Complexity of service value networks: conceptualization and empirical investigation

  • Authors:

  • R. C. Basole;W. B. Rouse

  • Affiliations:

  • Tennenbaum Institute, Georgia Institute of Technology, Atlanta, GA;Tennenbaum Institute, Georgia Institute of Technology, Atlanta, GA

  • Venue:
  • IBM Systems Journal
  • Year:
  • 2008

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Abstract

This paper explores how service value is created in a network context and how the structure and dynamics of the value network as well as customer expectations influence the complexity of the services ecosystem. The paper then discusses what transformative role information and communication technology (ICT) plays in coordinating and delivering value and managing this complexity. A conceptual model is developed for understanding and investigating the nature, delivery, and exchange of service value and assessing the complexity of a service value network. Three central arguments are presented. First, value in the services economy is driven and determined by the end consumer and delivered through a complex web of direct and indirect relationships between value network actors. Second, the complexity of service value networks not only depends on the number of actors but also on the conditional probabilities that these actors are involved in delivering the service to the consumer. Third, ICT plays a central role in reducing complexity for consumers by providing greater levels of value network integration, information visibility, and means to manage and anticipate change.