Service Design in Business Ecosystems: How you can use the service blueprint in the context of business ecosystems and the relation to my research.

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What you can expect from this article

As part of my research, I develop artifacts that help solve relevant management problems. At its core, this is best described as design-oriented research (cf. Aken, 2004). My core topic here is the capturing of value for organizations in business ecosystems. Formally described, the following research objective has emerged from the input of our research vessel, the Competence Center Ecosystems, a consortium of banks and IT providers in the DACH region: The conceptualization of value capture for organizations in business ecosystems by a framework.

If I’m asked in the elevator what I do, the probably more tangible description is: I try to conceptualize what organizations potentially gain from engaging in business ecosystems.

Today, I would like to present the grounding framework that I use as an essential building block in my research on the topic of “business ecosystems”. Specifically, I will briefly introduce you to what “business ecosystems” are from my point of view. I will then argue why the service blueprint, a concept that has already been widely used in service design, is a helpful tool in the context of business ecosystems – I will go into more detail in my dissertation. I would like to conclude with a few thoughts that may inspire you when analyzing this new value creation construct, “business ecosystems”.

An insight into Ecosystems

The last time I rented an apartment from Airbnb was for a vacation – so that my basic need of “I need a roof over my head” was covered. But now the service offerings go much further. Depending on where you are planning your stay, you are also offered cooking classes and private tours of local sights. The range of services now includes many other components that (can) benefit me as an end user. However, Airbnb is no longer providing the service all alone. They use the individual resources and competencies of many players, often private individuals, to offer potential customers the most comprehensive range of services possible. Airbnb is just one example and is far from alone in trying to achieve the most comprehensive range of services possible by combining the power of a large number of players. The list is long and includes Apple, Microsoft, Amazon and many more. The concept of “ecosystems” can also be applied to solve specific problems, e.g.
Vetterling et al. (2024) suggest using the concept in the context of identifying and managing Parkinson’s disease.

If a group of organizations comes together to jointly achieve a goal, e.g. the creation of a service offering that is as complete as possible, we describe this as an ecosystem.
Adner (2017) defines this approach as an “ecosystem-as-a-structure” – a group of actors (organizations) that come together with a common goal. Business ecosystems are the basic structure of the concept from which other specific concepts, e.g. platform ecosystems and data ecosystems, can be delineated (Vetterling & Baumöl, 2023a). This new construct of value creation is based on two developments in particular:

  1. End customers are increasingly demanding solutions that are difficult for individual organizations to produce efficiently on their own.
  2. Technological progress enables the efficient networking of different players.

This was followed by the emergence of a value creation construct that sits between two well-known approaches to value creation, market and hierarchy. Jacobides et al. (2018) show this schematically in their publication:

Fig.1: Types of value systems based on Jacobides et al. (2018, p. 2261), own illustration

Ecosystems differ from hierarchical value creation relationships in that customers can choose from the components offered or sometimes from the path of the offer
(Jacobides et al., 2018). Ecosystems differ from market-based value creation relationships in that customers can choose from a selection of providers that are linked, for example, by interdependent relationships (Jacobides et al., 2018).

In essence, business ecosystems are specified by two core elements:

  1. A special form of complementarities between the actors (Jacobides et al., 2018). Complementarities can exist in different forms. Generic complementarities refer to the benefit relationship between different assets that only develop their benefits jointly. If you want to brew coffee in a teapot, you need coffee powder, water, the teapot, and the stove. Only in combination do the respective assets unfold their value (in relation to the specific purpose: brewing coffee). Jacobides et al. (2018) use a similar example and conclude that although such complementary relationships only develop their value for users collectively, no coordination of producers is necessary for users to be able to combine the assets. Accordingly, the individual assets or components can also be purchased individually by the user on the market (the purchase of coffee from a trusted retailer, the stove pot in the supermarket, etc.).              
    According to Jacobides et al. (2018), ecosystems are based on a special form of complementarities. They are a) unique or b) supermodular. Complementarities are unique if one asset cannot function without the other (Jacobides et al. 2018). For example, look at Nespresso capsules and corresponding machines, which can often be used exclusively with each other. Supermodular complementarities describe another special type of complementarity. They describe a relationship between assets or components where the presence of more of one makes the other more valuable. “One” and “the other” can be products, assets, or activities. In principle, such “supermodular complementarities” (Jacobides et al., 2018, p. 2262) can exist both in production and on the consumption side (I will describe this to you later in the article as “front end” and “back end”). On the consumption side, there is also a link to the frequently described network effects, which can take various forms. For such effects, take a look at the “notion.so” platform[1], for example, which makes it possible to organize tasks, notes, and much more. The more specific functionalities are made possible by integrating third-party offers on the platform, e.g., integration of notes from the “GoodNotes” application, integration of videos from “YouTube”, etc., the more users will use the platform, and the more valuable the platform will become. According to Jacobides et al. (2018), ecosystems are now groups of companies in which there are more than generic complementarities between the actors—a specific structure of relationships and coordination is required to generate value. Adner (2017) describes such constructs as “ecosystems-as-a-structure”, in which the structure of actors is based on the fulfillment of a common goal.
  2. The need for an orchestrator (Lingens et al., 2023). In ecosystems, there is a dependency between the actors involved, as an ecosystem can collapse if one partner fails (Lingens et al., 2023). Since there is no hierarchical relationship between the actors in which one actor clearly has the “authority to issue instructions” to the other actors, the orchestrator must align the actors so that a joint value proposition can be fulfilled. Incentives and regulatory mechanisms must be organized for this purpose.

Overall, this results in a complex system for value creation through the use of a group of organizations with a common goal.

Modeling framework: Service blueprint

Already Vetterling & Baumöl (2023) use the service blueprint to model or delimit KPIs in various concepts of “ecosystems”. Today, I would like to demonstrate the more specific use of service design in the context of business ecosystems. My objective here is to introduce you to a tool that also provides a valuable context for my specific solution models in the context of value capture.

The service blueprint enables the modeling of services from the perspective of the user and the actors involved. The model itself goes back to Shostack (1984) and can be represented in a simplified form across three levels: the frontstage, the backstage, and the line-of-visibility, which separates the two levels (cf. Vetterling & Baumöl, 2023a). Further components are possible (cf. Fliess & Kleinaltenkamp, 2004; Zeithaml et al., 1996) but are excluded here for the sake of simplicity.

This roughly results in the following analysis grid, which you can use to model services.

Fig.2: The simplified framework for the service blueprint (own illustration based on the illustration in Vetterling & Baumöl (2023a)

In this grid, you can now enter the customer journey, for example, which is to be covered by the offer from the ecosystem, as well as the individual players who contribute to this.

Fig.3: Illustration of individual offers using the example of Airbnb

Figure 3 shows a list of simple services via a platform. Airbnb acts as the orchestrator (and platform owner) of this ecosystem. No complementarities have been taken into account here. However, when viewed as a whole, complementarities are what make up an ecosystem. For example, you could push for apartments to be booked in a certain region that is particularly known for its pub culture. As preparation, interested customers could also be offered a course on the history of pubs and a brewing course afterwards.

The complexity of the presentation can of course be increased even further. For example, you can add the specific capabilities that an actor contributes. Furthermore, the relationships in ecosystems are characterized by specific framework parameters (cf. Dalenogare et al., 2023) which you can also include in the modeling.

Concluding thoughts

The service blueprint can provide an appropriate framework for modeling services that are to be created, for example, within a business ecosystem. The approaches presented here already show that the relationship between the actors, characterized, among other things, by the relationship via specific complementarities, is of enormous importance. At the same time, it is reasonable to assume that in business ecosystems, a variety of values can be achieved for organizations through this specific network of relationships, which may also go beyond purely financial values. These are topics that concern me in the context of my dissertation, and for which I have developed solution artifacts.

Business ecosystems are not an end in themselves; they have emerged as a result of developments in the market and in technology. For participating organizations, they make it possible to generate disproportionately high-value contributions (cf. Adner, 2006, 2017). However, participation requires, among other things, a change in the operating model, as other skills and resources may be used or become more important. An example of an operating model blueprint can be seen in (Vetterling & Baumöl (2023b). From a modeling perspective, as shown here, the service blueprint can be used to conceptualize service offerings.

Business ecosystems are a new form of value creation that can be categorized between the two known forms, market and hierarchy (Jacobides et al. 2018). A new form of value creation requires the development of an understanding of how the corresponding processes and value flows work. This requires further research in order to find concrete solutions for various problems in practical implementation. In this article, you find initial approaches to dealing with business ecosystems.

I am developing a toolbox with a collection of tools that will enable managers to make informed decisions in connection with value capture in ecosystems as part of my dissertation. If this is of interest to you, please feel free to contact me.

Bibliography

Adner, R. (2017). Ecosystem as structure: an actionable construct for strategy. Journal of Management, 43(1), 39. https://search.ebscohost.com/login.aspx?direct=true&db=edsinc&AN=edsinc.A481211770&site=eds-live&scope=site

Adner, R. (2006). Match your innovation strategy to your innovation ecosystem. Harvard Business Review, 84(4).

Aken, J. E. van. (2004). Management Research Based on the Paradigm of the Design Sciences: The Quest for Field-Tested and Grounded Technological Rules. Journal of Management Studies, 41(2), 219-246. https://doi.org/10.1111/j.1467-6486.2004.00430.x

Dalenogare, L. S., Le Dain, M.-A., Ayala, N. F., Pezzotta, G., & Frank, A. G. (2023). Building digital servitization ecosystems: An analysis of inter-firm collaboration types and social exchange mechanisms among actors. Technovation, 124. https://doi.org/10.1016/j.technovation.2023.102756

Fliess, S., & Kleinaltenkamp, M. (2004). Blueprinting the service company: Managing service processes efficiently. Journal of Business Research, 57(4), 392-404.

Jacobides, M. G., Cennamo, C., & Gawer, A. (2018). Towards a theory of ecosystems. Strategic Management Journal (John Wiley \& Sons, Inc.), 39(8), 2255-2276. https://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=130771714&site=ehost-live

Lingens, B., Seeholzer, V., & Gassmann, O. (2023). Journey to the Big Bang : How firms define new value propositions in emerging ecosystems. Journal of Engineering and Technology Management, 69(July), 101762. https://doi.org/10.1016/j.jengtecman.2023.101762

Shostack, G. L. (1984). Designing services that deliver. Harvard Business Review, 62(1), 133-139.

Vetterling, D., & Baumöl, U. (2023a). Ecosystems als Quelle kundenzentrierter Wertschöpfung – Konzepte und Steuerungspotenzial. Controlling – Zeitschrift Für Erfolgsorientierte Unternehmenssteuerung, 35(5), 4-11.

Vetterling, D., & Baumöl, U. (2023b). Networked business design in the context of innovative technologies: Digital transformation in financial business ecosystems. Journal of Financial Transformation – Capco Institute, 58, 72-81.

Vetterling, D., Lucarelli, P., & Bischof, A. (2024). Advocating for Harnessing the Power of Ecosystems in Healthcare: The Case of an Ecosystem in the Realm of Parkinson’s Disease – A Position Paper. Proceedings of the 17th International Joint Conference on Biomedical Engineering Systems and Technologies, 838-845. https://doi.org/10.5220/0012399900003657

Zeithaml, V. A., Bitner, M. J., & Gremler, D. D. (1996). Services Marketing McGraw Hill. New York.

[1] https://www.notion.so/de-de.

Dennis Vetterling
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