Introduction to the Special Section: Service Science in Electronic Commerce

Indranil Bardhan, Haluk Demirkan, P.K. Kannan, and Robert J. Kauffman, Guest Editors
International Journal of Electronic Commerce,
Volume 14 Number 3, Spring 2010, pp. 5.


Abstract: At the 2007 Cambridge Service Science, Management, and Engineering Symposium (www.ifm.eng.cam.ac.uk/ssme), held at Churchill College of Cambridge University, service science was defined as “the study of systems that are dynamic configurations of people, technologies, organizations and shared information that create and deliver value to customers, providers and other stakeholders.” The symposium called for an interdisciplinary and intercultural approach to service systems research that builds bridges between disciplines and examines issues that arise at the interface of disciplines. One cannot think of a more apt context for examining these service science issues than the electronic commerce environment, which is an amalgam of technology, customers, systems, and information, and presents exciting challenges and opportunities for the study of service systems. Even as there is a critical need to understand and study issues in e commerce for the sake of innovating and improving business applications in the area, the lessons learned in this domain can be very valuable in other service system contexts. This was our prime motivation for this special section, which was conceived as a vehicle for understanding service system issues at the interface of the interrelated disciplines of information systems (IS), consumer psychology, economics, finance, marketing, operations and supply chain management, and information science.

The papers chosen for this special section examine a wide range of substantive issues related to service science in the e commerce area. They include the role of IT service intermediaries in developing trust and satisfaction, information sharing between customers and IT services vendors, co creation of services by customers and IT services vendors, and the design of automated tools to support service agreement negotiation. The authors’ results in all of the articles have implications for service science and electronic commerce that go beyond the immediate application settings on which they report. Their papers showcase the application of an array of research methods, including surveys, experiments, and design science.

In the remainder of this introduction, we will briefly discuss each of the articles in the special section to identify the main thrust of the authors’ investigation and the relevant findings for theory and practice. The special section opens with a contribution related to service science and consumer behavior in electronic commerce entitled “Assurance Seals, On Line Customer Satisfaction, and Repurchase Intention,” with a co authored article by Insu Park, Amit Bhatnagar, and H. Raghav Rao. It focuses on assurance seals sponsored by third parties who serve to guarantee the privacy policies of on line stores. The authors show that assurance seals influence customer satisfaction and repeat-purchase intention not only directly, but also indirectly by influencing the relationship between other service attributes, and customer satisfaction and repeat-purchase intention. Specifically, assurance seals provide a frame such that customer satisfaction and repurchase intention are higher for customers when vendors provide assurance seals than when they do not. The article uses the concept of diminishing ‘sensitivity’ to argue that the relationship between service performance, and customer satisfaction and repeat-purchase behavior should be concave, and the concavity should be less in the presence of seals. The authors test the hypotheses on data obtained from Bizrate.com and show support for most of the hypotheses. The study shows that the relationship between retailer services, on the one hand, and customer satisfaction and repurchase intention, on the other, is influenced by third-party assurance seals. In addition, the study provides compelling evidence that by decreasing the relative impact of service performance, assurance seals reduce the salience of service performance in the formation of customer satisfaction. Although the impact of service performance is higher for vendors without seals, this result does not necessarily imply that consumers’ overall satisfaction is greater for the vendor without seals.

The second article of the special section continues the theme involving consumers and service science in e commerce, with a focus on “Consumer Value Co Creation in a Hybrid Commerce Service-Delivery System.” Lih Bin Oh and Hock Hai Teo are the authors. They contribute new ideas and findings on the integration of promotion, product, pricing, and transaction information to increase order fulfillment and service convenience. They focus on the role of consumers in co creating value in a hybrid commerce service delivery system that includes physical and virtual retail channels. Their unique insight is that the integration of product and pricing information increases information quality most significantly. They report that consumers place great importance on getting more consistent, detailed descriptions of the product they wish to purchase and expect on line stores to provide a level of information quality that is equivalent to what they experience in a physical store setting. At the same time, consumers see the integration of promotion information across retail channels as valuable in enhancing information quality. Surprisingly, integrated transaction information seems to contribute the least to enhancing information quality, according to the authors. This is unexpected, since the integration of transaction information has the potential to offer consumers a high level of personalization. Overall, the metrics that the authors have developed and the empirical modeling results they present offer us a better understanding of how most organizations should effectively design hybrid commerce service delivery systems. Operations and supply chain management research has given considerable attention to issues associated with information sharing in buyer-supplier relationships in e commerce, but this is a relatively new direction for research that also has a service science theme.

The third article, by Katia Premazzi, Sandro Castaldo, Monica Grosso, Pushkala Raman, Susan Brudvig, and Charles F. Hofacker, explores the issues associated with “Customer Information Sharing with E Vendors: The Roles of Incentives and Trust.” Self-disclosure theories suggest that consumers’ willingness to disclose personal information is based on their assessments of the related costs, risks, and benefits. This research analyzes the interaction between two strategies that, according to self-disclosure theory, can be used by firms to alter potential customers’ cost and benefit evaluations. The strategies also increase their information disclosure and affect the development of initial trust and the compensation for disclosure that occurs. Most critically, the authors measure actual disclosure behavior rather than just intention or attitude. A key finding is that subjects did not claim to be more willing to provide information in the presence of incentives, but instead their behavior indicated that they were more inclined to do so. What is more, privacy concerns, the degree of commitment to mobile services, and attitudes toward on line shopping acted like antecedents for willingness to share. Attitudinal measures, on the other hand, were not very good diagnostics for actual behavior. This work is important to service science researchers because collecting personal information from customers is necessary for understanding the efficacy of providing services to customers on line. For example, personal information is critical for understanding how on line retailing functions, and it is also necessary for understanding how personalization and other relationship-oriented service strategies should be refined to produce the highest value. Unfortunately though, the ease with which data can be acquired and disseminated across the Web, and the peculiarities of the electronic environment, have led to growing concerns from many potential customers over disclosing personal information to e service providers. This article contributes in a significant way to understanding these concerns and what reduces them. Automated service systems that involve the Web are becoming ever more common both to reduce the cost to serve as well as to enhance relationships with clients. The authors’ behavioral experiment also shows that previous attitudinal research may have seriously understated the benefits of incentives. The design and management of IT service agreements is an area of growing challenges and increasing importance in e commerce, as organizations eschew the stark choice of ‘build vs. buy’ and increasingly explore the multiple avenues along which they can build and implement cost-effective and resilient infrastructural support for their core business processes.

Manuel Resinas, Pablo Fern├índez, and Rafael Corchuelo are the authors of the final article of the special section. They discuss design issues for “Automatic Service Agreement Negotiators in Open Commerce Environments.” Their article treats the issue of how IT service agreements are established between vendors and clients before they are implemented. In this context, the authors focus on research questions that deal with service agreements from the point of view of technologies that support electronic bargaining. They describe a proposed system tool called NegoFAST, with modularized capabilities to manage the negotiation protocol and handle the coordination among the user, the system, and the other party to the negotiation (especially the party that offers the IT services under the proposed agreement). The essence of their approach involves user-defined preferences for the delivery of services under the agreement that is to be negotiated. The authors observe the importance of several key aspects of the business problem that they address–the necessity to adequately describe the terms of an agreement, address the differences between the interests of the negotiating parties, handle partial or incomplete information in a negotiation without causing the process to break down, and represent the dynamic quality of the market in the context of a negotiation. Their work is executed in the vein of design science research in the IS discipline. It includes an analysis of the necessity for a technical innovation that goes beyond the capabilities of ineffective past solutions, takes advantage of current opportunities for technological innovations, proposes a variety of new artifacts that hold out promise for creating solutions to the business problem, and finally shows the appropriateness and value of the solutions that are made possible. This is a work that the service science and e commerce design science community will read with great interest. As we conclude this project, we recognize that the research work included in this special section only scratches the surface of the issues that need to be studied. We expect enterprising future doctoral students and junior faculty to establish names for themselves by pursuing interdisciplinary research agendas in service science and e commerce. We expect them to produce rich fundamental and applied work that leverages organizational and behavioral, economics and management science, and technical and design science research approaches toward the development of new managerial knowledge for service science and e commerce. If, as our colleagues at IBM, Jim Spohrer, Paul Maglio, and others, have averred, we are truly moving to a world involving a ‘new science for services’ for organizations large and small, then the time we have spent will be a sentinel effort for what is to come. By participating in the beginning of the development of a new paradigm, we will all–authors, editors, and readers alike–have front-row seats at the ‘table of innovation.’ We know the importance of having to start ‘somewhere’ to get new ideas moving and of finding the appropriate collaborators to make some initial steps and advances in new knowledge possible. The guest editors would like to thank the editor-in-chief, Vladimir Zwass, for the vision he shared with us. He got the discussions rolling that encouraged us to bring together new research perspectives for the IS and e commerce literature related to service science. We also were fortunate to be able to assemble a highly committed group of authors whose papers were selected from among the many submissions we received. We actually had 116 articles and extended abstracts submitted on the topics of ‘Information Systems in Services’ for the Journal of Management Information Systems and ‘Service Science in Electronic Commerce’ for the International Journal of Electronic Commerce. With so many submissions reflecting the interest in these topics among scholars and practitioners in our research community, it was necessary for us to make some tough decisions as to which papers to accept for further development and which to pass back to submitting authors with indications of the work they needed to do to put themselves in a better position to contribute to the service science literature. The articles in the special section went through a four-cycle ‘review and revise’ process. We would especially like to acknowledge the anonymous reviewers, who so generously offered their time, effort, and helpful insights for us to make the hard choices and for helping us with development and constructive reviewing that led to the final products that you see in the present special section. Finally, we thank the authors, both those whose work we accepted, and those whose efforts did not permit their research to go the final distance to publication. They all were diligent and careful, and gave us private lessons along the way about what vibrant and creative research on service science in electronic commerce already looks like in the present. We look forward to the ‘next generation’ of service science submissions to IJEC and hope that future authors will build on the foundations we have established here and in our companion special section articles in the spring 2010 issue of JMIS.

INDRANIL R. BARDHAN (bardhan@utdallas.edu) is an associate professor of management information systems and accounting and information management at the University of Texas at Dallas. His research interests are in the areas of information technology valuation, business impact of information systems on supply chain and firm performance, and healthcare informatics. His research has been published in leading journals, including Information Systems Research, Journal of Management Information Systems, MIS Quarterly, Operations Research Management and Service Operations Management, Production & Operations Management, European Journal of Operations Research, Annals of Operations Research, Journal of Productivity Analysis, and Journal of the Operations Research Society of Japan. He has 10 years of management consulting experience and has advised Fortune 500 executives on information technology strategy and systems implementation.

HALUK DEMIRKAN (haluk.demirkan@asu.edu) is a clinical associate professor of information systems and a member of the research faculty of the Center for Services Leadership at the W.P. Carey School of Business at Arizona State University. He has a doctorate in information systems and operations management from the University of Florida, and his research in service science and service-oriented management and technology solutions has included recent industry-sponsored research projects with American Express, Intel, IBM, MicroStrategy, and Teradata. His research has appeared in Journal of the Association for Information Systems, European Journal of Operational Research, IEEE Transactions, Electronic Commerce Research and Applications, IS Frontiers, Communications of the ACM, Information Systems and E-Business Management, and International Journal of Services Science. He has 15 years of consulting experience in the areas of service-oriented solutions, information supply chain, business intelligence, and strategic business engineering with Fortune 100 companies. He is a recent recipient of the IBM Faculty Award for a research project titled ‘Design Science for Self-Service Systems.’

P.K. KANNAN (pkannan@rhsmith.umd.edu) is a professor of marketing at the Robert H. Smith School of Business at the University of Maryland. He is the director for the Center of Excellence in Service. His research stream focuses on new product/service development, design and pricing digital products and product lines, marketing and product development on the Internet, e service, and customer loyalty. He has received several grants from the National Science Foundation, Mellon Foundation, Science Applications International Corp., and PricewaterhouseCoopers. He has published in Marketing Science, Management Science, Journal of Marketing Research, International Journal of Electronic Commerce, and Communications of the ACM. His research won the John Little Best Paper Award (2008) and the INFORMS Society for Marketing Science Practice Prize Award (2007). He serves on the editorial boards of Marketing Science, Journal of Marketing, Journal of the Academy of Marketing Science, International Journal of Electronic Commerce, and Journal of Service Research.

ROBERT J. KAUFFMAN (rkauffman@asu.edu) is the W.P. Carey Chair in information systems at the W.P. Carey School of Business, Arizona State University, where he holds appointments in information systems, finance, supply chain, and the School of Computing and Informatics. He has served on the faculty at New York University, Minnesota, and Rochester. His research interests span the economics of IS, competitive strategy and technology, IT value, pricing, supply chain management, and theory development and empirical methods. He has published in many leading journals, and in the past five years has won outstanding research awards from the Institute of Electrical and Electronic Engineers, Association for Information Systems, Institute for Operations Research and the Management Sciences, International Conference on Electronic Commerce, and Hawaii International Conference on System Sciences.