4th Science Service Forum - 2009
Service academics and practitioners gained an insight into the service-dominant (S-D) Logic concept during the recent Fourth Service Science Forum held in London on March 19.
Presented by Professor Stephen L. Vargo, Distinguished Professor at the University of Hawaii, Manoa and AIM Visiting International Fellow, his award-winning concept of the S-D logic has energised service research, and has implications for the whole organisation with its focus on the customer and the organisation coming together to co-create value.
The Forum meeting, which was hosted by Atkins at their offices on London’s Euston Road, was attended by 45 delegates from a diverse range of service industries including telecommunications, defence, consultancy, finance, and engineering. Organisations represented at the forum included IBM, Rolls Royce, BT, Fidelity, Nokia, Virgin Media, Vodafone, the Department for Business, Enterprise and Regulatory Reform, the Rural Payments Agency and the Ministry of Defence.
Professor Vargo presented two alternative logics for approaching service science and business; the traditional goods-dominant (G-D) logic of economic exchange and the service dominant (S-D) logic offered as an academically more robust and better suited approach from which to inform viable, long-term business practices. The S-D logic is offered as a mindset, a lens, which provides perspective on organisations, markets, and society, it embraces value-in-use, and co-creation of value and as such poses a number of potential implications for business.
The 4th SSF also featured a breakout session moderated by Professor Ng and Professor Roger Maull, during which participants formed six smaller groups to discuss implications and barriers to implementing the S-D Logic. The following issues were raised:
- Adopting the SD Logic would cause a change in organisational boundaries/blurred boundaries of the firm, altering the traditional business model
- Management of customer knowledge and expectation would become part of the service system.
- New measures for evaluating performance would be required.
- (S-D) Logic would have financial Implications – It may require new forms of organisational valuation and new pricing methods.
- Effectiveness should not achieved at the cost of efficiency; A balance between customisation and personalisation is required if firms are to remain cost effective.
- Cultural change in the mindset of the customer and the organisation would be required.
- Organisational structures would need to be transparent to ensure visibility of customer experience across the organisation.
- Organisations aren’t Greenfield sites; they are left with legacy systems based on (G-D) Logic.
Although the (S-D) logic was seen as having long-term benefits to business practice, it was noted that it is a philosophy rather than a methodology; it therefore has no toolkits for implementation or indication of economic benefit. Research is required if it is to become a practice and not just a logic.