Towards an Ontological Foundation of Service Dominant Logic

Garyfallos Fragidis Technological Education Institute of Serres,

Greece

Konstantinos Tarabanis University of Macedonia, Greece

► Service systems and value co-creation are recognized as the two most fundamental concepts of service science ●  “value co-creation is the primary object of study in service

systems” ●  “service science is the study of value co-creation phenomena”

Spohrer, J., Maglio, 2010; Maglio, Kieliszewski, and Spohrer, 2010

► Service-Dominant (S-D) logic is recognized as “one of the corner stones of service science” and “the philosophical foundation of service science”

Spohrer, J., Maglio, 2010

► Service science was acknowledged to be inconsistent in applying the principles of S-D logic

Maglio, Kieliszewski, and Spohrer, 2010 Vargo and Akaka, 2009; Vargo, Lusch and Akaka, 2010

► The slow development of service science ► The concepts of value, value creation and value co-

creation, remain still unclear and vague. ●  “Value co-creation is the basic action that take place in the

interaction between service systems”. ●  Value co-creation provides a balanced approach and an

integrated perspective on the creation of value for the business firm an the customer alike.

► A lack of alignment between business and IT approaches in service science ●  Service science and S-D logic function at different levels of

analysis and for different purposes

Purpose

► Support the deeper understanding of S-D logic and its key concepts (e.g. service, value co-creation, etc.) ●  Provide a common framework of concepts and relations ●  Move beyond a lexicon ●  Contribute in the resolution of inconsistencies and

misunderstandings ► Contribute in the establishment of S-D logic as the

foundational theory of service science ●  Contribute in the assimilation of the concepts of S-D logic

► Contribute in the improved communication of experts from different areas in the multidisciplinary field of service science.

Literature Review

►  Approaches that set conceptual foundations of service systems

●  Ferrario, R., Guarino, N.: Towards an Ontological Foundation for Services Science. ●  Alter, S.: Service system fundamentals: Work system, value chain, and life cycle. ●  Stanicek, Z., Winkler, M.: Service Systems through the Prism of Conceptual

Modeling. ●  O'Sullivan, J.: Towards a Precise Understanding of Service Properties.

►  Approaches that aim at the business modeling of service systems

●  Poels, G.: A Conceptual Model of Service Exchange in Service-Dominant Logic. ●  Weigand, et al.: Value-Based Service Modeling and Design: Toward a Unified View

of Services. ●  Andersson et al.: Towards a Reference Ontology for Business Models. ●  Baida, Z.: Serviguration ●  De Kinderen, S., Gordijn, J.: E3service. ●  Scheithauer: Business Service Description Methodology for Service Ecosystems. ●  Sorathia, V., et. al: Towards a Unifying Process Framework for Services

Knowledge Management.

Literature Review

►  Relationship to service science/ S-D logic ●  Most of them refer to service science (as a research trend) ●  Only two refer to S-D logic ●  Only three are based on input from service science and/ or S-D

logic ►  The origin of the concept of service

●  Input from the business management or the economics literature ●  a) service as an event, b) service as a process, c) service as a

resource ►  Customer- orientation ►  Co-production and/or value co-creation

●  Included only in two

Methodology

► We stay with the concepts of S-D logic ●  10 FP ●  Lexicon ●  The whole literature of S-D logic (by Vargo and/ or Lusch)

► Development of an ontological representation of S-D logic ●  as a class diagram ●  at a generic level

Key concepts

►  Actor: a generalization of Customer and Provider ►  Service: a generalization of Direct Service and Indirect Service ►  Value Co-creation: a generalization of Co-production

Integration and Customisation ►  Value: a generalization of Knowledge and Experience ►  Resource: a generalization of Operant Resource and Operand

Resource ►  Context: a generalization of Situational Context and

Idiosyncratic Context.

An ontological representation of S-D logic: the basic concepts

An ontological representation of S-D logic: the complete model

Actor ►  It is a general term used to address

to the entities that participate in the value co-creation process

► Other options (suboptimal): ●  FP9: “all economic and social actors

are resource integrators”. ●  In service science the basic entities

are the service systems ►  Customer and Provider are the two

key roles played by Actors in value co-creation processes. ●  Provider: provides Service ●  Customer: the beneficiary Actor that

receives the Service provided. ●  The Customer may receive and

integrate Service from many Providers and supplements them with proprietary resources.

●  The customer inherits all the attributes of an Actor

Service & Resource

►  Resource: any kind of input used by Actors in value co-creation processes ●  Operant Resource & Operand

Resource. ►  Service: the application of

specialized competences (knowledge and skills) for the benefit of another entity or the entity itself. ●  A process of applying

Resources. ●  “Recourcing”: the activity of

rendering resources into a specific benefit (the way that value creation occurs)

●  Direct Service & Indirect Service ●  Self-service

Value Co-creation

►  Value Co-creation: the service-based collaboration of at least one Provider, who provides Service, and at least one Customer, who integrates and complements it with proprietary Service, for the co-creation of value. ●  network relationships ●  service ecosystem

► Value Co-creation is a general concept that can be actualized in many different ways.

●  Co-production ●  Customization ●  Integration

Value ►  Value: the output of the Value Co-

creation process. ●  Value is related to the customer

(“value is always uniquely and phenomenologically determined by the beneficiary”- FP10);

●  “Value-in-use” & “value-in-context” ●  Value is determined “contextually

and idiosyncratically” by the customer.

●  Value affects also the Provider (“service is the fundamental basis of exchange” – FP1), namely that “service is exchanged for service”. feedback (direct and indirect).

►  Knowledge: learning opportunities for the improvement of Resources.

►  Experience: a basic way that the Customer perceives Value.

►  Context: the general conditions that exist for the co-creation of value ●  Situational Context: spatial, temporal, social and relational dimensions. ●  Idiosyncratic Context: personal needs and traits of the Customer

Benefits from the ontological representation of S-D logic

► The logical analysis of S-D logic: ●  provides insights ●  clarifies concepts ●  singles out inconsistencies

► Interpretation & improvement of S-D logic ► A basis for transdisciplinary communication ► A vocabulary and modeling constructs for the

development of “service-based” information systems (or “value-cocreation” information systems)

Service and Value Co-creation

Service and Value Co-creation

►  Value Co-creation becomes the result of the direct application of Resources from the Actors ●  It is compliant with S-D logic ●  It is compliant with Service Science

Concepts not included

► Exchange (FP1 & FP2) ► Competitive advantage (FP4) ► Value proposition (FP7) ► Solution, dialogue, reciprocity/ interactivity, value-in-

use, value-creation network and service ecosystem (possible entries to the S-D logic lexicon).

Concepts not included - exchange

► Exchange is a competing concept to Value Co-creation ●  Exchange is included in the Value Co-creation process, with

the meaning of contribution of service and resources ► Alternative modeling options

●  Replace Value Co-creation with Exchange ●  Add Exchange in the model

Concepts not included

► Exchange (FP1 & FP2) ► Competitive advantage (FP4) ► Value proposition (FP7) ► Solution, dialogue, reciprocity/ interactivity, value-in-

use, value-creation network and service ecosystem (possible entries to the S-D logic lexicon).

Problems & limitations

► The interpretation of S-D logic ●  Subjective interpretation, especially when the concepts are

vague and the meaning/ implications unclear. •  E.g. “service is exchanged for service” •  “Value is always uniquely and phenomenologically determined

by the beneficiary” ●  Stay with the general concepts, rather than emphasize on

the specific words ► The ontological form (why an ontology?)

●  Informal vs. formal ontology ●  Generic vs. specific ontologies

Future research

►  The elaboration of the foundational ontology of S-D logic with additional concepts, relationships and rules (for example with regard to the types and respective processes of value co-creation, the types of value for the customer and the provider, the contextual parameters, etc.)

►  The elaboration of the foundational ontology of S-D logic with partial aspects aspects (e.g. business aspect, customer aspects, etc.).

► Merging concepts between S-D logic and service science. Perhaps the development of a common/ integrated ontology.

►  The development of specific ontologies for some business domains or business models.

►  The formalization of the ontology. ►  The building of consensus.

Questions & comments

Thank you!

Gary Fragidis Technological Education Institute of Serres

62124 Serres, Greece E-mail: garyf@teiser.gr

tel.: +30 23 21049310