Towards an ontological foundation of service dominant logic

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
►  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

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

Towards an ontological foundation of service dominant logic

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