A Unified, Operational View of Service, Service Systems, and Service Science

Transcription

1 A Unified, Operational View of Service, Service Systems, and Service Science Steven Alter University of San Francisco San Francisco, USA Abstract This paper proposes a unified operational view of service and service systems, thereby addressing an important gap in service science. That gap involves over-emphasizing marketing, competition, and economic exchange as fundamental service science concepts and under-emphasizing operational systems that produce services and contribute to the co-creation of value. This paper proceeds through a set of layers, each of which builds on previous layers. Layer 1 proposes a broadly applicable definition of service after reviewing past definitions and noting that they suggest three different portrayals of the nature of service. A conceptual model in Layer 2 links service to work systems, as defined in work system theory (WST). Layer 3 explains why WST uses the term product/service instead of service to refer to both outputs of work system activities and a work system s contributions to value creation by customers. Layer 4 extends a work system metamodel that was originally designed to support systems analysis and design, thereby presenting a new version that illuminates the service-related path from provider resources to value for customers. Layer 5 explains service-related insights from the metamodel. Layer 6 explains how WST and the metamodel address operational topics that differ from most of the topics addressed in service-dominant logic. Layer 7 applies ideas from the previous layers to propose basic premises of an operational view of service, service systems, and related concepts, thereby supplementing the marketing and economic view expressed by service-dominant logic. Keywords: Service, service system, service theory, service dominant logic, self-service Creating a Unified, Operational Model of Service and Service Systems If service science is to be taken seriously in academia and in practice, it needs to provide concepts and frameworks that are clear and easy to apply meaningfully in real situations. Ideally, service concepts and frameworks should provide a unified view of how services are produced, delivered, and used or consumed. That unified view should be robust, in the sense that minor, incremental changes should not seem to transform something from being a service into being something that is not a service. The seemingly takenfor granted generalizations about aspects of services such as co-production by providers and customers, co-creation of value for customers, reliance on customer interactions, and centrality of value propositions should be questioned in relation to how and the extent to which they apply in most real situations that are typically viewed as services. Definitions of basic concepts should be questioned in relation to the extent to which they could guide typical business professionals attempting to describe and analyze most of the services encountered in everyday life. For example, the definition of service system from the Call for Papers (ICIS, 2014) might seem problematic in that regard: value co-creating configurations of people, technology, internal and external stakeholders, connected by value propositions and shared information. A basis in readily understandable and easily used frameworks and concepts is certainly preferable if service science is to have impact on business and society Steven Alter. This is a draft. Comments are welcomed. 1

2 This paper proposes a unified operational view of service, service systems, and many related concepts, thereby addressing the first topic listed in the Call for Papers, service science concepts and theory. In light of many conceptual disagreements in the service science community, creating a unified view of service and related concepts addresses one of the more difficult topics listed in the CFP. This paper s research question and method differ from what might be expected in an empirical paper. Research question: Create a unified operational view of service, service systems (as defined in the CFP), and related service science concepts, and demonstrate why that view is potentially useful. Method: Produce a conceptual contribution by creating a multi-layer rationale for an operational model of service and service systems, with each layer building on the previous layers. The ultimate result provides three components of a stronger basis for service science: 1) a metamodel showing a service-related path from provider resources to value for customers 2) a set of insights about basic service science concepts, 3) basic premises (BPs) of an operational view of service and service systems that could supplement the foundational premises (FPs) of service-dominant logic (SD-logic). The argumentation proceeds in layers that look at different topics and build on previous layers, ultimately leading to the BPs as the last layer. This argumentation differs from approach in the original SD-logic paper (Vargo and Lusch, 2004) because it is based on two conceptual models and because it introduces the BPs at the end as a usable re-statement of aspects of the previous layers. As a conceptual contribution (Hirschheim, 2008), this paper should be evaluated in terms of rigor and the potential usefulness of the results. Its claim to rigor is that the concepts and frameworks are defined clearly and that they operate together as a unified approach for understanding service and related concepts. Its claim to potential usefulness is six areas: 1) It provides a unified approach and an organized set of ideas, rather than an isolated definition or set of assertions. 2) It presents and organizes ideas that can be used by most business professionals, rather than just by economists, lawyers, or technical experts. 3) Minor, incremental changes will not lead to fundamentally different conclusions about whether something is or is not a service. 4) Its unified approach to the topic of service provides a platform for questioning or evaluating common assertions about co-production, value co-creation, and other important service science topics. 5) It provides a platform for understanding operational aspects of service systems, thereby supplementing SD-logic (Vargo and Lusch 2004, 2008) and related ideas about economic exchange and the nature of competition. 6) It suggests a new set of analysis and design questions that are relevant to most service systems and are easy to use. Organization. This paper proceeds through a set of layers, each of which builds on the previous layers. Layer 1 proposes a broadly applicable definition of service after reviewing past definitions and noting that they suggest three different portrayals of the nature of service. A conceptual model in Layer 2 links service to work systems, as defined in work system theory (Alter, 2013b). Layer 3 explains why work system theory (WST) uses the term product/service instead of service to refer to both specific outputs of work system activities and specific contributions to value creation by customers. Extending a work system metamodel that was originally designed to support systems analysis and design, Layer 4 presents a new version that illuminates the service-related path from provider resources to value for customers. Layer 5 explains insights from the metamodel. Layer 6 explains how WST and the metamodel address operational topics that differ from most of the topics addressed in SD-logic. Layer 7 applies ideas from the previous layers to propose basic premises (BPs) of an operational view of service, service systems, and related concepts. That operational view supplements the marketing and economic view expressed by SD-logic. Layer 1: Definition of Service Table 1 shows typical definitions of service from different disciplines including marketing, production management, economics, IT management, and computer science. (Most were cited in Alter, 2012a). These definitions portray service in three different guises in the column in Table 1 called portrayal. Some definitions focus more on acts performed by service providers, some focus more on outcomes perceived by customers, and some are about software entities that are meant to operate invisibly in the background Steven Alter. This is a draft. Comments are welcomed. 2

3 Table 1. Three different portrayals emphasized in past definitions of service Portrayal Definition acts an act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. (Kotler and Keller, 2006, p. 402) acts intangible activities customized to the individual request of known clients. (Pine and Gilmore, 1999, p.8) acts a provider-client interaction that creates and captures value. (IBM Research, 2009) acts situations in which the customer provides significant inputs into the production process. (Sampson and Froehle, 2006, p. 331) acts value-creating support to another party s practices. Grönroos (2011, p. 285) acts the application of skills and knowledge (operant resources) for the benefit of another party (Vargo and Lusch, 2008, p. 6) outcomes a time-perishable, intangible experience performed for a customer acting in the role of a co-producer. (Fitzsimmons and Fitzsimmons, 2006, p.4) outcomes a simultaneous or near-simultaneous exchange of production and consumption, transformation in the experience and value that customers receive from engagement with providers, and intangibility in that goods are not exchanged. (Rai and Sambamurthy, 2006, p.328) outcomes a change in the condition of a person, or a good belonging to some economic entity, brought about as a result of some other economic entity, with the approval of the first person or economic entity. (Hill, 1977, p. 318) outcomes an essentially intangible set of benefits provided by one party to another. (Clerc and Niessink, 2004, p. 104) outcomes A means of delivering value to Customers by facilitating Outcomes Customers want to achieve without the ownership of specific Costs and Risks. (ITIL, 2011, p. 66) software A service is generally implemented as a course-grained, discoverable software entity entities that exists as a single instance and interacts with applications and other services through a loosely coupled (often asynchronous), message-based communication model. (Brown et al., 2005). The component that consumes business services offered by another business component is oblivious to how the provider created the business service. (Cherbakov et al., 2005) Instead of assuming that service definitions are universally right or wrong, it is more useful to recognize that each definition makes sense from a particular viewpoint or in a context. A view of service for thinking about hospitality situations such as hotels or restaurants probably will not emphasize the same topics as the view of service for thinking about transportation of goods, water supply systems or software testing. And it certainly won t emphasize characteristics of a course-grained, discoverable software entity. Even though certain definitions fit best in certain situations, it would be nice to have one definition that actually covers most everyday services, such as haircuts, gardening services, medical care, transportation, package delivery, consulting, architectural design, process outsourcing, bug fixes, customer support, and software customization. Perhaps surprisingly, a simple, dictionary-like definition meets that goal: A service is an act performed to produce outcomes for the benefit of others. That definition covers all three portrayals of service in Table 1. In addition to applying to person-toperson and organization-to-organization services, it also applies to software services because those services are performed by software entities for other entities. Also, that definition is consistent with the spirit of the third foundational premise in SD-logic, goods are a distribution mechanism for service provision. In both cases, the conclusion is that most economic activities can be viewed as services Steven Alter. This is a draft. Comments are welcomed. 3

4 Layer 2: A Conceptual Model Linking Work Systems and Service The conceptual model in Figure 1 contains concepts such as service catalogs and service offerings because it was a contribution to ongoing discussions (e.g., IT4IT Consortium, 2013) in IT industry groups about the nature of service in IT service organizations that seek guidance from proposed sets of IT best practices such as ITIL, COBIT, ITSM, and IT service CMM. While that original purpose might seem tangential to a general discussion of services, its links between work systems and service (including references to service offerings and value propositions) provides a useful step toward this paper s subsequent layers. A work system is a system in which human participants and/or machines perform processes and activities using information, technology, and other resources to produce products/services for internal or external customers. Enterprises that grow beyond an improvised start-up phase consist of multiple work systems. Typical business enterprises contain work systems that procure materials from suppliers, produce products, deliver products, find customers, create financial reports, hire employees, coordinate work across departments, and perform other functions. Readily available descriptions of work systems and WST (e.g., in Alter, 2008, 2013b) will not be repeated, except that Layer 3 will explain why WST uses product/service instead of products and services. The fact that those products/services can be directed toward internal or external customers leads to symmetrical treatment of inwardly directed services and outwardly directed services for external customers. Consistent with Alter (2013b, pp ), this paper treats the work system framework as part of WST and a work system metamodel as an extension of WST. Figure 1 shows relationships between service catalogs, service offerings, work systems, services (as acts) and service outcomes. While it starts on the upper right with several terms related to IT services, most of Figure 1 is equally relevant to almost all important work systems and services in organizational settings. In the following summary of Figure 1, concepts from Figure 1 are bolded. A service catalog consists of (i.e., identifies) service offerings from a particular provider, such as an IT department or enterprise. A service offering includes one or more value propositions for customers of the service offering. Those customers may be employees of the firm that provides the service offering (e.g., a help line for employees) or may be economic customers of that firm (e.g., customers of a cloud computing service). In the context of service offerings, a value proposition is a relatively general statement about why potential customers of a service offering would want it. A service offering may (or may not) include contractual arrangements. Such arrangements are very important for service offerings such as outsourcing, and are less important for internally directed services such as help lines for computer users. A service offering is executed by one or more work systems. Thus, the realization or enactment of a service offering involves a specific set of acts and/or outcomes that one or more work systems will produce for internal customers and/or external customers. A work system performs one or more services. In organizational contexts, work systems almost always perform some activities for the benefit of others because organizations consist of interrelated work systems. Thus, while some work systems to operate solely for a single participant s benefit of (e.g., playing a one person videogame for fun), that type of situation is unimportant in most business settings. A more important point is that a work system that performs one or more services may perform many activities that are directed internally within the work system and are not services for its customers A service is a purposeful act for the benefit of others. In other words, a service is an act, not an outcome. As a type of purposeful acts for the benefit of others services have intended outcomes and also have actual outcomes that often differ from the intended outcomes. The difference between intentions and outcomes is one of the reasons why services should be viewed as acts Steven Alter. This is a draft. Comments are welcomed. 4

5 Unpurposeful Act Act Purposeful act not for benefit of others < has (1...*) Intended outcome Purposeful Act Actual outcome < has (1...*) Purposeful act for benefit of others Service < performs (1...*) Service Catalog Service Offering executed by (1...*) > Work System includes (1...*) > includes (0...*) > has (1...*) > has (1...*) > has (1...*) > uses (1...*) > consumes (0...*) > Value Proposition Contractual Arrangement Provider Responsibility Customer Responsibility Capability Resource Work system characteristics Scalability Flexibility Degree of structure Complexity Degree of automation Extent of co-production Extent of value co-creation Centrality of user experience Degree of customizability Visibility to customer And many others produces (1...*) > < has has > Internal metrics Cost to operate Efficiency/ productivity Speed/ cycle time Consistency/ variability Rate of errors/ failures Vulnerability to disruption Uptime And many others Product/service for customer (of work system) has > Product/service metrics Customer satisfaction Cost to customer Speed perceived by customer Quality perceived by customer Responsiveness Reliability Conformance to laws, standards And many others A B A B Generalization: A is a kind of B Composition: B consists of one or more A s A A affects > B Note: Many elements in the conceptual model have goals, attributes, performance indicators, and related principles, patterns, and generalizations that do not fit into a one page representation, and that must be included in more detailed explanations. B Figure 1. Concept map linking services, acts, outcomes, and other concepts related to service offerings and service execution. Figure 1 mentions a number of other points that are relevant to services and service systems and also to the work system metamodel in Layer 4. A work system always has one or more provider responsibilities. Those responsibilities are usually implicit in processes and activities within the description of the work system. A work system always has one or more customer responsibilities. Customer responsibilities are important for three reasons. 1) Customers often participate directly in many work systems, e.g., providing medical care or producing custom software. 2) Customers are responsible for cooperating with and not interfering with service providers, such as following requests of airplane flight attendants. 3) Customers are responsible for creating value for themselves from whatever products/services the work system provides, such as when an IT department s customers create value for themselves by using what is provided for them). This touches on debates (discussed later) about whether value is always cocreated (Vargo and Lusch, 2008) or whether of value co-creation is optional (Grönroos, 2011). A work system has one or more capabilities. Capabilities are summary descriptions of the work system s ability to use a certain level of resources to produce products/services of a certain quality. A work system always uses one or more resources and may consume some of those resources. The resources may be informational resources, technological resources, human resources, or other types of 2014 Steven Alter. This is a draft. Comments are welcomed. 5

6 resources. The distinction between using resources versus consuming resources is a clarification related to the difference between resource usage that does not consume the resource (e.g., using a computer or using information) versus resource usage that consumes the resource (e.g., consuming the charge in a battery or writing on a piece of paper). A work system produces one or more products/services for customers. Using the concept of product/service in WST bypasses definitional debates (see Table 1) that are unimportant for analyzing work systems. A product/service may consist of information, physical things, and/or acts or outcomes that customers receive or use. The term product/service is used because a work system outputs often combine product-like and service-like characteristics (see Table 2). Products/services for customers appears in Figure 1 because some products/services that a work system produces may not be received and used by its customers. For example, the third step in an assembly-line produces at least one product/service for the fourth step, and those products/services may be transformed further before any products/services for customers are produced. Notice also that a work system s customers may be work system participants, e.g., a user participating in software development. Products/services for customers have many product/service metrics, any of which may be important in some situations and unimportant in other situations. Figure 1 lists some of these metrics and notes that there are many others. Work systems have many internal metrics, any of which may be important in some situations and unimportant in other situations. Figure 1 lists some of these and notes that there are many others. Work systems have many work system characteristics, any of which may be important in some situations and unimportant in other situations. Figure 1 lists some of these and notes that there are many others. Some work system characteristics such as extent of co-production, extent of value cocreation, centrality of user experience, degree of customizability, and visibility to customer are often associated with services. Other work system characteristics such as scalability, flexibility, resiliency, degree of structure, complexity, and degree of automation are important design variables for many work systems but often are not directly associated with services. Layer 3: Interpretation of Product/Service in WST and WSM WST uses product/service because the controversial distinction (Table 1) between products and services is not important for WST or for the work system method (WSM), a systems analysis and design method developed to support the needs of business professionals (Truex et al., 2010; Alter, 2013b). As noted previously, work systems produce products/services for the benefit and use of its customers, who may be internal customers within the same enterprise or may be external, economic customers of the enterprise. In WST and WSM, a set of design dimensions ranging from product-like to service-like is useful for characterizing products/services that a work system produces. Those design dimensions treat productlike and service-like in a metaphorical sense rather than a definitional, yes/no sense. Table 2 (Alter, 2012a, p. 28) illustrates the use of the design dimensions by showing how five medical services named on the bottom of the Table are positioned quite differently along the dimensions even though all five are services based on both the definition from Layer 1 and everyday views of what service means. Also, some of them have characteristics that contradict some definitions of service in Table 1. For example, an artificial hip s recipient becomes the owner of an expensive physical object that obviously is not intangible, is not consumed as it is produced, and is much more than an experience. Many aspects vaccinations at a public health clinic are quite product-like because they are standardized, transactional rather than relational, involve transfer of ownership, and accommodate little customer discretion Steven Alter. This is a draft. Comments are welcomed. 6

7 Table 2. Approximate placement of five medical services across dimensions for designing products/service offerings (for illustrative purposes; not based on a specific instance of each service). Source: Alter ( 2012a, p. 28) More product-like << >> More service-like Customer value from things that the customer receives E D-A C--B Customer value from provider actions Customer value from things that the customer uses E D-A C--B Value from experience that the provider produces Production of value by the provider D C---A-E B- Co-production of value by the provider and customer Standardized, scripted interactions and products -E-D C AB-- Customized, non-scripted interactions and products Value from tangible features of whatever the provider produces -D-A-B C-----E Value from intangible features of whatever the provider produces Transferred to customer and used later ---E A---D----BC Consumed by customer during production Produced by provider with little or no co-production ----D-E C A---B- Customer plays extensive role in coproduction Transfer of ownership AD E BC-- Non-transfer of ownership Transaction-based interactions -EDC A B- Relationship-based interactions Interactions not concerned with the customer s emotional state Examples: -----E D----C AB- Interactions concerned with the customer s emotional state A = surgery to install an artificial hip B= extended courses of physical therapy for recovery from serious injuries C = pre-employment physical exams D = vaccinations provided at a public health clinic E = standardized, web-based wellness course provided by a vendor for employees of a university Layer 4: Work System Metamodel and the Link between Provider Resources and Value for the Customer Figure 2 is one of a series work system metamodels (Alter, 2010, 2012b, 2013a) that outline more detailed views of a work system than the work system framework provides. The latter framework is useful for summarizing a work system and achieving mutual understanding of its scope and nature, but is less effective for detailed analysis. The more complete and rigorous metamodel was developed to be more precise about concepts required to support deeper analysis without requiring specialized IT terminology. Each version of the work system metamodel built upon the work system framework (Alter, 2013b) by making its concepts clearer, more rigorous, and more useful in work system documentation and software development. This creates a bridge between a summary level description of a work system and more detailed models as the work system is decomposed into subsystems during analysis and design. That bridge can support traceability between summary level analysis by business professionals and more detailed analysis and documentation by IT specialists. It provides adequate rigor for that task without requiring the precision, terminology, and notation of detailed software specifications. The bottom of Figure 2 notes that many attributes of each entity type are hidden in the one-page representation of the metamodel. Analysts using the metamodel would consider and apply the hidden attributes while defining the problem or opportunity, evaluating the as is work system, and justifying proposed improvements that would appear in the to be work system. Another practical compromise is that the customer work system is represented in the upper right in a highly summarized fashion. A more detailed view of the customer work system would show the same entity types as are shown for the provider work system Steven Alter. This is a draft. Comments are welcomed. 7

8 Enterprise consists of (1...*) > Value Constellation < consists of (1...*) Customer Business Process < contains (0...*) contains (2...*) > Work System contains (1...*) > < interacts with (0...*) Other Work System < used as (0...*) Customer interacts with (0...*) > Work System contains (1...*) > creates (1...*) > perceives (1...*) > Value for Customer < (1...*) received by, used by, or facilitates Role in Customer Work System Resource < uses (1 *) Work System Activity produces (1...*) > Product/Service From Activity contributes to (0...*) > Product/Service for Customer performed by (1..*) > Actor Role performed by (1..*) > < performs (0..*) < performs (0..*) < performs (0..*) Automated Non-Customer Customer Agent Participant Participant performs (0..*) > Knowledge/ Expertise Other Resource Technological Entity Transaction Record Tool used by (1...*) > Plan, Forecast, or Commitment Participant Informational Entity Goal has (0...*) > Guideline, Rule, or Structure Skill/ Capability Performance Metric Motive Other Information Strategy Precondition Trigger Document Video Image Physical Entity Time Resource from Shared Infrastructure Enterprise Strategy Department Strategy Message Conversation Resource from the Environment Work System Strategy Other Env. Resource Shared Human Resource Shared Informational Resource Shared Technical Resource Organizational Culture Laws, Standards, Regulations, Policies A B A B Generalization: A is a kind of B Composition: B consists of one or more A s A A affects > B Note: Many elements in the conceptual model have goals, attributes, performance indicators, and related principles, patterns, and generalizations that do not fit into a one page representation, and that must be included in more detailed explanations. B Figure 2. Work system metamodel (based on in Alter, 2013a, Figure 2) 2014 Steven Alter. This is a draft. Comments are welcomed. 8

9 Each element of the work system framework is represented in the metamodel, although most are reinterpreted in a more detailed way. For example, information becomes informational entity, technology is divided into tools and automated agents, activities are performed by three types of actors, and so on. Whereas the work system framework does not include the term user, the metamodel includes "uses" as a relationship between a participant and a tool (which is one of two guises of technology). Representation decisions in the metamodel try to maximize understandability while revealing likely omissions from evaluation, analysis, or design processes. Starting at the top, the metamodel makes the following points: Enterprises and value constellations (Normann and Ramirez, 1994) consist of work systems. Work systems always contain at least one work system activity and may contain one or more business processes if some of the work system activities are sufficiently interrelated and sequential enough to be considered a process. Work system activities use resources to produce one or more products/services from activity that may be used as a resource for subsequent work system activities and/or may contribute to a product/service for a customer. Thus, only some of the products/services produced are products/services for customers. Customer work systems create value for customers using products/services for customers produced by the provider work system. Resources used by a work system activity may include human resources (participants), informational resources, technological resources, and other resources, each of which have a number of specific types that are worth including in the metamodel to minimize the likelihood that they will be overlooked in an analysis. Work system activities are performed by actor roles. Actor roles can be performed by three types of entities, noncustomer participants, customer participants, and automated agents. The outcome of work system activities that use human resources (participants) depends on the knowledge/expertise, skills/capabilities, performance metrics, motives, and other characteristics of those participants. The technological resources that may be used in a work system activity may include tools that are used directly by participants (e.g., a person driving a truck) or automated agents that perform work autonomously after being launched (e.g., a search engine). Informational resources that may be used in a work system activity may include many types of informational entities such as transaction records, plans, forecasts, commitments, goals, rules, structures, documents, video, images, messages, and even conversations. Other resources that may be used in a work system activity include physical entities, time, resources from the environment such as organizational culture, laws, standards, regulations, and policies, and resources from shared infrastructure that include shared human resources, shared informational resources, and shared technical resources. Both the work system and customer work system may interact with other work systems in ways that may have positive and/or negative impacts on the operation of either work system. Layer 5: Insights Related to Important Service Science Concepts Thus far, this paper defined service (Layer 1), linked the definition of service to work systems (Layer 2), explained why product/service is a useful way to think about what systems in organizations produce (Layer 3), and presented a work system metamodel that links provider resources, work system activities, and value for the customer (Layer 4). One of the goals of Layer 4 was to present entity types and relationships between entity types that could help in appreciating the operational meaning of service science concepts such as co-production, co-creation of value, customer experience, and service offering Steven Alter. This is a draft. Comments are welcomed. 9

10 Layer 5 explains implications of the ideas thus far, focusing on the operational meaning of service science concepts. Layer 6 will compare this paper s ideas with foundational premises of SD-logic. Layers 5 and 6 provide the basis for Layer 7, which presents basic premises (BPs) of an operational model of service. Three guises of service. The metamodel encompasses all three guises of service in Table 1. Services as acts appear as work system activities that produce products/services for the benefit of someone else. Those products/services may become resources for subsequent work system activities and/or may contribute to products/services for customers which are services as outcomes. These often are the cumulative result of many work system activities rather than just single activities that might be interpreted as services as acts. Thus, product/service encompasses both services as acts and services as outcomes. The metamodel also covers the third guise of service, services as software entities, because automated agents are totally automated work systems whose activities produce services. Value creation. The term value has many different meanings both in business and in everyday life. In marketing it may mean value-in-use, the net benefit to customers, and/or may mean value-in-exchange, how much customers pay for something. In accounting, economics, and operations management, value is often viewed in relation to production costs, with emphasis on value added, the monetary value of resources used by production steps based on the standard cost or current price of resources that are consumed by those steps. In this paper, value refers to value-in-use from a customer perspective. Meaning and extent of co-production. Some definitions of service in Table 1 imply that service necessarily involves co-production by providers and customers. The metamodel says nothing about coproduction, but clarifies where co-production might occur, thus making it easy to understand the extent of co-production. Co-production occurs in any work system activity whose actor roles include customer participants and noncustomer participants. A yes/no criterion for deciding on whether something qualifies as a service based on co-production would say yes to a 20 step process consisting of a customer request followed by 19 provider activities. It is more interesting and useful to examine the current extent and form of co-production, and ask whether more co-production or less would be preferable for providers and/or customers. A change that is beneficial for providers might not be beneficial for some customers. Meaning and extent of value co-creation. The metamodel clarifies where value co-creation might occur. Value co-creation occurs wherever activities in the customer s value creating work system coincide with work system activities within the provider's work system. A yes/no criterion for value co-creation would say yes if there is any value-related interaction between the provider and customer. From an operational viewpoint it is much more interesting and useful to look at the extent of co-creation and to ask whether more co-creation or less co-creation would be preferable for providers and/or customers. Location of service interactions. Service interactions occur wherever customer participants and noncustomer participants play actor roles in the same work system activity. The metamodel shows that some work systems are very intensive in service interactions and others have few service interactions. Meaning of the customer experience. The metamodel does not mention the customer experience, although it provides ways to describe aspects of customer experiences. Customer experiences start during any co-production that occurs, i.e., work system activities involving both customer participants and noncustomer participants. Subsequent customer experiences occur when customer work systems receive the provider work system s products/services for customers and use them to facilitate value for customers. The customer experience is a combination of the experience of interacting with the provider and the experience of attaining value that is facilitated by products/services for customers whether or not the provider work system is at all visible to customers at that point. Value proposition. Figure 1 assumes that a value proposition is an implied promise of benefits and a contractual arrangement is a specification of deliverables, costs, and other measurable outcomes. The terms value proposition and contractual arrangement were placed together in Figure 1 because achieving a value proposition often calls for contractual arrangements that specify costs and deliverables, with the ultimate benefits still relying on the customer s subsequent actions and perceptions. Figure 2 treats value proposition and contractual arrangement as hidden attributes. These and other attributes are hidden because the one page diagram in Figure 2 would be too crowded if all relevant attributes were visible. Service level agreement. The metamodel does not mention service level agreements explicitly but takes service level agreements into account because it includes commitment as one of the types of 2014 Steven Alter. This is a draft. Comments are welcomed. 10

11 informational entities. A service level agreement is a particular type of commitment that specifies provider and customer responsibilities and expectations that govern a work system s operation. Service offering. The metamodel does not include the concept of service offering. A work system s offering for its customers can be viewed as the sum of the products/services that it provides for them. That offering might or might not come with an explicit value proposition or contractual arrangement. Self-service. A work system is a self-service work system (e.g., buying books online) if customer participants use resources (such as web sites) that are made available by a work system owner to allow the customer to perform work system activities independently and without interacting with noncustomer participants. Noncustomer participants often perform other work system activities such as stocking goods and fulfilling orders. It may be more convenient to treat those activities as part of another work system. Service systems. At first blush it is unclear whether the concept of service system should mean anything other than work system that performs activities to produce outcomes for the benefit of others. Most work systems in business organizations fit that definition. The subtle definition of service system in the CFP for the Service Science and IS track goes further, saying that service systems are value co-creating configurations of people, technology, internal and external stakeholders, connected by value propositions and shared information. The metamodel in Figure 2 covers the most important part of that definition, the value co-creating configuration, because a value co-creating configuration is a combination of a customer work system (which creates value for customers) and a provider work system, which is an operational system that produces products/services for customers. The provider work system may have only noncustomer participants (as in a factory), may have customer and noncustomer participants (as in a hospital), and may be completely automated (as in an automated news service that compiles news from the internet). Other parts of the definition are more problematic because of the unclear meaning of being connected by value propositions and shared information. The metamodel could treat shared information as information that is available in both the provider work system and the customer work system. A more stringent condition for shared information would say that the information should be available to customer and noncustomer participants involved in the same work system activity. The metamodel could treat the concept of value proposition as a hidden attribute of product/service for customer, but that would not address the fuzziness of the concept of value proposition and the indistinct nature of being connected by value propositions and shared information. Also, it is not clear why internal and external stakeholders who are not participants should be viewed as part of a value co-creating configuration. The comments above illustrate the potential value of using the metamodel to describe a series of real world service systems that are viewed as value co-creating configurations. Assume that a provider work system and customer work system coincide at the point where the customer makes a service request, such as please paint my office and the point where the provider is paid. While the combination of the provider work system and customer work system might qualify as a value co-creating configuration, the term value co-creating configuration might seem an overly complex ways to say that a customer makes a request, the provider does the work, and the customer pays the provider. The indistinct nature of being connected by value propositions and shared information would raise other challenges. Layer 6. Comparison with Service-Dominant Logic Authors such as Maglio and Spohrer (2008) have argued that SD-logic is the theoretical foundation for service science. Assuming that the ultimate impact of service science will depend partly on its treatment of operational systems in organizations, This layer looks at the relationship between the operational view expressed by WST and the metamodel and the marketing-oriented view expressed by the 10 foundational premises (FPs) of SD-logic in Vargo and Lusch (2008). It finds that the spirit of the FPs focuses on marketing and economic exchange and is largely tangential to operational aspects of the production and delivery of services. When FPs touch on operational topics such as service provision, resources, and value co-creation, they emphasize marketing and economic exchange rather than operational topics and issues Steven Alter. This is a draft. Comments are welcomed. 11

12 FP1 and FP2: Service is the fundamental basis of exchange. Indirect exchange masks the fundamental basis of exchange. SD-logic emphasizes economic exchange and the nature of competition. WST focuses on work systems and says nothing about economic exchange because many problems and opportunities with work systems can be studied and understood without a great deal of attention to economic exchange, beyond the fact that work system participants should be compensated fairly for their work. For example, the analysis of problems with a firm s customer service system, regardless of whether it is directed toward the firm's employees or toward external customers, should probably focus first on the operation of the customer service work system. Whether work system participants are paid appropriately and whether they earn their pay are unquestionably relevant in most situations, but that does not imply that an operational analysis should emphasize economic exchange. On the other hand, concepts and relationships built into WST and the metamodel can be used directly for understanding the details of whatever economic exchange occurs, as reflected in the specific work systems through which an employee s efforts are assessed and through which payments are made. FP3. Goods are a distribution mechanism for service provision. WST and the metamodel do not distinguish between products and services or between goods and services. Instead they use the concept of product/service, as was explained in Layer 3. Use of that concept does nothing to contradict FP3, as is illustrated by the design dimensions in Table 2, which go from product-like to service-like. FP4. Operant resources are the fundamental source of competitive advantage. The metamodel provides no generalizations about the sources of competitive advantage. It covers operand and operand resources, however, by saying that any work system activity can use resources that may include human resources (participants), informational resources, technological resources and other resources. When noncustomer participants play actor roles in work system activities, they often are both operand and operand resources at that level of detail as they act and are acted upon (e. g. in a medical exam). FP5. All economies are service economies. While WST and the metamodel say nothing about the nature of economies, the metamodel seems consistent with FP5. It says that enterprises consist of work systems and that work systems produce products/services. Since those products/services are produced by purposeful activities for the benefit of others (see Figure 1 and the definition of service), all enterprises work on the basis of services, and therefore one might say that all economies are service economies. FP6. The customer is always a co-creator of value. The metamodel includes a customer work system that creates value for the customer, thereby implying that the metamodel generally agrees with FP6. On the other hand, as mentioned earlier, from an operational viewpoint whether or not a customer is co-creator of value is much less interesting than the extent to which co-creation occurs, and whether more co-creation or less co-creation would be beneficial for either the provider or the customers. In general, the metamodel reflects arguments in Grönroos (2008; 2011) stating that firms facilitate value creation by customers through provision of resources for customer use. Value co-creation is optional since suppliers decide whether and how to engage themselves with customers value-generating processes. FP7. The enterprise cannot deliver value, but only offer value propositions. The metamodel says that enterprises consist of work systems that produce products/services, and that products/services for customers are received and used by customer work systems that create value for customers. Thus, the metamodel agrees with FP7 that an enterprise does not create value directly for its customers. As explained earlier, the concept of value proposition appears in Figure 1 in conjunction with the companion concept of contractual arrangement. Value proposition is treated as a hidden attribute in Figure 2. Its largely subjective nature leads to questions about whether the companion concept of contractual arrangements is needed to clarify the practical application of FP7 in specific situations. FP8. A service-centered view is inherently customer oriented and relational. WST and the metamodel assume that work systems exist in order to produce products/services for customers. Within WST and the metamodel, the extent to which the work system is customer oriented and relational can be observed in the extent to which co-production and value co-creation play a prominent role in the work system. These are viewed as design variables, with the provider having the option of setting the level of coproduction and value co-creation. In general, work systems that are more customer-oriented and relational would express more of a service-centered view. FP9. All social and economic actors are resource integrators. Resources integration occurs within all provider work systems and customer work systems. The metamodel places a great deal of 2014 Steven Alter. This is a draft. Comments are welcomed. 12

13 emphasis on the different types of resources that are used in specific work system activities and therefore in the work system as a whole. It does not mention the concept of resource integrator. FP10. Value is always uniquely and phenomenologically determined by the beneficiary. The metamodel's inclusion of a customer work system that creates value for the customer implies that the metamodel generally agrees with FP10. Layer 7: Basic Premises of an Operational View of Service and Service Systems Table 3 lists 18 basic premises (BPs) of an operational view of service and service systems. and illustrates their practicality by identifying for each BP several issues for evaluation, analysis, and design of systems that produce real world services. These are questions that business professionals should be able to answer when thinking about services in their own organizations. Various combinations of those issues (possibly in different sequences) could be the basis of analysis and design templates for evaluation, analysis, and design of services and proposed service innovations. To minimize redundancy in the presentation of the BPs, this paper s most directly related Layer is noted as the proximate source of each BP. Table 3. Basic premises of an operational view of services and service systems. Basic premise (BP) of the operational view of service (and most direct source) BP1. Services are acts performed to produce outcomes the benefit of others. (Layer 1, definition of service) BP2. Customers of services create value for themselves. Service providers may have opportunities to co-create value. (Layer 4, Figure 2; also, Layer 5.) BP3. Most services are produced by work systems. (Layer 2, Figure 1) BP4. Work systems may have internal and/or external customers. (Layer 2, definition of work system.) BP5. Businesses operate through work systems regardless whether they are classified as goods manufacturers or service firms. (Layer 4, Figure 2.) BP6. Work systems may be social systems, sociotechnical systems, or totally automated systems. (Layer 2, definition of work system.) Related topics and issues for evaluating, analyzing, designing, and improving services. Who receives benefits from this service? What are those benefits? Who performs which acts in order to provide those benefits? To what extent does the service succeed in providing benefits? How do customers of this service create value for themselves? What are customer responsibilities in relation to this service? Which opportunities to co-create value are being pursued, and with what level of success? Could other opportunities to co-create value be pursued? What work system produces this service? How well does that work system operate? What changes might improve its performance? What are differences between the products/services for this work system s internal versus external customers? What are potential advantages of changing the mix of products/services for internal and/or external customers? What are this enterprise s most important work systems? How does the work system of interest interact with other work systems? What issues suggest advantages or disadvantages of improving the mechanics or outcomes of those interactions? What is the current division of labor between people and machines in the work system? What are potential advantages and disadvantages of additional automation and technology-based support? What are potential advantages and disadvantages of expanding roles and responsibilities of human participants? 2014 Steven Alter. This is a draft. Comments are welcomed. 13