Most of us live in a service-dominant economy, yet we still think about services in goods-dominant terms that emerged from the industrial revolution. An example of goods-dominant thinking is the strict division between demand and supply. With services, value is co-created in a complex, unpredictable and therefore emergent interaction between provider and consumer.
When service organizations are designed around goods-dominant logic, both consumers and suppliers of services suffer from poor interoperability between the parts of their ‘service systems’, such as processes and tooling. A fundamental rethink is needed. The Taking Service Forward (TSF) creative commons initiative has embraced modern service-dominant thinking and is developing a ‘service architecture’ called the Adaptive Service Model© (ASM). ASM’s terminology gives a better insight into the components of ‘service’, and by way of an introduction to the model, the main components are listed and defined below.
Service system: a dynamic configuration of resources and intents whose purpose is to create value with other service systems through co-creation. Service system is the term that is used to denote a provider or consumer of services, or any other party such as a regulatory body.
- Resource (of a service system): an entity to which a service system has access for the purpose of delivering, consuming or managing a service. There are resources within the service system of the provider, or within the service system of the consumer, or any other service system that participates in the delivery, consumption or management of a service.
- Intent (of a service system): something that creates, motivates, and fuels change. The reason for providing or consuming service and the way it is done. An organization’s principles, goals, policies, strategies and plans are all related to ‘intent’.
While the previous three terms refer to each service system, the following terms refer to the interaction between two or more service systems.
Service relationship: an aggregate of two or more roles that work together to perform collective behaviour. A relationship represents a latent service engagement. Trust is an essential part of a relationship. The degree of trust will inform service offers, engagements, agreements, and the service acts themselves.
Service offer: a proposal from a service provider to a service consumer for a potential future service engagement.
Service engagement: a formal or informal specification of agreed expectations, rights, obligations and interfaces of two or more service systems.
Service act: an interaction that achieves value co-creation between service systems. This is where provider and consumer collaborate closely until value is achieved. The major insight for people who are used to goods-dominant logic is the realization that they are involved until the consumer’s desired outputs and outcomes are achieved. Even when the consumer fails to derive (enough) value from the service act due to inappropriate (or lack of) action on their part, the provider will be expected to intervene. Similarly, the same applies when consumer observes that the provider isn’t performing as expected. You can’t just throw a service over the proverbial wall. It ain’t over until the fat lady sings, as the showbiz saying goes.
Service output: an artefact associated with the delivery of a service. The output is intended to add value for either the service consumer and service provider, or both. Outputs are measurable, generally directly controllable and intended to contribute to the desired outcome. Outputs are designed to produce the outcomes that are required but since the outcomes may not be directly controlled by the outputs they may not be achieved even if all outputs are correct.
Service outcome: the consequences for the stakeholders involved in a specific service act between one or more service systems. For example, the desired outcome of a new service might be for the company’s market share to increase – but the service can only affect that indirectly and many other factors also affect market share so the actual contribution of the service (through its outputs) to the market share might be difficult, or impossible, to measure. Even so, if a technically well-executed haircut (output) doesn’t achieve a partner’s admiration (desired outcome), the consumer will probably wonder whether provider should have advised another style. This is why it is essential for a service provider to understand the consumer’s desired outcomes and also their “dynamic configuration of resources and intents” so that they can advise which service will be most likely to provide the most value.
Service: An aggregation of a service engagement with one or more service acts between two or more service systems creating service outcomes
These are the main terms that make the notion of ‘service’ easier to understand. Other Adaptive Service Model terms and definitions are freely available under Objects and attributes at Taking Service Forward.
- The service system is the basic abstraction of service science; Jim Spohrer, Stephen L Vargo, Nathan Caswell, Paul P Maglio; 7/1/2008