fall into this category. This still involves
actors who perform a task, as well as social structure, but the technology is central to
this perspective. In structure-centered service innovations, interfacing operand resources
are generated that support new ways to govern interactions within the SNS, based on
norms, values, or expectations of involved actors. For example, privacy and security
features, or the implementation of group features, fall into this category. This still
involves actors who perform a task, enabling technology, but social structure is central
to this perspective.
The resource integration model provides a genuine theoretical frame and potentially a
useful vocabulary to address our research objective. It should be noted, however, that
the objective was not to establish and deductively test a theoretical framework, but to
enhance our theoretical understanding, and to sensitize our data collection and
subsequent analysis.
IV.3 Methodology
IV.3.1 Research design
The objective of this research is to develop an empirically based understanding of
resource integration, and to explore how resource integration of SNS consumer and
provider is linked to the generation of service innovations. To this end, we adopted a S-
74 Part B: Service Innovation in Social Networking Services
D logic perspective for studying resource integration and service innovation in the case
of Facebook.
We performed case study research (George and Bennett 2005; Gerring 2017; Klein and
Myers 1999) that involved the collection and analysis of qualitative data covering the
period from Facebook’s inception in 2004 until 2017. Based on multiple data sources,
we adopted Corbin and Strauss' (2014) approach for qualitative data analysis to
concretize consumer and provider resources, and to make sense of their resource
integration activities. Following a process of gradual generalization we establish three
service innovation mechanisms that rely on resource integration of consumer and
provider.
On the basis of the resource integration model, we view novel SNS features, i.e.,
interfacing operand resources, as the natural starting point of our case analysis. Viewing
SNS features as novel resources that result from resource integration has three
advantages for our study: First, features are visible and systematically identifiable. A
social networking page, for example, can be broken down into individual features, e.g.,
a profile picture, name and status information, personal posts, etc. This is a particularly
useful characteristic, because it directs our attention on consumers’ interaction with the
SNS (Aral et al. 2013, p. 5), and it allows us to evaluate the integrated consumer
resources involved in the feature. Second, features are functionally identical across the
consumer base. Although individual consumers use different subsets of features, the
basic functionality of a feature is stable between consumers. Finally, much of the
published information on service innovation in SNS reports on new features, how they
were intended by the provider, and how they were perceived by consumers. This helps
to identify the resources and resource integration activites of the provider involved in
the feature.
IV.3.2 Case selection
With the selection of Facebook as the single case of our empricial investigation we
follow an extreme case selection strategy. This strategy is useful for theory building,
because extreme cases are information rich and represent a paradigmatic manifestation
of the phenomenon of interest (Gerring 2017). Facebook is suitable for this type of
theorizing for three main reasons. First, Facebook exhibits an extreme case of ever-
present resource integration of an SNS provider and the involved consumers. In fact,
without consumers’ application of services and resources, Facebook would effectively
not produce any value. Second, Facebook has an exceptionally successful history of
Part B: Service Innovation in Social Networking Services 75
generating service innovations, which documents how the social network transitioned
from a simple website intended to connect college students, to the world’s largest SNS.
Today, Facebook consists of numerous, well-crafted features that are used by billions
of consumers every day. Third, the selection of Facebook was favored due to the rich
information that can be obtained about the case context. Facebook receives extensive
media coverage and releases information on new and existing features frequently. The
amount of publicly available information is well-suited to triangulate data sources and
to reflect the perspectives of different actors. Furthermore, sufficient historical data is
available to study the case over time, thereby making this detailed study possible.
IV.3.3 Data collection and analysis
In this study, three researchers engaged in collecting data from multiple sources, thereby
ensuring consistency of the process and limiting the risk of bias. While most data was
obtained from secondary sources, we collected first hand insights from studying and
analyzing Facebook’s website. This provided us with the opportunity to continuously
validate our understanding of Facebook’s overall structure and features in its real-world
setting. This approach was particularly useful for linking insights about Facebook’s
features and its development directly to the interfacing operand resource, which is the
locus where consumer and provider engage in resource integration.
It should be noted, that we performed data collection and analysis in the sense of a
hermeneutic process that involved going back and forth between sensemaking by the
researchers and the subsequent, iterative gathering of data (Klein and Myers 1999). This
data collection process allowed us to build a rich historical database of features and
events through which we could assess the case context, and resource integration
processes that laid the ground for generating service innovations. This contextualization
was an important step in the interpretation of collected data (Klein and Myers 1999).
Our research was informed by five data sources. The data sources included (1)
Facebook’s press releases and announcements; (2) Facebook’s communication to
investors and external developers; (3) an extensive engagement and review of the SNS
by the researchers; (4) online articles; and (5) several filings of the US Federal Trade
Commission.
First, we reviewed press releases and announcements that were published in the
“Facebook Newsroom” between February 2004 and April 2017 (Facebook 2007). This
source is directed at consumers and the general public. Besides publishing company
information and statistics, it provides extensive coverage of service-related news and
76 Part B: Service Innovation in Social Networking Services
events, and Facebook in general. For example, the “Products” page explains key features
such as profile, newsfeed, photo and video. Another source for our study was
Facebook’s “History” page which documents the implementation of new features with
a detailed description in chronological order. One important objective of collecting this
extensive amount of data was to elaborate a chronology of service innovations that
served as backbone for further data collection and to structure our analysis.
Second, we collected documentation that Facebook provides to investors and third-
party developers. For example, annual and quarterly reports document financial metrics
and give insights about Facebook’s current and future service strategy. We also collected
data from the “Facebook Developer Blog”, presentations of Facebook’s annual
developer conference “F8”, as well as developer policies, guidelines, and tools
documentation. Our objective was to attain a comprehensive understanding of the case
context, and to thoroughly document how Facebook approaches the development of new
features. For example, we found several video presentations in which Facebook
representatives explain the design process for new features, how Facebook approaches
new technologies, e.g., photo and video (Facebook 2017b), and how features like the
newsfeed and reactions have been developed (Facebook 2017c, 2017d).
Third, we collected data by engaging with Facebook’s social networking service. We
used an existing consumer account to review how consumers can use specific features.
For example, activities such as publishing a profile picture, or posting messages and
photos on a profile, and interacting with the newsfeed through reading, liking, reporting
or sharing are activities that are frequently performed by consumers. Our goal was to
document how the service and its most essential features function from a consumer
perspective. We also collected information from service descriptions and help sections
that explain how features work. By carefully studying the interfacing operand resources
through which consumer and provider interact, we enhanced our understanding about
what resources consumers are expected to integrate.
Fourth, we collected over 130 online articles from respected news outlets, including The
Economist, Wall Street Journal, Forbes; major technology news websites, e.g.,
TechCrunch.com, Hacker News, Wired, Crunchbase, as well as other blogs and
websites. These articles further contributed to a comprehensive understanding of the
case context and were particularly useful to provide different interpretations of key
events and features. This data supported us in identifying features that consumers
strongly resonate with. For example, consumers spend most of their time on Facebook
with photo and video functionality and newsfeed interactions. Similarly, many articles
Part B: Service Innovation in Social Networking Services 77
discussed privacy and security related questions, and have frequently criticized
Facebook for their use of consumer data. A strength of this data source was access to
experts. While Facebook does not publicly explain many details of how their most
important algorithms work, several technology outlets had the chance to speak with
Facebook employees and subject matter experts to obtain insights that otherwise would
have been impossible to gather. For example, TechCrunch regularly updates a report
that provides detailed insights about how the newsfeed algorithm works, e.g., which
parameters are incorporated to calculate the personal relevance of news stories for
consumers (TechCrunch 2016). The supporting data has been collected during
interviews with Facebook employees and was a valuable source for our interpretation of
specific, highly relevant features.
Lastly, we collected several complaints against Facebook that were filed by the US
Federal Trade Commission. This data sensitized us for the importance of privacy and
security in the context of Facebook. The publication and utilization of consumers’
personal data proved to be highly relevant for generating service innovations that
changed how social interactions were governed.
The combination of these data sources, including our in-depth engagement with
Facebook’s social networking features allowed us to gain a comprehensive
understanding of the case. We continued with data collection until we could
comprehensively describe the SNS. Another criterion for ending data collection was
when collected data consistently repeated.
We adopted Corbin and Strauss' (2014) approach for qualitative data analysis to study
the collected materials. This method provides a systematic approach to analyzing the
comprehensive, interesting, and historical data existing on the Facebook case. The
analysis followed a four-step process (cf. Table 14) which involved the identification
and typification of service innovations, consumer and provider resources and their
integration, as well as theorizing on service innovation mechanisms that are then used
to explain service innovation in the case context.
Table 14. Data analysis
Steps Tasks Output
1. Identify service innovations in case context
(a) Extract data from the five data sources
(b) Identify service innovations (new features, changes and events related to Newsfeed)
Research database
In-depth understanding of
case context
78 Part B: Service Innovation in Social Networking Services
Steps Tasks Output
(c) Create timeline of service innovations for each socio-technical perspective
Three chronologies (Appendix 1)
2. Identify involved resources and generate resource integration narratives
(a) Open and axial coding of resources using key constructs
(b) Generate narratives of resource integration to explain service innovation by using typologies of resources
Typologies of resources
(Appendix 2)
Coded instances of resource integration processes
3. Identify service innovation mechanisms
(a) Theorize on mechanisms based on axial coding of narratives
(b) Corroborate findings with case evidence and resource integration model
Three mechanisms, including visualized process models, and explanation of causal structure
4. Use mechanisms to explain service innovation in case context
(a) Use chronologies of service innovations and case evidence to sensitize mechanisms in their historical context
(b) Explain service innovations in the case context
Case findings and
presentation of mechanisms
In the first step, the objective was to identify service innovations and to develop an in-
depth understanding of the case context. As a result of an extensive analysis, we were
able to identify new, or altered features and time-stamped 142 associated events between
2014 to 2017. On this basis, we analyzed Facebook’s website to understand how
individual features work, and to generate an initial understanding of how features are
related with each other. For example, the like button is presented below every photo,
video, and comment displayed to consumers. It was important for us to understand how
features affected other features, e.g., how clicking the like button influences the
information that is displayed in the newsfeed of another consumer. We also analyzed
online articles and statistics about consumers’ use of Facebook to identify the most
popular consumer activities, i.e., clicking the like button, watching videos, and reading
news articles, and to identify consumers main reasons to use Facebook, e.g., staying in
touch with what friends are doing, staying up to date with news and current events, and
sharing photos and videos with others (Statista 2016). These activities provided a
comprehensive understanding of the case context.
At this stage, we narrowed the analysis to the newsfeed and its closely associated
features. The newsfeed is located on a consumer’s homepage and displays information
and news (e.g., photos, videos and news stories) that other consumers have shared.
Consumers, in turn, can use associated features, e.g., the Like button, reactions, or filters
to interact with and configure the content they want to see. Figure 9 illustrates exemplary
Part B: Service Innovation in Social Networking Services 79
features that are related with the Newsfeed. For example, the publisher, a feature at the
top of the newsfeed, enables consumers to post photos and videos, or 360° videos. Other
features relate to privacy and security, and include the configuration of sharing and
visibility settings of personal content in the newsfeed of other consumers.
This reduction was not done arbitrarily. Instead, it emerged from an iterative process of
data analysis and sensemaking. Multiple criteria were considered to warrant an
investigation of the most important service innovations and their underlying resource
integration processes. One argument was the proportion of time that consumers’ spent
using certain features within Facebook. We aimed to include features that consumers
use the most and that could confidently be regarded as highly relevant. Another
important aspect was the availability of rich data from a variety of sources that would
allow us to carefully and systematically analyze the innovation of new features in a
coherent way. We also paid attention that the development of examined features had a
sufficient history, so that they could be studied in relation to other features. Lastly, we
aimed for an operational definition of aspects relevant to the question at hand. That is,
we structured our analysis and materials so that we could capture the resources,
activities, and causal structures that generated service innovations in the case context.
This step reduced our list of features and change events to 51, which we identified to be
the most relevant service innovations in Facebook’s history.
Figure 9. Newsfeed and exemplary features
We then categorized each service innovation according to the perspectives derived from
the S-T framework. That is, we categorized the identified 51 features and events as (1)
80 Part B: Service Innovation in Social Networking Services
task-centered service innovation (22 entries, mostly relevant to the personalization of
news and information), (2) technology-centered service innovation (15 entries, mostly
relevant to photo and video features), or (3) structure-centered service innovation (14
entries, mostly relevant to privacy and security). The application of the S-T framework
increased our sensitivity to less obvious innovations, e.g., changing policies and
community standards, or introducing new privacy features. On this basis, we created
three chronologies that documented 51 service innovations related to Facebook’s
Newsfeed. Each entry in the chronology provides a brief description of the event, and it
indicates the involved feature(s) for each entry (cf. Appendix 1).
In the second step, we identified consumer and provider resources through open and
axial coding. To this end, we used the constructs of the resource integration model to
identify, generate, and categorize concepts from open coding (Corbin and Strauss 2014).
Specifically, we focused on depicting the operant and interfacing operand resources of
consumer and provider that were involved in each service innovation. The feature, i.e.
an interfacing operand resource, and the information about its generation by the provider
was the starting point for the coding process. For example, Facebook employed its
knowledge and skills (operant resources) to develop the like button (operand resource).
Consumers, on the other hand, employed their knowledge about personal preferences
and operational skills (operant resources) to click the like button, thereby generating
preferential data (operand resource) that is made available to the provider. Table 15
illustrates the initial coding of the like button.
We then performed axial coding to abstract the resources involved in each service
innovation. That is, we generated a typology of resources involved task-centered,
technology-centered, and structure-centered service innovation (cf. Appendix 2). This
was an important step in the case analysis, as it provided an empirically grounded
understanding and vocabulary of the resources that were integrated Three researchers
were involved in the coding. To ensure trustworthiness and reliability of this process,
we performed four iterations of open and axial coding. We also maintained a list of
disputes that was jointly reviewed and used to clarify our understanding of the involved
resources. The final step, i.e., the selective coding of resources has been performed by
two researchers who coded each service innovation independently. The research team
was confident to proceed with the further analysis after following this systematic
approach.
Part B: Service Innovation in Social Networking Services 81
Table 15. Coding of involved resources on feature level
Facebook’s resource integration Consumer’s resource integration
Operant resources Interfacing
operand resourcesOperant resources Interfacing
operand resources
Textual description of involved resources (from memo on Like Button feature)
Facebook employs knowledge and skills to develop and implement Like Button (new feature)
New feature: Like Button) through which preferences are expressed
Consumer employs knowledge and skills to use Like Button as an expression of his preferences
Preferential data from clicking the like button
Initial set of codes
Skill to develop novel feature
Novel feature to perform activity
Knowledge of own preferences
Operational knowledge for using novel feature
Preferential data
Next, we created narratives to explain the resource integration process that generated
each service innovation. Specifically, we used the three resource typologies and the
sequential process logic depicted in the model to generate a narrative of the resource
integration process that underlaid each service innovation. In total, we generated 51
narratives which we corroborated and enriched with the materials collected.
In the third step of the analysis, we traced three service innovation mechanisms, which
we define as causal structures by which actors generate service innovations through
resource integration. Specifically, we aimed to uncover how Facebook, as the provider,
and its consumers integrated their resources to generate service innovations. This step
of the analysis followed the principle of axial coding (Corbin and Strauss 2014). We
aggregated the identified resources and resource integration activities to further abstract
the concepts emergent to our analysis. At this stage, we were particularly attentive to
view resource integration processes in their entirety, that is, we focused on the interplay
of consumer and provider resource integration to uncover the recursive patterns that
generated service innovations in the case context. To this end, we scrutinized the 51
resource integration narratives in view of the case evidence and related theoretical work
as suggested in the resource integration model. For example, we drew on video
presentations and developer keynotes recorded by Facebook to further understand how
specific service innovations have been generated (cf. “How we shipped reactions”
(Facebook 2017c), or “What’s new with the newsfeed?” (Facebook 2017d)). We also
drew on multiple sources to sensitize the role of consumers’ in generating service
innovations. This was useful to reflect on how consumers’ activities and resources have
82 Part B: Service Innovation in Social Networking Services
triggered and enabled the generation of service innovations. This iterative process of
emerging sensemaking and analyzing the case evidence surfaced that Facebook’s ability
to generate service innovations depended on consumers’ use of the social networking
service, its constitutive features, and their contribution of feedback and personal
technology. Through this systematic process of gradual generalization we traced three
service innovation mechanisms which we termed data-driven innovation, technology
propulsion, and social debugging. Each mechanism includes a visualization, a
definition, and it explains a distinct causal structure by which different types of service
innovations have been generated.
In the final step of the analysis, we sought to examine how the three theorized
mechanisms can explain the generation of service innovations. We built on the findings
from the previous stages, in particular the three chronologies of service innovations and
the case evidence to sensitize the three mechanisms in their timely context to explain
the case findings. The three mechanisms have in common that they are generative of
service innovations. Due to the differentiation offered by the S-T framework, they differ
in their focus. Each mechanism points to distinct activities, resources, and service
innovations. In the following section, we first present the case overview, and then
illustrate for each mechanism its empirical context, followed by the presentation of the
respective service innovation mechanism.
IV.4 Facebook case findings
Since its inception in 2004 Facebook has increased the number of active consumers from
a few hundred to over 2 billion in 2017. With an employee-to-consumer ratio of
approximately 1 to 100.000 and a market capitalization of over $500 billion US-Dollars
(Wall Street Journal 2018), Facebook has become one of the worlds most valuable
companies (The Economist 2016b). Facebook generates 97 percent of its revenues from
displaying social advertisements (Facebook 2017a) and it has increased the average
annual revenue per US consumer from below $10 Dollars in 2010 to over $40 Dollars
in 2016 (The Economist 2016a). Globally, consumers spent an average time of 20
minutes per day, and in the United states, 40 minutes per day, on Facebook. Facebook
confirmed in 2016, that consumers watched 100 million hours of video every day, and
that 1 billion users are members of at least one group on Facebook. The event feature
was used by 500 million consumers who created 123 million events in 2015. Such
figures demonstrate consumers’ massive engagment in the service and also the
importance of continuously innovating new features.
Part B: Service Innovation in Social Networking Services 83
Facebook’s provisioning and consumers use of social networking features represents
processes and activities in which both actors employ their resources to produce an
outcome. Facebook, for example, draws on its competence to design and implement
novel features, as well as technology resources, such as databases, servers, and its
knowledge to shape the inherent social structure, that is the values, norms, and behaviors
that regulate interactions. Consumers, on the other hand, employ a variety of resources
which include, for example, the ability to operate and configure the SNS according to
personal preferences, the knowledge and skills to generate, consume, and interact with
feautures, e.g., news, photos and videos that they like, share, block, or comment on.
Consumers provide, configure and operate personal technology infrastructures that
evolve and consist of personal computers, smartphones, and related applications. When
using the service, consumers enact and shape the social structures that enables and
constrain the digitally mediated interactions within the social network.
For example, Facebook invented a feature called minifeed in 2004, which it developed
into the newsfeed in 2006. Initially, the newsfeed displayed news about a consumer’s
personal social network. Over time, and enabled through vast amounts of accumulated
data and knowledge about consumers’ preferences, Facebook transformed the newsfeed
into a highly personalized, rich stream of information that is fed from multiple data
sources and that consumers can customize and interact with to tailor the SNS to their
individual preferences. It is through mutual and reciprocal application of service and the
exchange of resources that characterizes the very nature of resource integration in the
newsfeed and its related features.
Our analysis of the Newsfeed focused on how Facebook generated service innovations
from resource integration with consumers. The chronological analysis was structured
along three socio-technical perspectives on service innovation. This surfaced three
mechanisms (data-driven innovation, technology propulsion, and social debugging) that
explain how Facebook generated service innovations based on the processing of data,
the utilization of consumer technology, and from analyzing the normative and
behavioral expectations of consumers.
IV.5 Task-centered service innovation
IV.5.1 Personalized news and information on Facebook
Early on, Facebook recognized that consumers were mostly interested in presenting a
personal profile, and to share and read news of their personal social network. Thus, the
84 Part B: Service Innovation in Social Networking Services
objective of Facebook’s innovation efforts was to gear the the service, and in particular
the newsfeed, towards the interests and preferences of each individual consumer. This
was particularly achieved by implementing novel features that generated and utilized
data from consumers’ interactions as resources, and that enabled Facebook to
personalize news and features accordingly.
When Facebook introduced the minifeed in 2004, and two years later the newsfeed,
Facebook took its first step to implement a central feature that personalized the
information displayed to each individual. Thirteen years later, in 2017, the Newsfeed
consisted of a highly modular section on the Facebook website that showed a rich,
personalized feed of stories, posts, pictures and videos. Following years of evolutionary
development, the presentation of news was then determined by an algorithm that drew
on more than 100,000 data parameters to calculate the relevance of each news element
for evey individual consumer.
In 2008, Facebook implemented the publisher, a feature that consumers could draw on
to publish comments, photos, and videos. The publisher, and other changes, which
fostered the generation of user generated content, increased the amount of data resources
that were re-bundled to personalize the newsfeed, and to innovate new features. When
Facebook introduced the like button, subscriptions, and reactions, for example, it
provided novel opportunties for consumers to express themselves, and to interact with
digital content. In turn, the use of these features generated rich, preferential data that
enabled Facebook to step-wise improve the personalization of the newsfeed.
The like button, which was implemented in 2009, enabled consumers to interact with
content that has been published by others. After a consumer “liked” a specific news
element, it was indicated in the Newsfeeds of this consumer’s friends. The like button
was a simple, yet effective feature that stimulated consumers’ interactions with digital
content, and it allowed Facebook to draw on data for tracing and predicting the relevance
of specific content for each consumer. The subscribe button, which was implemented in
2011, allowed consumers to follow profile changes and news updates of other persons,
even without becoming friends on the social network. Once consumers have expressed
their interest by subscribing, Facebook’s personalization algorithm would present future
updates and news in the Newsfeed of the subscriber.
The data that resulted from consumers’ likes and subscriptions, enabled Facebook to
innovate two entirely new personalized features. The Newsticker, introduced in 2011,
displayed real-time information about friends’ social networking activities on a side bar
Part B: Service Innovation in Social Networking Services 85
of the Facebook website. This feature was data-driven and personalized, as it utilized
data from likes and subscriptions that was generated during interactions within a
consumer’s personal social network. Similarly, like and subscription data laid the
ground for the data-driven personalization of profile sections, which was implemented
in 2013. Facebook enhanced the modular structure of the profile page and implemented
a new personalization algorithm to generate individualized profile sections based on the
likes and subscriptions of each individual.
For several years, after implementing the Like button, consumers demanded more fine-
grained and simple functionalities to express themselves. Following a global research
initiative that included focus groups, surveys, and experiments, Facebook invented the
reactions feature in 2016. Reactions enhanced the like button and enabled consumers to
interact with content by selecting emoticons that express “Like”, “Love”, “Haha”,
“Wow”, “Sad”, and “Angry”.
Facebook did not only use consumer-generated data to innovate novel features such as
the newsticker and personalized profile sections. Such data was also extensively used to
trace consumer preferences, and to improve personalization of the Newsfeed. In fact,
the majority of change events in the newsfeed history included refining its
personalization algorithm: In 2006, the newsfeed algorithm ingested consumer data
from personal profiles and presented this data in the Newsfeed of other consumers
(2006). Due to consumers’ active use of the like Button (2009) and subscriptions (2011),
and the subsequent availability of consumer-generated content and preferential data,
Facebook was able to change its algorithm in 2011 to display news not in reverse-
chronological order, but according to their popularity within the social network. In a
series of change events between 2013 and 2017, Facebook tweaked the newsfeed
algorithm to prioritize consumers’ recent interactions (2013), to account for consumer-
driven prioritization of news, e.g., through filtering and reporting mechanisms (2015),
as well as to reduce promotional content (2014), “click-baits” (2014), and “false news”
(2015). Following the implementation of reactions in 2016, and together with this, the
generation of more differentiating usage data, Facebook altered the newsfeed algorithm
to rank presented news stories according to their “engagement probability” (in 2016),
and to weigh reactions higher than likes (in 2017).
These service innovations were not independent one-time change events. Instead, they
followed an evolutionary, re-inforcing pattern that was rooted in consumers’ generation
and sharing of data and, conversely, on Facebook’s ability to utilize this data for
86 Part B: Service Innovation in Social Networking Services
personalizing displayed news and features. Then again, this personalization spurred
generation of more data by consumers.
IV.5.2 The data-driven innovation mechanism
Our data analysis surfaced Facebook’s ability to generate innovations based on the
processing of data, which was used to progress personalization. The backbone of such
innovation was the variety and vast amounts of consumer-generated usage data, and the
ability to analyze and process this data. This mechanism was used to produce entirely
new, and to improve already existing personalized features. We refer to this mechanism
as data-driven innovation. It depicts the resource integration process by which the
provider generates service innovations from collecting, analyzing, processing and
algorithmically re-combining data resources generated by consumers to produce
personalized features.
This mechanism addressed Facebook’s never-ending challenge of providing personally
relevant information to every individual consumer. It was used to expand the set of
offered features, to attract new consumers, and to innovate possible service experiences.
Data-driven service innovation results from resource integration performed by the
provider (labelled service personalization) and the consumer (labelled interaction and
self-expression), and it involves usage data and personalized features as interfacing
operand resources, through which these interactions manifest (cf. Figure 10).
Service personalization refers to resource integration in which the provider draws on
usage data that is generated by consumers’ interactions and it involves at least three
types of data-driven activities.
Part B: Service Innovation in Social Networking Services 87
Figure 10. Data-driven innovation mechanism
First, generation of data-driven personalized features. These features provide modular
structures and facilitate the dynamic recombination and presentation of data resources.
Facebook’s core elements, i.e., the homepage, including the newsfeed, and personal
profile page, consist of modular structures that enable the recombination of data
resources that are displayed to consumers. These features are not only data-driven
because of their data use; the interactions they enable also drive data generation. For
example, features for reading news, sharing and evaluating content, or connecting with
other consumers, are all designed to generate new and diverse types of data. They secure
an ongoing accumulation of usage data, thereby spurring further innovation
opportunities.
Second, the generation of personalization algorithms provides a programmed logic and
data-driven approach to recombine data resources. Personalization algorithms automate
resource bundling activities for the provider as they craft information bundles optimized
for personal relevancy. The application of personalization algorithms within Facebook
was regularly refined and expanded. Refinement aimed to increase the relevance of
displayed data at the individual consumer level. For example, Facebook, performed
changes to the newsfeed algorithm to improve the logic according to which data
resources are bundled and presented. Such refinements drew on data that represented
consumer preferences as parameters of the personalization logic. This data was
generated either explicitly, e.g., through consumers’ interactions with features (e.g.,
liking or subscribing), or implicitly, by inferring from log data of networking
interactions or consumed media content (e.g., intractions with friends or watched
videos). Another source of data parameters resulted from analysis of collective levels,
e.g., consumers from a specific country, language, or within a consumers’ personal
social network. Expansion of personalization refers to an increase of the scope and
application areas of personalization. Facebook has increased the amount of personalized
features, e.g, the Newsticker and Personalized profile sections, and it has expanded the
amount and variety of usage data that was drawn upon to personalize the service.
Third, data-driven management of service innovation refers to knowledge building and
decision making in the development and implementation of new personalized features.
This iterative process involved data-driven activities that are particularly employed for
sourcing innovation opportunities, and for testing consumers’ acceptance of new
personalized featues. Facebook’s data-driven management of service innovations
typically involved multiple prototypical implementations and extensive data-collection
88 Part B: Service Innovation in Social Networking Services
and analysis to inform the final design of novel features. For example, Facebook
employed various research methods, e.g., user-experiments, A/B-testing, and analysis
of usage data to validate assumptions over adoption and use of service innovations. The
reported methods were broadly applied to Facebook’s site structure, its elements, as well
as individual features. This data-driven approach did not necessarily involve consumers
to consciously giving feedback. Feedback was often inferred from large amounts of data
that resulted from consumers’ configuration and log data, which were produced while
using the social networking service. In addition, dedicated instruments, e.g., surveys and
feedback forms, were employed to explicitly collect consumer feedback, and to steer
service innovation efforts. In one instance, for example, Facebook reduced the amount
of promotional content that was displayed in the newsfeed due to results from consumer
surveys. These data-driven activities generated personalized features that enabled new
interactions for consumers.
Interaction and self-expression refers to activities in which consumers draw on
personalized features to express themselves. These interactions produced extensive
volumes and varieties of usage data which were integral for data-driven innovation and
involve at least two activities.
First, consumers’ employ their cognitive, creative and operational skills to generate and
publish content, and to interact with content generated by other consumers. For
example, consumers draw on the publisher to generate content, or interact with content
displayed in the newsfeed through likes, subscriptions, or reactions.
Second, Interaction and self-expression involves activities in which consumers
articulate their personal needs and preferences through surveys, feedback instruments,
and by configuring the SNS. Such configuration activities, for example, adapt the layout,
site structure, or displayed features to the personal preferences of an individual.
Consumers can take on an active/conscious, or a passive/unconscious role in providing
preferential and feedback data. When consumers chose to join a beta-test group,
participate in a survey, or to use an alternative experimental homepage, for example,
they took on an active role in which they actively and consciously applied their
competences to articulate how new features should be designed. Consumers who remain
passive, and who do not volunteer to provide feedback, do still generate preferential data
that is derived from indicators such as frequency of use, or (non-)adoption of specific
features.
Part B: Service Innovation in Social Networking Services 89
Inherent to consumers’ activities is the continuous production and accumulation of
usage data, that can be drawn on to enhance service personalization. In the case analysis,
five types of usage data were identified. First, feedback data that was collected through
experiments, tests, or surveys. Second, personal data that described and represented a
consumers’ virtual identity and personal social network, e.g., name, profile picture, job
information, or list of friends. User generated content referred to data that consumers
created, shared, and distributed within their personal social network, e.g., photos,
videos, or comments. Configuration data was actively created by defining privacy and
securtiy settings, customizing SNS features, or by explicating personal interests and
preferences through filters, ratings, or similar features. Log data was generated from
consumers’ feature use and collected by the provider. Log data included, for example,
timestamps of consumer actions (e.g., recently uploaded or viewed content). This
classification of usage data is not exhaustive; instead, it represents an empirically-
grounded vignette that indicates the variety and richness of data that providers can draw
upon to spur service personalization and data-driven innovation.
IV.6 Technology-centered service innovation
IV.6.1 Photo and video features an Facebook
In its short, but successful history, Facebook leveraged consumers’ adoption of
technology to generate service innovations. Many of these innovations generated new
photo and video features that relied on consumers’ personal computers, mobile phones,
digital cameras, and associated software. New photo and video features were important
to support Facebook’s strategy of growth and innovation. These innovations increased
the range of possible service experiences, prolonged consumers’service use, and, most
importantly, they ensured ongoing generation of data and interesting content that was
presented in the Newsfeed.
At the launch of Facebook in 2004, consumers could upload a profile picture to their
personal page. Seeing the profile picture of a friend defined the “magic moment” at
which consumers started to bond with the SNS, as stated by Alex Schultz, Facebook’s
Vice President of Growth. Since then, photo and video features have been a key area of
innovation for Facebook and the consumption of photos and videos ranges amonst the
most popular and frequent social networking activities of consumers.
As part of its expansion, Facebook launched two basic features, photos in 2005, and
videos in 2007, which enabled consumers to share photos and videos, and to tag friends
90 Part B: Service Innovation in Social Networking Services
within their social network. These features were primarily enabled because consumers
aquired digital cameras and camera-equipped mobile devices that increasingly pervaded
everyday life. It was exactly around this time when Apple introduced the iPhone, and
other technology companies started to offer more advanced smartphones, when a
Facebook engineer, who was responsible for developing the video feature, stated in a
company announcement:
„Now that consumer mobile phones and digital cameras are perfectly capable of
taking good quality video, we knew that it was time to build a video application
[…]” (Facebook 2007).
Facebook became increasingly alert to spot innovation opportunities that relied on
consumers’ technology resources, since consumers adopted more advanced technology,
e.g., smartphones, faster internet connectivity, and personal computers with built-in
webcams. Consumers, however, operated their technology indepentently of Facebook.
It was therefore important for Facebook to ensure that consumers could easily employ
their technology for using new photo and video features.
The implementation of the video calling feature in 2011, for example, required
consumers to operate a video camera, and to install a software-plugin to their internet
browser. The installation was a technical prerequisite for connecting consumers’
personal computers to the networking infrastructure that enabled video calling.
Facebook created different installation routines, one for each operating system and
browser combination, to accommodate for different consumer technology
configurations, and to minimize consumers’ configuration efforts. The design of the
video calling interface also promoted consumers use of video technology. It indicated
the message: “Try restarting your browser if you’re having trouble with your camera or
microphone”, and a “Help” button, that led to a step-by-step guide, on how to use
consumer devices for making video calls.
The introduction of 360° videos in 2015, and 360° photos in 2016, were milestones in
the development of photo and video functionality. Both features built on considerably
advanced technology, in particular motions sensors, that were built into the newest
mobile devices and virtual reality (VR) headsets. The production of 360° videos relied
on a set of specifically arranged cameras which recorded all 360 degrees of a scene
simultaneously. Similiarly, 360° pictures could be taken with smartphones that
possessed motion sensors. Consumers could use their mobile phones or virtual reality
Part B: Service Innovation in Social Networking Services 91
(VR) headsets to view these materials and to dynamically choose the angle of a scene
by turning the device into the desired direction.
These features relied on consumers adoption of VR technology and smartphones, as well
as consumers ability to employ their devices for generating and watching 360° photos
and videos. Accordingly, Facebook aimed to facilitate consumers’ use of personal
technology for these purposes. In nearly all instances the presentations and
announcements of new features by Facebook’s included information about technology
requirements, and instructions about how to setup and configure consumer devices.
Facebook published screenshots, demonstration videos and textual descriptions to
promote knowledge that consumers required to employ their technology. Key
information included compatible (or required) internet browsers, operating systems, and
schedules according to which new features were made available on different operating
systems. In addition, announcements of new features that involved advanced consumer
technology, e.g., 360° Photo and Video, was very detailed and included illustrative
content. For example, the presentation of 360° Video included a basic description of a
360° camera system, a demonstration video of the feature itself, and a description of
how such videos are watched with different consumer technology configurations.
Facebook also generated service innovations from recombining existing resources,
including consumer technology and related competences. The features high-quality
pictures (2012), animated pictures (GIF) (2015), collages (2015), profile and intro video
(2015) represented innovations that leveraged consumer’s cameras and even more their
existing competence to upload and share pictures and videos on Facebook. These
innovations were modest enhancements and recombinations of existing features that
consumers were familiar with. Facebook’s announcements of these innovations often
included screenshots or brief videos to explain how these new technology-enabled
features were intended to be used.
Technology-enabled service innovations were driven by consumers’ adoption of new
photo and video technology, and their ability to integrate new technology resources.
Facebook, on the other hand, harnessed advancements in consumer technology by
innovating new features that relied on consumers’ ability to integrate their technology
successfully.
IV.6.2 The technology propulsion mechanism
The case analysis revealed how Facebook utilized advancements in consumer
technology to generate service innovations. The driver of these technology-centered
92 Part B: Service Innovation in Social Networking Services
service innovations was the availability of new consumer technologies, in particular
mobile phones, that have been widely adopted by consumers and that rapidly pervaded
consumers’ everyday life. Facebook repeatedly leveraged consumers’ adoption of such
technologies to propel service innovations, that is innovating new and altering existing
features. We refer to this mechanism as technology propulsion. It depicts the resource
integration process by the provider generates service innovations from promoting new
technologies that are adopted by consumers. This mechanism produces technology-
enabled features which are based on novel consumer technology configurations.
The technology propulsion mechanism enabled Facebook to harness the rapid
advancements and pervasiveness of consumer technologies and, vice versa, it enhanced
consumers’ utilization of technology resources. This is particularly important, because
functioning consumer technology resources, are, to large degrees, not controlled by the
provider. Their utilization, however, is a prerequisite for innovations that depend on
consumers’ ability to configure and operate their technology resources. Technology
propulsion results from resource integration activities performed by the provider
(labelled technology promotion) and the consumer (labelled technology adoption), and
it involves consumer technology and technology-enabled features, as interfacing
operand resources (cf. Figure 11).
Figure 11. Technology propulsion mechanism
Technology promotion refers to resource integration activities in which the provider
draws on technology that is operated and configured by consumers to generate service
innovations. Technology promotion involves at least three types of activities:
First, identifying service innovation opportunities, that are enabled by new consumer
technologies. This includes monitoring of and learning about available consumer
Part B: Service Innovation in Social Networking Services 93
technology, such as mobile technologies or virtual reality, and subsequently, the
development of strategies to utilize new technological affordances.
Second, innovating new technology-enabled features. This refers to the invention of new
features that utilize consumers’ technology resources, e.g., photo and video cameras in
mobile devices, (mobile) network connectivity, or internet browsers. Facebook, for
example, invented new photo and video features, video calling, 360° photo and video,
as well as live video broadcasting functionality on the basis of advancing consumer
technology.
Third, technology promotion includes the creation of features that facilitate consumers’
technology integration. These features were either integrated within new features, e.g.,
as in-product-education elements or tutorial videos, or they complemented new
technology-enabled features, e.g., in the form of help pages, product announcements, or
question and answer videos with software developers who explain new features. The
case evidence showed that Facebook simplified installation and configuration routines,
and enforced adherence to design guidelines, in order to promote consumers’
technology-related competence development. These activities produced new social
networking features, that were enabled by consumers’ adoption of new technology.
Technology adoption refers to activities by which the consumer employs personal
technology and draws on technology-enabled features for using new social networking
features. Technology adoption involves two consumer activities, i.e., technology
acquisition and technology integration.
First, consumers aquire new technology resources that become available due to
technological evolution. This includes, for example, advancements in mobile devices,
networking infrastructure, or software. Technology acquisition describes consumers’
general utilization of new technology resources and includes selecting, purchasing,
configuring, and operating these resources within a personal technology infrastructure.
This acquisition of technology might be partly influenced by a social networking
provider, but in general, it is controlled by the consumer.
Second, technology integration refers to activities by which the consumer develops
required competences and integrates personal technology resources to use new
technology-enabled features. In the case of Facebook, consumers’ technology
integration required the navigation and use of user interfaces and work flows, and to
understanding how new features function, e.g., through public announcements of new
features. As a result, consumers could effectively adopt personal technology and
94 Part B: Service Innovation in Social Networking Services
integrate it in a way that produced functioning technology configurations, which
eventually enabled new SNS features.
Part B: Service Innovation in Social Networking Services 95
IV.7 Structure-centered service innovation
IV.7.1 Privacy and security features on Facebook
On September 5th, 2006, when Facebook released the newsfeed, consumers instantly
protested against the automated publication of their activities and personal information
within the social network. Consumers created several groups on Facebook, one reached
a membership of over 280,000 within hours, to complain about the intrusiveness of the
newsfeed on their privacy. Mark Zuckerberg, the CEO of Facebook, responded
immediately with an announcement that was titled “Calm down. Breathe. We hear
you.”. Zuckerberg emphasized that Facebook understood consumers’ concerns and that
it appreciated the feedback provided. Three days after the incident, on Sepember 8th,
2006, Facebook announced more granular data privacy controls and an open letter from
Mark Zuckerberg was published in which he stated:
“We really messed this one up. When we launched News Feed […] we did a bad
job of explaining what the new features were and an even worse job of giving you
control of them. I'd like to try to correct those errors now.” […] Somehow we
missed this point […] and we didn't build in the proper privacy controls right
away. This was a big mistake on our part, and I'm sorry for it. But apologizing
isn't enough. I wanted to make sure we did something about it, and quickly.”
In December 2009, with a consumer base of 350 million, Facebook altered its Publisher
feature to let consumers control case-by-case were and to whom their content was
displayed. In addition to expanding its privacy settings, Facebook introduced the
transition tool, a feature that guided consumers through a review of their privacy
settings. Facebook presented the transition tool as an innovation in response to consumer
requests who have urged the company to implement simpler and more effective privacy
options. Despite the company’s positive portrayal, consumers and advocate groups
criticized Facebook harshly for promoting visibility of personal data to “Everyone” in
the configuration process, thereby hoping to nudge consumers into sharing personal data
more freely.
Only 5 Months later, in May 2010, Facebook once again announced a redesign of its
privacy settings. In the corresponding communication Facebook CEO Mark Zuckerberg
stated:
96 Part B: Service Innovation in Social Networking Services
“Over the past few weeks, the number one thing we’ve heard is that many users
want a simpler way to control their information. Today we’re starting to roll out
changes that will make our controls simpler and easier.”
The announcement provided operational principles that defined how Facebook would
handle consumer data. These principles affirmed, for example, that consumers had
control over how their information is shared, and that no personal information was
shared without consumers’ consent. Facebook also layed out that it performed several
iterations of testing with consumers, and that it consolidated the privacy settings that
were needed to restrict the sharing of personal data.
In 2011, the US Federal Trade Commission (FTC) filed a complaint in which it alleged
Facebook of not having implemented effective privacy controls, and that consumers’
choice not to share personal data was undermined through deceptive practices. Shortly
after settling the charge with the FTC, Facebook’s CEO, Mark Zuckerberg, stated in an
announcement that his company was respecting consumers’ privacy and that he regarded
Facebook as “the leader in transparency and control around privacy” (Facebook 2011).
Between 2012 and 2015, Facebook responded to the privacy concerns of its consumers.
This was reflected in new and altered privacy features. In 2012, for example, Facebook
added shortcuts to untag consumers in photos, and installed in-product education and
in-context reminders to guide consumers’ behaviour in managing privacy settings.
Facebook also implemented a support dashboard to provide status information to
consumers who have reported violations to Facebook’s data policy or community
standards. In 2014, Facebook updated its data policy and terms of service to accomodate
for location based services (check-in and nearby friends), which track and publish a
consumer’s location. In the announcement, Facebook asked consumers to vote and
comment on these policy changes with the aim to build consumers’ trust into its SNS.
Part B: Service Innovation in Social Networking Services 97
IV.7.2 The social debugging mechanism
The case analyis surfaced several disputes over how personal data was used and shared
within the social network. Such disputes often resulted from new features that
consumers perceived as privacy-violating. Consumers were less concerned with the
(technical) task that a new feature afforded, but protested severely about its social
implications and practices. Facebook did repeatedly demonstrate its ability to debug
underlying “defective” practices and created features that would alter or complement
other features to, at least some extent, meet consumers’ expectations. We refer to this
mechanism as social debugging. It depicts the resource integration process by which the
provider generates service innovations from shaping social structure to improve
compliance with the normative and behavioral expectations of consumers. This
mechanism produces structure-carrying features that govern social interactions, and it is
aimed to resolve malfunctions within these interactions.
Figure 12. Social debugging mechanism
Social debugging results from resource integration activities performed by the provider
(labelled shaping of social structure) and the consumer (labelled value and norm guided
behaviour). It manifests in value and norm exposing data, and structure-carrying
features as interfacing operand resources (cf. Figure 12).
Shaping of social structure refers to resource integration activities in which the provider
draws on data that exposes consumers’ values and norms. This process involves at least
two types of activities.
First, the monitoring and analysis of data that, explicitly or implicitly, exposes
consumers’ normative and behavioral expectations This data improved the provider’s
understanding of consumers normative and behavioral expectations and included, for
98 Part B: Service Innovation in Social Networking Services
example, feedback data, public outcries in the media, or the formation of discussion
groups, which often triggered the innovation of new features.
Second, the provider generates structure-carrying features, which we termed according
to their characteristical properties, as governance instruments, value communication and
articulation instruments, and regulation and enforcement instruments. Governance
instruments include policies and guidelines that hold information about general
assumptions and beliefs, and they communicate expected roles and behavioral standards
of actors involved. Facebook, for example, installed a data policy that specifies its use
of consumer data and how third-parties can access such data. It also published
community standards and guidelines for sharing content to guide consumer behavior.
Value communication and articulation instruments include news, announcements, press
releases, and discussion forums. These features document how specifc interactions,
features, and workflows are envisioned to be used and often provide background
information about intended social interactions. However, such instruments facilitate not
only a one-directional communication to consumers, they also provide a venue for
exchanging structure-related feedback with consumers. Regulation and enforcement
instruments provide workflows, controls and tools that enable and constrain consumers’
behavior. These instruments include, for example, privacy and security settings (e.g.,
revealing or deceiving personal data), and related tools, e.g., tutorials, dashboards, or in-
product advice, as well as features to enforce certain behaviors, e.g., for reporting
inapproprate content or behavior. Facebook, for example, developed features that
enabled consumers to report, block, and flag content that they regarded as being
inappropriate, e.g., content that violated community standards, that was faked, or that
conflicted with personal values. The provider’s shaping of social structure manifests in
the identfied features which do not represent social structure as such. Structure is
enacted and constituted in practice. Accordingly, we contend these features to be
structure-carrying; they enable and constrain possible actions, and thereby, carry
normative and behavioral assumptions and beliefs.
Value and norm guided behavior refers to activities in which the consumer draws on
structure-carrying features to enact and communicate normative and behavioral
expectations. These activities are guided by consumers’ values and norms and generate
a digital trace that exposes values and norms to the provider. Such behavior resides in
consumer’s cognitive and operational abilities, and includes the ability to act upon
personal values and norms. The analysis revealed at least two activities that expose
consumers’ values and norms to the provider. First, consumers use of communication
Part B: Service Innovation in Social Networking Services 99
instruments to articulate normative and behavioral expectations. This includes, for
example, the use of discussion groups, feedback, or messages that are directed at the
provider. Such communication is reflective of consumers’ worldview and exposes her
values and norms. Thus, it provides merely explicit and conscious indications of
conflicts over how social practices are enabled by new features. Second, consumers use
of features to regulate and enforce social practices. This includes consumers’
configuration of features and associated workflows to comply with personal values and
norms. It also involves the reporting of inacceptable practices, inappropriate content, or
violation of a shared code of conduct, as well as flagging or blocking of other entities.
In essence, consumers integrate their social structure-related resources through activities
that are guided by and reflective of their personal values and norms. In this process,
consumers generate value and norm exposing data, that is used by the provider for
shaping social structure.
IV.8 Discussion
In this paper, we adopted a S-D logic perspective to enhance our understanding of
service innovation in social networking services. In particular, it has highlighted the
importance of resource integration for generating service innovations. SNS providers
innovate most often for consumers, and hence, understanding the resource integration
of consumer and provider is of critical importance.
This paper proposes the resource integration model as a theoretical framework with
which to make sense of the underlying activities and reciprocal dynamics of resource
integration that are emphasized in S-D logic (Vargo and Lusch 2004, 2008). The model
distinguishes between operant and interfacing operand resources, and depicts two
resource integrating actors, i.e., provider and consumer. The model suggests that
resource integration of both actors is generative of service innovations in SNS. We argue
that the model is useful for explaining service innovations, because it provides a
coherent understanding for examining the resource integration of consumer and provider
on the premises of S-D logic.
We employed the resource integration model to analyze the historical development
process of Facebook’s Newsfeed. Our analysis uncovered three service innovation
mechanisms: data-driven innovation, technology propulsion, and social debugging.
Each mechanism provides insights about the resources and resource integration
dynamics of consumer and provider, and how these dynamics have been generative of
100 Part B: Service Innovation in Social Networking Services
service innovations in the case context. These mechanisms suggest that service
innovation in SNS relies significantly on a provider’s ability to successfully engage,
facilitate, and leverage the resources and resource integration of its consumers.
Data-driven innovation depicts the mechanism by which a provider generates service
innovations from collecting, analyzing, processing and algorithmically re-combining
data resources generated by the consumer to produce personalized features. This
mechanism may be useful to comprehend consumers’ resource integration as a data
generating activity upon which new personalized services may be generated. It might
also be useful to analyze the degree to which (new) features, or more general, interfacing
operand resources, are driven by consumer data and also, wether they facilitate the
generation of novel data resources that spur further innovations.
Technology propulsion depicts the mechanism by which actors generate service
innovations from promoting and adopting new technologies. This mechanism produces
new technology-enabled features, which are based on consumer technology
configurations. It offers an explanation for how providers can harness advancements in
consumer technology to generate service innovations. It comprehends consumer
technology as resources upon which services can be innovated, and it might be useful to
appraise consumers’ abilities to utilize technology as a foundation of succesful
innovation. It might also be useful to study features that support consumers adoption of
technology for specific services, e.g., in-product education materials or learning
tutorials.
Social debugging depicts the mechanism by which a provider generates service
innovations from shaping social structure to improve compliance with the normative
and behavioral expectations of consumers. This mechanism produces structure-carrying
features that govern social interactions, and it is aimed to resolve malfunctions within
these interactions. This mechanism may be useful to study how tensions and conflicts
are addressed in digital services in the course of time. It might be particularly useful to
examine how features can be adapted to comply with consumers normative and
behavioral expectations. This also turned out to be an important measure to retain
consumers’ acceptance, trust, and to ensure continued use of SNS. The social debugging
mechanism offers an alternative, critical explanation that stands in contrast to the
favorable self-portrait that the provider in the case context drew about privacy and the
usage of data. While the social debugging mechanism does not suggest how to shape
social structure in SNS, it might be useful to sensitize for the social implications of
service innovations which are often subtle and difficult to assess.
Part B: Service Innovation in Social Networking Services 101
The insights derived from the resource integration model and the three service
innovation mechanisms enhance previous research on service innovation in the digital
age (Barrett et al. 2015; Lusch and Nambisan 2015; Nambisan et al. 2017), and extant
research on SNS (Aral et al. 2013; Gnyawali et al. 2010; Singaraju et al. 2016).
First, it provides a theoretical account of how provider and consumer integrate their
resources in SNS. The model incorporates the key resources and activities defined in S-
D logic into a coherent model of resource integration. This is important to advance our
understanding of and theorizing about value cocreation and service innovation, which
are both based on the activities that underlie resource integration of different actors, and
that needed more theoretical and empirical foundation (Lusch and Nambisan 2015, p.
168). Our work also suggests to direct attention to SNS features and data, which we
conceptualized as interfacing operand resources. These resources mediate service
exchange and often represent the locus where innovations manifest. That is, they
represent novel resources that result from the rebundling of resources. Resource
integration, as depicted in the resource integration model, provides opportunities for
studying the resources and activities taken by consumer and provider in generating
service innovations. In this regard, our work complements research that studied the
resources and innovations generated by providers and third-party developers (Eaton et
al. 2015; Ghazawneh and Henfridsson 2013; Gnyawali et al. 2010), by explicitly
accounting for the consumer, who is often not only a beneficiary, but also a contibutor
of essential resources for service innovation.
Second, the model views resource integration as a generic process that allows studying
service innovation from a dynamic and emergent perspective. The case analysis has
demonstrated that reciprocity and relatedness are critical to understand how service
innovations are generated on the basis of repeated resource integration activities. These
dynamics are captured in the three identified mechanisms. Data-driven innovation relies
on consumers’ repeated generation of usage data and the ability of the provider to draw
on and process this data. Technology propulsion relies on consumers’ acquisition and
repeated ability to integrate technology, and the ability of the provider to promote and
harness advancements in consumer technology. Social debugging relies on value and
norm exposing data that is repeatedly generated by consumers, and the ability of the
provider to draw on such data to innovate the governance of social interactions. Our
research indicates that these interactions are reciprocal, dynamic and emergent over
time, and they represent the common denominator of the identified service innovation
mechanisms.
102 Part B: Service Innovation in Social Networking Services
The resource integration model challenges extant contributions that model linear,
onetime processes in which actors apply their resources either in parallel (Lusch and
Nambisan 2015; Payne et al. 2008), or consecutively (Grönroos and Voima 2013) to
cocreate value. Although such linear visualizations are often employed for simplicity
(ibid, p. 136), and despite researchers’ emphasis on the relational nature of S-D logic
(Vargo and Lusch 2008), only recently value generating activities have been theorized
as a repeated process of resource integration (Vargo and Lusch 2016). The proposed
resource integration model provides an intellectual structure that brings together the
underlying activities of value cocreation and service innovation, as postulated by (Lusch
and Nambisan 2015). Consumers derive value from drawing on interfacing resources;
At the same time, they often generate new resources, e.g., usage data and technology
configurations, that serve as resources for service innovation. We argue that this
theoretically grounded, empirically-based conceptualization of resource integration
addresses the challenge of studying innovation in the digital world, which has been
identified as being increasingly less bound in terms of time and space (Nambisan et al.
2017).
Third, as demonstrated in our empirical analysis, the resource integration model can be
specialized for studying specific aspects of service innovation and resource integration.
The application of the S-T framework, for example, offered a novel vista on service
innovation and resource integration in SNS. For one thing, we could derive different
centers of gravity, which we termed task-centered, technology-centered, and structure-
centered service innovations. Secondly, we could enrich our coding of resources and
resource integration by extending the generic distinction of operand and operant
resources offered by S-D logic. As a result, each service innovation mechanism
specializes on a different center of gravity of service innovation. This facilitates a
refined and nuanced understanding of service innovation in SNS that was particularly
valuable for identifying and theorizing about how disputes over social structure where
attenuated through the social debugging mechanism. In this regard, we uncovered novel
aspects of service innovation and complement extant literature, which has employed a
variety of theories, e.g., complexity theory (Xiao and Wang 2014), task-technology fit,
long-tail concept, or resource-based view (Enders et al. 2008; Ketonen-Oksi et al. 2016)
to study SNS.
Finally, our work contributes to the ongoing research on digital innovation (Yoo et al.
2010; Yoo et al. 2012) and digital ecosystems (Henfridsson and Bygstad 2013; Reuver
Part B: Service Innovation in Social Networking Services 103
et al. 2017; Tilson et al. 2010; Tiwana et al. 2010) by examining and specifying
resources that are essential for innovating digital services for and with consumers.
This research also holds implications for managers. We demonstrated that Facebook
leveraged consumer resources to generate service innovations through resource
integration. We hope that our work stimulates managers to think in more nuanced ways
about how to invent and design novel features by considering consumers’ social and
technical resources as sources for future service innovations. The dynamic and emergent
perspective offered in the three mechanisms underlines the importance to comprehend
innovation in consumer services as an incremental, continuous effort to improve and
adapt to the ever changing needs of consumers.
Future studies could address the limitations of our work. First, this paper focused on the
single case of Facebook, which exhibits the phenomenon of interest extremely. While
extreme cases are a fertile ground for theory-building, future research could study
service innovation in different empirical settings. We deem it plausible to find similar
dynamics and service innovation mechanisms in other types of consumer-centric
systems. Potential exemplary success cases for future research are personalized music
and video playlists (cf. Spotify, YouTube, Netflix), the promotion of consumer
hardware to innovate new services (cf. Amazon’s Alexa, or Virtual Reality devices), or
the implementation of anti-cheat functionality in video-gaming (cf. Steam gaming
platform). The study of failed digital consumer services, potentially beyond SNS, could
challenge the resource integration model, and the respective mechanisms. Such future
research would add further empiricial grounding to S-D logic, which is increasingly
becoming a narrative of resoure integration (Vargo and Lusch 2016). It would also
increase our knowledge about how firms generate service innovations by leveraging
consumer resources over time and potentially help to identify further service innovation
mechanisms. Second, our research focused exclusively on the resource integration of
consumer and provider. Consequently, it did not account for the resource integration of
other actors. Future research could apply, or extend, the resource integration model to
examine resource integration of other stakeholders, e.g., third-party developers. This
could employ extant research on boundary resources (Eaton et al. 2015; Ghazawneh and
Henfridsson 2013), and extend the scope of research to investigate the resources of third-
party developers, and the interfacing resources that are provided to consumers by third-
party developers (cf. Sarker et al. (2012) for case study in a B2B-ERP environment).
Finally, we acknowledge that there are implicit interactions between the three service
innovation mechanisms. For example, a novel virtual reality feature, i.e., a technology-
104 Part B: Service Innovation in Social Networking Services
centered service innovation, might subsequently enable a task-centered service
innovation, e.g., displaying news on a virtual reality device. Studying these interactions
are beyond the scope of this article and would require further research.
IV.9 Conclusion
In this paper, we contribute a model that captures the dynamic interactions by which
consumer and provider generate service innovations in social networking services. The
model depicts resource integration as a process in which actors draw on interfacing
resources to which they apply their competences to produce an effect that manifests in
interfacing resources. Service innovation, which we understand as the rebundling of
resources that creates novel resources, result from these resource integration activities.
In social networking services, new features represent such novel resources.
The application of the resource integration model uncovered three service innovation
mechanisms: data-driven innovation, technology propulsion, and social debugging. Our
findings suggest that service innovation in social networking services relies significantly
on a provider’s ability to successfully engage, facilitate, and leverage the resources and
resource integration of its consumers. Each mechanism underlines that service
innovations are generated on the basis of consumer-provider interactions. Their
interactions that are reciprocal, dynamic and emergent over time. The logic inherent to
the mechanisms can be used to examine the generation of service innovations in specific
research contexts.
The model itself can be specialized for studying diverse aspects of service innovation
and resource integration, which we exemplified by blending the socio-technical
framework into our model. Thereby we created a novel vista on service innovation and
resource integration in social networking services.
We would like to note, that service-dominant logic and the underlying concept of
resource integration has received increasing attention in recent publications on service
innovation (Barrett et al. 2015; Lusch and Nambisan 2015; Nambisan et al. 2017). We
agree with others that this paradigmatic shift provides excellent opportunities for new,
innovative IS research. In so far, our work sketches a path for future research on service
innovation in the digital age.
Part B: Service Innovation in Social Networking Services 105
IV.10 Appendix 1: Chronology of the Facebook Newsfeed
Table 16. Task-centered service innovations in the Newsfeed
Year Description Involved feature
2004 Launch of Facebook including profile page and the Wall. The profile serves as central element of the Facebook website and indicates a picture and personal information of consumers. The profile also includes “the Wall”, an element where consumers can post information and content.
Profile page, the wall
2006 Introduction of Newsfeed and Mini-Feed: Newsfeed is included on a consumers’ homepages as an aggregator to indicate news about people and activities within personal social network. The Mini-Feed is located at the profile page and indicates changes and updates to consumers’ profile pages.
Newsfeed
2006 Privacy control over Newsfeed: Consumers receive granular control of how information is integrated into Newsfeed. Consumers can block information and prevent content from being published on the newsfeed of other consumers. Change was a response to consumer feedback.
Newsfeed settings
2007 Facebook adopts a modular site structure and distinguishes between core elements, (profile and newsfeed), and (modular) applications, e.g. photos and groups. Consumers can add, remove and reorder applications in the navigation panel.
Modular site structure, profile
2008 New design of Facebook site (Tabbed profile and Publisher). Profile pages are split into tabs such as wall, info, and photos. To include further applications, more tabs can be added to the profile page. The Publisher is introduced as a universal function to publish content. These changes have been based on user previews, user tests, and the analysis of more than 100,000 suggestions of consumers.
Tabbed profile, the wall, publisher
2008 Update to Facebook site implements technological enhancements to feed more current and pertinent information about consumers and their social network into the newsfeed. The updated is based on user previews, tests and a collection and analysis of more than 100,000 suggestions of consumers on layout and features.
Newsfeed algorithm, feedback instrument
2009 The Like Button is introduced. Consumers can react on content that has been published within the social network by expressing “I like this” via a single button.
Like button
2009 Newsfeed is updated and includes, amongst other changes to the homepage, filters to control information listed within the Newsfeed. “As more and more is shared, we want you to be able to [...] shape the stream of information most relevant to you.” Functioning is illustrated within a “product tour”. Facebook received 30.000 emails feedback on the design of the homepage / newsfeed.
Newsfeed filters, consumer feedback
2011 Combined Newsfeed and popular post prioritization: As part of a facelift of the Homepage the sections “Highlights” and “News Feed” were consolidated into one single News Feed. Algorithm is updated to indicate top stories are listed at the top of the feed. That is, the algorithm ranks presented posts in new order. Instead of reverse chronological order, posts are presented based on their popularity (quantified by engagement of a post).
Newsfeed algorithm
2011 Implementation of subscribe button enables consumers to choose what to see from friends in Newsfeed, hear from others that are not within personal network (if subscribed), and let others hear from them (even if they are not connected).
Subscribe button
2013 Profile sections. The profile page is updated to differentiate sections for e.g., videos, music, books, etc. Profile sections organize content and profile information that consumers have added by using the like button.
Profile sections
106 Part B: Service Innovation in Social Networking Services
Year Description Involved feature
2013 Newsfeed is updated to increase consumer engagement by including more information feeds, e.g., friends, photos, music, followed pages of each consumer (extending data that feeds into the algorithm). Introduction of automated video play in Newsfeed: Videos start playing silently when it they are indicated to the consumer.
Newsfeed, algorithm, photos, videos, pages, List of friends
2013 New ranking algorithm indicates (selected) posts that have not been seen by consumer a second time. Also, more weight is given to consumers recent interactions on the SNS.
Newsfeed algorithm, log data
2014 Reduction of click-baiting headlines in Newsfeed. Newsfeed algorithm
2014 Less promotional posts. Based on insights from a survey, the number of promotional page posts is reduced. Instead Newsfeed shows less promotional content and more stories from friends and pages associated with consumers preferences and personal network.
Newsfeed algorithm, consumer feedback, list of friends
2015 Fewer hoaxes (reporting of false news). Facebooks implements means to reduce number of hoax news within the Newsfeed. On the one hand posts are algorithmically evaluated, on the other hand, consumers can report questionable posts as “false news story”. Distribution of a post will be reduced if many consumers report a news story.
Newsfeed algorithm, reporting function
2015 Prioritization of news on and about friends. Newsfeed algorithm is updated to prioritize the indication of posts from (close) friends over pages consumers follow.
Newsfeed algorithm, friend list
2015 See first. Consumers can specify their Newsfeed preferences to prioritize specific friend’s and other pages (e.g., news to see first or to hide in Newsfeed).
Newsfeed algorithm, filter configuration
2016 Reactions are introduced as an extension of the Like button. Consumers can react to content by selecting emoticons that comprise Like, Love, Haha, Wow, Sad, and Angry. This change was a result of global research initiative and included focus groups and surveys.
Reactions
2016 Ranking of posts based on engagement probability. News that are likely to stimulate consumers’ interaction (e.g., rating, sharing, liking) are displayed at the top of the Newsfeed.
Newsfeed algorithm, rating, sharing, liking functionality
2017 Ranking of videos in the Newsfeed is (partly) based on the “percent completion”, that is for how long a video is watched, respectively if it is completely watched by many consumers.
Newsfeed algorithm, log data
2017 Ranking of posts. Newsfeed algorithm is updated to weigh “reactions” more than “likes”
Newsfeed algorithm, Likes, Reactions
Part B: Service Innovation in Social Networking Services 107
Table 17. Technology-centered service innovations in the Newsfeed
Year Description Involved feature
2004 Launch of Facebook. Facebook launches its social networking services by providing a profile page for every consumer. Consumers can provide personal information and upload a profile picture.
Photos, camera, PC, Profile page
2005 Facebooks launches application “Photos”. Consumers are enabled to upload digital photos from their personal computer to a Facebook photo album.
Photos, camera, PC
2007 Facebook introduces application “Video”. Consumers can store and distribute videos to friends. Facebook built the application because “now (..) consumer mobile phones and digital cameras are perfectly capable of taking good quality video”.
Videos
2008 “Publisher” is introduced as central / universal feature to simplify publication of photos and videos within the SNS.
Publisher
2011 Video calling. In collaboration with Skype, consumers can make video calls directly from the chat function.
Chat, (Skype), Video camera
2012 High resolution pictures. Photo viewing application allows high-resolution photos and full screen viewing for Firefox and Chrome.
Browser, PC, , Photo viewer,
2014 Video view counts are indicated below published videos. Publisher, Newsfeed
2015 Consumers are enabled to publish animated pictures (GIFs) in their Newsfeed. Publisher, Newsfeed,
2015 Facebook allows upload of 360° videos. A set of specially configured cameras record all 360° of a scene simultaneously. Consumers can dynamically choose the angle of a scene by dragging the video with the finger, or by turning the device into a desired direction. This functionality is enabled by a gyroscope that is built into consumers’ mobile phone.
Recording: 360° video camera; Viewing: Mobile phone with gyroscope
2015 Consumers can build collages from photos and videos, that is consumers can group photos and videos into a movie collage.
Collage
2015 Video broadcasts can be shared live. Consumers can use the “live video” function to broadcast a video in real time. During a live session, number and name of viewers is indicated to the broadcaster. At the same time, viewers can post real-time comments that are indicated in real time below the video stream.
Network connection
2015 Profile page can include enhanced photos and video footage. Consumers can upload a video and a photo series on the personal profile page (“Intro”). In addition, consumers are enabled to set a temporary profile picture that expires after a specified time.
Profile page, mobile phone/ camera with video
2016 Implementation of 360° photos and virtual reality. Consumers can use their mobile phones with gyroscope to record all 360° in one photo. These photos can be viewed with mobile phones, with virtual reality (VR) headsets, or within a browser.
Mobile phone or camera with gyroscope, VR headset
2016 Live video functionality is enhanced. Facebook indicates videos that are currently broadcasted on a map of the world. Consumers can also express their feelings by using “reactions” in live videos. Also, consumers can broadcast live videos from events that are organized with Facebook’s event function. Similarly, consumers can broadcast live videos within Facebook groups.
Mobile phone or camera GPS, network connection, events, groups, reactions, filters
108 Part B: Service Innovation in Social Networking Services
Table 18. Structure-centered service innovations in the Newsfeed
Year Description Involved feature
2006 Introduction of privacy page to control information displayed in newsfeed as a result of user feedback (and consumer protests organized by using Facebook groups). Implementation is a result of re-design of Newsfeed and Mini-Feed. Facebook CEO apologizes in open letter.
Privacy settings, Newsfeed, Groups
2007 Privacy controls for applications in conjunction with platform. Selective configuration of data access, reporting and blocking of applications.
Privacy settings,
2008 New design of the site design, including privacy page. Cleaner and simpler; Facebook declares it has no impact on previously selected privacy settings.
Privacy settings
2009 Update of privacy controls. Facebook calls consumers to review and update privacy settings. Implementation of new privacy features: granular control of over shared content (“publisher” privacy control, simplified privacy settings, expansion of education materials (on e.g., privacy center, guideline for sharing). Facebook declares that this implementation is a response to “requests from both users and experts”.
Privacy settings, transition tool, publisher, website
2010 Update of privacy settings and introduction of privacy dashboard to define and indicate information that third party applications can access from individual consumer profile.
Privacy settings
2010 Redesign of privacy settings. Simplification of user interface, (e.g., reduction from nearly 50 to 15 settings), reduction of information that is publicly available by default, increase of control about information shared with applications and websites. Change of privacy controls reflect feedback from various stakeholder groups (e.g., Facebook consumers, political institutions, consumer advocacy groups). Explicit communication of privacy operational principles.
Privacy settings
2011 Facebook settles Federal Trade Commission charges for deceiving consumers about the management of consumers private data. Facebook CEO announces commitment to privacy and two new roles Chief Privacy Officer, Policy and Chief Privacy Officer, Products.
Event
2012 Implementation of additional and update of existing privacy tools. Privacy shortcuts, activity log, control/remove tags in photos. In addition, implementation of “in-product education” and “in-context reminder” functions to guide consumers in managing privacy and security.
Privacy settings, security settings, photos
2012 Implementation of a support dashboard to feedback status information reports consumers have submitted on e.g., violations of policies (e.g., community standards).
Reporting; Com-munity policy
2013 Default privacy for teens. New accounts for teens (age 13-17 ) start with privacy settings that display shared content by default to “friends”. In addition, implementation of inline reminders and in-product education.
Privacy settings
2014 Implementation of “privacy checkup”. A tool to support consumers in reviewing and controlling information that is shared within the SNS. Also default audience for first posts of new accounts is “friends” instead of “public”.
Privacy settings
2014 Implementation of “privacy basics”. Interactive guides and information about how consumers can control information and data on Facebook with regard to, e.g., tagging, friending, blocking.
Privacy settings
2014 Update to terms and policies to accommodate for location based services (e.g., check-in, nearby friends), changes in policies regarding consumer data use, advertisements and third-party developers.
Policy, (Nearby, Friends, check-in)
2015 Implementation of “security checkup”. A tool to support finding and using security controls. For example, consumers are reminded to log out from devices that haven’t been used for a certain time, receive login alerts, and advice for secure passwords.
Security settings, login
Part B: Service Innovation in Social Networking Services 109
IV.11 Appendix 2: Typologies of resources
Table 19. Typology of resources involved in task-centered innovations
Operant resources of provider
Interfacing operand resources from provider
Operant resources of consumer
Interfacing operand resources from consumer
Application of an iterative service design and development process.
Application of quantitative and qualitative research methods and implementation of feedback mechanisms to enhance knowledge about customer needs, wants and de-facto SNS use.
Knowledge of consumer needs, wants and SNS use enables data-driven analysis and decision making in system development.
Ability to identify and realize consumer-driven customization opportunities within the interfacing operand resource.
Ability to develop, refine and expand the application of data-driven personalization algorithms.
Ability to develop, implement and maintain the interfacing operand resources and additional functionality in support of these features.
Features related to service design and development, e.g., surveys, experiments, testing and various consumer feedback systems.
Features related to service use enable the primary functions of the SNS, e.g., profiles or homepages. These IS artifacts are highly customizable by consumers and integrate personalized information.
Operand resources related to personalization include recommendation algorithms that draw on various sources of data, e.g., user generated content, configuration and log data. The application of personalization algorithms is regularly refined and expanded within the SNS.
Consumers’ knowledge about their general needs in their use of a SNS as well as the ability to articulate those preferences through feedback instruments.
Consumers’ cognitive, creative and operational skills to create user generated content (e.g., photos, videos, tags, comments) and to evaluate content of other consumers (e.g., ratings or subscriptions).
Consumers’ knowledge about personal preferences in the use of a SNS and the ability to customize IS resources accordingly (e.g., layout, design, site structure and elements).
Consumers’ ability to communicate and interact with other consumers within through comments, messages, ratings.
Feedback data is collected through feedback mechanisms, e.g., experiments, tests, or surveys.
Personal data includes publicly shared and private information to describe and represent a consumers’ virtual identity and associated personal social network. Examples: name, profile picture, job information, list of friends.
User generated content include digital information such as photos, videos, or comments that consumers typically create, share, and distribute within the SNS.
Configuration data is actively created by consumers, e.g. by defining privacy and security settings, customizing features, or by explicating personal interests and preferences through filters, ratings, or similar features.
Log data is passively created and collected by the provider. It is based on consumers system use. Log data includes, for example, timestamps of consumer actions (e.g., recently uploaded or viewed content).
110 Part B: Service Innovation in Social Networking Services
Table 20. Typology of resources involved in technology-centered innovations
Operant resources of provider
Interfacing operand resources from provider
Operant resources of consumer
Interfacing operand resources from consumer
Application of an iterative service innovation process
Ability to develop and operate the SNS technology infrastructure
Knowledge of consumer technology and consumers’ technology capabilities, e.g. through beta-user communities
Ability to develop and implement features that facilitate consumer learning
SNS technology infrastructure
Information and exchange to teach and educate consumers, e.g., announcements, introduction videos, Q&A and exchange with engineers, feedback sessions
Features to foster consumer competence development, e.g., in-product education, tutorial videos, help sections
Features that adhere to standard and consistent digital interfaces
Consumers’ knowledge and skills to configure and operate personal technology infrastructure
Consumers’ knowledge and understanding of relevant provider technology resources and skill to integrate personal technology
Functioning technology configuration, i.e. configured personal infrastructure, that enable (new) feature
Consumer hardware (e.g., phones, cameras, personal computer, network connection)
Consumer software (e.g., operating system, browser, mobile apps
Table 21. Typology of resources involved in structure-centered innovations
Operant resources of provider
Interfacing operand resources from provider
Operant resources of consumer
Interfacing operand resources from consumer
Knowledge & skills
Knowledge about providers’ and consumers’ values and norms.
Development of governance instruments.
Development of value-reflecting communication and articulation instruments.
Development of regulation and enforcement instruments.
Governance instruments
Policies (data policy, third party developers, community standards)
Guidelines (for sharing con
tent)
Default settings (“private”)
Value communication and articulation instruments
Discussion forums
Q&A sessions
Groups function
Press releases
Regulation and enforcement instruments
Privacy and security settings
Privacy and security tools (e.g., tutorials dashboards, in-product education, password advice)
Enforcement mechanisms (reporting, blocking, flagging, connect)
Knowledge & skills
Knowledge about own worldview and ability to act upon underlying values and norms
Operational skills to define settings according to personal preferences
Ability to utilize functionalities to communicate and articulate own values
Value & norm exposing data
Privacy and security configuration (data)
Value articulation data (flags, blocks)
Feedback data
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Publication list of the author XVII
Publication list of the author
The full list of publications to which the author contributed during his dissertation
process are indicated in Table 22.
Table 22. Comprehensive publication list with participation of the author
# Title Outlet Authors
1 Consumer-Centric Information Systems: A Literature Review and Avenues for Further Research
ICIS 2015 Proceedings (Thesis article)
Benjamin Spottke, Jochen Wulf, Walter Brenner
2 A Socio-Technical Approach to Study Consumer-Centric Information Systems
ICIS 2016 Proceedings (Thesis article)
Benjamin Spottke, Alexander Eck, Jochen Wulf
3 Explaining Value Cocreation in Social Networking Services: Towards a Process Model of Resource Integration (presentation)
Social Study of IT Open Research Forum 2017
Benjamin Spottke, Alexander Eck
4 Project Report Joint Research Initiative Agile Application Management:
IWI-HSG, University of St. Gallen
Benjamin Spottke, Jochen Wulf, Fiorenzo Maletta
5 What Companies Can Learn from the Videogame Industry for the Design of the Digital Customer Experience: An Analysis of the Platform Steam
HMD Praxis der Wirtschaftsinformatik (HMD best paper award 2017) (Thesis article)
Benjamin Spottke
6 Actualizing Affordances: A Socio-Technical Perspective on Big Data Analytics in the Automotive Sector.
ICIS 2017 Proceedings Christian Dremel, Matthias Herterich, Jochen Wulf, Benjamin Spottke
7 Bootstrapping a Digital Ecosystem. (presentation)
European Workshop on Software Ecosystems, Darmstadt (Best Presentation Award)
Alexander Eck, Benjamin Spottke,
8 Service Innovation in Social Networking Services: A Resource Integration Perspective on Facebook
Working paper (IWI-HSG) 2018 aiming at a top IS journal
(Thesis article)
Benjamin Spottke, Alexander Eck, Jochen Wulf
Curriculum vitae XIX
Curriculum vitae
Personal information
Name Benjamin Spottke
Date of birth 22 December 1981
Place of birth Koblenz
Nationality German
Education
2014 – 2018 University of St. Gallen, Switzerland
PhD Program in Management (Business Innovation)
2001 – 2007 RWTH-Aachen, Germany
Dipl.-Kfm. in Business Administration
1995 – 2004 Gymnasium im Kannenbäckerland, Höhr-Grenzhausen
Abitur (University Entrance Diploma)
Work experience
2014 – 2018 Research Associate
Institute of Information Management
University of St. Gallen, Switzerland
2012 – 2014 Manager Sales & Supply Planning Europe
West Pharmaceutical Services GmbH & Co. KG
2010 – 2012 Specialist Sales & Supply Planning Europe
West Pharmaceutical Services GmbH & Co. KG
2007 – 2010 System Validation & Project Management Office Analyst Europe &
Asia Pacific
West Pharmaceutical Services GmbH & Co. KG