Competence Center IT in Service Economy RESEARCH AGENDA
A modified version of this research agenda is to be published as: MACIASZEK, L.A. (2016): On Service e-Marketplaces for Independent and Assisted Living, In: Sixth International Symposium on Business Modeling and Software Design BMSD 2016, ed. B. Shiskov, ScitTePress
The Competence Center IT in Service Economy (CC ITSE) is a research and development (R&D) initiative of the Institute of Business Informatics (IBI) at Wrocław University of Economics (WUE). The Center conducts R&D projects in collaboration with other R&D institutions, businesses, government and social organizations across Europe. It was launched under the CC ITSE name in October 2013, but its history goes back to September 2012 when a cooperation agreement was signed between WUE and the University of St. Gallen Switzerland for a joint R&D in the area of Independent Living (IL). This initiative has resulted in a release in October 2014 of a ITSE platform called Amiona (https://sg.amiona.ch/). In parallel to the development of Amiona, the CC ITSE has acquired new R&D partners and has extended its mission to includee-health domain of Ambient Assisted Living (AAL).
The mission of CC ITSE is to conduct research for enablement and empowerment of IT/society alignment through development of Lifestyle Engineering & Health Management (LE&HM) platform offering concierge-mediated, requestor/supplier-negotiated, and cyber/physical-based delivery of LE&HM services to requestors (consumers, patients). The CC ITSE Research & Development (R&D) emphasis is on consumer services, as opposed to citizen (government) services. The purpose is to enable elderly people (in particular, but not exclusively), nearing or in retirements, healthy or unhealthy, to live socially-included and economically-active lives. Naturally enough, the CC ITSE purpose and research agenda stem from the collaboration with the University of St. Gallen’s Competence Centre Independent Living (CC IL) (http://il.iwi.unisg.ch/index.php?id=2&L=2) and they are aligned with Hubert Oesterle’s work on life engineering (Oesterle, 2014).
On the society side, the idea is to address the lifestyle needs of senior citizens (IL) and people with disabilities or suffering from medical conditions (AAL) for self-determination, self-fulfillment, self-enrichment, self-respect, dignity, and equal opportunities. On the IT side, the idea is to provide innovative systems and solutions embracing contemporary shifts of computing paradigm to service science, cloud computing, mobile connectivity, business processes, and societal participation.
We live in a service economy (Chesbrough and Spohrer, 2006). In developed countries, service sector (known also as the tertiary sector of industry) accounts for most Gross Domestic Product (GDP). For example, in 2014 in the United States, the service sector contributed 79.7% of the country’s GDP, as compared to 19.1% of the industrial sector (manufacturing, construction, mining and extraction) and 1.12% of the agricultural sector. In Poland the corresponding numbers were 63%, 33.6%, and 3.4% (Wikipedia, 2015).
Almost every modern agricultural or manufacturing product is combined with services, and it is the joint product-service experience that is judged by service requestors, thus truly generating real value for individuals and profit growth for businesses. Interaction and collaboration between actors of a service (suppliers, requestors, and intermediaries) create value-in-context, employment and economic growth. A supplier offers a value proposition that can be realized in a separate process involving requestors and intermediaries. The benefits to all actors define the context of value co-creation – realized (typically) through service information systems (IT services, e-services, cloud services).
Following the IT Infrastructure Library (ITIL framework, we distinguish between a service and an IT service (Aguter, 2013, p.17):
“A service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks.”
“A service provided by an IT service provider. An IT service is made up of a combination of information technology, people and processes. A customer facing IT service directly supports the business processes of one or more customers, and its service level targets should be defined in a Service Level Agreement. Other IT services, called supporting services, are not directly used by the business, but are required by the service provider to deliver customer- facing services .”
The CC ITSE research is set against the background of (1) social networks, collaborative consumption, and sharing economy and (2) service science, engineering and management. Social networks, in the traditional sense of interconnection of people, have been known to have significant positive impact on LE&HM (Smith and Christakis, 2008). When propped up by Internet-based social media platforms, social networks facilitate collaborative consumption and lead to the contemporary phenomenon of sharing economy (Botsman and Rogers, 2010). The LE&HM platform leverages further information technology to enable shared access to services and related products, information and knowledge.
The R&D challenges of service science, engineering and management are supported by a parallel investigation pathway of a connected research community called Service-Oriented Software Engineering & Management (SOSEM) (http://sosem.ue.wroc.pl/, Maciaszek, 2014).
The R&D innovation within CC ITSE relates to e-service systems, i.e. service systems actioned via information and communication technology (Internet, cloud computing, mobile devices, Internet-of-Things (IoT), etc.). According to Targowski (2009, p.64), “E-service innovation often requires integrating technology innovation, business model (or value proposition) innovation, social-organizational innovation, and demand (new customer wants, needs, aspirations) innovation”.
In CC ITSE, we innovate by embracing all kinds of concepts, ideas, processes, activities, tools, etc. that bring about an invention that addresses a particular lifestyle or health need and creates economic value through risk-taking joint venturing. The most significant innovation leverage and the greatest value co-creation can be achieved by a service system that connects actors in many-to-many collaborative network, in which diverse offerings of suppliers are facilitated by diverse intermediaries and meet with diverse realizations of requestors. Such a viewpoint goes beyond enablement and coordination of peer-to-peer services and provides a new perspective on the sharing economy concept.
Service innovation is requestor-focused. Requestor market, as the primary driver of e-service innovation, challenges the way companies innovate and evolve with IT. The innovation ideas need to tap into the phenomenon of consumerization and personalization as the tendency for new IT solutions to emphasize requestor-focused service provision and to emerge first in the personal requestor market and then spread into business and government organizations. Consumerization opens up an opportunity for new business models and ways of value creation.
The delivery of e-services to actors is performed (typically) on Everything-as-a-Service models (Banerjee, 2011), in which software, platform and infrastructure are made available as services paid for according to the usage. This creates ubiquitous marketplace where commercial, social, government, health, education and other services are facilitated, negotiated, coordinated and paid for through service e-marketplace platforms.
We recognize that e-marketplaces for services (such as Airbnb, OpenTable, or BlablaCar) are governed by different business and technology principles than e-marketplaces for products (such as Alibaba, eBay, MarcadoLivre, or Amazon). However, we also recognize that e-service systems narrow the differences between services and products. The dichotomy between these two concepts has been replaced by a service-product continuum (Targowski, 2009). On one hand, software products are servitized; on the other hand, software services are productized (Cusumano, 2008). On one hand, vendors of traditional “boxed” software products use the cloud as a means of servitizing the product (and using it without owning it); on the other hand, productized services (e.g. movies over Internet) enable “people to participate in a growing number of service-related activities without having to be physically present” (Targowski, 2009, p.57).
The business models need to consider three dimensions: economic, operational and strategic (Osl et al., 2008). The models for the use of a LE&HM platform vary and can involve many actors. A vendor of a cloud Software-as-a-Service (SaaS) solution offers tenant instances to suppliers of concrete LE&HM services (i.e. intermediary e-service businesses). Suppliers/intermediaries act as context integrators for interested service providers (e.g. a hospital). A provider enlists service performers (e.g. a nurse) as subscribers to a cloud-based LE&HM platform. A performer delivers the service to a requestor (e.g. a patient).
Technological novelty and attractiveness of a LE&HM platform is a necessary condition for a business success, but it is not a sufficient condition. By observing “rising stars” in service e-markeplaces, such as airbnb.com, CC ITSE identifies and subscribes to five major success factors:
Trust (LE&HM platform must provide mechanisms facilitating trust between all actors; the mechanisms must integrate the remaining four factors into a coherent trust-building endeavor).
Guarantee (LE&HM platform must offer safeguards to actors in a monetary form for such things as lost business to a performer or damages to a requestor).
Payment system (LE&HM payment system must offer a trustworthy and reliable means of transferring money between the actors; the means should include refunds, cancellation policies, protection under Terms of Service, etc.).
Verification (LE&HM platform must ensure a proper identification and verification of performers and requestors prior to allowing them to use the system and must seek opinions after a service delivery concluded).
Community (most services offered via a concrete instantiation of the LE&HM platform are “localized”, i.e. services are enacted in geographically-closed communities; accordingly the platform must facilitate community building by allowing barter services etc. and permitting the community to evolve the platform).
3. Backgroundand Constraints
Physical and psychological health of senior citizen brings concrete social and economic benefits and is an important enabling factor for the sustained economic growth in the world of otherwise unsustainable-economically demographic change. The increased participation of seniors, while demanded by the demographic change, is very much in line with the observed transition to a decentralized and skill-based service economy. The experience, knowledge and wisdom of older citizens are a huge asset and underutilized enabler of Internet-facilitated service economy of today. The understanding and explanation of these complex relationships constitutes the social and economic background for our research.
The economic and social cost of the aging population defines the LE&HM background for R&D into ITSE. As reported in Pritchard and Potter (2011) and elsewhere, the increasing life expectancies and associated healthcare expenditures become quickly unsustainable for world economies. To sustain the pension and healthcare growing costs, there is a need to activate older adults by providing opportunities for greater economic and social engagement and to extend care from hospitals, nursing accommodations, etc. to the home surroundings of consumers/patients. With the assistance of tele-monitoring and tele-treatment, health management can contribute to the benefits and become a part of lifestyle engineering.
The problem of unsustainable healthcare costs is exacerbated by a vicious circle in which better healthcare further increases the life expectancies. An obvious solution is to make senior citizens economically useful (for the lack of better term) and even return them to the workforce in various capacities, thus taking advantage of their experience in the knowledge-based economy of today. It follows that health management and lifestyle engineering are two sides of the same coin.
The shifts to consumerization and personalization underlies next generation LE&HM e-service solutions, in which service requestor is placed in the center of attention, while the service supplier is given enough incentive to use the e-marketplace (and, in most business models, pay for the use of it). The formula of consumer being a core entity in lifestyle engineering domain matches well the traditional marketing principle that “the customer is always right”.
A notable exception has traditionally been public-sector, in particular healthcare services. In the health management domain the service supplier (physician) has supreme power over the service requestor (patient), who is seen as a grateful, passive entity. Next generation service e-marketplaces bring about a wave of change. The road is bumpy, though, for reasons of (1) professional autonomy of service providers and (2) perception that resource utilization in publicly-funded health services constitutes public rather than private (patient) good (Laing and Hogg, 2002).
Because the IT is an empowerment and enhancer in the service economy and because senior citizens are asset and potential engine in the service economy, then there is an obvious need to provide to seniors a friendly easy-to-use e-service platform. This is a huge LE&HM challenge because of the “lost in the cyberspace” resistance of seniors to using Internet via mobile and non-mobile devices (Heart and Kalderon, 2013). A corresponding challenge is that the delivery of software and systems that are easy to use implies that they are difficult to design and implement.
Our research has resulted from and is partially financed by the University of St. Gallen’s Competence Center Independent Living (CC IL). Consequently, our research objectives have been aligned with the objectives of CC IL (http://il.iwi.unisg.ch/) to:
Providing a service platform for participation of seniors in various economic models (paid and unpaid) supported by mobile and non-mobile software applications with intelligent matching of supply and demand to allow situational and personal delivery of services to seniors.
Reducing the social exclusion of the elderly and the associated economic and human cost by an Internet-enabled integration of otherwise fragmented services already provided by social organizations, government entities, insurance organizations, health care providers, banks, retail stores, etc. A related objective is to create and support new opportunities for provision of services that would not be possible without the platform.
New research grants, that have followed from the collaboration with CC IL, and new R&D partnerships, have resulted in extensions of the R&D scope within CC ITSE. The main additional objectives are:
Extending the IL functionality of the LE&HM platform into e-health area to include the AAL functionality and cater for people with chronic illnesses and disabilities. To this aim, the platform needs to integrate with clinical/hospital care systems in order to empower patients in obtaining professional and home care. Furthermore, the platform needs to tap into Big Data analysis to enrich medical case management and recommend better therapies. This in turn opens up new possibilities for better service coordination and delivery to patients.
Tapping into SOSEM expertise (http://sosem.ue.wroc.pl/) in order to make the LE&HM interoperable with cyber-physical monitoring systems (IoT sensors and actuators) and with social, enterprise and government systems (such as social networking sites, Electronic Health Records (EHR), Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) systems).
Figure 1 presents actors and revenue streams for ITSE business case. Requestors (consumers, patients) solicit services of Suppliers by using LE&HM system. Services can be obtained via Intermediaries, who have access to service context and information about requestors’ standing. They can act as concierge or call centers and can make appointments for services on behalf of Providers. Alternatively, Requestors can make direct appointments with Providers via LE&HM system. In a typical situation, Provider employs Performers, who actually execute a service.
The Intermediary aspect of the LE&HM solution enables human-driven concierge-like appointment coordination made possible by all communication means (Internet, telephone, email, etc.). However, the principal modus-operandi of the LE&HM platform is to encourage Requestors and Suppliers to manage appointment and service provisioning with web-based applications using context-aware and purpose-designed mobile and non-mobile devices. In some cases, in particular in e-health domain, delivery of services can be auto-activated by sensing/computing/actuating capabilities of cyber-physical systems (Haque et al., 2014). Such systems utilize technologies of IoT (Miorandi et al., 2013) and environments of ambient intelligence (Cook et al., 2009).
Figure 1. Actors and revenue streams in ITSE business case
Figure 1 shows also that the owner/vendor of LE&HM software platform sets up cloud tenant instances for service e-marketplace businesses. LE&HM system in Figure 1 is a cloud instance of a generic LE&HM Software-as-a-Service platform. Customization and variability of instances is based on the technology of multi-tenancy and uses the emerging principles of Service Line Engineering (SLE) (Mohabbati et al., 2013; Walraven et al., 2014)).
A troublesome side-effect of any chosen LE&HM business model is a cold start problem and a catch 22 situation. How to entice service providers and performers to pay for and use a vendor’s LE&HM platform, if there are no requestors yet? On the other hand, how to entice requestors to request services prior to a significant presence of providers and performers on the platform with their service offers? One way of alleviating the cold start problem is by creating local communities of requestors, which not only can create “volume” to attract providers and performers, but can even use barter trade to switch between the roles of requestor and provider/performer.
Figure 2 illustrates a requestor-centric view of LE&HM processes. The diagram distinguishes between the IL and AAL environments and contexts. In both environments, ambient intelligence (Cook et al., 2009; Sadri, 2011) has an important role to play. Immobile (residential, fixed) and mobile ambient intelligence devices (sensors, actuators) cover the whole spectrum of requestor (consumer, patient) monitoring (daily living, health status, intensive care). They provide input to cyber-physical systems (Hague et al. 2014), which in turn supply information to concierge systems (intermediaries in Figure 1), to EHR systems (Frączkowski et al., 2014), and to emergency and alerts handling facilities. In parallel, requestors provide real-time input to concierge and EHR systems as well as can request emergency assistance.
Figure 2. Requestor-centric view of LE&HM processes
The upper part of Figure 2 relates to the services required by a requestor. Some services can be automatically or semi-automatically identifies through the process of service matching and selection. Although not directly shown in Figure 2, this process can be triggered in a way oblivious to a requestor – it can be cyber-physical or concierge/intermediary initiated. It can also be activated and negotiated directly by a requestor. Service order and execution can flow from service matching and selection. In all cases, a requestor will be directly involved ordering and execution of a service. The process itself can be advised by experts (suppliers and other professionals) and by social networks. Finally, the process of payments and accounts is noted in Figure 2.
Figure 3 is an attempt at classifying and identifying services of interest of requestors in the LE&HM domain. The model is partially based on a classification of services in Targowski (2009), who in turn draws on a classification by the US Bureau of Census. The model differs from the Amiona’s app map that includes around 500 services (Hess et al., 2014, http://www.amiona.com/index.php/downloads/viewcategory/3-appmap). However, both models are open-ended and allow requestors and suppliers to freely add new services at system’s run-time. Such an approach facilitates the practice of viral marketing (Long and Wong, 2014; Zhu, 2013), whereby selective users (requestors or suppliers) acting as seeds can be given incentives to promote services (including new services) via their social relationships and networks.
5. Research Approach and Method
The CC ITSE research agenda focusses on the dedicated science and engineering for designing software systems and applications supporting provision of e-service solutions in general, and specifically for lifestyle engineering and health management. By centering on consumerization, personalization, and collaborative context-dependent value creation, the R&D into e-services shifts towards what Brenner et al. (2014) call user, use & utility research (or 3U research, to use another parlance).
The CC ITSE agenda concentrates on IT-supported lifestyle engineering and health management. Within this agenda, we conduct both fundamental and pragmatically-minded research along the design science principles (Hevner and March, 2003; Hevner et al., 2004; Niederman and March, 2012, Oesterle et al., 2010). While design science is a preferred scientific method for much of information systems research, it becomes a necessity for R&D into service information systems, as per three convincing arguments identified by Boehmann et al., 2014:
Service systems cannot be meaningfully validated in laboratory experiments. An external validity in real-world contexts (piloting of innovation) is necessary.
Novel service systems can only emerge with actors acceptance and involvement (through participatory design and action research).
Service systems engineering develops software models and artifacts and is, therefore, design-oriented by their very nature.
Within the realm of design science, the CC ITSE follows the recommendation and practice of consortium research (Oesterle and Otto, 2010). The consortium research method bridges the practitioners’ knowledge with scientific objectives. In effect, it bridges practical relevance with scientific rigor. The Amiona platform has been developed following the practice of the consortium research.
Figure 3. Services in LE&HM
Within the realm of consortium research, the CC ITSE embraces the innovation chain as pictured in Figure 4. The diagram extends the model of evolution of an engineering discipline proposed by Shaw (2009). The innovation chain originates from a craft practice of available technology that leads to some localized use of it. If successful, the craft practice evolves into a production line under management control. This results in a commercial market for a line of products. Competition and a natural human inquiry lead to science, based on observations, experiments and proofs in order to confirm stipulated theories. When the volume of confirmed theories gets sufficiently significant, an engineering discipline emerges and allows production with predictable outcomes. Consequently, a related economy emerges as a network producers, distributors and consumers of products and services based on these products. The final beneficiary of the innovation chain is society at large.
Figure 4. Innovation chain in ITSE research (extended from Shaw (2009))
An important underpinning of the ITSE research is a desire for using rigorous qualitative and quantitative investigation methods. While qualitative and quantitative research can be conducted independently and in parallel, there is a realization that quality characteristics of software systems can and should be quantified, as evidenced in software metrics research (Fenton and Pfleeger, 1997; SQuaRE, 2011). In particular, the research in CC ITSE uses the SQuaRE standard (SQuaRE, 2011) as a reference model for investigation into quality of proposed LE&HM solutions, and the Amiona platform as its existing practical incarnation.
The CC ITSE research agenda originates from the R&D collaboration between the Wrocław University of Economics and the University of St. Gallen. By following the design orientation approach, the cornerstone of the agenda is the Amiona SaaS platform. The Wrocław University of Economics does not hold intellectual rights on Amiona, but through dedicated business arrangements and extending Amiona for the specific organizations and categories of services, the CC SITSE pursues its own R&D paths. These paths are opportunistic and dictated by obtained research grants and/or deployments of customized or extended Amiona instances to interested organizations.
While the past and the current R&D at the University of St. Gallen concentrates on IL, the R&D within CC ITSE has diversified and branched also into the domain of AAL and e-health. This has been possible due to the cloud-based SaaS architectural underpinnings of Amiona that enables easy creation of new multi-tenant system instances for clients in various application domains, such as for patients, doctors, nurses, etc. in the e-health domain.
Scientific contributions resulting from CC ITSE research span hard and soft computing and can go beyond computing to discuss management, economic, marketing and other themes as long as specific topics derive from the development and/or use of the LE&HM platform and apply to IL and AAL application domains.
I am grateful to Hubert Oesterle for his constructive comments on earlier versions of this agenda document and for important hints how to extend and improve it.
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