The document discusses service design from a modeling perspective that incorporates service thinking, system thinking, design thinking, and business thinking to provide an integrated approach across disciplines in the service design process. It outlines key concepts in service science, service systems, value co-creation, design thinking, and business thinking to demonstrate how an integrated modeling approach can effectively manage information and knowledge from design to engineering of service systems.

1. Service Design Basics –
from System to Business Modeling
Dr. Stephen K. Kwan
Professor, Service Science
Management Information Systems
College of Business Administration
San José State University, CA, USA
http://www.sjsu.edu/ssme
Contact: stephen.kwan@sjsu.edu
Presented at Yuan Ze University
December 6th, 2012, Taiwan
Download these slides at: http://www.slideshare.net/StephenKwan
Kwan 2012 1

2. Do you know the way to San José?
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3. Silicon Valley &Its Environs
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4. Kwan 2012 4

5. Kwan 2012 5

6. Abstract
This presentation looks at service design from a
modeling perspective that incorporates service
thinking, system thinking, design thinking, and
business thinking. This approach provides an avenue of
integration across different disciplines and roles in the
service design process. A desirable outcome of this
integration would be more effective information and
knowledge management from design to engineering of
service systems.
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7. Some Definitions
Service Science is short for Service Science, Management,
Engineering and Design (SSMED1).
Service Science is concerned with the study of Service Systems.
cf. Computer Science is concerned with the study of Computer Systems.
Service Systems are man-made complex systems designed to
improve the quality of life by co-creating value through value
propositions among the stake-holders.
1 Spohrer, J., Kwan, S.K. “Service Science, Management, Engineering, and Design (SSMED): An Emerging
Discipline – Outline and References”, International Journal of Information Systems in the Service Sector, 1(3),
2009.
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8. Service System Worldview1
Service
Customer
Provider
Service
Experience
A Service System and Its Entities
1Kwan, S. K. & Min, J. H. (2008) “An Evolutionary Framework of Service Systems”.
Presented at the International Conference on Service Science, Beijing, China, April 17-18.
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9. A Service System Network
Service Service Interactions
System A
Service
System B
Service Service
System E System C
Service
System D
Service
System F
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10. Service System Worldview
Employees &
Stockholders
Community
Service
Customer
Provider
Service
Partners
Experience
Service System Competition
Society
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11. Value Co-Creation Through Value Propositions
Employees & Value
Stockholders
Community
Value Service
Value Customer
Provider
Value
Service
Partners
Experience
Service System Competition
Society
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12. Service Systems, Computing, and IT Services1
Service Provider’s Back Stage Support
Back
Stage
Processes
Information
Technology
Platform
Front
Stage
Front Stage Processes
ITSM – Management of the Processes
Service Computing
and Infrastructure of IT Services
(e.g., SOA)
1 Kwan, S. K. & Hefley, B., “Service Systems”, 2008.
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13. Service System Design (1)
From:
To:
Service
Customer System
Design Service
System
Engineering
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14. Service System Design (2)
Service System Design Business
Thinking Thinking Thinking Thinking
A Multi-disciplinary Approach
Service
Customer System
Design Service
System
Engineering
Knowledge Management –
maintaining integrity of information and
knowledge throughout the lifecycle
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15. What is Design (1)
A conscious effort to create something that
is artistic, purposeful, and better.
Not casual, you have to work at it
Creativity is needed here
Object
Product
Service
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16. What is Design (2)
A conscious effort to create something that
is artistic, purposeful, and better.
Pure Art
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17. What is Design (3)
A conscious effort to create something that
is artistic, purposeful, and better.
Utilitarian,
Commodity
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18. What is Design (4)
A conscious effort to create something that
is artistic, purposeful, and better.
Form Function Desirable
State
Not easily Can apply metrics
measurable and measurements
Connection to
engineering
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19. Design and Innovation
Design New
A conscious effort to create something that is
artistic, purposeful, and better. ^
Unique
Innovation Desirable
혁신 创新
Valuable…
CREATING
SOMETHING
創新 革新 NEW
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20. Service System Design as
part of the Service System Life Cycle
Design is an important component in
the study of Service Systems
e.g., SSMED – D is for Design
Discovery Conception
Operation Design
Development Engineering
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21. Incorporating Multiple
Perspectives in Modeling
Competition
External or Internal Forces Strategy
Customers
create impetus for Change Regulations
Discovery Conception Obsolescence
Technology
Design Innovation
Operation
Servitization ..
Development Engineering
J. Bradford Jensen
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22. Incorporating Multiple
Perspectives in Modeling
for example:
Service Thinking Servitization
Platformtization
Discovery Conception Open Service Innovation
Operation Design
Development Engineering
(S-D) Logic -
Service Dominant Logic
Vargo & Lusch
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and many more! 22

23. Foundational Premises of Service Dominant Logic
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24. Incorporating Multiple
Perspectives in Modeling
for example:
System Thinking
Discovery Conception
Operation Design
C. West Churchman Russell L. Ackoff
Development Engineering and many more!
Herbert Simon’s
The Sciences
of the Artificial
Kwan, S. K. & Min, J. H. (2008) “An Evolutionary Framework of Service Systems”.
Presented at the International Conference on Service Science, Beijing, China, April 17-18.
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25. Incorporating Multiple
Perspectives in Modeling
Discovery Conception
Operation Design Design Thinking
Development Engineering
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26. Design Thinking – some resources
Emotional
Innovation
Business
(Viability) Experience
Innovation
Design People
Thinking (Desirability)
Process
Functional Innovation
Technology
Innovation (Feasibility)
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27. Design Thinking – some resources
Peter G. Rowe
Stickhorn &
Schneider
Thomas Lockwood
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28. Design Thinking – some resources
Divergent Converge
Thinking nt
Thinking
© Cockayne and Carleton
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29. Incorporating Multiple
Perspectives in Modeling
Discovery Conception
Operation Design Business Thinking
Development Engineering
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30. Business Thinking - Service System Worldview1
Employees &
Stockholders
Community
Service
Customer
Provider
Service
Partners
Experience
Service System Competition
Society
1Kwan, S. K. & Min, J. H. (2008) “An Evolutionary Framework of Service Systems”.
Duplicate Presented at the International Conference on Service Science, Beijing, China, April 17-18.
Slide Kwan 2012 30

31. Business Thinking -Value Co-Creation Through
Value Propositions
Employees & Value
Stockholders
Community
Value Service
Value Customer
Provider
Value
Service
Partners
Experience
Service System Competition
Society
Duplicate
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32. Stages in Customer Empowerment
in Value Co-Creation
Stage 1: Value Chain
Value Proposition
Focal Service
Customer Relationship Provider
Service
Experience
5 Kwan, S. K. & Yuan, S. T. ”Customer-Driven Value Co-Creation in Service Networks”, to appear in Demirkan, H.,
Spohrer, J.C. and Krishna, V. ed., The Science of Service Systems, volume in Service Science: Research and Innovation
(SSRI) in the Service Economy series, Springer, 2010.
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33. Stage 2: Traditional Service Value Network
Value Proposition
Focal Service
Customer Relationship Provider
Provider
Service Partner
Experience Network
Value Proposition
cf. ICT-enabled service networks,
mobile applications, etc.
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34. Stage 3 – Improved Value Chain
Value Proposition
Focal Service
Customer Relationship Provider
Value
Proposition
Service
Customer’s Experience
Social
Network
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35. Stage 4: Customer Driven Service Value
Network
Value Proposition
Focal Service
Customer Relationship Provider
Value
Value
Proposition
Proposition
Provider
Service Partner
Customer’s Experience
Social Network
Network
cf. “Resource Integrators” in Service Dominant Logic literature
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36. Variety of Value Propositions
Maslow’s
Hierarchy
Of Needs
Service Provider
Society Hedonic
Stakeholders
Spiritual
Community Cultural
Corporal
Employees Emotional
Intellectual
Stockholders Familial….
Partners
A point in this 3-D space is a potential
Customers
Value Proposition e.g. Service Provider
/ Society / Environmental
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37. Disposable
Income &
Desire for
Services
Needs
vs.
Wants
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38. Value Systems and Value Dimensions
Provider’s Value System

  





   Opportunities for
  Value Co-Creation

Customer’s
★ Value System
★ ★ ★
★ ★
★ ★ Kwan, S.K., Hottom, P., Kieliszewski, C. “Moving from B2X to
B2X2Y Value Propositions in Service System Networks”,
1st International Conference on Human Side of Service
His Customer’s Value System Engineering, HSSE 2012, San Francisco, 24 July, 2012.
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39. Constructing a Value Proposition
** Expected ** VPj = [SE,B,C,P,Q,Sc,R,M]j
Service Performance
Experience Metrics
Benefits
Stakeholder
Roles
Costs Quality
The Customer will will
will Probability Schema for Data
have a lot of VP’s do not
do of Success
to choose from for +$ do Exchange
Kwan, S.K., Muller-Gorchs, M. (2011). "Constructing Effective Value Propositions for Stakeholders in Service System Networks," Proceedings >
Proceedings of SIGSVC Workshop . Sprouts: Working Papers on Information Systems, 11(160). http://sprouts.aisnet.org/11-160
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40. Business Thinking – some resources
Osterwalder & Pigneur
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41. Service System Framework
& Service System Networks
Foresight and Innovation Method
Business Model, Value Propositions
& Service Patterns
© Cockayne and Carleton
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42. Foresight and Innovation Method © Cockayne and Carleton
Process
Chain
Network
Diagram
UI Prototyping
UML – Use
Cases
BPMN Work
System
Looking for the
MANGA right tools to
connect to the
Story Service Blueprint next stage
Boards
Kwan & Müller-Gorchs 2011
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43. From Design to Engineering
Discovery Conception
Operation Design
Development Engineering
Engineering
Discipline
& Methodology
Service Design Engineer?
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44. Some aspects of Service System Engineering
Service Provider’s Back Stage Support
Back
Stage
Processes
Information
Technology
Platform
Front
Stage
Front Stage Processes
ITSM – Management of the Processes
Service Computing
and Infrastructure of IT Services
(e.g., SOA)
Duplicate 1 Kwan, S. K. & Hefley, B., “Service Systems”, 2008.
Slide Kwan 2012 44

45. Incorporating Multiple
Perspectives in Modeling
Discovery Conception
Development Operation Design
Discipline
& Methodology Development Engineering
and RAD, Agile, Extreme Programming, etc.
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46. Incorporating Multiple
Perspectives in Modeling
Discovery Conception
Operations Design
Operation
Management
Development Engineering
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47. Service System Operational Worldview (1)
Service Management
Fitzsimmons & Fitzsimmons Employees & Capacity
Stockholders & Manpower
Planning,
Community Training
Service
Customer Facility
Location
Provider
& Design
Service
Partners
Experience
Social
Networking Competition
Competitive
Market Customer Service Strategy
Society Segmentation Flow & Concept Operating
Service Realized Strategy
Delivery
Duplicate
Slide Kwan 2012 47

48. Service System Operational Worldview (2)
Value Proposition
Focal Service
Customer Relationship Provider
Value
Value
Proposition
Proposition
Provider
Service Partner
Customer’s Experience
Social Network
Network
Information &
Duplicate Knowledge Management
Slide Kwan 2012 48

49. Information &
Knowledge Management
2008 Olympic Games
Both US teams dropped the baton
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50. Poor (Communication and) Information
& Knowledge Management
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51. Information &
Knowledge Management
2012 Olympic Games
US men‟s won silver
US women‟s won gold
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52. Information &
Knowledge Management
How can we effectively define, capture, share
and maintain the information and knowledge
from the different stages of the Service
System Life Cycle?
From: To:
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53. Information & Knowledge Management
- Sharing the Canvas
Customer
Designer
• Service Thinking
• System Thinking
• Design Thinking
• Business Thinking
Manager
• Engineering Discipline Engineer
• Development Discipline
• Operations Management
Operator
Developer
Who are these artists?
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54. T-shaped People (1)
Industry says:
“We need to hire more T-shaped people!”
Across industries Complex Communications Across Fields
Across cultures
Across functions
Across disciplines
=
More experienced Develop
More adaptive
New
More collaborative
Knowledge
Broaden
In-depth With
With
knowledge Research
Based on slides by Global
Jean Paul Jacob
of IBM
of a specific Educational
discipline program
Academia says:
“We need to hire more T–shaped faculty!”
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55. T-shaped People (2)
Paul Harris, “Help Wanted: „T-Shaped‟ Skills to meet 21st Century
Needs”, T&D, September 2009
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56. We need T-shaped People
Who can work together as a Team
Using Design Thinking as the basis of Project-based Team Building
56
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57. Design Thinking for Managers
Some Business Schools are
teaching Design Thinking:
Toronto
Northwestern
Maastricht
Berkeley
Virginia
St. Gallen
……….
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58. T-shaped People (3)
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59. Service Design Basics –
from System to Business Modeling
Dr. Stephen K. Kwan
Professor, Service Science
Management Information Systems
College of Business Administration
San José State University, CA, USA
http://www.sjsu.edu/ssme
Contact: stephen.kwan@sjsu.edu Fin
Presented at Yuan Ze University
December 6th, 2012, Taiwan
Download these slides at: http://www.slideshare.net/StephenKwan
Kwan 2012 59

60. Value Proposition Model (VPM)
Starting with the Service System
Service
Customer
Provider
Service
Experience
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61. VPM – a common example
Service
Customer Value Proposition
Provider
Customer
Service
Experience
Service
Customer
Experience
Service
Experience
Kwan 2012 61

62. VPM – individuals and community
Service
Customer Value Proposition Provider
Community/
Social
Customer Network A Shared
Experience
Service
Experience
Service
Experience
Customer
Service
Experience
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63. VPM – individuals and Facebook community
Service
Customer Value Proposition Provider
Community/
Social
Customer Network A Shared
Experience
Service
Over 1 Billion !! Experience
Service
Experience
Customer
Service
Experience
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64. VPM – service provider partners
Service
Customer Provider
Value
Proposition
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Value Proposition Vendor
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65. VPM – partner‟s acquistion of customer
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Service Vendor
Experience
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66. Example 1 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Vendor
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67. Example 2 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Service Experience
Service
Experience Experience
Service Vendor
Vendor
Experience
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68. Example 3 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Service Experience
Service
Experience Experience
Service Vendor
Vendor
Experience
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69. Example 4 of 4
Service
Customer Provider
Customer
Service
Service
Experience
Experience
Service
Experience
Service
Experience
Service Vendor
Experience
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70. Example: E-Commerce
Customer
Amazon.com
Bookcloseout_us
theBookGrinder
nengland4
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71. VP0
Se0
SE0
Amazon.com
S0
SP0
Se1
Bookcloseout_us
S1
SP1
S4
SP4
Customer Se2
theBookGrinder
S2
SP2
S5
Se3
negland4
S3
SP3
S6
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72. Service Pattern 1 – Single Service Episode
Customer Instantiation
of the Service
Experience at a
particular point
VP0
In time
SE0
Focal
Relationship
Time
SP0
SE0 = Service Experience provided by SP0
SP0 = Service Provider of the Focal Relationship
(the basis of the Value Proposition from Kwan & Yuan 2011)
VP0 = Value Proposition offered by SP0 to Customer for SE0
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73. Pattern 2 – Continuous Service over a Period of Time
Customer
VP0
SE0
Time
SP0
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74. Service Pattern 3 – Service in Parallel
Customer
VP0
SE0
Se0
Se1
Se2
Time
Instantiation of the Service
SP0 SP1 SP2 Experience at a particular point
In time
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75. Pattern 3 – Continuous Service with
Occasional Service Episodes
Customer
VP0
SE0 Se1 Se2
Se0
Time
SP0
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76. Pattern 4 – Service provided by more than
one Partner Service Providers
Customer
VP0
SE1 SE2 SE3
SE0
Time
SP0 SP1 SP2 SP3
VP1
VP3
SE4
SE6
VP2
SE5
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