Value Co-creation and Customer-driven Innovation in Social Networking Systems

Garyfallos Fragidis Technological Education Institute of Serres,

Greece

Ioannis Ignatiadis and Chris Wills Kingston University, UK

► Fundamental questions: ● What is Service Science?

•  It initiated as an effort for the development of scientific methods in services1.

● What is it for? •  It aims at the acceleration of innovations and the

augmentation of value in the service sector1. ● How can it be achieved?

•  By applying the existing scientific approaches, methods, and tools

•  By developing new ones.

1 Chesbrough, H., Spohrer, J.: A research manifesto for services sciences. Communications of the ACM, vol. 49, no. 7, pp. 35-40 (2006).

► Fundamental questions: ● What is Service?

•  An activity that somebody does for the benefit of somebody else

•  The co-creation of value between the provider and the customer

● What is so different about Services? •  The co-creation of value •  The role of the customer as contributor in value creation •  Value creation is interactional •  Value is idiosyncratically determined by the customer

Is value co-creation possible?

provider customer value reception value co-creation

value creation

services self actions

► From the customer point of view co-creation is the major pattern people use in their everyday lives

Types of value co-creation

►  Co-production ●  The participation of the customer in the production process, when

the customer performs some activities that normally are performed by the provider (e.g. self service, etc.).

►  Customization ●  It refers to changing some characteristics of the service, so that

make it fit or bring it closer to the preferences of the customer (e.g. vegetarian meals or business class services in flights)

●  Customization activities can be performed by the provider or the customer (or a third entity on his behalf), before, during or after the service provision.

►  Integration ●  It refers to synthesizing service elements from a network of

organizations and peers and adding proprietary activities, if necessary, to create individualized solutions.

●  It is required because of the complexity of people’s needs. ●  It provides the general context for value co-creating systems

Our approach on Service Science

► Service Science is about value co-creation service systems ●  It aims at the development of new scientific approaches,

methods, and tools that are based on value co-creation and enhance the key characteristics of services.

●  Such an approach ... •  adopts a different perspective (customer-oriented) •  proliferates the ways and opportunities for value creation •  provides ample room for innovations •  prepares for a paradigm shift in business thinking

► Service is any item or action someone can offer which could meet the needs of himself or somebody else. ●  Marketable or non-marketable

► Value is determined contextually and idiosycratically ●  Value co-creation is a an everyday practice and a social process ●  Value co-creation takes place in networks of businesses & peers

State of the art in value co-creating systems

► There is limited significant research output ●  Lack of interdisciplinarity ● Emphasis on B2B relationships ● Emphasis on technologies (even if we do not have

business model) ● Misunderstanding between information/software

services (e.g. SOA and Web Services) and real world services

Web 2.0 as a value co-creation environment

► Where is the success of Web 2.0 attributed? ● Companies or users? ●  Technologies or uses? ● Why did Twitter or Facebook succeed? ● What does iPhone provide?

► Web 2.0 proves that there are both business models and technologies for the development of value co-creation systems

►  The key requirement is a shift in the mindset on how we do business and we create value.

Value co-creation in social networks

► Networks of businesses, other organizations and other people (peers, relatives or friends) that co-create value ●  They provide a space for open innovation that is driven by people’s

needs and actions. ●  They can be based on the successful example of online social

networks ► Key functional characteristics:

●  Support all types of value co-creation (co-production, customisation, integration)

●  Provide front-end and back-end services ●  Individual users: use existing services or create new ones to meet

their needs or provide service to their peers or the community ●  Business users: they make their services available in the platform

for selling, marketing or collaboration with others ●  The exploitation of user feedback, as well as user-generated

activities (e.g. proposing new uses, introducing new services or improving the existing ones)

An online social network for career improvement (1)

►  An online social network that enables a user to provide an integrated view of her academic, professional and personal profile to prospective employers. ●  Great variety of evidence and data relating to her personal,

educational and professional achievements (e.g. academic degrees, other certified or uncertified qualifications, business experience, etc.)

●  Great variety of format (e.g. digital artefacts like videos and photographs evidencing her achievements or her personality (e.g. on Flickr or YouTube), a blog where she posts ideas and views that could interest prospective employers, etc.)

●  Great variety of places where this data are sitting ►  Co-creation of value

●  The user receives services from external providers, creates and adds her services and integrates all of them together in a personal way to develop a unique solution that meets the needs and preferences of her.

A social network for career improvement (2)

► Types of services provided ●  E-portfolio services (editing a portfolio of qualifications and

achievements and aggregating credentials and data from different places, e.g. LinkedIn, Facebook, etc.).

●  Job preference services (e.g. type of work, location, conditions, etc.).

●  Job search services (searching for hiring ads and collecting information, either from external places or within the platform, through the similar services created by other users).

●  Consultation services (e.g. what is career of other people with the same profile).

●  Job reviewing services (providing comments and reviews on jobs she was hired or interviewed in the past).

●  Peer communication services. ●  Communication services with employers.

Conclusion

► The concept of co-creation of value provides a good basis for the development of Service Science ●  It provides the framework for innovations in services ●  It provides a guideline for what are we looking for ●  It provides ample opportunities for innovations

► We proposed an approach for Service Science ●  Service Science is about value co-creation service systems ●  Service is any item or action someone can offer which could meet

the needs of himself or somebody else. ●  Value is determined contextually and idiosycratically and value co-

creation takes place in networks of businesses & peers

► We suggest focusing on the users and the uses provide opportunities for innovations.

Questions & comments

Thank you!

Gary Fragidis Technological Education Institute of Serres 62124 Serres, Greece E-mail: garyf@teiser.gr tel.: +30 23 21049310