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Service Systems

Services are processes that connect up different products to deliver an end user solution

Services are processes that connect up different products to deliver an end user solution

A service system is a coherent combination of people, process, and technology that delivers some value to an end user.1 Service systems are a type of complex sociotechnical system that is designed to deliver some functionality within a particular context to a particular end user by aggregating different technologies and people through procedures. Examples of service systems are all forms of education, entertainment, transportation systems, and telecommunications services among many others.

Context

The industrial model to design and engineering was or is very much focused on the production of things. Thus, we live in a world of isolated things, which we call products: cars, watches, tables and washing machines. They are conceived of, designed, developed and operated in relative isolation from each other. But, over the past few decades, there has been a quiet but fundamental revolution in services as they have come to dominate post-industrial economies.
Services are not just another sector to the economy. They represent a whole new paradigm in how we think about the systems we design, one that shifts the focus from isolated technologies to integrated systems. Within the services paradigm, the post-industrial world is saturated with products, and people who no longer want more things. They just want the functionality of these things that is their service. So I don’t want four credit cards, three debit cards, two bank accounts and a little pile of bank statements sent to me every month. I want a financial service that is there when I need to pay for something and not when I don’t. I don’t want a piece of software that I have to download, install, update, and maintain. I want a software service that is there when I need it and not when I don’t. This is the world of services and it is focused on pure functionality.

Service Systems

Services are essentially the product of connecting many products together, that is, integrating products into systems of services, what we call product service systems, or more simply service systems. Service systems can be characterized by the value that results from the interaction between their components. A car sharing service might be a good example of this. By connecting people, technology, and information, we are able to deliver the end user with close to nothing but the pure functionality or services of personal mobility. Another good example of a real-world product service system is Rolls Royce that produces jet engines, but they do not sell these to their end-user. They provide them as a service through what they call their “power by the hours” program. The airline gets the functionality of the engine as a service but ownership and maintenance remain in the hands of the producer. The highly successful website Airbnb is another example of a product service system. They provide a common interface and platform for integrating many different providers of accommodation to deliver a unified service to the end-user.
This concept of a service is very important in the design of complex systems in that it helps to shift the focus to what is of real importance, that is, the relations between components, the whole system and most importantly the functionality of the system. Because at the end of the day, we don’t really want things, components or even systems. What we really want is functionality, pure functionality, and that is what we call a service. By focusing on this end service, we can work backward to ask what the basics we need to deliver this are , or what we need to connect to deliver this functionality. Most of these things are already out there; we just need to design new configurations, new frameworks for integrating them. Our example of Airbnb is a good one. The components of their system – that is the people who actually provide the accommodation – they were already there. Airbnb just created a new platform and interface for connecting these things to delivering an integrated service.

Characteristics of Services

Services like this financial transaction in the image above, are intangible and this gives them very different characteristics to tangible products

Services like this financial transaction in the image above, are intangible and this gives them a very different set of characteristics to tangible products

This new paradigm of service systems brings with it a new logic that is very different to our traditional product-centric one. So let’s take a look at some of the key characteristics of service systems. Firstly, services are intangible. They cannot be touched, gripped, looked at, or smelled. Tangibility is an important factor of industrial goods upon which much of our economics is predicated. They can be easily quantified, priced, bought, sold, and owned. Many services only have value-in-use, meaning the value of the service is often only released when the product is used. Thus, the enforcement shifts from ownership to access. A consequence of this is that defining and measuring the value delivered becomes more complex with the designing of new, more sophisticated business models moving to the forefront. This immaterial nature to services also means the shift towards services represents a powerful way of doing more with less, dematerializing our economies and is often presented as an important method of achieving sustainability.

End-User Focused

Services are focused on the end-user. The industrial paradigm is centered around objects, products and the properties of these things, and thus the end user is shifted to the periphery of this model mainly having significance as an owner of these things. When we begin to focus on the system’s functionality and services, we turn this the other way around. The solution to the end user’s problem now becomes the center of this cosmos. When we are selling solutions instead of products, to deliver these solutions properly we need a deep understanding of the end user’s particular needs and context.

Continuity of Services

Whereas products exist in particular locations within space and are often sold as one-offs, services are more about time. Integrated solutions involve long-term partnerships between customers and producers. For example, Nike sells running shoes. Buying a pair of sports shoes is a once off purchase of a product, but by creating Nike Plus, a digital coaching service that connects up to a web platform where users can exchange their running performance, they have managed to turn the product into an instance of a prolonged service delivery relationship with their customers that will likely see them coming back to buy shoes in the future simply to continue the service.

Co-Creation

Many services, such as consulting, involve the cocreation of value that takes a combine effort of both producer and consumer to achive the outcome

Many services, such as consulting, involve the cocreation of value that takes the combined engagement of both producer and consumer to achieve the outcome

In service environments, the customer provides inputs to the service process, and often the customer is present during the service and plays an active role. Hence, the value is co-created by the customer and producer. Coupled to this is the fact that end-users desire integrated services, and as services become more technologically sophisticated with firms focusing more on their core capabilities, networks of firms have to co-operate over prolonged periods of time to ensure the design and delivery of these services.

The Services Paradigm

As information technology networks our world, the forefront of design challenges becomes the designing of these complex service systems that are able to integrate many diverse components into real-time dynamic networks that wrap around the end user to simplify the complex and deliver them with a seamless service. The services paradigm changes our conception of what we are designing when we talk about the design of complex systems. That is a change from developing a thing to developing a function or service, which provides a solution to a particular end-user. We can then ask what resources or what components does one need to integrate into a system in order to deliver this functionality.

Cite this article as: Joss Colchester, "Service Systems," in Complexity Labs, May 7, 2016, http://complexitylabs.io/service-systems/.

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2017-05-10T12:01:44+00:00