Managing regulatory risks when outsourcing network-related services in the electricity distribution sector

Deregulation of the electricity sector liberated the electricity sale and production for competitive forces while in the network business, electricity transmission and distribution, natural monopoly positions were recognised. Deregulation was accompanied by efficiencyoriented thinking on the whole electricity supply industry. For electricity distribution this meant a transition from a public service towards profit-driven business guided by economic regulation. Regulation is the primary means to enforce societal and other goals in the regulated monopoly sector. The design of economic regulation is concerned with two main attributes; end-customer price and quality of electricity distribution services. Regulation limits the costs of the regulated company but also defines the desired quality of monopoly services. The characteristics of the regulatory framework and the incentives it provides are therefore decisive for the electricity distribution sector. Regulation is not a static factor; changes in the regulatory practices cause discontinuity points, which in turn generate risks. A variety of social and environmental concerns together with technological advancements have emphasised the relevance of quality regulation, which is expected to lead to the large-scale replacement of overhead lines with underground cables. The electricity network construction activity is therefore currently witnessing revolutionary changes in its competitive landscape. In a business characterised by high statutory involvement and a high level of sunk costs, recognising and understanding the regulatory risks becomes a key success factor. As a response, electricity distribution companies have turned into outsourcing to attain efficiency and quality goals. This doctoral thesis addresses the impacts of regulatory risks on electricity network construction, which is a commonly outsourced activity in the electricity distribution network sector. The chosen research approach is characterised as an action analytical research on account of the fact that regulatory risks are greatly dependent on the individual nature of the regulatory regime applied in the electricity distribution sector. The main contribution of this doctoral thesis is to develop a concept for recognising and managing the business risks stemming from economic regulation. The degree of outsourcing in the sector is expected to increase in years to come. The results of the research provide new knowledge to manage the regulatory risks when outsourcing services.

Resources and capabilities approach to online strategy – Multiple-case study of Finnish magazines' online services

Most Finnish periodical magazines have a website, often an online service. The objective of this thesis is to understand the magazines’ resources and capabilities and match them with online strategies’ goals and objectives. The thesis’ theoretical part focuses on explaining and classifying resources, capabilities, goals and objectives, and applying everything into Finnish magazine publishing context. In the empirical part, there is a comparative case study of four magazines. The findings indicate that with cooperating, advertising and community hosting capabilities magazines may utilize their human, brand, content and customer base resources. The resources can be further addressed to reach profitability, customer-centricity and brand congruency goals.

Customer reference marketing and utilization of social media as an integral part of customer references

The objective of this Bachelor's Thesis is to find out the role of social media in the B-to-B marketing environment of the information technology industry and to discover how IT-firms utilize social media as a part of their customer reference marketing. To reach the objectives the concepts of customer reference marketing and social media are determined. Customer reference marketing can be characterized as one of the most practically relevant but academically relatively overlooked ways in which a company can leverage its customers and delivered solutions and use them as references in its marketing activities. We will cover which external and internal functions customer references have, that contribute to the growth and performance of B-to-B firms. We also address the three mechanisms of customer reference marketing which are 'status transfer', 'validation through testimonials' and 'demonstration of experience and prior performance'. The concept of social media stands for social interaction and creation of user-based content which exclusively occurs through Internet. The social media are excellent tools for networking because of the fast and easy access, easy interaction and vast amount of multimedia attributes. The allocation of social media is determined. The case company helps clarify the specific characteristics of social media usage as part of customer-reference-marketing activities. For IT-firms the best channels to utilize social media in their customer reference marketing activities are publishing and distribution services of content and networking services.

Customer relationship management through life cycle analysis, case professional service firm in B2B market

The objective of this master’s thesis was to study how customer relationships should be assessed and categorized in order to support customer relationship management (CRM) in the context of business-to-business (B2B) and professional services. This sophisticated and complex market is utilizing possibilities of CRM only rarely and even then the focus is often on technology. The theoretical part considered first CRM from the value chain point of view and then discussed the cyclical nature of relationships. The case study focused on B2B professional service firm. The data was collected from company databases and included the sample of 90 customers. The research was conducted in three phases first studying the age, then the service type of relationships and finally executing the cluster analysis. The data was analysed by statistical analysis program SAS Enterprise Guide. The results indicate that there are great differences between developments of customer relationships. While some relationships are dynamically growing and changing, most of customers are remaining constant. This implies expectations and requirements of customers are similarly divergent and relationships should be managed accordingly.

Smart homes as service platforms. Research report of ÄLYKOP sub-project “Competitive advantage from customer value”

In this report, we summarize results of our part of the ÄLYKOP-project on customer value creation in the intersection of the health care, ICT, forest and energy industries. The research directs to describe how industry transformation and convergence create new possibilities, business opportunities and even new industries.The report consists of findings which are presented former in academic publications. The publication discusses on customer value, service provision and resource basis of the novel concepts through multiple theorethical frameworks. The report is divided into three maim sections which are theoretical background, discussion on health care industry and evaluations regarding novel smart home concepts. Transaction cost economics and Resource- Based view on the firm provides the theoretical basis to analyze the prescribed phenomena. The health care industry analysis describes the most important changes in the demand conditions of health care services, and explores the features that are likely to open new business opportunities for a solution provider. The third part of the report on the smart home business provides illustrations few potential concepts that can be considered to provide solutions to economical problems which arise from aging of population. The results provide several recommendations for the smart home platform developers in public and private sectors. By the analysis, public organizations dominate service provision and private markets are emergent state at present. We argue that public-private partnerships are nececssary for creating key suppliers. Indeed, paying attion on appropriate regulation, service specifications and technology standards would foster diffusion of new services. The dynamics of the service provision networks is driven by need for new capabiltities which are required for adapting business concepts to new competitive situation. Finally, the smart home framework revealed links between conventionally distant business areas such as health care and energy distribution. The platform integrates functionalities different for purposes which however apply same resource basis.

The value of digitalization of services in the new service development

The purpose of this thesis is to study factors that have an impact on the company’s capabilities to identify and analyze the value of digitalization of services during the early stages of service development process and evaluate them from the perspective of a case company. The research problem was defined: “How digitalization of services affects delivering the services of the future?” The research method of this thesis was based on the qualitative case study which aimed to study both company’s and customer’s set of values. The study included a literature review and a development study. The empirical research part consisted of analyzing three existing services, specifying a new digital service concept and its feasibility analysis as part of a business requirement phase. To understand the set of values, 10 stakeholder interviews were conducted and earlier customer surveys were utilized, and additionally, a number of meetings were conducted with the case company representatives to develop service concept, and evaluate the findings. The impact of the early stages of service development process discovered to reflect directly in the capabilities of the case company to identify and create customer value were related to the themes presented in the literature review. In order to specify the value achieved from the digitalization the following areas of strategic background elements were deepened during the study: Innovations, customer understanding and business service. Based on the findings, the study aims to enhance the case company’s capability to identify and evaluate the impact of the digitalization in delivering services of the future. Recognizing the value of digital service before the beginning of the development project is important to the businesses of both customer and provider. By exploring the various levels of digitalization one can get the overall picture of the value gained from utilizing digital opportunities. From the development perspective, the process of reviewing and discovering the most promising opportunities and solutions is the key step in order to deliver superior services. Ultimately, a company should understand the value outcome determination of the individual services as well as their digital counterparts.

Improving product profitability control in continuous IT-services

The target of the thesis is to improve product profitability control in continuous IT-services. Accurate product cost accounting and correctly allocated revenues are a necessity for good product profitability control. The focus of the study is on costs and revenues that are not traced directly to services. The thesis is focused on revenue allocations as revenue allocation methods have not been used in the case company before. In order to achieve the target revenue allocation methods, which improve the product profitability accounting and control, are presented. The research methods used in the thesis are literature review and empirical case study. The research approach is constructive. The theoretical part is composed of literature and articles that create a base for the empirical part. Internal interviews describe the current situation in the company and based on it development actions are planned. The part of the empirical case study is seen mostly in the limitations as the research is limited to concern only one department in the company. Problems in the revenue tracing are caused by customer specific services and lack of service definitions because of which the revenues are not traced correctly. Methods to allocate revenues are presented in the thesis and stand-alone revenue allocation method is the most suitable one because it is fair and it can be modified. Approximate product profitability analysis is done in the thesis and the results of it indicate that some services are profitable and some unprofitable.

Analysis of value drivers behind CRM adoption projects in financial services industry

This research is focused on deriving framework for the value thought for from the Customer Relationship Management system adopted by an enterprise operating in the financial services industry. It will analyze existing academic work to derive a conceptual value model, while applying secondary industry specific case studies provided by the CRM vendors to check the validity and commonality of these drivers. Furthermore this work locates the variances and correlation between value thought for from CRM system, scope of enterprise operations and size of the enterprise.

Customer profitability measurement in a not-for-profit organization

The objective of this study was to find out the factors that affect customer profitability in the not-for-profit case company. The customer profitability was examined in two different segments of the customer base. The effects that price, cost and the amount of services provided have on the profit margin were studied. The distribution of profitability among the customers and the effect of certain characteristics, such as size of the customer measured in services purchased, on the profitability were analyzed. The theoretical framework was built around customer profitability and the use of customer profitability information in a not-for-profit organization. The present use of customer profitability information and the possibilities of using the results of this research in the case company were presented. Quantitative research methods were used in the empirical part of the study. The results indicate that the two customer segments have differences in their buying behaviors which affect the profitability and thus the measures taken to improve the profitability should be considered with the different characteristics of the customers in mind. Finally the limitations of the study were discussed as possible further research topics.

The Effects of Service Quality, Customer Satisfaction and Customer Perceived Value on Behavioral Intentions

The intent of this research was to develop a model that describes the extent to which customer behavioral intentions are influenced by service quality, customer satisfaction and customer perceived value in the business-to-business service context. Research on customer behavioral intentions is quite fragmented and no generalized model has been presented. Thus, there was need for empirical testing. This study builds on the services marketing theory and assesses the relationships between the identified constructs. The data for the empirical analysis was collected via a quantitative online survey and a total of 226 usable responses were obtained for further analysis. The model was tested in an employment agency service setting. The measures used in this survey were first assessed by using confirmatory factor analysis (CFA) after which the hypothesized relationships were further verified using structural equation modeling (SEM) in LISREL 8.80. The analysis identified that customer satisfaction played a pivotal role in the model as it was the only direct antecedent of customer behavioral intentions, however, customer perceived value showed a strong indirect impact on buying intentions via customer satisfaction. In contrast to what was hypothesized, service quality and customer perceived value did not have a direct positive effect on behavioral intentions. Also, a contradicting finding with current literature was that sacrifice was argued to have a direct but positive impact on customer perceived value. Based on the findings in this study, managers should carefully think of their service strategies that lead to their customers’ favorable behavioral intentions.

Productizing professional consultancy services modularly through service blueprinting: Case QPR Software

Services are getting more complex and difficult to manage, but much less attention and resources are directed towards service development than product development both in literature and business life. The paper sheds light on how productization together with modularization and service blueprinting would help make consultancy services more manageable, scalable and efficient while retaining their customer focus. The research was qualitative and based on active research and participant observation. A theoretical framework was constructed on the basis of relevant literature and was then evaluated in two steps: first the overall framework was evaluated by mirroring it to a real life case at QPR Software. Then a service blueprint was created of a selected service, and its benefits and challenges were evaluated. The framework reflected the case company's situation well. Service blueprinting proved to be a valuable tool for facilitating discussion and knowledge sharing. The characteristics of consultancy services provide many challenges for productization. They are highly heterogeneous and people-centric whereas productization is based on standardizing the offering, the delivery processes and managing the service's tangible properties. The research indicated that by modularizing services, both customer focus and standardization can be achieved by creating variety.

E-business solutions as a part of a customer service portfolio

Tässä työssä tutkittiin sähköisen liiketoiminnan palveluiden tarvetta kartonkiteollisuudessa. Palveluiden tarvetta ja sisältöä tutkittiin suomalaisessa metsäteollisuusyrityksessä. Tutkimus suoritettiin teemahaastatteluin ja sitä täydennettiin tekemällä yritys case. Tutkimuksen pohjana toimi esiselvitys, jossa muutamia sähköisen liiketoiminnan palveluita oli tunnistettu. Sähköisen liiketoiminnan palveluiden on havaittu lisääntyneen merkittävästi yritystenvälisessä liiketoiminnassa. Kuluttajakaupassa sähköisen liiketoiminnan palvelut ovat olleet jo pitkään käytössä. Sähköisen kaupankäynnin lisääntyminen on ajanut yrityksiä perustamaan sähköisiä kauppapaikkoja, modernisoimaan toimitusmallejaan tai palvelukonseptejaan sekä huomioimaan sähköisen tiedonvaihdon vaikutuksia liiketoimissaan. Tutkimuksen tulokset johtivat kolmeen johtopäätökseen. Tutkimus osoitti, että sähköisen liiketoiminnan palvelut ovat osa nykyaikaista yritystenvälistä liiketoimintaa. Palveluita on olemassa ja niitä on tarjolla yrityksen kilpailijoiden toimesta maailmanlaajuisesti. Toiseksi tutkimus osoitti, että toimitusketjun tulevaisuus on palveluiden kehittämisessä ja niiden rakentamisessa. Kartonkituotteet lähenevät toisiaan laadullisesti kokoajan, sähköiset palvelut voivat tuoda kilpailuetua ja niiden avulla voidaan erottua markkinoilla. Kolmanneksi, sähköiseen liiketoimintaan on panostettava ja palveluita on rakennettava toimitusmalleja tukevaksi. Palveluiden sisällön on huomioitava asiakastarpeet.

Profiling the Value of Industrial Maintenance Services

Industrial maintenance can be executed internally, acquired from the original equipment manufacturer or outsourced to a service provider, and this concludes in many different kind of business relationships. To maximize the total value in a maintenance business relationship it is important to know what the partner values. The value of maintenance services can be considered to consist of value elements and the perceived total value for the customer and the service provider is the sum of these value elements. The specific objectives of this thesis are to identify the most important value elements for the maintenance service customer and provider and also to recognize where the value elements differ. The study was executed as a statistical analysis using the survey method. The data has been collected by an online survey sent to 345 maintenance service professionals in Finland. In the survey, four different types of value elements were considered: the customer’s high critical and low critical items and the service provider’s core and support service. The most valued elements by the respondents were reliability, safety at work, environmental safety, and operator knowledge. The least valued elements were asset management factors and access to markets. Statistically significant differences in value elements between service types were also found. As a managerial implication a value gap profile is presented. This Master’s Thesis is part of the MaiSeMa (Industrial Maintenance Services in a Renewing Business Network: Identify, Model and Manage Value) research project where network decision models are created to identify, model and manage the value of maintenance services.

Productivity and Services – Safety Telephone Services for the Elderly

Previous research on productivity is often associated with manufacturing or uses manufacturing definitions of productivity. Marketing research on services has not been satisfied with the manufacturing definitions. No universal definition for service productivity exists. The lack of a universal definition highlights the complexity entailed in the concept of productivity. The objective of this study was to investigate service productivity in situations, where traditional ways are in some cases even not possible or are not enough. In one definition of the productivity of service organisations there is the efficiency of the organisation on the input side and on the output side the customers’ perceived quality or value-in-use. To learn about value-in-use, many methods have been developed. A common practice is to make customer opinion surveys in the form of customer questionnaires and interviews. However, customers cannot always be asked directly, for example, because of impaired cognitive abilities. Such cases include the elderly and children. Furthermore, customer opinion surveys are time consuming. In addition, customers do not always know what kind of services they would benefit from. For the empirical part of the study, a business area was identified where traditional ways of measuring value-in-use are difficult or in some cases even not possible. This business area is safety telephone services. These services are most often used by the elderly. The way to define value-in-use here was to assess how well the services offered met customer expectations. Comparing the services customers asked for and the services provided to them indicated whether customer expectations were met. This study showed that customers had their ideas concerning the contents of the services but many times the services provided did not meet these expectations. Organisational efficiency aspirations can decrease customers’ value-in-use. This study found a solution, in which increasing organisational efficiency would go hand-in-hand with increasing customers’ value-in-use; the result being that the organisations’ needs and the service users’ expectations were in line. Value creation for customers produced organisational efficiency and thus increased productivity. In this study, customer expectations were observed by means of wellness technology. With the help of modern technology, customer expectations can be followed quickly and easily and customers can co-create with the organisation. This type of an approach could be useful even in the development of other services for other ages and in different contexts. If a service organisation decreases the number of personnel and, at the same time, tries to offer services to the same or a larger clientele, customers easily notice the change, which is often negative. To avoid harmful decrease in value-in-use, limitations to the aspiration of efficiency should be implemented – one of such is that the organisation is required to meet certain quality standards defined by experts. The aim is to secure that, as a result of efficiency aspirations in the organisation, the quality of the service offerings does not diminish below mutually agreed standards. Traditionally, when productivity in services has been estimated, organisational efficiency has not been combined with both customer expectations and an expert assessment of quality. This study contributes with novel thinking entitled ‘Relationship Management of the Elderly’. This study handles productivity, expert defined quality and value-in-use in an organisational context, which is practically untouched in previous research studies.

The effects of the service process on satisfaction, trust and value as creators of customer loyalty in a daily deals concept

This study aims at applying the customer behaviour studies of satisfaction, trust, perceived value and loyalty to a daily deals concept. The goal is to find out whether the relationships are the same in this specific context when compared to previous e-commerce studies. The study examines how the daily deals service process affects customer satisfaction, trust and value, and how these in turn impact customer loyalty and each other. The data was collected via e-mail survey from case company customers, and research was conducted on a quantitative basis by using multivariate methods as tools. The results suggest that daily deals service process and service quality do have a direct and positive effect on customer satisfac-tion, trust and value. Additionally, positive correlations between the latter variables and customer loyalty were found. The results imply that the daily deals concept does not differ from other e-services when considering the studied factors. The results also emphasize the importance of recognizing what determinants have the greatest impact on customer loyalty in this specific context.