科技化互動服務創新議題之研究 - 政大學術集成

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(1)國立政治大學資訊管理研究所博士學位論文. 指導教授：周宣光博士. 立. 蔡瑞煌博士政治大. ‧. ‧ 國. 學. 科技化互動服務創新議題之研究 y. Nat. er. io. sit. The Issues of IT-enabled Interactive n. a l Service Innovation iv n Ch engchi U. 研究生：陳惠娟. 中華民國九十九年七月.

(2) THE ISSUES OF IT-ENABLED INTERACTIVE SERVICE INNOVATION. A Dissertation Presented to Department of Management Information Systems. 立. 政治大. National Chengchi University. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. In Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy. by Ada Hui-Chuan Chen July, 2010.

(3) 摘. 要. 為因應服務經濟時代的挑戰，企業必須不斷的追求服務創新來建構本身的競爭優勢，而資訊科技和網路通訊技術的發展，亦讓組織、系統、人力以及資訊等各種資源更加有效率、有效能的聯結在一起。對於以服務為導向的組織而言，如何運用資訊科技以提供線上及時、互動的服務給顧客，已成為攸關組織未來存亡的重要課題。. 政治大本論文在探討組織推動科技化互動服務創新(IT-enabled 立. ‧ 國. 學. Interactive Service Innovation)時所面臨的相關議題，並定義科技化互. ‧. 動服務創新係指一項以資訊科技(亦包含通訊及網路)為基礎的互動. sit. y. Nat. 式服務創新，其發展、建置以及播散的過程。研究目的是為了解科技. n. al. er. io. 化互動服務創新如何由最初的提案轉換至最終的企業經營績效，而其轉換過程中有那些可能的挑戰或窒礙。 C. hengchi. i Un. v. 本論文採用過程理論並提出一完整的分析架構，藉以闡述科技化互動服務創新於價值實現過程中，所有阻礙其推動或減損其價值的相關挑戰。研究中進行了三個田野個案(Field case)分析及三個圖書館個案(Library case)分析，所涵蓋的創新服務包括互動電視服務、證劵服務與旅遊服務。研究貢獻包含：(1)提出一分析架構，完整描述科技化互動服務創. I.

(4) 新之價值轉換過程；(2)對於過程中造成價值減損的相關挑戰有全面性的呈現，對實務界的高階主管在推動科技化互動服務創新時，可作為決策之參考。. 關鍵字：科技化服務，服務創新，互動服務. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. II. i Un. v.

(5) ABSTRACT As the economies are becoming increasingly service oriented, firms need to create competitive service advantages to compete in the service arena. Thus, enterprises endeavor to develop innovative services to meet the rapid changing customers’ needs and to create leverage from these innovations. Furthermore, with the significant advances in networks, telecommunications, and computing technologies, people, organizations, systems and heterogeneous information sources now can be linked together more efficiently and cost effectively than ever before (Qiu, 2010). For. 治政 the service-oriented businesses, a lot of emerging 大 service opportunities, such as 立 e-services, e-commerce, and auctions, are envisioned, and well utilizing IT to provide ‧ 國. 學. on-line, real-time interactive services to customers becomes an imperative for. ‧. company’s survival.. sit. y. Nat. Therefore, the call for responsive, flexible, agile and on-demand services forces. io. er. the enterprises deliberating the IT-enabled interactive service innovation (IISI) to. al. enhance their distinctive competency. This research conceptualizes the IT-enabled. n. iv n C interactive service innovation as thehdevelopment, deployment, and diffusion of a new engchi U interactive. service. through. information. technologies. (IT). (including. the. communication and networking) for the customers. The purpose of this research is to answer the question of how an IISI is transformed from the initial proposal, IT assets, competency, and to the end, the business performance, and what the possible challenges may encounter during the transformation. This research adopts process approach and proposes a holistic analytical framework to highlight various challenges that will erode the value realization and even hamper the firms’ evolution. Three field cases and three library cases are adopted to show the empirical III.

(6) evidences that support the framework of IISI. The related industries involve interactive television services, securities brokerage services, and traveling services industry. The research contributions in this dissertation include; (1) building up an analytical framework to expound the process of value generation in IT-enabled service innovation; (2) to delineate the gapping hole in the value chain of IT-enabled service innovation. The practical contributions involve providing a global picture of the IT-enabled service innovation process, thus, the top management or decision makers can foresee the possible challenges, and take proactive strategies to overcome. 治政 them lest the values will be eroded. 大立. ‧. ‧ 國. 學. Key words: IT-enabled Service, Service Innovation, Interactive Service. n. er. io. sit. y. Nat. al. Ch. engchi. IV. i Un. v.

(7) ACKNOWLEDGMENT I would like to take this opportunity to thank all the people for giving me their generous support to complete this work. Firstly, special thanks and gratitude are devoted to my advisors, Dr. Shrane-Koung Chou and Dr. Rua-Huan Tsaih, who motivated and guided me during every phase of this work. Without their inspiration and support, this thesis could not be successfully completed.. I also express my gratitude to the other members of my Thesis Committee,. 治政 Dr. San-Cheng Chang, Dr. Ming-Dar Huang, and Dr. Hsin-Lu 大 Chang. I further express 立 special thanks to Dr. Minder Chen, Dr. Yan-Ping Chi and Dr. Johannes K. Chiang for ‧ 國. 學. their support during my doctoral studies.. ‧. sit. y. Nat. My deepest appreciation goes to my family, my parents, Mr. Bo-Wen Chen. io. al. er. and Mrs. Shia-Chiou Chang Chen, my husband, Leo, my son and daughter, Eugene. n. and Karen, their support and encouragements were much valuable to me.. Ch. engchi. i Un. v. I would also like to thank the Department of Management Information Systems, NCCU for their financial support of my study program.. V.

(8) TABLE OF CONTENTS. CHAPTER 1. Introduction...................................................................1. 1.1. Research Background.....………………………….………..1. 1.2. Research Motivation and Purpose......…………………..….4. 1.3. Research Scope...........................……..…………………….6. 1.4. Research Flow........………………………………..…….….7. CHAPTER 2 2.1 2.2. Literature Review..........................…………….….…..9. 政治大 Service Innovation........................................................…...20 立 Services..................................................................................9. Diffusion of Innovation........................................................21. 2.4. Interactive Service...............................................................24. 2.5. Interactive Innovation..........................................................25. 2.6. IT-enabled Service...............................................................25. sit. y. Nat. Ontological Description of IT-enabled Interactive. er. io. CHAPTER 3. ‧. ‧ 國. 學. 2.3. n. a lInnovation Process.........................................27 Service iv. CHAPTER 4. Un. C. hengchi Research Methodology................................................30. 4.1. Process Theory.....................................................................30. 4.2. Case Study.....................………………………………..…33. CHAPTER 5. The Framework of Challenges for IISI.....................35. 5.1. The Development of IISI.....................................................35. 5.2. Challenges and the Value Flow of IISI................................39. CHAPTER 6. Multiple Case Studies..................................................42. 6.1. The Cases of Interactive Television Services.......................42. 6.2. The Cases of Securities Brokerage Services........................58 VI.

(9) 6.3. The Case of C Travel Service Co. LTD...............................92. CHAPTER 7. Concluding Remarks..................................................96. REFERENCES...............…….……………………………....…….......99. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. VII. i Un. v.

(10) LIST OF FIGURES. Figure 1.1. The percentage of output of GDP in USA….........................2. Figure 1.2. The percentage of output of GDP in Taiwan…….....…….. ..2. Figure 1.3. The classification of innovation……...……………………..7. Figure 1.4. Research flow….…….……………………………………...8. Figure 2.1. The Goods-to-Services Continuum……………..……........15. Figure 2.2. 政治大 The service process matrix………………...……………....16 立. Competitive use of information...........................................18. Figure 3.1. The activities associated with the IISI.................................29. Figure 5.1. The development framework of IT-enabled interactive. ‧. ‧ 國. 學. Figure 2.3. sit. y. Nat. n. al. er. io. service innovation................................................................36. iv. Figure 5.2. The Value Flow of IISI.............41 Cand Associated Challenges Un. Figure 6.1. The content production food chain of ITV service..............44. Figure 6.2. The ITV value chain............................................................45. Figure 6.3. The unbundling of the brokerage industry...........................59. Figure 6.4. The on-line brokerage value chain.......................................61. Figure 6.5. The value chain of travel service company..........................92. hengchi. VIII.

(11) LIST OF TABLES. Table 1.1. The progression of IT’s view in evolutionary economy....5. Table 2.1. Summary of the definition of services.................................10. Table 2.2. The differences between goods and services………….......14. Table 2.3. Challenges for service managers…………………...……..17. Table 2.4. Role of technology in the service encounter.....................19. Table 2.5. Stages in the Innovation-Decision Process.......................23. Table 4.1. Difference between variance theory and process theory.31. Table 6.1. The basic types of applications that constitute ITV........46. Table 6.2. The different types of ITV…………….…………….…...47. Table 6.3. The differences between ITV and the Internet…..……..48. Table 6.4. The analysis. Table 6.5. The timeline of ITV development in Time Warner.........52. Table 6.6. Challenges to the commercial exploitation of ITV service..57. Table 6.7. Evidences of Charles Schwab in 2002 supporting the. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. iv n C U of hcontributors’ e n g c h i geographical. location.......51. framework of IISI................................................................64 Table 6.8. Evidences of Charles Schwab in 2007 supporting the framework of IISI................................................................73. IX.

(12) Table 6.9. Evidences of Polaris 2008 supporting the framework of IISI.......................................................................................87. Table 6.10 The challenges of implementing IISI in Travel Service Co.........................................................................................95 Related tasks of IISI.............................................................99. 立. 政治大. 學 ‧. ‧ 國 io. sit. y. Nat. n. al. er. Table 7.1. Ch. engchi. X. i Un. v.

(13) CHAPTER 1. INTRODUCTION. As the economies are becoming increasingly service oriented, many organizations regard IT-enabled interactive service innovation (IISI) as new business opportunities. The ability of structuring an innovative service to fulfill the customers’ needs and ensure the process of value generation is critical to the organizations’ success. This research seeks to formulate a conceptual framework and delineates the challenges of value generation resulted from IT-enabled interactive service innovation (IISI), moreover, to provide the proactive suggestions for executive management.. 立. 政治大. 1.1 Research Background. ‧ 國. 學. In the earlier production oriented economy, services are defined as a diverse. ‧. group of economic activities not directly associated with the manufacture of goods,. sit. y. Nat. mining or agriculture. They can not be invented and must be consumed at the point of. io. er. sale. Gronroos (1990) put services in a different way; “A service is an activity or series of activities of a more of less intangible nature that normally, but not. al. n. iv n C necessarily, take place in interaction the customer and service employees h e n between gchi U and/or physical resources or goods and/or systems of the service providers, which are. provided as solutions to customer problems.” As the technologies advances, along with the cultural and environmental changes, the difference between service sector and manufacturing sector has blurred and economies across the world have become more service orientated. Some practical evidences have shown that the service economy has evolved and dominated our economy. In the national level, figure 1 presents the locus of changing economic structure of USA, which describes the distribution of the percentage of service output from private service-producing industries, private goods-producing 1.

(14) industries and government as a share of gross domestic product from 1987 to 2007. It shows that the percentage of output from service-producing industries has grown from 52 percent in 1987 to over 61 percent in 2007, and the role of goods-producing industries slipped to less than 28% of GDP (BEA, 2009) . 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%. Private servicesproducing industries. 政治大. Government. 19 87 19 90 19 93 19 96 19 99 20 02 20 05. 立. Private goodsproducing industries. ‧ 國. 學. Figure 1.1 The percentage of output of GDP in USA. ‧. Source: BEA (2009). sit. y. Nat. Besides, the services sector is an important engine of the Taiwan economy.. n. al. er. io. According to the data of National Statistics in the May of 2008 (Figure 1.2), there are. i Un. v. 51.5% of GDP derived from private service sectors, 25.1% of GDP derived from. Ch. engchi. manufacturing sector (National Statistics, 2009) .. Figure 1.2 The percentage of output of GDP in Taiwan Source : National Statistics (2009) 2.

(15) Another report by the International Labor Organization in 2007 indicates that, worldwide service jobs (42%) outnumbered jobs in agriculture (36.1%) and manufacturing (21.9%). The global shifts to service as an economic driver is extremely clear (ILO, 2007). The prosperous developments in service sectors also appeared in enterprise level; the recent list of Fortune 500 companies comprises more service companies and fewer manufacturers than in last decade, moreover, the world renowned enterprises such as General Electric and IBM, which are manufacturers of goods, currently assert that more than half of their revenues are generated from services. The driving forces of. 治政 service-oriented economy urge the governments to大 reform policies, revise regulations, 立 and private organizations to set service strategy, and develop innovative services. ‧ 國. 學. To compete in a service economy, firms need to create competitive service. ‧. advantages. Thus, enterprises endeavor to develop innovative services to meet the. sit. y. Nat. rapid changing customers’ needs and to create leverage from these innovations. Qiu. io. er. (2010) asserts that service innovations are the key to stay a step or two ahead of competitors. Besides, the contemporary revolution in information technology and the. n. al. Internet have automated. iv n C the hactivities and processes engchi U. of providing services to. customers and thus have the power to revolutionize firms’ business models and reshape industries’ business patterns. Developments in the past decade have shown that IT-enabled innovation and the commercial developments of the Internet can lead to electronic commerce and greatly disrupt traditional value chains through disintermediation and/or re-intermediation. In the end, as Carr stated, IT “has become the backbone of commerce. It underpins the operations of individual companies, ties together far-flung supply chains, and increasingly, links businesses to the customers they serve.” (Carr, 2002). Furthermore, with the significant advances in networks, telecommunications, and 3.

(16) computing. technologies,. people,. organizations,. systems. and. heterogeneous. information sources now can be linked together more efficiently and cost effectively than ever before (Qiu, 2010). For the service-oriented businesses, a lot of emerging service opportunities, such as e-services, e-commerce, and auctions, are envisioned and to well utilize IT to provide on-line, real-time interactive services to customers becomes an imperative for company’s survival. Therefore, the call for responsive, flexible, agile and on-demand services forces the enterprises deliberating the IT-enabled interactive service to enhance their distinctive competency.. 立. 政治大. 1.2 Research Motivation and Purpose. ‧ 國. 學. By examining the context of IT in literature and business world, various. ‧. perspectives were depicted to illuminate the different and multiple views of IT (OGC,. sit. y. Nat. 2007). The traditional expectation for IT is a problem solver or a fire fighter, while. io. er. play a supportive role as a function, the major purpose of adopt IT is to reduce cost, the value been created by IT is implicit, the focus is upgrade the efficiency and. al. n. iv n C effectiveness. In the post-industrial IT plays the supportive role as a process; the h e era, ngchi U. purpose is to improve the service offering and providing added value, the major focus is the business-IT alignment. Nowadays, in the increasing complexity of modern business environment, IT has been urged to play a strategic role as a system, to drive the business strategy, develop the service innovation and trigger the service value chain. The progression of IT’s development was concluded as Table 1.1.. 4.

(17) Table 1.1 The progression of IT’s view in evolutionary economy Economy. IT’s view. Role. value. Purpose. Focus. creation Industrial. Operational Functional. Post-industrial Process. Service/. System. Information. Cost. Implicit. Efficiency/. role. reduction. value. effectiveness. Supportive. Service. Added. Business-IT. role. Improvement value. alignment. Strategic. Service. Initiate. Business-IT. the value. integration. partnership Innovation. 立. 政治大. chain. Source : Constructed by the author. ‧ 國. 學 ‧. With the growing significance of service innovation and the strategic role of IT. sit. y. Nat. in modern society, this study endeavors to develop a holistic framework of IT-enabled. io. er. interactive service innovation that comprehensively explores all of the challenges. al. involved in IT-enabled interactive service innovation (IISI).. n. iv n C In the extant literature, numerous h e n ginnovation c h i Umodels were presented. In a study. of Song and Benedetto (2009), their model integrates the service quality training into new service innovation and demonstrates the usefulness of training for service entrepreneurs to make decisions. Klein and Sorra (1996) proposed an integral innovation model focusing on the effectiveness of organizational implementation. Hertog (2000) highlighted the significance of non-technological factors in innovation by presenting a four-dimensional model, which includes the dimension of new service concept, new client interactive, new service delivery system and technological options. A framework linking the leadership pyramid and the drivers and enablers of service 5.

(18) innovation was presented in the white paper by Rangaswamy and Pal (2005). Johannessen (2009) grouped the driving factors of inducing interactive innovation into three categories, namely, company internal factors, company external factors, and national and regional innovation systems. Although the various models were provided, there is still the lack of a comprehensive approach to address how and why such an IISI framework can be enabled in practice. Moreover, an explicit framework of challenges for IISI is highly valuable for executive management to foresee and overcome those retardants by taking proactive strategy.. 1.3 Research Scope. 立. 政治大. ‧ 國. 學. Owing that the innovation can be analyzed in different aspects; thus, we. ‧. classified the innovation as two categories, namely, non-IT-enabled innovation. sit. y. Nat. (management innovation) and IT-enabled innovation. The former category involves. io. er. marketing innovation and organization, the latter is grouped into goods manufactory innovation and service innovation by the industry. The focus of our research is the. al. n. iv n C IT-enabled interactive service h innovation which U e n g c h i is emerged in service industry and. involves the whole process of service innovation, namely, the front-office innovation, the middle-office innovation and the back-office innovation. The classification is presented as follows and the grey boxes identify the scope of research and the ambit of IT-enabled interactive service innovation.. 6.

(19) 立. 政治大. ‧. ‧ 國. 學 sit. y. Nat. io. er. Figure 1.3 The classification of innovation Source : Adapted from Taiwan CIS (2007). n. al. Ch. engchi. i Un. v. 1.4 Research Flow The research flow is presented as follows. Chapter one is the introduction, including the research background, research motivation, research purpose, research scope and the research flow, followed by Chapter two, the thorough literature review related to IT-enabled interactive service innovation, then, Chapter three presents the ontological description of the IISI, Chapter four describes the research methodology adopted, in Chapter five, we conduct two field cases and four library cases in order to build up the conceptual framework of IT-enabled interactive service innovation which is shown in Chapter six. At last, the conclusion is made in Chapter seven. 7.

(20) Introduction. Literature Review. The Ontological Description of IISI. Research Methodology. 立. 政治大. The Framework of Challenges for IISI. ‧. ‧ 國. 學 Multiple Case Studies. n. er. io. sit. y. Nat. al. Conclusion and Discussion. Ch. engchi. i Un. v. Figure 1.4 Research flow. 8.

(21) CHAPTER 2. LITERATURE REVIEW. The pivot of this research focuses on the process of IT-enabled interactive service innovation. The literature reviewed include service, service innovation, diffusion of innovation, interactive service, the interactive innovation and IT-enabled service.. 2.1 Services In the extant literature, the services have been elaborated by scholars from. 治政 different perspectives. However, as the role of 大services becomes increasingly 立 significant in contemporary economy, the essence of services has undergone ‧ 國. 學. evolutionary change. The following part will discuss the definition of service, the. er. io. sit. y. Nat. services.. ‧. distinction between good and services and the role of information technology in. 2.1.1 Definition of Service. al. n. iv n C complex h nature of services, e n g c h i U the definition. Owing to the. of services has. diversified explanations in literature. Early studies describe the distinct essences of services as yielding satisfactions, perishability, simultaneity, and intangibility (Regan, 1963, Hill, 1977, Sasser et al. 1978). Following researches assert that the service can provide added value, solutions to customer problems and are processes and performances (Quinn et al. 1987, Zeithaml and Bitner, 1996, Gronroos, 2001). The latest researches underscore that the hybrid form of services involves various elements (e.g. tangible or intangible) and roles (e.g. technology and organization). Moreover, the services are capabilities or competencies that enterprises provided for customers, and the process of co-producing, participation, and value creation is 9.

(22) emphasized (Vargo and Lusch 2004, Sheth et al. 2006, Fitzsimmons and Fitzsimmons 2008, Lovelock and Wirtz 2010). Some examples of detailed service definitions are presented in Table 2.1.. Table 2.1 Summary of the definition of services Author. The definition of services. Regan (1963). Services represent either intangibles yielding satisfactions directly (insurance), tangibles yielding satisfactions directly (transportation, housing), or intangibles yielding satisfactions. 治政大with commodities or other jointly when purchases either 立 services (credit, delivery).. ‧ 國. 學. A service is a change in the condition of a person, or a good. ‧. belonging to some economic entity, brought about as a result of. y. io. al. A price definition of goods and services should distinguish. iv n C them on U attributes. h ethenbasis g c hofi their. n. Wyckoff (1978). person or economic entity.. sit. Nat Sasser, Olsen. and. some other economic entity, with the approval of the first. er. Hill (1977). A goods is tangible. physical object or product hat can be created and transferred; it has an existence over time and thus can be created and used later. A service in intangible and perishable. It is an occurrence or process that is created and used simultaneously or nearly simultaneously. While the consumer cannot retain the actual service after it is produced, the effect of the service can be retained.. 10.

(23) Table 2.1 Summary of the definition of services (Cont.) Author. The definition of services. Quinn, Baruch and. Most authorities consider the services sector to include all. Paquette (1987). economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort, or health) that are essentially intangible concerns of its first purchaser.. Zeithaml and Bitner. Services are deeds, processes, and performances.. 政治大. (1996). A service is an activity or series of activities of a more or less 立. Gronroos (2001). ‧ 國. 學. intangible nature that normally, but not necessarily, take place in interaction between the customer and service employees and. ‧. /or physical resources or goods and/or systems of the service. Gomadam (2006). y. sit. al. Services are capabilities or competencies that one person,. iv n C organization, or system provides for another. h e nenterprise, gchi U. n. Sheth, Verma and. io. (2004). problems.. er. Nat Vargo and Lusch. provider, which are provided as solutions to customer. A service is defined as value proposition provided to an organization and its definitions includes the following: technical description of the implementation technology; organizational description of the people and their roles involved in developing, rendering, managing, or supporting the service; and the business or organizational value it renders.. ITIL (2007). 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. 11.

(24) Table 2.1 Summary of the definition of services (Cont.) Author. The definition of services. Fitzsimmons and. A service is a time-perishable, intangible experience performed. Fitzsimmons (2008). for a customer acting in the role of co-producer.. IBM Research. A service is a provider-client interaction that creates and. (2010). captures value.. American Marketing. Products, such as a bank loan or home security, that are. Association (2010). intangible or at least substantially so. If totally intangible, they are. 立. 治政大 exchanged directly from. producer to user, cannot be. ‧ 國. 學. transported or stored, and are almost instantly perishable. Service products are often difficult to identify, because they. ‧. come into existence at the same time they are bought and. y. sit. io. inseparable; they usually involve customer participation in. n. al. er. Nat. consumed. They comprise intangible elements that are. Ch. i Un. v. some important way; they cannot be sold in the sense of. engchi. ownership transfer; and they have no title. Today, however, most products are partly tangible and partly intangible, and the dominant form is used to classify them as either goods or services (all are products). These common, hybrid forms, whatever they are called, may or may not have the attributes just given for totally intangible services.. 12.

(25) Table 2.1 Summary of the definition of services (Cont.) Author. The definition of services y A service is an act or performance offered by one party to. Lovelock and Wirtz (2010). another. Although the process may be tied to a physical product, the performance is essentially intangible and does not normally result in ownership of any of the factors of production. y Services are economic activities that create value and provide benefits for customers at specific times and places,. 治政 as a result of bringing 大 about a desired change in—or on 立 behalf of—the recipient of the service.. ‧ 國. 學. Wikipedia (2010). A service is a set of singular and perishable benefits,. ‧. y delivered from the accountable service provider, mostly in. y. sit. Nat. close co-action with his service suppliers, y generated by functions of technical systems and/or by. er. io. n. a ldistinct activities of individuals, v respectively, i n Ch y commissioned e n g caccording h i U to the needs of. his service. consumers by the service customer from the accountable service provider, y rendered individually to an authorized service consumer at his/her dedicated request, y And, finally, consumed and utilized by the requesting service consumer for executing and/or supporting his/her day-to-day business tasks or private activities. Source : Constructed by the author 13.

(26) 2.1.2 Distinction between goods and services A careful review of the definitions above reveals that services inherently differ from the physical goods; their unique characteristics can be generally concluded as customer participation, simultaneity, heterogeneity, intangibility, and perishability (Fitzsimmons and Fitzsimmons, 2008). In literature, Hill (1977) asserted goods and services belong in different logical categories; the ownership of a good can be transferred from one economic unit to another in an exchange transaction, whereas no such exchange is possible for a service. Some key differences between goods and. 治政 services were proposed as Table 2.2. 大立 ‧ 國. 學. Table 2.2 The differences between goods and services Services. ‧. Goods. Are end per se (solution s to customer. sit. y. Nat. Are a means to an end. io. er. problems or experiences). Are more homogeneous. Are more heterogeneous. n. al. Are more tangible. Ch. iv n U intangible e n g cAre h i more. Generally separate production and. Are co-produced with customers. consumption. (production and consumption are inseparable). Are storable (can be inventoried). Are perishable (can’t be inventoried). Embody technology. Use technology to provide customers more control Source : Gustafsson and Johnson (2003). 14.

(27) Although the dichotomous contrast provided above shows clear comparison between the goods and services, the modern services have integrated these two settings and the boundary has gotten blurred. The following goods-to-service continuum (Figure 2.1) proposed by Gustafsson and Johnson (2003) provides a more comprehensive understanding of services and goods. The four general categories involve the pure services, such as teaching and consulting; the core services, such as airline and hotel; the core goods, such as appliance and vehicle, and the pure goods, such as food product and books. As the services dominate the economy, the pure goods and the core goods industries endeavored to integrate value-added services into. Core Services. Training. Airline ISP. Chemical Book. n. al. er. io Services. Food Product. y. Medical Advice. Pure Goods. sit. Hotel. Nat. Financial Consulting. Core Goods Appliance Data Storage System Vehicle. ‧. Pure Services. 學. ‧ 國. 治政 the core product offerings to enhance their competitive 大 advantages. 立. iv n C h e nand Products h i Uare g cServices. Physical Goods. made more similar. Figure 2.1 The Goods-to-Services Continuum Source : Gustafsson and Johnson (2003). Based on the concept of continuum, Oliva and Kallenberg (2003) developed the process model to explore how the equipment manufacturers incorporated services into their offering; they found that the transition occurred in stages and involved a deliberate developmental process to build capabilities as firms shift the nature of the 15.

(28) relationship with the product end-users and the focus of the service offering (Oliva and Kallenberg, 2003). The sequential stages are consolidating product-related services, entering the Installed Base service market, expanding to relationship-based services, and taking over the end-user’s operation. Moreover, a service process model was proposed by Schmenner and covered the whole diverse service businesses. He used two key elements, the degree of labor intensity and consumer interaction/service customization, to classify the service businesses into four categories (Schmenner, 1986). Each quadrant in the two-by-two matrix (Figure 2.2) was labeled a name as service factory, service shop, mass service, and professional service.. 立. 治政 The different managerial 大. challenges were also issued. ‧. Professional Service:. Mass Services:. —Doctors. —Wholesaling. —Lawyers. er. sit. —Retailing. io. High. y. Nat. al. iv n C —Retail Aspects h ofe n g c h i U—Architects n. Degree of Labor Intensity. Those challenges for managers are shown in Table 2.3.. 學. ‧ 國. according to the degree of labor intensity and degree of interaction/customization.. —Schools. —Accountants. Commercial Banking. Low. Service Factory:. Service Shop:. —Airlines. —Hospitals. —Trucking. —Auto Repairs. —Hotels. —Other Repair Services. —Resorts & Recreation Low High Degree of Interaction & Customization Figure 2.2 The service process matrix Source : Schmemmer, R. W. (1986) 16.

(29) Table 2.3 Challenges for service managers Low or high distinction Low labor intensity. Challengers for managers 1. Capital decisions 2. Technological advances 3. Managing demand to avoid peaks & to promote off peaks 4. Scheduling service delivery 5. Technological advances. High labor intensity. 1. Hiring 2. Training. 政治大 4. Employee welfare. 3. Methods development & control. 立. ‧ 國. 學. 5. Scheduling workforces. 6. Control for far-flung geographical locations. ‧. 7. Startup of new units. Low customization. 2. Making service “warm”. n. al. er. 1. Marketing. io. Low interaction/. sit. Nat. y. 8. Managing growth. i Un. v. 3. Attention to physical surroundings. Ch. engchi. 4. Managing fairly rigid hierarchy with need for standard operating procedures. High interaction/. 1. Fighting cost increases. High customization. 2. Maintaining quality 3. Reacting to consumer intervention in process 4. Managing advancement of people delivering service 5. Managing flat hierarchy with loose subordinate-superior relationship 6. Gaining employee loyalty Source : Schmenner, R. W. (1986) 17.

(30) 2.1.3 The role of information technology in services Commerce developments in the past decade have shown that information technologies (IT) (and the Internet) have become the backbone of commerce (Carr, 2003). Gustaffsson and Johnson (2003) posited that technological advances and e-commerce have become important parts of an integrated solutions concept that provides a constellation of service or an experience per se. The competitive use of technology can support a service firm’s competitive strategy (Fitzsimmons and Fitzsimmons, 2008). The following matrix (Figure 2.3) illustrates the different roles in which information technology can enhance the firm’s advantages. For external. 治政 customer, online information technology can create 大the barriers to entry; the offline 立 information such as database can be well utilized for extracting the consumers’ ‧ 國. 學. behavior to develop new service or micromarketing. For the internal operation, the. ‧. online information technology can be incorporated with the service to increase. sit. y. Nat. revenue; the offline information can enhance the organizational ability in controlling. io. n. al. er. and monitoring to improve the efficiency of operation process.. Ch. engchi. i Un. v. Figure 2.3 Competitive use of information Source : Fitzsimmons and Fitzsimmons, 2008 18.

(31) In addition to analyze IT’s competitive use from service businesses’ perspective, information technology also plays a critical role while the service provider interacts with the customer. Froehle and Roth (2004) presented five archetypes of technology’s contribution to the service encounter. The descriptions of each archetype are described in Table 2.4.. Table 2.4 Role of technology in the service encounter Role of technology. Scenario description and examples. Technology-free. The customer is in proximity to and interacts with a human. 治政大 salon). service provider (e.g., hairdresser 立. Technology-assisted. The service provider has access to the technology to. ‧ 國. 學. facilitate the delivery of face-to-face service (e.g., an eye. Both the customer and service provider have access to the same technology (e.g., a financial planner in consultation. er. io. sit. y. Nat. Technology-facilitated. a customer by using a financial model on a personal awith iv l C n computer). hengchi U. n Technology-mediated. ‧. exam by optometrist).. The customer and human service provider are not physical co-located and thus the service encounter no longer is the traditional face-to-face contact (e.g., getting technical help from a distant call center).. Technology-generated. The human service provider is replaced entirely with technology that allows the customer to self-service (e.g., online brokerage or bank ATM).. Source : Adapted from Froehle and Roth (2004) 19.

(32) 2.1.4 Summary The literature reviewed above corroborate that the service, inherently being regarded as an add-on by firm, has become a sustainable source of competitive advantages (Heskett et al, 1997). Besides, the distinct characteristics of services, namely, customer participation, simultaneity, heterogeneity, intangibility, and perishability, can be ascribed to one central characteristic: services are processes (Bruhn, 2005). As the information and communication technologies advance, service organizations are increasingly utilizing them to improve the efficiency, the. 治政 effectiveness, and the quality of their customer-facing 大 operations (Froehle and Roth, 立 2004). The infusion of information technology has made organizations confront more ‧ 國. 學. complex challenges while transforming to service-oriented. However, the literature is. ‧. sparse in delineating the associated issues that management executives should take. er. io. sit. y. Nat. into consideration.. al. 2.2 Service Innovation. n. iv n C The study of service innovation emerged as an important research field. h e nhasg been chi U. However, service innovations are not new to the world, but they may still be new to the company, customers, or network partners (Gustafsson and Johnson, 2003). In the early stage, Schumpeter, the prophet of innovation, identifies five different forms to expound the innovations, including the introduction of a new good, the introduction of a new means of production, the discovery of a new source of raw material or semi-finished product, the conquest of a new market, and the establishment of a new organization (Schumpeter, 1934), who provides a broad and open definition. Rogers (1995) defined an innovation as an idea, practice, or object that is perceived as new to an individual or another unit of adoption. Moreover, subsequent researchers divide 20.

(33) innovation into four groups, namely, supplier-dominated, specialized suppliers, science-based, and resource-intensive (Pavitt, 1984), or two patterns including technology-using and technology-producing (Soete and Miozzo, 1989), another five-pattern. classification,. which. comprises. supplier-dominated. innovation,. innovation in services, client-led innovation, innovation through services, and paradigmatic innovation, is developed by Den Hertog (2000). Whereas the grouping models provide various and new taxonomies, there is no consensus achieved. Heretofore, various modes of service innovation were expounded from different perspective. Some prior studies segmented the schools of thought to elaborate their. 治政 different focus, such as technological approach, assimilation approach, demarcation 大立 approach, and synthesis approach (Gallouj and Weinstein, 1997; Coombs and Miles, ‧ 國. 學. 2000; Drejer, 2004; DeVriess, 2006; Droege, et al., 2009). Whilst the technological. ‧. lens arise limitation in exploring non-technological innovation and the emphasis on. sit. y. Nat. varieties of service or product innovation in the stream of demarcation or assimilation. io. er. seems no necessary, the synthesis approach proposed by Gallouj and Weinstein (1997) develops a integrative model applicable to both manufacturing and service industries.. al. n. iv n C Their research introduces six types innovationU which includes radical innovations, h e ofn g chi incremental innovation, improvement innovations, combinatory (architectural) innovations, formalization innovations, and ad hoc innovations.. With regard to the success factors investigating in the literature, Menor and Roth (2007) found that new service development relied on five factors, which are process focus, market acuity, strategy, culture and IT experience. Meanwhile, Froehle and Roth (2007) extracted success factors of new service development and segmented them into two groups, which are process-orientated new service development practices and resource-orientated new service development practices. The former group focuses on the effectiveness of innovation, and the latter group considers about 21.

(34) the issues like intellectual, organizational and physical resources. Despite of the emphasis on the perspective of service business, another school of research assert that the success of an innovation depends on the way the customer/user deals with the innovation (Abramovici and Bancel-Charensol, 2004; Bitner et al., 2008).. 2.3 Diffusion of innovation In the studies of diffusion of innovation, Rogers, (1995) firstly posits four prominent elements in the diffusion, including innovation, communication channels, time, and social system. According to his theory, technological innovation is. 治政 communicated through particular channels, over time, 大 among the members of a social 立 system. He describes the innovation-development as the process that starts from the ‧ 國. 學. recognition of a need or a problem, through research, development, and. ‧. commercialization of an innovation, through diffusion and adoption of the innovation. sit. y. Nat. by users, to its consequences.. io. er. Besides, the diffusion of innovation can be regarded as a hierarchy of communication effects, which explains how various aspects of communication, such. al. n. iv n C as message design, source, andh channel, as well asUreceiver (audience) characteristics, engchi effect the behavioral outcome of communication (McGuire, 1969 & 1987). Another. renowned preventive health research proposes a stages-of-change model (Prochaska, et al, 1992), which consists of pre-contemplation, contemplation, preparation, action, and maintenance stage. It attempts to answer why the change stuck or why the change was not made, and is widely applied in the adoption of preventive health innovations. A more thorough model of innovation-decision process was issued by Rogers (1995), which comprised of five stages, namely knowledge stage, persuasion stage, decision stage, implementation stage, and confirmation stage. Two above mentioned model is listed as follows. 22.

(35) Table 2.5 Stages in the Innovation-Decision Process Stages in the Innovation-Decision. Prochaska’s Stages-of-Change. Process I. Knowledge Stage. I. Pre-contemplation. 1. Recall of information. The stage at which there is no. 2. Comprehension of messages. intention to change behavior in the. 3. Knowledge or skill for effective. foreseeable future. adoption of the innovation II. Persuasion Stage. 立. 1. Liking the innovation. II. Contemplation 政治大. The stage in which people are aware that a problem exists and are seriously. ‧ 國. 學. 2. Discussion of the new behavior. thinking about overcoming it but have. with others. ‧. Nat. y. not yet made a commitment to take. 3. Acceptance of the message about. io. n. al. er. 4. Formation of a positive image of. Ch. the message and the innovation 5. Support for the innovative. sit. action. the innovation. engchi. i Un. v. behavior from the system III. Decision Stage. III. Preparation. 1. Intention to seek additional. This stage combines intention and. information about the innovation. behavioral criteria. 2. Intention to try the innovation Source : Adapted from Rogers (1995). 23.

(36) Table 2.5 Stages in the Innovation-Decision Process (Cont.) Stages in the Innovation-Decision. Prochaska’s Stages-of-Change. Process IV. Implementation. IV. Action. 1. Acquisition of additional. The stage in which individuals. information about the innovation. modify their behavior, experiences,. 2. Use of the innovation on a regular. or environment in order to overcome. basis. their problems. 3. Continued use of the innovation V. Confirmation Stage. 立. 政治大 V. Maintenance. 1. Recognition of the benefits of. The stage in which people work to. ‧ 國. 學. using the innovation. prevent relapse and consolidate the gains attained during action. ‧. 2. Integration of the innovation into. sit. y. Nat. one’s ongoing routine. io. al. iv n C Sourceh : Adapted U (1995) e n g cfrom h iRogers. n. others. er. 3. Promotion of the innovation to. 2.4 Interactive service Several discussions on interactive service in the literature involve emotion work (Wharton, 1996; Belt, 2002) and service encounter (Warhurst and Nickson, 2007). Some scholars elaborate the interactive service from the technical perspective, for instances, Law, et al. (1999) propose an efficient VOD storage system to solve the delivery problems in interactive service providing; Li, et al. (2009) enhance the BPEL (Web Services Business Process Execution Language) engine for providing composite 24.

(37) services with user interactions features. Besides, an interactive service platform was proposed by Lin and Sun (2007) for interactive digital TV. On the other hand, the customers’ perspective is taken by another stream of thought, such as Cao, et al. (2006) present a dynamic and on-demand service model for achieving the goals of mass customization. Low and Sloan (2001) asserted that the digital interactive service industry has the potential to generate innovation and strategic advantage for existing business. Nevertheless, the focus of this research, IT-enabled interactive service, is scantly discussed.. 2.5 Interactive innovation. 立. 政治大. Interactive innovative projects were widely applied in the classroom curriculum. ‧ 國. 學. to facilitate learning and teaching (Bruce, 1997), the financial and business services to. ‧. understand how innovation operates as an interactive process (Barras, 1990).. sit. y. Nat. Kietzmann, (2008) took the lens of a normative interactive innovation framework and. io. er. explored the interaction problems of mobile RFID technology. Another scholar, Johannesse, (2009), proposed a systemic model and regarded innovation itself as an. al. n. iv n C interactive learning. Lu, et al. (2009) the interaction and the impact between h e nexplored gchi U. the service personnel and the customer on development of service innovation activities. Heretofore, few researches probe into the diffusion of interactive innovation.. 2.6 IT-enabled service Most of the literatures related to IT-enabled service (ITES) were expounding the issue of Business Process Outsourcing (BPO), especially in the case of US-Indo. (Mukherjee, A and Deb Gupta, P., 2007, Henley, J., 2007, Mahnke, V., Oxcan, S. and Overby, M. L., 2006, Srinivasan T. N., 2005, Ramachandran, K.and Volete, S. V., 25.

(38) 2004) According to the Wikipedia, ITES is a form of outsourced service which has emerged due to involvement of Information Technology in various fields such as finance, banking, insurance. Some examples are medical transcription, back-office accounting and insurance claim, credit card processing etc. Thus, ITES are often regarded as synonym of BPO to refer to the same set of services and involves outsourcing of one or more complete business processes or entire business function that can be enabled with IT (Mukherjee and Gupta, 2006; NASSCOM, 2010). Nevertheless, the issue of Information Technology enabled Services (ITeS) has turned to a frontier one in Taiwan since the government targeted to upgrade itself from. 治政 a key IT manufacturer country to become an important 大 ITeS supplier nation. The 立 scope of IteS was defined as: “the combination of knowledge regarding certain ‧ 國. 學. specific areas and information technologies, or the generation of new application. ‧. ideas based on IT itself, to create innovative technology-based services, new business. sit. y. Nat. model and value added” (MOEA, 2006). The Taiwanese government determined to. io. er. promote the technology-enabled service industry, and this flagship plan would involve twelve categories, namely, financial, distribution, telecommunication and media,. n. al. medical, health care and. iv n C care-giving, training, h e n g manpower chi U. property management,. tourism, sporting and recreational, cultural and creative, design, information, and environmental protection (MOEA, 2006). Given the proximity of IT-enable service to the digital revolution, it can be regarded as the digitally enabled service. In this regard, Rai and Sambamurthy (2006) conceptualized the digitally enabled service management as the capabilities, structures, and processes with which digitized services are conceived and architected, how these services are offered and orchestrated, and how interactions for innovation and production of services are managed (Rai and Sambamurthy, 2006). 26.

(39) CHPATER 3. ONTOLOGICAL DESCRIPTION OF IT-ENABLED. INTERACTIVE SERVICE INNOVATION PROCESS. The extant literature reviewed above reveals that the issue of IT-enabled interactive service innovation (IISI) has gained a lot of interests from academia. However, a comprehensive and full exploration of the process of IISI is still sparse. This research conceptualizes the IT-enabled interactive service innovation as the development, deployment, and diffusion of a new interactive service through information technologies (IT) (including the communication and networking) for the customer.. 立. 政治大. This research attempts to answer the question of how an IISI is transformed from. ‧ 國. 學. the initial proposal, IT assets, competency, and to the end, the business performance,. ‧. and what the possible challenges may encounter during the transformation. Therefore,. io. er. IISI and to obtain the ontological description of IISI.. sit. y. Nat. the process theory is adopted as the research approach to conceptualize the process of. As shown in Figure 3.1, the IISI consists of two areas of sub-processes – the new. al. n. iv n C service design/development process new service implementation process. The h e nandgthe chi U. new service design/development process includes service proposal development, service concept development, service component development, service design, service analysis and service component integrating and testing. Triggered by certain external stimuli. coming. from. economic/social/competitor/technology. environment. or. intrepreneur stimulus, the firm should have developed a proposal for the ideal service innovation, which includes the formulation of new services objective/strategy and idea generate and screening; based upon the proposal, then a service concept should have developed to provide a more detailed description of service innovation. Then, the service analysis will determine the potential as part of a profitable business 27.

(40) venture and authorize the project. A service design should also be conducted to determine a more detailed requirements (and specifications/standard operation procedure/service-standard) of components of IISI that include IT/IS assets (for front/middle/back offices), people (for front/middle/back and MIS offices), and knowledge/know-how (for front/middle/back and MIS offices). Note that the design of service encounter system should adopt the principle of user-centered interaction design. Based upon the perceived service design, each service component should be developed and then tested and integrated via setting up a pilot food chain of service to test the synergy of integrated service components. Key issues include the acceptance. 治政 of employees (involving culture and organizational大 issues and incentives), the process 立 re-engineering (cooperation between inter-function or new departments). ‧ 國. 學. Once the new service innovation is ready for rolling out, there is a service. ‧. transition that transits the pilot food chain of service into a real (internal and external). sit. y. Nat. food chain of service.. io. er. In the new service implementation process, this involves the interaction process and the relationship process. The former process comprises of three value activities,. al. n. iv n C which are customer integration, and service recovery. The latter h service e n g production, chi U process also includes three activities, namely, customer acquisition, customer retention, and customer recovery. Note that an interaction describes the throughput of a customer via an individual service process; the relationship concerns the customer’s throughput through a relationship with the provider. (Fitzsimmons and Fitzsimmons, 2008; Bruhn and Gerogi, 2006).. 28.

(41) 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. Figure 3.1: The activities associated with the IISI. 29.

(42) CHAPTER 4. RESEARCH METHODOLOGY. This research adopts process theory as research approach to structure the locus of analysis and building the conceptual framework. Moreover, we strive for gaining insights and understanding the retardants in the whole IISI process, thus, the case study methodologies are appropriate for this study.. 4.1 Process Theory Process philosophy refers to identify metaphysical reality with change and. 治政 dynamics. Process may be integrative, destructive 大or both together, allowing for 立 aspects of interdependence, influence, and confluence, and addressing coherence in ‧ 國. 學. universal as well as particular developments. In management research, process theory. ‧. provides an explanation for 'how' something happens and a variance theory explains. sit. y. Nat. 'why'. Variance approach is appropriate for investigating variable related innovation,. io. er. yet, it cannot probe backward in time to understand what happened first, next, and so on (Rogers, 2003). Research on the exploration of value transition in a service. al. n. iv n C innovation should be appropriate of process theory. h for e nadoption gchi U. The logical structure differences between variance theory and process theory are. provided in Table 4.1 (Mohr, 1982, Markus and Robey, 1988). Moreover, scholars like Soh & Markus (1995) suggested that variance theories excel at explaining variations in the magnitude of a certain outcome.. 30.

(43) Table 4.1 Difference between variance theory and process theory Characteristic. Variance Theory. Process Theory. Outcome. A variable. A discrete occurrence. Definition. The cause is necessary and. Causation consists of necessary. sufficient for the outcome.. conditions in sequence; chance and random events play a role.. Logical Form. If X (independent variable),. If not X, then not Y; can not be. then Y (dependent variable).. extended to “more X”, or “more. Y”. 治政大 outcomes Discrete. Elements. Variables. Assumptions. Outcome will invariably. when conditions are present unless. sufficient conditions are. a particular “recipe” involving. present.. external directional forces and. ‧. occur when necessary and. probabilistic processes.. er. io. sit. y. Nat. al. Irrelevant; Static:. Crucial; Longitudinal;. conditions can occur in any. necessary conditions combine is. order. consequential.. How to “read”. The cause is necessary and. Causation consists of necessary. the theory. sufficient to produce the. conditions occurring in a. effects.. particular sequence in which. iv n C hsufficient Necessary and The time ordering in which engchi U n. Role of time. Outcomes may not occur even. 學. ‧ 國. 立. change and random events play a role. Source : Mohr (1982); Markus and Robey (1988) 31.

(44) Several pieces of the information technology research adopting process theory have appeared in the literature. One is the work on studying the strategic contributions of specific technologies, ATM, and specific processes by Banker and Kauffman (1988). Soh and Markus (1995) conducted a complete process theory to explain why and how IT spending became business performance. The process elements, such as expenditure, IT assets, IT impacts, and organizational performance, were rearranged and use intermediate outcome to fill in the gap of discontinuity in previous “causal but insufficient” relationship study, and moreover, three sub-processes are proposed as the IT conversion process, the IT use process, and the competitive process.. 治政 Furthermore, Moony, et al. (1996) provide a 大 base for studying business value of 立 IT by taking a process perspective, clarify the link between organizations and ‧ 國. 學. information technology, and propose a process oriented model of IT business value organization. environment,. information. competitive. sit. y. Nat. environment, and operational & management processes.. technology,. ‧. including. io. er. Tallon, et al. (2000) incorporate corporate goals for IT and management practices as key determinants of realized IT payoffs; propose a process-level model to focus on. al. n. iv n C how IT affects critical businesshactivities within U e n g c h i the corporation’s value system. The executives’ recognition that IT investment must be managed like any other capital investment is asserted as well. Oliva and Kallenberg (2003) elaborated the transition of manufacturing industry from products to services by developing a process theoretical framework of transition patterns. In this research, we regard the IT-enabled innovative service as a process of developing, deploying, and diffusing an IISI for the customer. Firstly, the stimuli either from external (e.g. economic, social, or competitive factors) or from internal (e.g. entrepreneur) can initiate the IISI, then, the service proposal including the 32.

(45) detailed service concept needs to be developed, the user-centric interactive service design involves detailed requirements and specifications of service innovation. Next, the service components including IT/IS assets, people, procedure, standard and knowledge should be developed; the following will be the service component integration and testing. Once the IISI is ready, the service will be transited, operated and delivered among the front, middle and back offices. At last, the service experience will be generated for service improving and retention. This ongoing process will be adopted as the research axis to analyze the locus of value transformation through IISI.. 立. 4.2 Case study. 政治大. ‧ 國. 學. In general, case studies are the preferred research strategy when “how” or “why”. ‧. questions are being posed (Yin, 1994). This research strategy focuses on. sit. y. Nat. understanding the dynamics presents within single settings (Eisenhardt, 1989). The. io. er. essence of a case study, the central tendency among all types of case study, is that it tries to illuminate a decision or set of decisions: why they were taken, how they were. al. n. iv n C implemented, and with what result 1971). The theme of this research is h e(Schrammen, ngchi U. to delineate the process of value transformation starting from the initial proposal to the final outcome, namely, business performance. Moreover, we also expound the obstacles that erode the value generation. Hence, this context of “how” and “why” questions should be appropriate for adopting the case study methodology. As indicated in the research background, the development of IT-enabled interactive service innovation is a state-of-the-art issue and involves a lot of market participants from different sectors. According to the definition provide by Yin (1994), “A case study is an empirical inquiry that, investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and 33.

(46) context are not clearly evident”. Thus, a case study strategy should be applicable for the study of IT-enabled interactive service innovation. Besides, Eisenhardt (1989) proposed a synthesized roadmap for building theory from case study research, which includes getting started, selecting cases, crafting instruments and protocols, entering the field, analyzing data, shaping hypotheses, enfolding literature and reaching closure. Stake (1994) presents three types of case studies, namely, intrinsic case study, instrumental case study and collective case study. The intrinsic case study aims at increasing the understanding of a phenomenon and make sense of the case being studied; the instrumental case study aims at refining a. 治政 theory; and the collective study focuses on using several 大 studies to compare and draw 立 general implications of the phenomenon being studied. In this research, the multiple ‧ 國. 學. cases will be adopted and follow the Eisenhardt’s roadmap to build a general. ‧. framework for analyzing the IT-enabled interactive service innovation.. sit. y. Nat. Furthermore, Yin (1994) issued six sources of evidence related to the data. io. er. collection in conducting case study strategy, which comprise documents, archival records, interviews, direct observation, participant-observation, and physical artifacts.. n. al. In order to enhance the. iv n C explanatory we will collecting h e n gpower, chi U. the evidence by. conducting several semi-structural interviews across different sectors and businesses, the relevant archival records and documentary information will be gathered and analyzed.. 34.

(47) CHATPER 5. THE FRAMEWORK OF CHALLENGES FOR IISI. In the literature, there are several studies addressing the issues of assessing IT values at different levels and of avoiding value discounting. These pioneering studies either propose a chain of three different process of IT value creation, or identify a series of specific barriers in a two-stage framework (Soh and Markus, 1995; Chircu and Kauffman, 2000). Nevertheless, in the context of web-based service, namely, a request-and-respond service pattern, the issues of identifying value and overcoming barriers are intricate because they span multiple level of analysis, including the use of. 治政 IT and the impact of innovation on the marketplace, 大 where it may alter the 立 fundamental ways in which firms and individuals interact. At the latter level, the ‧ 國. 學. issues of interest are business process designs, technological standards, firm-to-firm. ‧. competition, and alternative organizational strategies. A better understanding of these. sit. y. Nat. issues, along with the extent to which new innovations diffuse through the. io. er. marketplace and are accepted by users, is required. Those studies described above do not seem to provide a comprehensive framework for exploring all the challenges. al. n. iv n C involve in the IT-enable interactive innovation. Next, we propose an analytic h e nservice gchi U framework for delineating all the issues above.. The ultimate goal for IT-enabled interactive service innovation is to improve the organizational performance and gain competitive advantages. However, the most challengeable part for the executive management is to ensure this transformative potential will proliferate successfully and benefit the bottom-line.. 5.1 The Development of IISI The conversion from the initiation of an IT-enabled Interactive Service Innovation to its final outcome, the firm’s business performance, should be regarded 35.

(48) as a process of transformation that comprises several intermediate states. Based upon the process-oriented approach of Soh and Markus (1995); Kohli and Sherer (2002), this research proposes the following three-phase development framework shown in Figure 5.1, which specifies how the tasks and underlying expenditures in each stage contribute to the outcome. Foremost, the IT acquisition phase, the development of enabling IT, specifies IT development, where the enabling IT assets of the service initiative are built up; then, the set-up phase, the set-up of IT-enabled interactive service innovation, focuses on the conversion of a firm’s IT assets to its competencies; and the diffusion phase, the diffusion of IT-enabled interactive service innovation,. 治政 specifies the diffusion through which the service initiative 大 is commercialized through 立 translating competencies into business performance. The outcome of each phase and ‧ 國. 學. its (customer) value may vary based on the level of expenditures and the quality of. ‧. management. The details of this approach are described as follows.. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. Figure 5.1 The development framework of IT-enabled interactive service innovation 36.

(49) The IT acquisition Phase: Once the initiative to pursue an IT-enabled Interactive Service Innovation is approved by top management, the first major tasks are to form a business strategy that also specifies the business-IT integration and then, based upon the integration, to develop the IT assets that enable the IT-enabled Interactive Service Innovation. There are different types of IT assets, comprising a portfolio of tangible inputs, including hardware,. software,. infrastructure,. communication. technology,. and. other. complimentary intangible elements, such as knowledge, enhanced technological and managerial skills in the use of IT, and so on.. 治政 During this phase, infusing “IT expense” is大 necessary for the acquisition of 立 enabling IT, furthermore, the levels of IT expense may impact the breadth (number of ‧ 國. 學. IT assets) and the depth (levels of activities supported) of acquired IT assets.. ‧. Moreover, with the same level of IT expense, some organizations may be able to. sit er. io. al. n. The set-up phase:. y. Nat. acquire more IT assets than others due to their ability to address technical challenges.. After acquiring IT. iv n C assets, should h eannorganization gchi U. incorporate them into its. IT-enabled Interactive Service Innovation projects by effectively integrating these assets into the competencies resulting from the synergy of the cross-functional capabilities of different functions. These competencies include the effective use of IT in service design and automated service processes and activities, a better understanding of service markets and of customers, and flexible and adaptive organizational structures in support of service development and delivery. “Managerial expense” during this stage refers to exploiting the firm’s capabilities by leveraging all of its business resources, including tangible resources (such as manpower, management teams, and training) and intangible resources (such as culture 37.

(50) and reputation). On the base of well utilizing all resources within business, the capabilities of different dimensions such as the R&D capabilities, production capabilities, and logistic capabilities etc. can be built on. Thereby, an effective co-ordination and integration of capabilities, the business competencies will evolve. It is necessary to formulate a service strategy, select the right service projects, infuse business resources into the project, and manage the project effectively.. The diffusion phase: As the competencies have been built up, this IT-enabled interactive service. 治政 innovation will encounter the challenges whilst diffusing 大 market wide, in particular, 立 the competencies do not sufficiently result in a good organizational performance ‧ 國. 學. when a firm is in an unfavorable environment. The firm should develop a favorable. ‧. environment through some deliberate activities that, for example, help diffuse the. sit. y. Nat. IT-enabled Interactive Service Innovation with either greater benefits (e.g., resulting. io. diffusion process) in comparison with its competitors.. al. er. from a larger customer base) or lower costs (e.g., resulting from a more efficient. n. iv n C In this phase, market expenses to handle (1) social issues, including h e naregrequired chi U. gaining social acceptance and government support, (2) inter-organizational issues, entailing the strategies for satisfying the key stakeholders’ needs, seeking trustworthy partners, maintaining good governance, and understanding the competitors’ strategies, and (3) managerial issues, such as designing and maintaining an efficient process for diffusing the IT-enabled Interactive Service Innovation, building high market sensing capabilities, and responding the market proactively. The forgoing discussion provide an exemplar of the transformation process of IT-enabled interactive service innovation, this three-phase framework can be further applied for investigating the retardants in the process of value generation. 38.

(51) 5.2 Challenges and the Value Flow of IISI The value flow within the three-phase development framework of IISI is shown in Figure 5.2. Conceptually, the major challenge in Phase 1 is to acquire reliable IT assets through IT expenses. The major challenge faced in Phase 2 focuses on addressing managerial and organizational issues through managerial expenses, and Phase 3 calls for the use of market expenses to address social/environmental, managerial, and inter-organizational issues. The details are described as follows. Instead of random trial and error, the company usually sets up several IISI proposals, each of which has a hypothesized value. The hypothesized value can be. 治政 treated as a mix of performance measures for a 大 particular service initiative, which 立 determines the original decision for innovation. Later, the hypothesized value is tested ‧ 國. 學. through pilot studies to provide the firm with a better understanding of the potential. ‧. value of associated IT assets. Here, the potential value of IT assets refers to that. sit. y. Nat. generated under optimal organizational and environmental conditions for IISI. Note. io. er. that a high hypothesized value may not lead to a high potential value when the resulting IT assets do not provide the hypothesized functionality, the wrong IT is. al. n. iv n C proposed, or suitable software/hardware That is, there are technical h e n g cis hunavailable. i U challenges related to the way in which the firm converts IT spending into IT assets.. Although technical challenges can be addressed by infusing more IT expenses, sometimes they cannot be effectively addressed with a limited budget; in this case, the decision to terminate or reshape these projects will be made. Thorough technical planning during this stage should be regarded as the foremost concern. The set-up of IISI incorporates not only IT assets but also other essential business elements, such as people and the processes by which a service is created and delivered. When IT assets are infused into a firm’s business functions, the firm becomes more aware of what the consumer expects and is thus better able to deliver 39.

(52) IISI. The expected value of competency refers to the value that is expected to be gained from a particular business competency by which a firm is able to design and deliver IISI. Executives often find managerial and organizational issues that undermine this competency and prevent the firm from delivering what the consumer expects; thus, a variety of organizational and managerial commitments are required to develop a proper foundation for IISI. For instance, executives in the online service for logistics are aware that RFID (Radio Frequency Identification) technology has a high potential to provide efficient tracking of parcels, a vital component of high-quality shipping service. However, providing such a shipping service may be difficult due to. 治政 a lack of trained service personnel, an absence 大 of total management commitment, 立 inefficient business processes, and an unsupportive corporate culture. ‧ 國. 學. Through the firm’s competency, an IISI diffuses to the public to realize its. ‧. expected value. The realized value of a service refers to the real value gained from the. sit. y. Nat. market. Normally, the diffusion of an IISI presents additional managerial challenges;. io. er. for example, an organization needs to learn about new markets and develop new processes. Inefficient resources such as legacy systems and processes and the absence. al. n. iv n C of knowledge regarding new markets prevent an organization from maximizing h e noften gchi U. the IISI’s realized value. Additionally, there are difficult issues such as ambiguous laws discouraging the IISI, a partnership that is ineffective in providing expected service, a competitive environment that makes the IISI unattractive and low customer acceptance. A variety of managerial, inter-organizational, and social/environmental expenses are required to improve the realized value of IISI.. 40.

(53) 立. 政治大. ‧ 國. 學. Figure 5.2 The Value Flow and Associated Challenges of IISI. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. 41. i Un. v.