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Service selection – the dynamics

The impact of service pricing models on service selection. Service selection – the dynamics. Kristjan Košič Institute of Informatics University of Maribor. Motivation. Service costumers mostly buy results

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Service selection – the dynamics

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  1. The impact of service pricing models on service selection Service selection – the dynamics Kristjan Košič Institute of Informatics University of Maribor

  2. Motivation • Service costumers mostly buy results • Clients should be able to control total costs of services thru scheduled payment schemes (service to service provisioning) • Service oriented computing and SLA are drivers of dynamic pricing mechanisms • Adaptive business models • Service offerings and service selection methods

  3. Motivation • Impact of service pricing models on service selection (current main goal) • Dynamic pricing models for e-business • Dynamic: dynamic service behavior, which is driven by consumers decisions and selections in the business process • Customers decisions can be guided with the right information and offer

  4. The Purpose • Overview of existing dynamic business models in e-business domain • To build taxonomies of business models and map them to taxonomies of value-creation • Overview and analyze methods for dynamic price estimation • To build a simulation engine for dynamic service pricing framework to study and simulate impact of service pricing models

  5. Current research findings • Learning curve – a simulation based approach to dynamic pricing [Di Micco / 2003] – product based • Categorization of service e-business models [Narahani / 2005] • Practice prize report—an assortment wide decision-support system for dynamic pricing and promotion planning in DIY retailing [2007] • A proposal for Unified Service Pricing Framework [CSS /2009] – web services stack • Already well established pricing techniques: • Yield management • Dynamic pricing

  6. Models used in dynamic pricing • Inventory-based models(stock, demand over time, customer types…) • Data driven models(amazon, yahoo, airline industry) • Auction based models • Game theory models • Machine learning models(single agent, multiple agents, reinforcement algorithms, Markov decision process) • Simulation models

  7. Unified service pricing framework proposal • Ourarchitecture proposal extends already known service pricing models (iRMU, VTPES, SGEE)seearticle in CSS209 - Collaboration, Software and Services in Information Society • It provides additional pricing information and simulation options (dynamics) • Simulation modules of the pricing system are related to the layers in web-services technologies stack Dynamicservicepricingmodules Servicepricingmodules SLA server module Discount module Servicebilling Workflowmanagement module Suggestion module Resourcepricing Serviceflow Management & Security Simulation module(market simulations) Trafficmeasuring

  8. Workflow 1: Clientpointofview • Service offerings are registered in the main repository by service providers. • Client is selecting services for business process realization. • During service selection client is informed of similar services with better offerings. • Semantic module is also monitoring service selection process and suggests similar processes with special offerings. • Client confirms service selection – a new usage contract is defined. • Client confirms usage contract and enters additional payment information. Usage contract defines payment strategies and billing cycle. • Client can start using requested services.

  9. Workflow 2: Serviceproviderpointofview Not all service offerings in the main repository are from the same serviceprovider Services user selected for the realization of the business process are contained in different SLA layers between various service providers • Service provider publishes service in the main repository. • Client can consume the service that is not composed in the business process. • During publishing process service providers offers his starter pricing offerings on the server. A template SLA for the provider is created. • Other providers negotiate and define their provider contracts based upon provided template. • Service can be consumed in various business processes; the only condition is the existence of intermediate SLA agreements. Workflow:

  10. CRM and its role in decision process • Customer Relationship Management is at the core of the dynamic pricing and offerings (customers profile, interests, sites visited, history-social engineering, google ad words…) • DIY retail pricing decision support system • DoCoMo mobile platform

  11. To develop a modular and step based process for the development and support of dynamic service pricing system. This includes • Data mining • Dynamic pricing • Customer profile • Market analysis/competition • Region specifics

  12. Steps • Define CRM system and categorization of it for decision support and service offerings • Define the service system (organization based or wider specter: problem CRM data) • Usage of existing prediction and estimation methods for service price and service proposal / semantics? • Data, data, data….? • Business process integration into organization

  13. Comments&Questions Thank you….

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