How relationships can be utilized for service bundling

The phenomenon of organizations offering service bundles can typically be observed in dynamic markets with heterogeneous customer demand. Available literature broaching the issue of service bundling covers strategic considerations for organizations related to their respective market position as well as their pricing options for different bundle configurations. However, little guidance can be found regarding the identification of potential bundle candidates and the actual process of bundling. In this paper, we present an approach to service bundling that can be utilized by organizations to identify services that are suitable for bundling. The contribution of the paper is twofold. Firstly, the proposed method represents a structured conceptualization approach for organizations to facilitate the creation of bundles in practice based on empirical findings. Secondly, from a Design Science research perspective, the proposed method represents an innovative artifact that extends the academic knowledge base related to service management.

Conceptualizing a bottom-up approach to service bundling

Offering service bundles to the market is a promising option for service providers to strengthen their competitive advantages, cope with dynamic market conditions and deal with heterogeneous consumer demand. Although the expected positive effects of bundling strategies and pricing considerations for bundles are covered well by the available literature, limited guidance can be found regarding the identification of potential bundle candidates and the actual process of bundling. The contribution of this paper is the positioning of bundling based on insights from both business and computer science and the proposition of a structured bundling method, which guides organizations with the composition of bundles in practice.

Identification and specification of relationships as the foundation for service bundling

Service bundling can be regarded as an option for service providers to strengthen their competitive advantages, cope with dynamic market conditions and heterogeneous consumer demand. Despite these positive effects, actual guidance for the identification of service bundles and the act of bundling itself can be regarded as a gap. Previous research has resulted in a conceptualization of a service bundling method relying on a structured service description in order to fill this gap. This method addresses the reasoning about the suitability of services to be part of a bundle based on analyzing existing relationships between services captured by a description language. This paper extends the aforementioned research by presenting an initial set of empirically derived relationships between services in existing bundles that can subsequently be utilized to identify potential new bundles. Additionally, a gap analysis points out to what extent prominent ontologies and service description languages accommodate for the identified relationships.

Decision-support for service bundling

Offering service bundles to the market is a promising option for service providers to strengthen their competitive advantages, cope with dynamic market conditions and deal with heterogeneous consumer demand. Although the expected positive effects of bundling strategies and pricing considerations for bundles are covered well by the available literature, limited guidance can be found regarding the identification of potential bundle candidates and the actual process of bundling. The proposed research aims at filling this gap by offering a service bundling method complemented by a proof-of-concept prototype, which extends the existing knowledge base in the multidisciplinary research area of Information Systems and Service Science as well as providing an organisation with a structured approach for bundling services.

The morphology of service bundling settings

The purpose of this paper is to advance our understanding of what contextual factors influence the service bundling process in an organizational setting. Although previous literature contains insights into the mechanisms underlying bundling and the artefacts for performing the bundling task itself, the body of knowledge seems to lack a comprehensive framework for analysing the actual scenario in which the bundling process is performed. This is required as the scenario will influence the bundling method and the IT support. We address this need by designing a morphological box for analysing bundling scenarios in different organizational settings. The factors featured in the box are systematised into a set of four categories of bundling layers which we identify from reviewing literature. The two core layers in the framework are the service bundling on a type level and on an instance level (i.e. configuration). To demonstrate the applicability and utility of the proposed morphological box, we apply it to assess the underlying differences and commonalities of two different bundling scenarios from the B2B and G2C sectors which stress the differences between bundling on a type and instance level. In addition, we identify several prospects for future research that can benefit from the proposed morphological box.

Auditor industry specialisation, service bundling and partner effects in a mining-dominated city

This study examines auditor industry specialisation effects in Perth, a remote mining town in Australia characterised by a large number of small, homogeneous firms. We consider the impact of leadership by the non-Big 4 auditor BDO Kendalls (BDO) for a sample of 371 mining development stage entities (MDSE's). After controlling for factors known to determine audit fees, we find no evidence of auditor industry leadership fee premiums accruing to (BDO), a result robust to a range of sensitivity tests including the broadening of tests Australia-wide. However, when the dependent variable is redefined to the total 'bundle' of services provided by the audit firm (including audit and non-audit fees), the industry leader is shown to earn a fee premium suggesting BDO uses audits as a conduit to supply higher margin non-audit services. Our findings suggest that strategic pricing by industry leaders may not be confined to Big 4 firms.

Partner-scale economies, service bundling and auditor independence in the Australian self-managed superannuation (pension) fund industry

Using proprietary Australian Taxation Office (ATO) data, this study examines audit pricing, service bundling and independence issues in the self-managed superannuation fund (SMSF) sector, the fastest growing and largest segment of the Australian $2 trillion retirement savings industry. We consider the impact of partner-level scale effects for a large sample of SMSF audits for the three years to June 2010. After controlling for factors known to determine audit fees, we find evidence of fee discounting by partners with large client portfolios. However, when the dependent variable is redefined to the total 'bundle' of services (including audit and non-audit fees), the firms of partners with larger client portfolios are shown to earn bundling fee premiums. This finding suggests industry specialists price strategically using audits as a conduit to supply higher margin non-audit services (NAS) to clients with more resources. Last, we find no evidence the supply of NAS impairs auditor independence, alleviating joint supply concerns raised in the Cooper Review.

Service aggregators in business networks

This position paper examines the development of a dedicated service aggregator role in business networks. We predict that these intermediaries will soon emerge in service ecosystems and add value through the application of dedicated domain knowledge in the process of creating new, innovative services or service bundles based on the aggregation, composition, integration or orchestration of existing services procured from different service providers in the service ecosystem. We discuss general foundations of service aggregators and present Fourth-Party Logistics Providers as a real-world example of emerging business service aggregators. We also point out a demand for future research, e.g. into governance models, risk management tools, service portfolio management approaches and service bundling techniques, to be able to better understand core determinants of competitiveness and success of service aggregators.

Service delivery in one-stop government portals : observations based on a market research study in Queensland

New government service delivery models based on a “franchise” metaphor are being proposed recently to allow more citizen-centric service delivery by decoupling the government’s internal departmental structure from the way services are presented and delivered to citizens. In order to evaluate the approach from an online channel perspective, the Queensland Government commissioned a market research study to compare their websites with the online presences of the UK Government and the South Australian Government, who both have adopted the “franchise” approach. The study aimed to inform an understanding of citizens’ preferred model for interacting in the online channel and to identify the relative strengths and weaknesses of the existing websites. In this paper, we will a) report on the findings of this third party usability study and b) position the study, in the form of a critical reflection, against the background of a more comprehensive “Transformational Government” approach using a “franchise marketplace”. The critical reflection points towards limitations of the study with regard to this bigger picture and discusses the potential benefits of service bundling that remained unconsidered in the study.

A comparative study of governmental one-stop portals for public service delivery

The continuing need for governments to radically improve the delivery of public services has led to a new, holistic government reform strategy labeled “Transformational Government” that strongly emphasizes customer-centricity. Attention has turned to online portals as a cost effective front-end to deliver services and engage customers as well as to the corresponding organizational approaches for the back-end to decouple the service interface from the departmental structures. The research presented in this paper makes three contributions: Firstly, a systematic literature review of approaches to the evaluation of online portal models in the public sector is presented. Secondly, the findings of a usability study comparing the online presences of the Queensland Government, the UK Government and the South Australian Government are reported and the relative strengths and weaknesses of the different approaches are discussed. And thirdly, the limitations of the usability study in the context of a broader “Transformational Government” approach are identified and service bundling is suggested as an innovative solution to further improve online service delivery.

Identification and evaluation of service bundles for governmental one-stop portals

Recent advances in the area of ‘Transformational Government’ position the citizen at the centre of focus. This paradigm shift from a department-centric to a citizen-centric focus requires governments to re-think their approach to service delivery, thereby decreasing costs and increasing citizen satisfaction. The introduction of franchises as a virtual business layer between the departments and their citizens is intended to provide a solution. Franchises are structured to address the needs of citizens independent of internal departmental structures. For delivering services online, governments pursue the development of a One-Stop Portal, which structures information and services through those franchises. Thus, each franchise can be mapped to a specific service bundle, which groups together services that are deemed to be of relevance to a specific citizen need. This study focuses on the development and evaluation of these service bundles. In particular, two research questions guide the line of investigation of this study: Research Question 1): What methods can be used by governments to identify service bundles as part of governmental One-Stop Portals? Research Question 2): How can the quality of service bundles in governmental One-Stop Portals be evaluated? The first research question asks about the identification of suitable service bundle identification methods. A literature review was conducted, to, initially, conceptualise the service bundling task, in general. As a consequence, a 4-layer model of service bundling and a morphological box were created, detailing characteristics that are of relevance when identifying service bundles. Furthermore, a literature review of Decision-Support Systems was conducted to identify approaches of relevance in different bundling scenarios. These initial findings were complemented by targeted studies of multiple leading governments in the e-government domain, as well as with a local expert in the field. Here, the aim was to identify the current status of online service delivery and service bundling in practice. These findings led to the conceptualising of two service bundle identification methods, applicable in the context of Queensland Government: On the one hand, a provider-driven approach, based on service description languages, attributes, and relationships between services was conceptualised. As well, a citizen-driven approach, based on analysing the outcomes from content identification and grouping workshops with citizens, was also conceptualised. Both methods were then applied and evaluated in practice. The conceptualisation of the provider-driven method for service bundling required the initial specification of relevant attributes that could be used to identify similarities between services called relationships; these relationships then formed the basis for the identification of service bundles. This study conceptualised and defined seven relationships, namely ‘Co-location’, ‘Resource’, ‘Co-occurrence’, ‘Event’, ‘Consumer’, ‘Provider’, and ‘Type’. The relationships, and the bundling method itself, were applied and refined as part of six Action Research cycles in collaboration with the Queensland Government. The findings show that attributes and relationships can be used effectively as a means for bundle identification, if distinct decision rules are in place to prescribe how services are to be identified. For the conceptualisation of the citizen-driven method, insights from the case studies led to the decision to involve citizens, through card sorting activities. Based on an initial list of services, relevant for a certain franchise, participating citizens grouped services according to their liking. The card sorting activity, as well as the required analysis and aggregation of the individual card sorting results, was analysed in depth as part of this study. A framework was developed that can be used as a decision-support tool to assist with the decision of what card sorting analysis method should be utilised in a given scenario. The characteristic features associated with card sorting in a government context led to the decision to utilise statistical analysis approaches, such as cluster analysis and factor analysis, to aggregate card sorting results. The second research question asks how the quality of service bundles can be assessed. An extensive literature review was conducted focussing on bundle, portal, and e-service quality. It was found that different studies use different constructs, terminology, and units of analysis, which makes comparing these models a difficult task. As a direct result, a framework was conceptualised, that can be used to position past and future studies in this research domain. Complementing the literature review, interviews conducted as part of the case studies with leaders in e-government, indicated that, typically, satisfaction is evaluated for the overall portal once the portal is online, but quality tests are not conducted during the development phase. Consequently, a research model which appropriately defines perceived service bundle quality would need to be developed from scratch. Based on existing theory, such as Theory of Reasoned Action, Expectation Confirmation Theory, and Theory of Affordances, perceived service bundle quality was defined as an inferential belief. Perceived service bundle quality was positioned within the nomological net of services. Based on the literature analysis on quality, and on the subsequent work of a focus group, the hypothesised antecedents (descriptive beliefs) of the construct and the associated question items were defined and the research model conceptualised. The model was then tested, refined, and finally validated during six Action Research cycles. Results show no significant difference in higher quality or higher satisfaction among users for either the provider-driven method or for the citizen-driven method. The decision on which method to choose, it was found, should be based on contextual factors, such as objectives, resources, and the need for visibility. The constructs of the bundle quality model were examined. While the quality of bundles identified through the citizen-centric approach could be explained through the constructs ‘Navigation’, ‘Ease of Understanding’, and ‘Organisation’, bundles identified through the provider-driven approach could be explained solely through the constructs ‘Navigation’ and ‘Ease of Understanding’. An active labelling style for bundles, as part of the provider-driven Information Architecture, had a larger impact on ‘Quality’ than the topical labelling style used in the citizen-centric Information Architecture. However, ‘Organisation’, reflecting the internal, logical structure of the Information Architecture, was a significant factor impacting on ‘Quality’ only in the citizen-driven Information Architecture. Hence, it was concluded that active labelling can compensate for a lack of logical structure. Further studies are needed to further test this conjecture. Such studies may involve building alternative models and conducting additional empirical research (e.g. use of an active labelling style for the citizen-driven Information Architecture). This thesis contributes to the body of knowledge in several ways. Firstly, it presents an empirically validated model of the factors explaining and predicting a citizen’s perception of service bundle quality. Secondly, it provides two alternative methods that can be used by governments to identify service bundles in structuring the content of a One-Stop Portal. Thirdly, this thesis provides a detailed narrative to suggest how the recent paradigm shift in the public domain, towards a citizen-centric focus, can be pursued by governments; the research methodology followed by this study can serve as an exemplar for governments seeking to achieve a citizen-centric approach to service delivery.

Online service delivery models : an international comparison in the public sector

Governments around the world are facing the challenge of responding to increased expectations by their customers with regard to public service delivery. Citizens, for example, expect governments to provide better and more efficient electronic services on the Web in an integrated way. Online portals have become the approach of choice in online service delivery to meet these requirements and become more customer-focussed. This study describes and analyses existing variants of online service delivery models based upon an empirical study and provides valuable insights for researchers and practitioners in government. For this study, we have conducted interviews with senior management representatives from five international governments. Based on our findings, we distinguish three different classes of service delivery models. We describe and characterise each of these models in detail and provide an in-depth discussion of the strengths and weaknesses of these approaches.

Service enhanced manufacturing in the building and construction product system

This report examines the involvement of manufacturers in value-adding through service-enhancement of product offerings. This focus has been prompted by:  emphasis in the knowledge-economy literature on the increasing role played by services in economic growth; and  recent analysis which suggests that the most dynamic sector of many economies is an integrated manufacturing-services sector (see Part One of this report). The report initially describes the emergence of an integrated manufacturing-services sector in the context of increasingly knowledge-based economic systems. Part Two reports on the results of a survey of manufacturers in the building and construction product system, investigating their involvement in service provision. Parts Three and Four present two case studies of exemplary manufacturers involved in adding value to their manufacturing operations through services offered on building and construction projects. The report examines manufacturers of materials, products, equipment and machinery used on building and construction projects. The two case study sections of the report, in part, focus on a major project undertaken by each of the manufacturers. This project element of activity is focussed on (as opposed to wholesale or retail supply), because this area of activity involves a broader array of service-enhancement mechanisms and more complex bundling of products and services.

A framework for designing product service systems

In this competitive globalizing scenario, manufacturers are adopting a strategy of bundling products and services into an integrated solution to create sustainable competitive advantage. Servitizing manufacturers are increasingly transforming their processes and practices to build product-service systems (PSS). During this transformation they require substantial support to face stringent challenges. Research in the PSS domain is heading towards the development of a design theory and methodology that facilitates the systematic creation of viable PSS conceptual designs. In this paper, various proposed design methods are reviewed and research gaps are summarized. Primarily, it has been observed that the importance of the capabilities of the stakeholders involved in designing PSS has not been noted in the proposed methods. Regarding this capability view point, a framework for designing PSS has been proposed. This framework highlights the important features required in designing PSS such as co-creation, responsibilities and competences. Every step in the framework has been explained with a case study involving laser systems used for manufacturing cutting operation.

Bundling under the Threat of Parallel Trade

This paper examines the use of bundling by a firm that sells in two national markets and faces entry by parallel traders. The firm can bundle its main product, - a tradable good- with a non-traded service. It chooses between the strategies of pure bundling, mixed bundling and no bundling. The paper shows that in the low-price country the threat of grey trade elicits a move from mixed bundling, or no bundling, towards pure bundling. It encourages a move from pure bundling towards mixes bundling or no bundling in the high-price country. The set of parameter values for which the profit maximizing strategy is not to supply the low price country is smaller than in the absence of bundling. The welfare effects of deterrence of grey trade are not those found in conventional models of price arbitrage. Some consumers in the low-price country may gain from the threat of entry by parallel traders although they pay a higher price. This is due to the fact that the firm responds to the threat of arbitrageurs by increasing the amount of services it puts in the bundle targeted at consumers in that country. Similarly, the threat of parallel trade may affect some consumers in the hight-price country adversely.