Service innovation has been discussed by many authors, but usually not from a system perspective. Recent literature about service systems and service innovation stresses multi-partner commercial offerings, ecosystems of interacting suppliers and consumers, globalization, and the changing nature of advanced economies. Interesting as these large-scale topics are, discussions at that level tend to overlook operational and organizational issues that service innovators must address in order to create or improve specific, localized systems that deliver services to internal and/or external customers.

This paper builds on three interrelated frameworks that describe fundamental aspects of service systems at the level at which they are designed, operated, and improved:
  • The work system framework identifies nine elements that should be included in even a rudimentary understanding of any work system. (Service systems are work systems.)

  • The service value chain framework incorporates characteristics often associated with services, such as coproduction by providers and customers.

  • The work system life cycle model treats the system’s life cycle as a set of iterations involving planned and unplanned change.

This paper shows how each of those three frameworks provides insights that apply to service innovation across a wide range of service systems.


Service innovation service system definition of service work system framework service value chain framework work system life cycle model 


  1. Alter, S. 2003. “18 Reasons Why IT-Reliant Work Systems Should Replace the IT Artifact as the Core Subject Matter of the IS Field,” Communications of the Association for Information Systems (12:23), pp. 365-394.Google Scholar
  2. Alter, S. 2006. The Work System Method: Connecting People, Processes, and IT for Business Results, Larkspur, CA: Work System Press.Google Scholar
  3. Alter, S. 2007. “Service Responsibility Tables: A New Tool for Analyzing and Designing Systems,” in Proceedings of the 15 th Americas Conference on Information Systems, Keystone, CO, August 9-12.Google Scholar
  4. Alter, S. 2008. “Service System Fundamentals: Work System, Value Chain, and Life Cycle,” IBM Systems Journal 47:(1), 71-85 (
  5. Brown, A. W., Delbaere, M., Eeles, P., Johnston, S., and Weaver, R. 2005. “Realizing ServiceOriented Solutions with the IBM Rational Software Development Platform,” IBM Systems Journal 44:(4), 727-752 ( Carlzon, J. 1989. Moments of Truth, New York: Harper Collins.
  6. Chesbrough, H., and Spohrer, J. 2006. “A Research Manifesto for Services Science,” Communications of the ACM (49:7), pp. 35-40.CrossRefGoogle Scholar
  7. Christensen, C. M., Cook, S., and Hall, S. 2005. “Marketing Malpractice: The Cause of the Cure,” Harvard Business Review (83:12), pp. 74-83.Google Scholar
  8. Fitzsimmons, J. A., and Fitzsimmons, M. J. 2006. Service Management: Operations, Strategy, and Information Technology (5th ed.), Boston: Irwin/McGraw-Hill.Google Scholar
  9. IfM and IBM. 2007. Succeeding through Service Innovation: A Discussion Paper, University of Cambridge Institute for Manufacturing (IfM) and International Business Machines Corporation (IBM), October (
  10. Hill, T. P. 1977. “On Goods and Services,” The Review of Income and Wealth (23:4), pp. 315-338.CrossRefGoogle Scholar
  11. Kotler, P., and Keller, K. 2006. Marketing Management (12th ed.), Upper Saddle River, NJ: Prentice Hall.Google Scholar
  12. Krogh, E., El Sawy, O. A., and Gray, P. 2005. “Managing Online in Perpetual Perfect Storms: Insights from IndyMac Bank,” MIS Quarterly Executive (4:4), pp. 425-442.Google Scholar
  13. McGovern, G., and Moon, Y. 2007. “Companies and the Customers Who Hate Them,” Harvard Business Review (85:6), June, pp. 78-84.Google Scholar
  14. Rai, A., and Sambamurthy, V. 2006. “Editorial Notes: The Growth of Interest in Services Management: Opportunities for Information System Scholars,” Information Systems Research (17:4), December, pp. 327-331.Google Scholar
  15. Sampson, S. E., and Froehle, C. M. 2006. “Foundations and Implications of a Proposed Unified Services Theory,” Production and Operations Management (15:2), pp. 329-343.Google Scholar
  16. Schumpeter, J. A. 1934. The Theory of Economic Development, Boston: Harvard University Press.Google Scholar
  17. Spohrer, J., Maglio, P. P., Bailey, J., and Gruhl, D. 2007. “Steps Toward a Science of Service Systems,” IEEE Computer (40:1), pp. 71-77.Google Scholar
  18. Spohrer, J., Vargo, S. L., Caswell, N., and Maglio, P. P. 2008. “The Service System Is the Basic Abstraction of Service Science,” in Proceedings of the 41 st Hawaii International Conference on Systems Sciences, Los Alamitos, CA: IEEE Computer Society Press.Google Scholar
  19. Stabell, C. B., and Fjeldstad, O D. 1998. “Configuring Value for Competitive Advantage: On Chains, Shops, and Networks,” Strategic Management Journal (19, 413-437.CrossRefGoogle Scholar
  20. Teboul, J. 2006. Service Is Front Stage: Positioning Services for Value Advantage, New York: Palgrave Macmillan.Google Scholar
  21. Van Halen, C., Vezzoli, C., and Wimmer, R. 2005. Methodology for Product Service System Innovation: How to Implement Clean, Clever, and Competitive Strategies in European Industries, Assen, Netherlands: Royal Van Gorcum.Google Scholar
  22. Vargo, S. L., and Lusch, R. F. 2004. “Evolving to a New Dominant Logic for Marketing,” Journal of Marketing (68, 1-17.CrossRefGoogle Scholar
  23. Vargo, S. L., and Lusch, R. F. 2006. “Service-Dominant Logic: What It Is, What It Is Not, What It Might Be,” in The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions, R.F. Lusch and S. L. Vargo (eds.), Armonk, NY: M. E. Sharpe, pp. 43-56.Google Scholar
  24. Wikipedia. 2008. “Innovation” (, viewed on March 17, 2008).
  25. Wood, J. B. 2007. “Major Service Challenges Facing Technology Companies in 2007,” presentation at the 16th Annual Frontiers of Service Conference, San Francisco, CA, October 4-7.Google Scholar

Copyright information

© International Federation for Information Processing 2008

Authors and Affiliations

  • Steven Alter
    • 1
  1. 1.University of San FranciscoSan FranciscoUSA

Personalised recommendations