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The service literature discusses several instruments designed to enhance the depiction of the service delivery process. One of these tools is the “Service Blueprint” technique (Bitner et al., 2008): “Services are dynamic, unfolding over a period of time through a sequence or

constellation of events and steps” (Bitner et al., 2008, p. 68), and service systems can be defined as “value co-creation configurations of people, technology, value propositions connecting

internal and external service systems, and shared information” (Maglio & Spohrer 2008, p. 18). These actors create value by cooperating and merging their resources, competencies, and capabilities (Bovet & Martha, 2000; Kähkönen & Lintukangas, 2012). We coded and analyzed our data (Sections 6.1, 6.2) using S-D logic (Vargo & Lusch, 2004, 2008), and adopted the framework as an analytical lens to make sense of the rich data we had gleaned from our collaborative action study with Software Inc. As a result, we developed a detailed account of how teams and individuals collaborated during the service-delivery process, and by extension the value co-creation process, at Software Inc. The framework of S-D logic enabled us to learn how the service teams engaged in the value co-creation process over the period of our action study. Specifically, S-D logic (Vargo & Lusch, 2004, 2008) and the service blueprint technique (Figure 5.2 - 1 above) (Bitner et al., 2008) made it possible for us to tease out the ways in which teams and individuals adopted various changes in order to refine the value co-creation process (Maglio & Spohrer, 2008; Vargo et al., 2008).

Based on the empirical accounts of our analysis and previous literature, we offer a grounded- process model of how individuals and teams interacted as they engaged in the service- delivery process, Figure 8.3 - 1. This model illustrates the activities of each team in relation to the value co-creation process at Software Inc., and pinpoints the service components involved as per the service blueprint technique (Bitner et al., 2008). Moreover, the model identifies the role of each team as it adopted changes in the release-cycle management and consequently the value co-creation process. The ability to describe service process to SaaS managers and customers will help them recognize what the service process encompasses and understand their corresponding roles in the value co-creation process.

Figure 8.3 - 1 Grounded Process Model for Value Co-Creation in SaaS

Additionally, we draw upon our empirical results and propose theoretical statements or principles (Lee & Baskerville, 2003) related to service innovation in SaaS environments, as demonstrated in Table 8.3 - 1. The first principle states that value co-creation requires that SaaS providers and customers engage in continuous quality interactions. The proposed grounded- process model illustrates that activities that are related to engagement and continuous interaction with the customer occur mainly during the service requirement and service delivery stages. This principle is consistent with one of the main foundational premises of S-D logic (FP 6), which states that the customer is always a co-creator of value (Vargo & Lusch, 2008). The value co- creation process, in which the customer plays a central role, demands continuous interaction between SaaS provider and the customer.

Table 8.3 - 1 Grounded Process Model for Value Co-Creation in SaaS

Stages Actors Activities _Components Service

C o nt inu o u s Fee dba ck 1. Service Requirements Customer AM PM DEV  Engagement of Customer through Various Platforms such as CAB and Early Adopters Program  Responsiveness to Market Needs  Customer Actions  Onstage employee Actions  Backstage employee Actions 2. Service Development AM PM DEV QA  Clarification and Prioritization of Service Requirements  Completion of Service Information

 Support Service Production

 Backstage employee Actions  Support Processes 3. Service Deployment Customer _AM PM OPS  Communication of Service Information  Deployment of Developed Service  Customer Actions  Onstage employee Actions  Backstage employee Actions  Support Processes 4. Service Delivery Customer AM OPS

 Support Service In Use  Leveraging technology

similar to “Help Desk” for knowledge sharing with customers

 Utilization of service usability in the SaaS portal

 Customer Actions  Onstage employee

Actions  Backstage

employee Actions

The second principle states that SaaS providers must understand their customers’ requirements and processes while developing and delivering the service: this is related to the service requirement and service delivery stages as demonstrated in the grounded- process model. This principle is in accordance with S-D logic (FP 10), which states that value is always uniquely determined by the beneficiary (Vargo & Lusch, 2008). In the SaaS context, a particular service delivered to a particular customer is understood to provide a specific value; the same service

delivered to another customer might provide a very different value. A customer’s industry and his or her need for that service constitute the determining factors. Hence, it is crucial for SaaS providers to have a good grasp of their customers’ processes and specific requirements while developing and delivering their software-as-a-service.

The third principle states that SaaS providers adopting service logic are required to implement processes that facilitate close interactions between teams developing and supporting the service. Service development-stage activities are related to this principle. The fourth principle proposes that customers require complete information as they obtain and integrate the service with other resources to create value. This principle is mainly associated with service-deployment activities. These two principles are related to S-D logic (FP 9), which maintains that all

economic and social actors are "resource integrators." This term implies that the context of value creation is a network of networks (resource integrators) and that social and economic actors integrate various types of resources to create value (Vargo & Lusch, 2008). We take this general notion and zero in on SaaS providers’ service teams and customers as the main actors in this large network. The service developed and deployed is considered part of a larger solution required by customers, and certain processes are required to facilitate close interactions for efficient resource integration between all actors.

The fifth and final principle states that customers and SaaS providers exchange skills and knowledge through developing and using the service. This principle is related to the service- delivery stage illustrated in the grounded-process model. In addition, this principle is associated with the S-D logic premise that service is the fundamental basis of exchange (FP1), and that the application of operant resources (knowledge and skills) “service,” is the basis for all exchange (Vargo & Lusch, 2008). Customers and SaaS providers exchange skills and knowledge in

creating and using the software as a service, and co-create value with their customers in the process.

Finally, although such analytical generalizations are not validated beyond the observed case, as noted by Yin (2009), they combine empirical and theoretical insights in a way that informs further research in this important area. As our analysis incorporates empirical observations and contributions from earlier studies, the proposed model might be applicable, with minor variations and modifications, to other SaaS environments.

Table 8.3 - 2 Service Innovation Principles in SaaS Environments

Service Innovation Principles in

SaaS Environments Process Model Stage Related S-D Logic FP

1. Value co-creation requires that SaaS providers and customers engage in continuous quality interactions

Service Requirements Service Delivery

FP 6 - The customer is always a co-creator of value

2. SaaS providers are required to understand their customers’ requirements and

processes while delivering the service

Service Requirements Service Delivery FP 10 - Value is always uniquely and phenomenologically

determined by the beneficiary 3. SaaS providers adopting a service logic

are required to implement processes that facilitate close interactions between teams developing and supporting the service

Service

Development FP 9 - All economic and social actors are resource integrators

4. Customers require complete information as they obtain and integrate the service with other resources to create value

Service Deployment

5. Customers and SaaS providers exchange skills and knowledge through developing and using the service

Service Delivery

FP 1 - Service is the