The Architecture of Collaborative Service Innovation

1. The Architecture of Collaborative Service Innovation Ramaswami Sridharan Newcastle Business School University of Newcastle - Australia Togar M. Simatupang School of Business and Management Bandung Institute of Technology - Indonesia The 2nd International Research Symposium in Service Management (IRSSM-II) Yogyakarta INDONESIA26-30 July 2011

2. Outline • Introduction • Collaborative Service Innovation • The Architecture of Collaboration • Propositions • Conclusions

3. Introduction • Collaborative service innovation has become a strategic weapon to remain competitive. • A productive behavior is needed to ensure that different actors would contribute to value creation. • However, there is little attention given to elaborate what factors that affect different actors to interact and identify detrimental decisions to the value creation process. • We propose a conceptual framework that enables different actors in service innovation to interact and develop capability for value creation. • The lens of the paper is drawn from the economic approach of behavior that views actors to take actions and make decisions to maximize their personal performance.

4. Collaborative Service Innovation • A service innovation is on is the result of bringing to a new of significantly improved way to solve the customer's problem. • Collaborative service innovation provides a framework for different actors in a supply chain to share and apply knowledge in reducing costs and risks. • The emerging practice of collaborative service innovation that facilitate different actors to innovate has change the mindset of a company to combine internal innovation with external sources of innovation.

5. The Architecture of Collaboration (1) • The architecture of collaboration contains specific elements that drive the behavior of different actors in carrying out collaborative service innovation. • The goal of architecture is to create a platform that affect the factors to be committed to ongoing value to current and future customers while at the same time they improve the overall performance. • The theoretical lens of the architecture is drawn from the economic approach of behavior that views actors to take actions and make decisions to maximize their personal performance.

6. The Architecture of Collaboration (2) • The basic assumptions of the architecture include: • each actor tends to maximize its own performance, • the information is not distributed uniformly amongst the actors and cannot fully transmitted to other actors, • interrelated tasks have to be bundled into a specific collaborative effort, • the collaborative effort is measured by a certain performance system, each actor has different decision authority, and an actor pays attention to a specific incentive in taking an action and making a certain decision. • The architecture of collaboration is thus composed of five aspects, namely performance accountability, collaborative decision making, information sharing, process integration, and incentive alignment.

7. Propositions • Proposition 1: The greater performance accountability between partners, the greater the potential will be to facilitate the creation of value. • Proposition 2: The greater collaborative decision making between partners, the greater the potential will be to facilitate the creation of value. • Proposition 3: The greater information sharing between partners, the greater the potential will be to facilitate the creation of value. • Proposition 4: The greater process integration between partners, the greater the potential will be to facilitate the creation of value. • Proposition 5: The greater incentive alignment between partners, the greater the potential will be to facilitate the creation of value.

8. Conclusions • The study argues that service providers often collaborate in the innovation processes and many of the value enhancing activities are influenced by the architecture of collaboration. • The proposed architecture for collaborative service innovation provides practitioners and researchers with a structured approach to manage interactions for collaboration. • The potential contribution of this paper is to point the direction for future work in the importance of the collaboration architecture in stimulating value enhancing behavior for collaborative service innovation.

9. Thank You