Productivity of Business Services - Towards A New Taxonomy

Statistics show that the expanding service sector accounts already for three quarters of GDP in the developed economies. Moreover, there is abundant evidence on high variation in productive performance across the service industries. This suggests divergent technological and institutional trajectories within the tertiary sector. While conceptual knowledge on services and their performance has accumulated substantially, the overall landscape on productivity and competitiveness is still inconclusive. As noted by number of authors the research on service productivity is still in its infancy. The purpose of this paper is to develop further the analytical framework of service productivity. The approach is based on the notion that service definitions, classifications and performance measurement are strongly interdependent. Given the ongoing restructuring of businesses activities with higher information content, it is argued that the dichotomy between manufacturing and services should not be taken too far. Industrial evolution also suggests that the official industry classifications are increasingly outdated and new taxonomies for empirical research are therefore needed. Based on the previous analyses and new insights the paper clarifies the debated concept of service productivity and identifies the critical dimensions by which the service industries cluster. It is also demonstrated that the dimensions enable to construct new service taxonomies which bear essentially on productivity opportunities at the business level. Needles to say the key determinant explaining the development and potential of productivity growth is innovation activity. As an extensive topic of research, however, service innovation is tackled here only in a cursory way. The paper is constructed as follows: the first section focuses on the conceptual issues and evolving nature of service activities. A workable definition of service should capture the diversity of service activities, as well as the aspects of service processes, comprehensively. The distinctions and similarities between services and manufacturing are discussed, too. Section 2 deals with the service productivity, a persistent and controversial issue in academic literature and policy. With the assessments of strengths and weaknesses of the main schools new insights based on value creation will be brought in. Industry classifications and taxonomies are discussed in Section 3. It begins with a short analysis of the official classifications and their evaluation from the perspective of empirical research. Using well-known examples it is shown that the taxonomies on the manufacturing industries have a clear analogy with the business services. As there is a growing interest to regroup services too, the work to date, has been less systematic and inherently qualitative. Based on the earlier contributions threedimensional service taxonomy is constructed which highlight the key dimensions of productive performance. The main findings and implications are summed up in Section 4.

Product Data Managemet as a Key Success Factor in After Sales Business

The objective of this master’s thesis is to define Larox´s Product Data present state and future development needs from after sales point of view. In particular the object was to investigate after sales needs, which data related to products need to be managed by using Product Data Management. Empirical material of thesis was collected mainly through interviews, benchmark visits, and personal experience. Among the interviewees were internal stakeholders who are closely related to the product process, as well as external stakeholders. Interviews revealed that each stakeholder group has deviating needs for product data management and that at present all the needs are not met to take the best possible way. The main requirement was availability of up-to-date information, which plays a key role in after sales business. At the end of study is concentrated to find development targets at Larox, especially from after sales point of view. In addition, consideration of how the product data management advantages can utilized in making internal processes more efficient. Development needs are collected together as project descriptions, whose headings are shown at the end of the study.

Quality standards in e-business software development

Large enterprises have for many years employed eBusiness solutions in order to improve their efficiency. Smaller companies, however, have not been able to leverage these technologies due to the high level of know-how and resources required in implementing them. To solve this, novel software services are being developed to facilitate eBusiness adoption for the small enterprise with the aim of making B2Bi feasible not only between large organisations but also between trading partners of all sizes. The objective of this study was to find what standards and techniques on eBusiness and software testing and quality assurance fit best for building these new kinds of software considering the requirements their unique eBusiness approach poses. The research was conducted as a literature study with focus on standards on software testing and quality assurance together with standards on eBusiness. The study showed that the current software testing and quality assurance standards do not possess such characteristics as would make select standards evidently better fitted for building this type of software, which were established to be best developed as web services in order for them to meet their requirements. A selection of eBusiness standards and technologies was proposed to support this approach. The main finding in the study was, however, that these kinds of web services that have high interoperability requirements will have to be able to carry out automated interoperability and conformance testing as part of their operation; this objective dictates how the software are built and how testing during software development is to be done. The study showed that research on automated interoperability and conformance testing for web services is still limited and more research is needed to make the building of highly-interoperable web services more feasible.

Customer reference marketing in a business to business context

This study focuses on the phenomenon of customer reference marketing in a business tobusiness (B to B) context. Although customer references are generally considered an important marketing and sales tool, the academic literature has paid surprisingly little attention to the phenomenon. The study suggests that customer references could be viewed as important marketing assets for industrial suppliers, and the ability to build, manage and leverage customer reference portfolios systematically constitutes a relevant marketing capability. The role of customer references is examined in the context of the industrial suppliers' shift towards a solution and project orientation and in the light of the on going changes in the project business. Suppliers in several industry sectors are undergoing a change from traditional equipment manufacturing towards project and solution oriented business. It is argued in this thesis that the high complexity, the project oriented nature and the intangible service elements that characterise many contemporary B to B offerings further increase the role of customer references. The study proposes three mechanisms of customer reference marketing: status transfer, validation through testimonials and the demonstration of experience and prior performance. The study was conducted in the context of Finnish B to B process technology and information technology companies. The empirical data comprises 38 interviews with managers of four case companies, 165 customer reference descriptions gathered from six case companies' Web sites, as well as company internal material. The findings from the case studies show that customer references have various external and internal functions that contribute to the growth and performance of B to B firms. Externally, customer references bring status transfer effects from reputable customers, concretise and demonstrate complex solutions, and provide indirect evidence of experience, previous performance, technological functionality and delivered customer value. They can also be leveraged internally to facilitate organisational learning and training, advance offering development, and motivate personnel. Major reference projects create new business opportunities and can be used as a vehicle for strategic change. The findings of the study shed light on the on going changing orientations in the project business environment, increase understanding of the variety of ways in which customer references can be deployed as marketing assets, and provide a framework of the relevant tasks and activities related to building, managing and leveraging a firm's customer reference portfolio. The findings contribute to the industrial marketing research, to the literature on marketing assets and capabilities and to the literature on projects and solutions. The proposed functions and mechanisms of customer reference marketing bring a more thorough and structured understanding about the essence and characteristics of the phenomenon and give a wide ranging view of the role of customer references as marketing assets for B to B firms. The study suggests several managerial implications for industrial suppliers in order to systematise customer reference marketing efforts.

Finnair Technical Procurement’s Processes and Service Quality

As primary objective, this thesis examines Finnair Technical Procurement’s service quality with its underlying process. As an internal unit, Technical Procurement serves as a link between external suppliers and internal customers. It is argued that external service quality requires a certain quality level within an organization. At the same time, aircraft maintenance business is subject to economic restraints. Therefore, a methodology was developed with a modified House of Quality that assists management in analyzing and evaluating Technical Procurement’s service level and connected process steps. It could be shown that qualitative and quantitative objectives do not exclude each other per se.

Distribution development in global business environment

The purpose of this master’s thesis was to analyze a case company’s distribution and its elements. With different distribution structure options a customer can be served with different ways. However, cost elements and service elements create different trade-offs. In this work the case company’s distribution’s present state was analyzed and conclusions were made. Based on these conclusions different alternatives for distribution were created. These different alternatives were analyzed through simulations and with more traditional calculations to compose the total operative costs of each alternative. Also other aspects were considered, such as required organizational changes and the possible better customer service. With the suggested 3-stock distribution structure shorter delivery times and possibly more punctual deliveries for products kept in stock could be achieved with the same operative costs as in current direct delivery model. Also, similar benefits could be achieved with other products with the 3-stock model.

Russian market entry decision for an e-business company, the case Ampparit Inc.

The aim of the study was to examine foreign operation methods and suggest the entry mode for the Russian E-business market. Ampparit Inc. was chosen as a case company, as it operates in the e-commerce B2B type of the business by providing Witpik - media monitoring service. The concept of foreign operation method was clarified with a specific focus on Russian market peculiarities and E-business. The main focuses of the present work were to figure out the most applicable entry mode for the Russian market in case of e-business company and factors affecting the decision about entry, including risks, barriers and other aspects.

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.

When to Utilize Software as a Service

Cloud computing enables on-demand network access to shared resources (e.g., computation, networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort. Cloud computing refers to both the applications delivered as services over the Internet and the hardware and system software in the data centers. Software as a service (SaaS) is part of cloud computing. It is one of the cloud service models. SaaS is software deployed as a hosted service and accessed over the Internet. In SaaS, the consumer uses the provider‘s applications running in the cloud. SaaS separates the possession and ownership of software from its use. The applications can be accessed from any device through a thin client interface. A typical SaaS application is used with a web browser based on monthly pricing. In this thesis, the characteristics of cloud computing and SaaS are presented. Also, a few implementation platforms for SaaS are discussed. Then, four different SaaS implementation cases and one transformation case are deliberated. The pros and cons of SaaS are studied. This is done based on literature references and analysis of the SaaS implementations and the transformation case. The analysis is done both from the customer‘s and service provider‘s point of view. In addition, the pros and cons of on-premises software are listed. The purpose of this thesis is to find when SaaS should be utilized and when it is better to choose a traditional on-premises software. The qualities of SaaS bring many benefits both for the customer as well as the provider. A customer should utilize SaaS when it provides cost savings, ease, and scalability over on-premises software. SaaS is reasonable when the customer does not need tailoring, but he only needs a simple, general-purpose service, and the application supports customer‘s core business. A provider should utilize SaaS when it offers cost savings, scalability, faster development, and wider customer base over on-premises software. It is wise to choose SaaS when the application is cheap, aimed at mass market, needs frequent updating, needs high performance computing, needs storing large amounts of data, or there is some other direct value from the cloud infrastructure.

Customer-related skills and capabilities in knowledge-intensive business services

The roles of knowledge and customer involvement form distinct features in providing knowledge-intensive business services. The objective of this study was to investigate the customer-related skills and capabilities of knowledge-intensive business services. The research was carried out as case study, involving two polar cases. The other case represented customized services, and the other standardized services. The research method was qualitative, and included focus group workshops, individual interviews and a survey. The capabilities of business services have been mainly studied on organizational level. This study provides valuable insight into the role of individual skills as a part of capabilities of knowledge-intensive business services. According to this study, the most important capabilities are related to acquiring and integrating of knowledge, resource management, managing the customer’s role as a co-producer of the service, and active and effective communication. The study indicates that the level of tacit knowledge is high in the needed individual skills. Based on the study, the needed capabilities and skills are affected by the level of customization of the service, the demand for customer knowledge, the demand for consultation and the stage of the service providing.

A design and a prototype for a mobile information service for tourists

Tourism is one of the biggest industry branches with billions of tourists traveling every year around the world. Therefore, solutions providing tourist information have to be up to date with both changes in the industry and the world’s technological progress. The aim of this thesis is to present a design and a prototype of a tourist mobile service which is individual-oriented, cost-free for the end user, and secure. On the information providers’ side, the solution is implemented as a Webbased database. The end users access the information through a Bluetooth application on their mobile devices. The Bluetooth-based solution allows to avoid any costs for the end users, that is tourists. The study shows that, even with small data transfers, the tourists could save significantly when compared to possible roaming charges for data transfer. Also, the proposed mobile service is not intrusive, as it is provided through an application installed by tourists voluntarily on their mobile devices. Through design and implementation this work shows that it is possible to build a system which can be used to provide information services to tourists through mobile phones. The work achieved a successful ongoing synchronization between the client and the server databases. Implementation and usage were limited to smart phones only, as they provide better technological support for the solution having features like maps, GPS, Wi-Fi, Bluetooth and Databases. Moreover, the design of this system shows how Bluetooth technology can be used effectively as a means of communication while minimizing its shortcomings and risks, such as security, by bypassing Bluetooth server service discovery protocol (SDP) and connecting directly to the device. Apart from showing the design and implementation of the end-user costfree mobile information service, the results of this work also highlight the possible business opportunities to the provider of the service.

Private Home Care in Municipal Service Systems – A Case Study among Finnish and Swedish Municipalities

The aim of this study is to assess the current and future preconditions for conducting private business in municipal service systems for home care in Lahti and Hyvinkää in Finland, and in Uppsala and Huddinge in Sweden. This study also aims to assess the implications of quality related issues on the preconditions for conducting private business in the service systems in question. The theories and the research methodologies of the study are based on the Business Model Generation and the Business Model Canvas -concepts. Also a couple of frameworks on implications of quality are applied and integrated into the study. The study is completed as a case study – with structured and identical approaches for all four municipalities. The analyses and assessments of the study are primarily qualitative, but supported by simple quantitative methodologies. The data of the study consists primarily of publicly available information, and secondarily of answers provided by the case-municipalities to multiple choice questions. The results of the study show that the service systems for home care among the case-municipalities are, from perspective of private companies, diverse with local characteristics. Both the premises for conducting private business and the quality-issues are in many respects different in the Finnish and the Swedish case-municipalities. This is partly due to differences in the national service systems; the service voucher system versus the system of choice. Still, it appears that the current preconditions for conducting private business in the service systems for home care, including the implications of quality, would be more favorable in Uppsala and Huddinge than in Lahti and Hyvinkää. On the other hand, the service systems are subject to changes, and the most positive and significant development is here forecasted for a Finnish case-municipality (Lahti). Communication of quality is clearly more advanced in the Swedish case-municipalities. The results of this study can be utilized in several ways, for instance by private companies interested in entering into service systems for home care, either in some of the case-municipalities, or in some other Finnish or Swedish municipalities. Also municipalities can apply the analyses of the study when designing, developing or evaluating their own service systems for home care.

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.

Developing the measurement and management of knowledge: applying the constructive research approach in a knowledge intensive service environment

Intellectual assets have attained continuous attention in the academic field, as they are vital sources of competitive advantage and organizational performance in the contemporary knowledge intensive business environment. Intellectual capital measurement is quite thoroughly addressed in the accounting literature. However, the purpose of the measurement is to support the management of intellectual assets, but the reciprocal relationship between measurement and management has not been comprehensively considered in the literature. The theoretical motivation for this study rose from this paradox, as in order to maximise the effectiveness of knowledge management the two initiatives need to be closely integrated. The research approach of this interventionist case study is constructive. The objective is to develop the case organization’s knowledge management and intellectual capital measurement in a way that they would be closely integrated and the measurement would support the management of intellectual assets. The case analysis provides valuable practical considerations about the integration and related issues as the case company is a knowledge intensive organization in which the know-how of the employees is the central competitive asset and therefore, the management and measurement of knowledge are essential for its future success. The results suggest that the case organization is confronting challenges in managing knowledge. In order to appropriately manage knowledge processes and control the related risks, support from intellectual capital measurement is required. However, challenges in measuring intellectual capital, especially knowledge, could be recognized in the organization. By reflecting the knowledge management situation and the constructed strategy map, a new intellectual measurement system was developed for the case organization. The construction of the system as well as its indicators can be perceived to contribute to the literature, emphasizing of the importance of properly considering the organization’s knowledge situation in developing an intellectual capital measurement system.