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Technique to measure value co-creation opportunity using prioritized drivers in a B2B outsourced contract

IP.com Disclosure Number: IPCOM000214697D
Publication Date: 2012-Feb-03
Document File: 8 page(s) / 1M

Publishing Venue

The IP.com Prior Art Database


Disclosed is a technique to measure the value co-creation opportunity in service delivery by prioritizing the value drivers. This technique helps determine which drivers of value a service provider and a client should collaborate upon for value co-creation to improve the overall value in the relationship.

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Technique to measure value co-creation opportunity using prioritized drivers in a B 2B outsourced contract

In Business to Business (B2B) IT outsourcing contracts service providers have to demonstrate value continuously to their clients to retain client loyalty. This process of jointly creating value is termed value co-creation [1]. This publication presents a new technique to identify the opportunities for value co-creation in a IT enabled B2B services contract. We illustrate this technique by applying it to the IT Helpdesk service.

  While there has been some work done on value co- creation in services, no one has attempted to quantify the process of value co-creation by the service provider and client on the basis of their priorities and the parameters or value drivers it depends on.

   The process starts with defining and documenting the value metrics from both supplier and client point of view. Groonos [2] defines value facilitation, value co-creation, and sole value creation (or value realization) as the three main phases in the value generating process. Based on this we propose Supplier Capability, Strategic Alignment and Client Capability as the criteria for value co-creation in B2B services.

  We build a hierarchy of the input metrics to identify the value drivers. The value drivers are classified under each value criteria. The criteria for value and drivers are prioritized on their level of importance. One can use any of the Multi Criteria Decision Analysis (MCDA) tools that are available. For our study, we applied the Analytic Hierarchy Process (AHP) proposed by Saaty, T.L. [3] We next map the drivers to the (outcome) value measures and estimate the expected value outcome by adding the overall priority of the value drivers. We derived the expected value measures for the suppliers and client separately. The expectation gap is the difference between the priorities allocated by the client and those allocated by the suppliers.

Next we assess the current practices of value drivers and estimate the practiced value measures. Opportunity to co-create value is the difference between the value measures expected by the stakeholders and value measures that are in actual practice. If this value is positive, then opportunity exists for value co-creation. On the other hand, if the difference is negative, the relationship is already in a mature state and co-creating value.

  The value outcomes in B2B services are defined as Transactional Value (lower end), Business value (middle), and Strategic value (higher end) in line with value spectrum stated by Moller, K, Torronen P.[5] While priorities are driven by strategies they are highly influenced by feelings and emotions and AHP could be an appropriate methodology to assess relative importance of drivers using multi-criteria decision making tool for value co-creation.

Example: value co-creation in Helpdesk Service

  For our pilot study, we concentrated on the IT Helpdesk service provided by IBM, Ind...