Collaborative Decision Making with the Customer: The Impact of IS Capabilities on Co-Production of IS/IT Services

Transcription

1 Collaborative Decision Making with the : The Impact of IS Capabilities on Co-Production of IS/IT Services Laleh KASRAIAN a,1, Audrey GRACE a and David SAMMON a a Dept. of Accounting, Finance and Business Information Systems, University College Cork, Cork, Ireland Abstract. This research in progress paper proposes an evaluation matrix to explore co-production of IS/IT services between a firm s project group and its customers (i.e. the project community) in order to examine the impact of IS capabilities on this process. The firm s project group includes planners and doers who are responsible for the improvement of IS/IT service features and for ensuring that the IS/IT service meets customer expectations. The paper describes the phenomenon of co-production within the IS domain and examines the impact of a firm s IS core capabilities on service co-production that is viewed as collaborative decision making at the intersection of the firm and the customer. Keywords. Service Co-Production, Core IS Capability, Minimum Viable Service, Service Market Fit, Project community, Collaborative Decision Making Introduction Recently, service-related topics have received increased attention from IS scholars across various areas such as service-oriented architectures, IT service management frameworks like ITIL (Information Technology Infrastructure Library) [1] and service co-production and innovation [2]. Despite on-going debates about the coherence of the IS field and the service-related domain, for example Benbasat and Zmud [3], there is great attention being placed on service engagement within the IS field [4]. Lusch and Vargo [5] describe a nested role between service co-creation (value-in-use) and coproduction as shared inventiveness, co-design or shared production. It is widely held that the co-creation effort takes place in the usage or consumption stage Etgar [6] while co-production takes place within the production process that precedes the usage stage [7]. The role of customer as co-producer in production of goods or services has been argued via different disciplines [8, 9, 4] and it means that the customers do some of the work that traditionally is done by producer. The firm and the customer jointly decide (collaborative decision making) about which part of production activities, the customer will participate in and what configuration or design of product or service, will be 1 Corresponding Author: Laleh Kasraian, Dept. of Accounting, Finance and Business Information Systems, O Rahilly Building, University College Cork, Ireland; l.kasraian@umail.ucc.ie

2 produced jointly [10]. Thus, the co-production is an explicit result of decision making which is done by customers based on their own preferences [6]. One of the main challenges in service co-production activities is how a firm s project community may accomplish service changes quickly enough to meet the customers needs within the required timeframe. Co-production efforts (with the customer) facilitate service modifications and these modifications are significantly shaped by the firm s potential capabilities for growth within the collaborative layers between the firm and its customers. In this way, the effectiveness of a firm s collaborative layers should be considered as a prerequisite parameter for any coproduction activities. 1. Service Co-Production: Key Characteristics and Collaborative Layers Based on a review of extant literature, Table 1 below presents the key characteristics of service co-production. This table illustrates that service co-production requires the customer to play a leading role as co-producer for the attainment of further value. Table 1. Service Co-production Key Characteristics Key Characteristic Sample Sources Attain further value Wikström [8], Ramirez [11], Lusch &Vargo [12] All co-operation formats of various activities and stages Bendapudi & Leone [13], Jaworski & Kohli [10], Etgar [6], Dabholkar [14], Ramirez [11] The degree of customer participation Dabholkar [14], Etgar [6], Jaworski & Kohli [10] Innovative involvement in new or core offering Ramirez [11], Lusch&Vargo [12] The role of the customer as a co-producer is discussed in many disciplines, especially in the services domain and in various types of agile methodologies such as the Lean Start-up method. The Lean method focuses on the iterative interaction processes which happens between a firm and its customer in order to gather information for developing a particular service or product [15]. According to the Lean method, firms transform the customer s information into actionable ideas. This iterative collaboration between the customer and the firm helps the company to see new opportunities and increase the speed of service modifications and its effectiveness. It also assists company to move from Minimum Viable Service (the idea of the smallest service feature set) [16], towards Service Market Fit (referring to the knowledge that the firm has finally developed a solution that matches the problem and targets the market segment) [17, 18]. The co-production of any service or product involves collaboration at three distinct layers. Firstly, at the firm business layer, certain issues may affect service development or modifications, like financial dependencies or a firm s strategic mission [6]. Secondly, from technology perspective, engineering plans and concepts may accelerate or assist the service development [18]. These two layers are internal to the organization. A third, external layer incorporates the customer viewpoint as a co-producer. This includes customer parameters and goals which must be catered for, as an example, the context and preferences of the customer, their culture, etc. For any service or product

3 development or enhancement, these three layers are in collaboration and interaction with each other [16]. Through co-production activities, the three well-known groups (i.e. planners, doers and customers) are involved together until the last milestone of a project has been completed. Planners such as sponsors and other business stakeholders are involved with the customer in the early stages of the project to formalise the cost justification, project inception and project planning. During the project life cycle, this group is usually informed via updated reports related to any business affairs which may be necessary (e.g. financial, strategic or tactical planning alignments). During the gathering of service requirements at subsequent phases of the project such as initiation, design/development and deployment until the final customer acceptance, and release preparation, the customer is also normally engaged with another group known as developers or doers [19]. This group includes technical specialists and analyst, project managers, programmers and operations professionals. These two internal groups of planners, doers as well as external customer group represent the project community who enable layers of innovation interaction [20, 21]. 2. Co-Production of IS/IT Services and the Core IS Capability Framework With respect to the delivery of IS/IT services in particular, Willcocks and Feeny argue that IS components in business solutions need to be organized quickly and effectively despite huge changes in system developments and information technology [21, 22]. They describe three internal intersecting areas within the organizational boundaries that are relevant for IS/IT services namely, the business area, the technical and IS/IT service delivery areas. Table 2 presents the nine internal core IS capabilities that are important for an organization to produce an IS/IT service. Willcocks and Feeney also go further to identify which of these IS capabilities are important within each of the three intersecting areas (i.e. business, technical and IS/IT service delivery). However, an extensive review of extant literature reveals that it is not known which of these nine IS capabilities (see Table 2) are significant in the case of co-production of an IS/IT service. Table 2. The Nine IS Core Capabilities, adopted from Willcocks and Feeny [21, 22] Capability Leadership (IS/IT Governance) LE] Business systems thinking [BST] Relationship building [RB] Architecture Planning [AP] Making technology work [MTW] Informed buying [IB] Contract facilitation[cf] Contract monitoring [CM] Vendor development [VD] Definition Integrates the IT efforts with business purposes Points to planners or business systems thinkers who are important contributors to business problem solving, process reengineering, strategic development or delivering e-business Improves dialogue and establishes better understanding, trust and cooperation amongst different layers Refers to a firm s ability to alter the technical blueprint in response to present and future business needs Refers to rapidly reacting, solving problems and troubleshooting Analyses of the market for IT related services Relates to ensuring the success of existing contracts for IT/IS services on behalf of the firm Current service contract commitments are tracked and which also facilitates the development of performance standards for the particular services market Creates win-win situations between firms and their suppliers

4 Figure 1 below depicts the three layers involved in delivering IS/IT services. The shaded area in this figure entitled Service Co-production illustrates where coproduction occurs namely at the intersection between planners and customers, and also at the intersection between doers and customers. The legend within this figure depicts the nine core IS capabilities. Nine IS Core Capabilities Business Systems Thinking Making Technology Work Relationship Building Architectural Planning Leadership Informed Buying Contract Facilitation Vendor Developing Contract Monitoring Design of IT/IS Architecture Business & IS Vision Delivery of IS Services Doer Layer Planner Layer Service Co-production Layer Firm-Side Figure 1. Co-production of an IS/IT Service - Collaborative Layers -Side 3. Current Research in Progress The objective of this research is to propose a framework to examine the co-production of services, viewed as collaborative decision making between firm project groups (planners and doers) and customers (all of whom constitute the project community) in order to understand which IS core capabilities enable or assist co-production efforts. It is important to note that the IS service delivery layer in the IS core capability framework is considered to be part of Doer layer which collaborates with customers via its relationship intersection. To achieve this objective, the key characteristics of service co-production (see Table 1) are adopted as measures of co-production. In this way, they may be used to explore and examine how IS core capabilities facilitate moving from a Minimum Viable Service towards a Service Market Fit in an iterative manner between plannercustomer and doer-customer intersections. This will enable the researcher to highlight which of the nine IS core capabilities are important factors in the co-production of IS/IT services and indeed help us to understand why they are important within each intersecting area (i.e. planner-customer or doer-customer) The Research Approach This research examines the core IS capabilities and their significance in IS/IT service co-production. In addition, it investigates how such capabilities affects the ability of firm project groups (i.e. planners and doers) in iterative collaborate activities with customers as they jointly set about to co-produce/improve the IS/IT service features. The proposed research model (see Figure 1) helps to break up the research objective

5 into two research questions. Research question one is; what core IS capabilities play a significant role in the co-production of IS/IT services between firm s planners and customers? and research question two is what core IS capabilities play a significant role in the co-production of IS/IT services between firm s doers and customers? Table 3. Evaluation Matrix - The impact of core IS capabilities in co-production of IS/IT services Co-production Key Concepts - Intersection Layer Innovative All co-operation Degree of Attain involvement in new formats of various Participation further value or core offering activities and stages IS Core Capabilities Business System Thinking [BST] S/M/W Making Technology Work[MTW] Relationship Building [RB] Architecture Planning [AP] Leadership [LE] Informed Buying [IB] Contract Facilitation [CF] Vendor Developing [VD] Contract Monitoring [CM] *S (Strong) or M (Medium) or W (Weak) This study is exploratory in nature and multi-case study approach has been chosen [23]. This approach also will allow in-depth description of the phenomenon under investigation and permit multiple cross case analysis. Data collection will be conducted by choosing three companies that engage in offering, delivering and improving IS/IT services via cooperative and collaborative activities with customers. 4. Discussion and Expected Contribution This study will make a significant contribution by providing an in-depth understanding of how core IS capabilities impact on the co-production of IS/IT service features (viewed as collaborative decision-making efforts) with individual customers or customer groups. Such an understanding will be particularly valuable to certain areas within the IS discipline such as Lean-Start up solutions and agile methodologies. The study will also contribute to Service Science Management and Engineering (SSME) literature, particularly areas of research which endeavour to raise the competence of the service provider [4] and areas with an essential focus on service innovation [24]. From a practice perspective, organisations can draw on this research to improve and innovate how they invest and support their employees, the environment in which they operate, the information systems that they use, and the networks that they employ for partnership and collaboration with customers. By improving in-house IS capabilities, organisations can leverage technologies to optimize service delivery and to raise the competence of the provider [25]. This research will also provide companies with a better understanding of which IS capabilities specifically relate to service co-production and collaborative activities with customers. The evaluation matrix depicted in Table 3, will be used to assess the

6 important core capabilities in planner-customer and doer-customer intersections via coding dimensions as a three-point scale (strong as S, medium as M, weak as W ) to prepare the case comparison. Therefore, this would be beneficial for the participating service-based companies that may have focused on wrong capabilities instead of core capabilities that play significant role at the time of service co-production. References [1] A. Rai and V. Sambamurthy, Editorial Notes The Growth of Interest in Services Management: Opportunities for Information Systems Scholars, Inf. Syst. Res., vol. 17, no. 4, pp , Dec [2] S. Alter, Viewing Systems as Services : A Fresh Approach in the IS Field, Commun. Assoc. Inf. Syst., vol. 26, [3] I. Benbasat and R. W. Zmud, The Identity Crisis within the IS Discipline, Mis Q., pp , [4] S. Alter, Making a Science of Service Systems Practical : Seeking Usefulness and Understandability while Avoiding Unnecessary Assumptions and Restrictions, no. January, [5] R. Lusch and S. Vargo, Service-Dominant Logic What It Is, What It Is Not, What It Might Be, pp , [6] M. Etgar, A descriptive model of the consumer co-production process, Acad. Mark. Sci. 2007, vol. 36, no. 1, pp , Jul [7] L. a. Bettencourt, A. L. Ostrom, S. W. Brown, and R. I. Roundtree, Client Co-Production in Knowledge-Intensive Business Services, Calif. Manage. Rev., vol. 44, no. 4, pp , Jul [8] S. Wikström, The customer as co-producer, Eur. J. Mark., vol. 30, no. 4, pp. 6 19, [9] C. Gronroos, Value co-creation in service logic: A critical analysis, Mark. Theory, vol. 11, no. 3, pp , Oct [10] B. Jaworski and A. K. Kohli, Co-Creating the voice of the customer, Serv. Domin. Log. Mark., [11] R. Ramirez, Value Co-production: Intellectual Origins And Implications For Practice And Research, Strateg. Manag. J., vol. 20, no. June 1998, pp , [12] R. Lusch and S. Vargo, Service-dominant logic: reactions, reflections and refinements, Mark. Theory, vol. 6, no. 3, pp , Sep [13] N. Bendapudi and R. P. Leone, Psychological implications of customer participation in coproduction, J. Mark., vol. 67, no. 1, pp , [14] P. A. Dabholkar, How to improve perceived service quality by improving customer participation, B. J. Dunl. (Ed.), Dev. Mark. Sci. (pp ). CullowheeJournal Acad. Mark. Sci., [15] S. G. Blank, The Four Steps to the Epiphany. Quad/Graphics, [16] E. Ries, The Lean Startup How Todays Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses [17] C. Nobel, Teaching a Lean Startup ' Strategy, Harvard Bus. Sch., pp. 1 2, [18] S. Blank and B. Dorf, The Startup Owner s Manual: The Step-By-Step Guide for Building a Great Company [19] K. Collier, Agile analytics: A value-driven approach to business intelligence and data warehousing. Pearson Education, Inc, [20] T. Brown, Strategy By Design, Fast Co. - IDEO LLC, pp. p52 54, [21] D. F. Feeny and L. P. Willcocks, Core IS capabilities for exploiting information technology, Sloan Manage. Rev., vol. Spring1998, p. 9, [22] L. Willcocks, D. Feeny, and N. Olson, Implementing Core IS Capabilities:, Eur. Manag. J., vol. 24, no. 1, pp , Feb [23] C. Marshall and B. G. Rossman, Designing Qualitative Research. Sage Publications, California, [24] D. T. Jones, J. Womack, and D. Jones, Lean Solutions : How Companies and s Can Create Value and Wealth Together, no. 617, pp. 1 3, [25] P. P. Maglio and J. Spohrer, Fundamentals of service science, J. Acad. Mark. Sci., vol. 36, no. 1, pp , Jul