The service creates value

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According to the Service-Dominant logic (S-D logic), service is the fundamental basis for all value exchange. S-D logic focuses on value creation in the use of facilities (value-in-use).

The objective of each service provider is to provide value to its customers. If value is to be added by a service provider, then the vitality of the recipient's system – the customer - must be improved: value is a change in the vitality of a system.

If there is to be added value, then the vitality of the system in question will have to be improved. The supervision of value creation focuses on realizing the intended benefits at optimal cost and acceptable risks.

The USM Customer-Provider Interaction Model

For value in a service context, the following applies in USM (following Vargo, Akaa & Vaughan, Conceptualizing Value: A Service-ecosystem View]):

  • Value is determined by the observer. Consequently, the perceived value can vary depending on the perspective of that observer. For example, carpooling may offer great value to participants, as well as to the environment and to other road users, but a cab driver may think very differently. There may also be a difference in perception of value between provider and customer.
  • Value is created through co-creation. Service delivery always involves the exchange of resources between the parties involved. Customers and providers are involved in the joint creation of the service value. Value on the customer's side is created only when the user uses the service. The provider adds value to the customer with the service and the customer returns value to the provider. The latter can be a fee in the form of euros, but it can also be a performance that represents value to the provider in a supply chain or supply network, such as returning another facility (a kind of 'swap' transaction) or contributing to better service propositions of the provider. In other words, there is an exchange of value in the interaction with which the service value is co-created. The recipient determines the value of the service from its own perspective.
  • Value is multidimensional. Value can be considered from multiple perspectives, for example, from the needs of those involved, from social norms, from technological possibilities, or from cultural acceptance.
  • Value arises in the interaction. It is difficult to determine value in advance. The user's experience greatly influences the perceived value of the service. This experiential value can only be determined in retrospect.
Added value relates more to outcome than to output. The increase in the vitality of the customer's system is mainly felt in the slightly longer term, from the benefits that follow from the direct output of the service.

The output is the direct result of an interaction, the outcome is the longer-term effect that is achieved with it.

The ITOCO model

Added-value of facility services can be translated into several concrete values (after Prevosth & Van der Voordt: De toegevoegde waarde van FM and Coenen c.s.: Facility management value dimensions from a demand perspective):

  • value in use that increase the effectiveness of the business in terms of productivity, yield, competitiveness, flexibility, risk management, innovation capacity
  • social values that result from the design of the built environment, or that have an impact on the client's image
  • environmental values that influence sustainability (people, planet, profit) and the ecological footprint
  • relationship values in customer-provider relationships, where providers distinguish themselves by e.g. knowledge of the customer, personal attention, or the quality of support.

Many of these values can be translated into financial benefits, and indirectly even into an increase in the value of the business. Focusing too heavily on financial benefits alone does injustice to the potential contribution of services to the business.

USM specifies a USM Value Maturity Model, that describes an organizations maturity in terms of delivering value to the customer.