A Model Transformation for Increasing Value in Service Networks through Intangible Value Exchanges

Transcription

1 A Model Transformation for Increasing Vale in Service etworks throgh Intangile Vale Exchanges Daniel J. Dois Diartimento di Elettronica e Informazione Politecnico di Milano Milan, Italy dois@elet.olimi.it hristos ikolao, Manolis Voskakis Transformation Services Laoratory University of rete Heraklion, Greece {nikola,voskakis}@tsl.gr Astract One of the main goals in service science is to find efficient ways to analyze and increment the vale in a service network. The aroach we roose in this aer is to increase the agility of the system in sch a way that the network and the nderlying siness rocesses are ale to sontaneosly react to changes in the reqirements or in the environment. This is done y making extensive se of knowledge transfer and intangile interactions among network articiants. The final otcome is a transformation and analysis methodology that may e alied to a wide variety of service networks with the aim of finding ossile reconfigrations for increasing cstomer satisfaction, redcing transaction risks, and therefore increasing the overall vale of the network. Keywords-comonent; vale networks, siness rocess management, service networks, vale analysis I. ITODUTIO Modern siness systems are ecoming more comlex over time since the cost and seed of storing and exchanging information is ecoming lower and the nmer of articiants is ecoming higher. These systems are not only large, t they are set in an environment that is always changing oth in reqirements and in the nmer of articiants. Therefore we need an intelligent way to analyze them and rovide a methodology to kee or imrove the vale of articiation into the system even in sch dynamic conditions. The aility of the system to react to environmental ertrations is defined as the agility of the system. In this context we roose a methodology for transforming a siness network, known also as a service network, to imrove the vale for their articiants even if their reqirements change over time or some articiant acts in a way that decreases the vale of the network. The two key technologies that we are exloiting are: (1) vale estimation ased on revenes and offerings from each articiant; (2) risk redction and transarency that emerges after making extensive se of intangile interactions and knowledge transfers. The methodology we roose has een alied in the context of a traditional car sharing comany [20] and its ossile transformation into a more agile network. The final reslt is that a siness network designer has now a method for taking strategic decisions whether to modify its siness network or not, asing his decisions on the environment/articiants characteristics gathered over a certain eriod of time. elated work on this tye of siness networks, known also as service vale networks, or simly service networks may e fond in [15, 14, 8, 16, 5, 4, 13]. In these networks entities are either comanies or different roles within a comany, connections are offerings from one entity to another. These networks may e agile, in sch a case agility is their level of flexiility in dealing with changing reqirements [17]. In [7] we can also find a definition of vale as enefits of an agent accred y his articiation in the network mins any costs involved in setting the network links directly and indirectly. However there is a rolem with the actal evalation of this amont of enefits. The evalation method we will ase the rest of the aer is exlained in [9]: in this work all the interactions are exressed as offerings and ayments occrred er time nit, then the total revenes for all offerings exorted y each articiants are comted and sed to estimate ftre revenes. However according to this work the total vale is not simly a straction of revenes mins costs, t there is another vale-contriting comonent called Satisfaction Index: it measres the erceived reference for a relationshi. Other metrics for evalating service networks are roosed in the following works: the work from Parolini [15] descries a methodology called Vale ET for taking strategic decisions on the service network y doing a qalitative analysis over it to identify ottlenecks, dominant relationshis, and to redict the effects of ossile strctre/relationshi modifications; in Allee works [1,2,3,4] there are other metrics related to the strctre of the network sch as staility and risk, she also oints ot an analysis methodology that focses on the intangile exchanges from the network; additional works that try to nderstand and evalate the vale of services networks may e fond in [19,5,8,18]. Or way for evalating vale takes some insiration from all the works aove, esecially [9,1] since strctre is not stale in an agile dynamic network, therefore we will focs on the measrement on actal revenes, costs, and satisfaction of each articiant of the network. Another concet that this work relates to is the concet of siness ecosystem coordination mechanism [12], in which siness networks are ket together y so-called

2 keystone comanies (for examle ebay and Amazon) whose ojective is not to remove cometitors, t to cooerate with them y estalishing some vale-creating virtos circles and otain an emergent vale [11]. The final key concet taken from literatre is the concet of trst, defined as an attitde of ositive exectation that one s vlnerailities will not e exloited [10]. In this context trst is needed when dealing with risk, and the sal way to redce risk is to increase the knowledge transfers (intangile interactions) in the system. A ossile way that we will se for evalating trst is to define it as the willingness to ay for not having the risk (insrance), and reresenting it as a vale transfer (offering) from the Trstee to another entity that garantees for the Trstor. The rest of this aer is organized as follows. Section 2 discsses the rolem. In section 3 we roose a ossile methodology for dealing with sch rolem. Section 4 gives an examle of how the methodology may e alied in the context of a car sharing comany. Finally section 5 concldes the aer and gives an overview of ossile new research directions. II. POBLEM STATEMET In this section we define a common attern in service networks and rovide a rolem formalization. A. Model and Assmtions Under the same definition of service network discssed in Section 1, we will consider the following simlified attern in which there are only two entities: a service rovider and a ser (See Figre 1). The rovider offers a service and the ser ys that service, oviosly there may e many cometing roviders and cstomers. The main assmtions in this network is that the environment is not controllale y articiants (risk), there is lack of knowledge for matching sers to the most sitale service roviders (no transarency), and lack of knowledge for allowing a ser to act as a rovider (no information flow). B. The Prolem The rolem we are facing is to find a qalitative and qantitative way to decide if a network transformation that tries to redce risk, that tries to increase transarency among articiants, and that allows knowledge transfer, may e more rofitale than the original one. In articlar we focs or attention to the insertion of a new entity in the network with the role of matchmaker etween roviders and sers. Its rose is to redce risk and allow knowledge transfer sing a retation management system. Figre 1. Service etwork Fragment. Figre 2. Transformed etwork Fragment. III. MODEL TASFOMATIO In this section we exlain how the original network transfer discssed in the revios section may e transformed into a new fragment. A. General Idea The first model reresents one of the traditional ways of creating vale. ommon firms tend to focs on their rodcts and/or their services withot sharing knowledge or having an efficient feedack mechanism from their cstomers. This way of siness organization makes them nale to self-adat to market condition and therefore to qickly resond to new challenges. To address these isses and rovide a ossile transformation we had an idea of a second network where each articiant focses on its core cometencies and on the aroriate alliances to increase its rofitaility and flexiility to changes. These articiants will still act as (more secialized) service roviders and cstomers, t with a third tye of articiants that focses on the transfer or knowledge, on managing feedacks, and on making the emergence of sch agility ossile. B. The Transformation In the first network we have two roles: the service rovider who offers a service and the ser who receives the service (see Figre 1). In the second model we have one new entity: a roker who sorts and coordinates the interactions etween the rovider and the ser. The roker rovides to the ser all the ossile roviders of the service he asked. Moreover the roker cooerates with the roviders who advertise their services or rodcts via the roker. In addition the roker collects ser feedacks and informs ftre sers aot the qality of availale service roviders sing a retation mechanism. This is very imortant ecase it redces the risk for the sers of eing cheated. Frthermore the services offered aove increase sers satisfaction and loyalty, which means more vale for the network. To kee the network simle we are omitting some entities that rodce some costs and revenes (for examle laor costs, dereciation, tilities, and government incentives), however the associated vale exchanges will e considered as inner costs and revenes.. Vale Evalation In this ssection we show how to estimate the vale in several sitations, this information will then e sed to take decisions aot the rofitaility of articiating in the network. The otcome of these calclations will e to find

3 ot nder which circmstances it is rofitale for an entity to articiate in the network. We define first some arameters that will e sed in the final analytical definition of vale. Each of these arameters is evalated after every secified time interval that shold e roerly chosen y the siness rocess manager ased on the sitation. To distingish different time intervals we se the notation T 1, T 2, T. We k define also c ij as the cost comonent k that articiant i ays to j to consme his services, Ic ij k as the inner costs associated to the same transaction (which corresond to ayments to entities that are not reresented in the network, sch as laor cost and tilities), and finally I k ji as the inner rofits that come from external entities involved in the rocess sch as, for examle, government incentives. evenes are the ayments that each articiant receives for the services he offers. evenes of an entity i coming from another articiant j are defined as the amont the other articiant ays to consme services that come from entity i, ls the inner rofits associated to the same transaction: ij ( T ) = ( c k + I k ) κ ji ji osts are the amont of money each articiant has to ay to e ale to articiate in the network and offer his services. osts of an entity i coming from another articiant j are the ayments for the services that node i consmes from j dring his articiation in the network, ls the inner costs associated to the same transaction: k k ij ( T ) = ( c ij + Ic ij ) k Satisfaction index is an imortant factor that measres the imortance of a relationshi and the willingness to reeat it. Its analytical definition and evalation deends on the actal rolem. Past vales of evenes, osts, and Satisfaction index can e sed to redict ftre exected vales of the same arameters sing, for examle, atoregressive with moile average models as done in [9], or simly sing the last actal evalation of the arameters, as we have done in Section 4 since ast data information is limited. To refer to the exected vales we simly t a dash on to of the arameter name. Finally the total vale for each articiant i at time T is the sm of the vale that comes from the relationshi with any other articiant j: v T ) = v ( T ) i ( ij j Where the definition of the relationshi vale v ij is different for cstomers (entities that do not have direct revenes) and other entities. For cstomers it is defined this way: k k k vij : = ij ( δ SAT ij, ij ) where (, ) reresents the tility fnction that measres the vale of the cstomer who ses the service. For all the other entities it is defined this other way: vij ( T ) = δ SAT ij ( ij ( T ) ij ( T )) These definitions are different ecase the final rose of a cstomer is simly to otain the service in the most convenient way, and the convenience is exressed y the (rolem-deendent) tility fnction definition. For the other entities it is measred y the exected rofits (defined as exected revenes mins costs) times the vale of the relationshi (exressed y the satisfaction index). If the exected rofits are smaller than the ones of cometing networks, then the otential articiants will not enter and the service system has a qestionale ftre. It is imortant to note that the time horizon considered for deriving the vale of a service system is a arameter that has to e roerly set; it mst e long enogh to comensate for the changes of the dynamic system and short enogh to offer the right incentives for dating the articiants strategies. IV. ASE STUDY: A A SHAIG OMPAY This section shows how the methodology we descried in the revios section can e alied to estimate the vale of each articiant. In or examle we will se the car sharing comany of Milan. The car sharing system is a system for motorized ersonal moility that is alternative to traditional lic/rivate transortation. The system gives the oortnity to the cstomers to se a car from half a hor to several days and the access to the service is comletely atomatic. A. Traditional ar Sharing The traditional car sharing has two entities. The car sharing rovider, who offers car sharing services and owns all the cars; and the ser who consmes the service. In this case the rovider is niqe and the cstomer may either cooerate with him or leave the network. B. ar Sharing after Transformation In the second model we have three different roles: a rovider, who offers his car(s) for sharing and can e either a single car owner or a comany; a ser, who chooses to se car sharing service system instead of ying a car; a roker, who collects information from oth the roviders and the sers and coordinates their cooeration. The roker gives to the sers information aot the availaility of cars, and to the roviders information aot the availaility of cstomers. After this transformation, more articiants will e ale to join ecase any car owner may ecome a rovider and therefore the network will e ale to sontaneosly grow and serve more sers with a more differentiated offer.. Model of Vale In this section we resent the eqations we sed to estimate the vale of this service system. All the symols are exlained in Tale 1 and costs/revenes/vales, which are artly derived from licly availale data [20], are in Eros. For the traditional model revenes of the rovider deend on the sage of the cars from the cstomers: = (Fc + Ph h + Pk g) + i c) rovider

4 The costs of the rovider deend on the nmer of cstomers and the car maintenance cost: rovider = c ( Pi + P + a + m) + k c g + Pm k c + ( P + Pc + ) v + Of + Oc c + Or r + O The exected vale of the rovider is the difference etween the revenes and the costs times a satisfaction index of 1 since there is only one rovider and cstomers are assmed eqal. The exected vale of the ser, defined sing the cstom tility fnction elow, deends on his satisfaction and other arameters that have to do with the cost of sing the service: k k k S v c = ij ( δ SAT ij, ij ) : = ((Fc+ Ph h + Pk k) In the new model we have 3 entities. So we will estimate vales and costs for each one of them. Total revenes of the rovider are the sm of all the revenes he receives from oth ser and roker. evenes of the rovider coming from the roker are, =0, revenes of the rovider coming from the ser deend on the nmer of the sers, the hors and the kilometers that the each ser will se the car:, = Pk k c + h c Ph + O c Total costs of the rovider are the sm of the costs coming from the roker and the ser. osts de to the roker are the annal fee aid from the rovider to the roker and the commission that the roker receives for any transaction etween the rovider and the ser:, = F + c, osts de to the ser are the costs of the dereciation of the car de to the car sharing with the ser: = c (a + m + P) + k Pm +, (P + + Pc) v onseqently total costs of the rovider are: =, +, Exected revenes of the rovider are: = Ss + S,, The exected costs of the rovider are: =, S +, Ss Total revenes of the roker are the sm of the revenes coming from the other 2 entities. The revenes of the roker de to the rovider are:, = F + c, and the revenes coming from the ser are:, = + Fc conseqently: =, +, Total cost of the roker is the sm of any costs that roker has, to have the aility to offer his services to the other articiants: = Of + Or r i + O i The exected cost of the roker is the cost de to the ser mltilied y the satisfaction of ser from their relationshi ls the costs de to the rovider mltilied with its satisfaction: =, S +, S TABLE I. PAAMETES USED I THE A SHAIG MODELS ame Sym. Vales Mod. 1 Vales Mod. 2 mer of cars c Insrance Pi mer of cstomers Dereciation er car a Maintenance er car m Annal cost of arking er car P Total km er car k Annal fee of the cstomer Fc Annal fee of the rovider F 0 60 Price er hor Ph Hors er year h Price er km Pk Gas consmtion er km er car g Price km maintenance er car Pm Bank fee er invoice P ontrovercy management er invoice Pc 1 1 Total invoices er cstomer v 6 6 Fixed oerational costs (information system) Of Oerational costs er car Oc Oerational costs er cstomer O Government incentives er car i Oerational costs er reservation Or 1 1 eservations er cstomer r Postage cost er invoice mer of roviders ommission of roker c SAT index of roker (from rovider) S 1 1 SAT index of roker (from ser) S 1 1 SAT index of rovider (from roker) S 1 1 SAT index of rovider or seller (from ser) Ss 1 1 SAT index of ser (from rovider or seller) S SAT index of ser (from roker) S Exected revenes of the roker are: =, S +, S Finally the cost of the ser is the sm of the costs that are de to the rovider and the roker. The cost of the ser de to the roker is:. = Fc

5 The cost of the ser de to the rovider deends on the kilometers and the hors he will se the car sharing service and the gas he will consme: = k Pk c+ Ph h c + g k c + Pi c, The exected vale of the ser is calclated with this cstom tility fnction: v k k k S = ij ( δ SAT ij, ij : = + c ). S D. Vale Analysis We calclated all the vales for oth models sing the vales of Tale 1. Then we have seen that the variation of some arameters of sch tale is ale to change the analysis reslts, and therefore the winning network. The variation examle we will show focses on the fixed costs (maintenance, insrance, arking, and dereciation): in the first network all these costs are charged to the ser, while in the second network it is assmed to e lower since the car is not shared 100% of the time (roviders in the second model can decide when to share their car and when to reserve it for their ersonal se). So if it is shared for examle 25% of the time (and the rest of the time is sed for their ersonal se), we can assme that fixed costs are 75% less with resect to the first model. The reslts of the simlation (as can e seen in Tale 2) show that if fixed costs in the second model are 25% of the first model, then the second model is more rofitale for all the articiants, while if the fixed costs are 50%, than the first model wold e etter (ecase some articiants have negative vale). In conclsion we exect that the second network wold ecome etter than the traditional one if sers that already own a car, start sharing their car when they are not going to se it, so that only a relatively small amont of fixed costs is charged to other sers. TABLE II. EXPEIMETS O VALUES WHE HAGIG THE OSTS Increase in Exected Vales w.r.t. to the first Fixed costs of 2 nd model are 25% w.r.t. the first Fixed costs of 2 nd model are 50% w.r.t. the first User 1 st model 65 (normalized) 65 (normalized) User 2 nd model 1439 (normalized) 1258 (normalized) Provider 2 nd model (Er) (Er) Broker 2 nd model (Er) (Er) V. OLUSIOS In this aer we resented a methodology for transforming a recrrent attern in service networks to increase the agility of the network. The stdy is sorted y a techniqe for estimating the vale and therefore to sort the final decision whether to reconfigre the network or not. Possile ftre research is the develoment of software modles to atomate sch transformation in crrent Bsiness Process Management architectres. Another ossile research direction can e to find and stdy new. transformation atterns and to imrove the vale estimation techniqe. 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