Digitization makes ‘service’ visible

In one of my previous posts, I wrote how service-dominant (S-D) logic enables us to see that it’s really all about service, and also that what we are witnessing nowadays is not so much a services revolution but a service realization. How has the world changed then? And what is it that enables us to see service-for-service exchange more clearly today?

One of the main reasons for the service realization is the evolution of technology, and digitization in particular. In his book Richard Normann [1] talks about dematerilization, i.e. how digital technology is enabling the separation of knowledge and information from the constrains of the physical world. This does not of course mean that information will flow without any physical objects − on the contrary, complex infrastructure is needed but once the infrastructure is in place information is able, at least in principle, to travel with infinite speed and to exist everywhere in real time. Hence, the tremendous impact of technology is in its ability to loosen constraints and by doing so to increase density for value co-creation by making more resources available anytime and anywhere. In S-D logic’s terms digitization enables service (applying knowledge and skills for the benefit of others) to break free from the physical service vehicles that were needed before to support service provision [2].

So what does all this mean in practice? Last time I gave you an example of how, based on the traditional logic, me telling you my thoughts face-to-face or via a book changes the nature of my ‘offering’ from a service to a product. S-D logic, however, would actually argue that I am applying my knowledge for somebody elses benefit, i.e. providing service, in both cases. This service it can be provided either directly or indirectly (through a tangible object).

This example was okay, but not really what I did, right? Instead of telling you my thoughts in person or through a printed book, I digitized them. Basically this meant that I wrote my thoughts down in a Word document with my laptop and published them at our blog. I could also have shared them differently, e.g. record a video of me telling this and posting it somewhere in the Internet. If we are looking at all this from the traditional viewpoint and trying to determine whether we are talking about products or services things get complicated. The blog and its contents or the video would probably be considered as intangible (you can’t really touch them) and due to this characterized as a service. However in order to access these “services” you need to have some kind of a tangible device with an internet connection (to put it very simple). Due to the digital nature of my service (my thoughts in the blog), it is not constrained in a single tangible object, e.g. a specific computer, but accessible through numerous different tangible devices. Hence, digitization enables us to see the direct-indirect continuum of service more clearly and makes it unnecessary to divide the world into outputs called products and services.

References:

[1] Normann, R. (2001) Reframing Business: When the map changes the Landscape, Chichester, England: Wiley.
[2] Lusch, R.F., Vargo, S.L. & O’Brien, M. (2011) Competing through service: Insights from service-dominant logic. Journal of Retailing, 83 (1), 5-18.