How to Coordinate Value Generation in Service Networks – A Mechanism Design Approach

The fundamental paradigm shift from traditional value chains to agile service value networks implies new economic and organizational challenges. As coordination mechanisms, auctions have proven to perform quite well in situations where intangible and heterogeneous goods are traded. Nevertheless, traditional approaches in the area of multidimensional combinatorial auctions are not quite suitable to enable the trade of composite services. A flawless service execution and therefore the requester’s valuation highly depends on the accurate sequence of the functional parts of the composition, meaning that in contrary to service bundles, composite services only generate value through a valid order of their components. The authors present an abstract model as a formalization of service value networks. The model comprehends a graph-based mechanism implementation to allocate multidimensional service offers within the network, to impose penalties for non-performance and to determine prices for complex services. The mechanism and the bidding language support various types of QoS attributes and their (semantic) aggregation. It is analytically shown that this variant is incentive compatible with respect to all dimensions of the service offer (quality and price). Based on these results, the authors numerically analyze strategic behavior of participating service providers regarding possible collusion strategies

Measuring the Utility of Mobile Phone Video Service Based on A Service Value Network Model

Service value networks (SVNs) are a new form of industrial cooperation. Within SVNs, service providers engage in loosely coupled relationships to jointly offer dynamically configured complex services to customers. Value is co-created through these joint complex services. By specialization, service providers leverage the knowledge and capital assets of their partners, and share the risk of operating in a changing and uncertain environment. However, as a new approach, SVNs lack theoretical foundations and empirical studies to validate its applicability. This paper seeks to address these problems by making three contributions. First, based on an existing theoretical SVN model, the paper presents a design for a mobile phone video service value network (MPVSVN) in China. Second, we describe a systematic approach to calculate the value and utility of services on the SVN. Third, we demonstrate our approach in detailed steps through real world service examples identified from the MPVSVN

Competition of Service Marketplaces: Designing Growth in Service Networks

The cloud computing paradigm gives rise to Web service marketplaces where complex services areprovided by several modular vendors. Recently more and more intermediaries are pushing onto themarket, thereby driving competition. Offering innovative business models which are capable ofattracting service providers and consumers is a reasonable strategy to beat competitors and to takeadvantage of network effects. We develop a mechanism that introduces a novel way of distributingrevenues among service providers – the power ratio. Its underlying presumption is not only tocompensate service providers who actually contribute to a complex service offered at a time, but alsoto pay out partners who are on standby – i.e. vendors that support the network’s variety and stability,but actually do not contribute to the complex service delivered. We show that a payment function thatis based upon the power ratio is a promising approach to draw in service providers as it outperformsa payment function that rewards vendors merely based on their actual allocation in terms of expectedpayoffs for different types of service vendors

Internet social networking - Distinguishing the phenomenon from its manifestations in web sites

The Service-Oriented Architecture (SOA) paradigm promises to facilitate the integration of software services provided by different vendors and thus enables users to benefit from Best-of-Breed solutions. In order to support software architects we present the Multilayer Standardization Problem (MSP) to analyze the trade-off between possibly enhanced utility versus higher assembling costs of Best-ofBreed SOA solutions. We implemented a software prototype to support decision makers during the data input and the subsequent analysis of the solution’s robustness. The MSP for the SOA-case is formulated as a linear 0–1 optimization model and extends the established Standardization Problem (SP) by modeling the user preferences and considering varying granularity as well as integration relationships in addition to communication relationships. These characteristics are common to numerous systems – thus the general MSP can serve as a basis for further research in this fiel

Flexible Decision Support in Dynamic Interorganizational Networks

An effective Decision Support System (DSS) should help its users improve decision-making in complex, information-rich, environments. We present a feature gap analysis that shows that current decision support technologies lack important qualities for a new generation of agile business models that require easy, temporary integration across organisational boundaries. We enumerate these qualities as DSS Desiderata, properties that can contribute both effectiveness and flexibility to users in such environments. To address this gap, we describe a new design approach that enables users to compose decision behaviours from separate, configurable components, and allows dynamic construction of analysis and modelling tools from small, single-purpose evaluator services. The result is what we call an “evaluator service network” that can easily be configured to test hypotheses and analyse the impact of various choices for elements of decision processes. We have implemented and tested this design in an interactive version of the MinneTAC trading agent, an agent designed for the Trading Agent Competition for Supply Chain Management

A Service-Oriented Approach to Freight Routing in Intermodal Transport Systems

Determining optimal routes for given freight is a core decision inlogistics. In intermodal logistics, freight routing has to considerthe interfaces between different modes of transportation, such ashand-over offsets, load changes, and organizational procedures.We study this problem from the perspective of Service-OrientedComputing (SOC). We (1) propose representing intermodaltransport systems as a set of service offerings and customerdemand as service requests, (2) define freight routing as a servicecomposition problem, and (3) develop a composition algorithmfor transportation services

Sources of value in application ecosystems

Mobile application stores have revolutionised the dynamics of mobile ecosystems. Research onmobile application ecosystems has been significantly driven by data that is focused on the visualisation of an ecosystem's dynamics. This is a valuable step towards understanding the nature of the ecosystems, but it is limited in its explanatory power. Thus, a theory-driven approach is needed to understand the overall dynamics of such systems. This study applies a theoretical framework of value creation in e-business in the context of mobile application ecosystems, with a focus on application developers. A qualitative research strategy is employed in testing operationalisationina sample of developers. The sample comprises 27 application developers from the three leading mobile application ecosystems. The results show that efficiency is the main source of value, products seldom create value through complementarities, and approaches towards lock-in and novelty seem to vary among application developers. The managerial and theoretical implications of such biased value creation in mobile ecosystems are considered. </div

Value Creation through Co-Opetition in Service Networks

Well-defined interfaces and standardization allow for the composition of single Web services into value-added complex services. Such complex Web Services are increasingly traded via agile marketplaces, facilitating flexible recombination of service modules to meet heterogeneous customer demands. In order to coordinate participants, this work introduces a mechanism design approach - the co-opetition mechanism - that is tailored to requirements imposed by a networked and co-opetitive environment

Cost-Optimal Service Selection Based on Incident Patterns - A Service Level Engineering Approach

The assessment of services\u27 adverse business impact is a prerequisite for the determination of cost-optimal service offers. We suggest service incident patterns as an advanced form of quality measures describing a service\u27s characteristic incident behavior. We show that the knowledge about service incident patterns and the business impact induced by service incidents is required to determine the total business costs a service induces and develop the method for Cost-Optimal Service Selection