《系统工程》课程教学资源（英文文献）SERVICE VALUE NETWORKS VALUE PERFORMANCE AND STRATEGY FOR THE SERVICES INDUSTRY

SERVICE VALUE NETWORKS:VALUE,PERFORMANCEAND STRATEGY FOR THE SERVICESINDUSTRYAbstractServices maybe investigated frommanyperspectives.They encapsulateover65%ofglobal business,yet many gaps in the services knowledge base exist- particularly from areas including informationtechnology, operational, customer targeting.and services provision This research investigates anemerging and truly disruptive business scenario-the service value network, from a marketing, anoperations and services approach. The service value network is defined as the flexible, dynamic,delivery of a service, or product, by a business's coordinated value chains (supply chains and demandchains working in harmony), such that a value-adding, specific, service solution is effectively, andefficiently,deliveredtotheindividualcustomerThe'physical and virtual service value network customer-business encounter model is developed.Impediments to the development of a service value networks are investigated. Eight key areas relatedto website customer encounters are offered as investigationareas.The customer'touch-points'acrossthevirtual service encounteroffersa raftof newresearchpossibilities and possible newpathways tocompetitiveadvantage.ApproachestomeasureservicenetworkencountereffectorsareexplainedCurrent and future areas ofbusiness research are described. This paper frames the research agenda forservice value networks.Keywords: Service value networks, services, web services, value, network, virtual service encounterbalanced scorecard, customer performance1.IntroductionThe services industry provides services not goods (Hughes and Mitchell et al., 1993). This industry ismoving towards globalization (Kathawala and Abdou, 2003). In 1870 the service sector employedslightly more than 20% of the U.S. workforce, whilst by 2002 it employed in approximately of82% ofthe U.S. workforce, and 81 % of the private sector GDP (US Bureau of Labor Statistics, 2002 and2004).Service Management is a'transfunctional research area (Kamarkar, 2002).It covers areasincluding service quality (Chase and Aquilano et al., 1996), services encounters (Cook and Goh, et al.1999), and service execution (Nie and Kellog 1999). Services operations management and services

SERVICE VALUE NETWORKS: VALUE, PERFORMANCE AND STRATEGY FOR THE SERVICES INDUSTRY Abstract Services may be investigated from many perspectives. They encapsulate over 65% of global business, yet many gaps in the services knowledge base exist- particularly from areas including information technology, operational, customer targeting, and services provision. This research investigates an emerging and truly disruptive business scenario-the service value network, from a marketing, an operations and services approach. The service value network is defined as the flexible, dynamic, delivery of a service, or product, by a business's coordinated value chains (supply chains and demand chains working in harmony), such that a value-adding, specific, service solution is effectively, and efficiently, delivered to the individual customer. The `physical and virtual service value network customer-business encounter model' is developed. Impediments to the development of a service value networks are investigated. Eight key areas related to website customer encounters are offered as investigation areas. The customer `touch-points' across the virtual service encounter offers a raft of new research possibilities and possible new pathways to competitive advantage. Approaches to measure service network encounter effectors are explained. Current and future areas of business research are described. This paper frames the research agenda for service value networks. Keywords: Service value networks, services, web services, value, network, virtual service encounter balanced scorecard, customer performance 1. Introduction The services industry provides services not goods (Hughes and Mitchell et al., 1993). This industry is moving towards globalization (Kathawala and Abdou, 2003). In 1870 the service sector employed slightly more than 20% of the U.S. workforce, whilst by 2002 it employed in approximately of 82% of the U.S. workforce, and 81 % of the private sector GDP (US Bureau of Labor Statistics, 2002 and 2004). Service Management is a `transfunctional' research area (Kamarkar, 2002). It covers areas including service quality (Chase and Aquilano et al., 1996), services encounters (Cook and Goh, et al., 1999), and service execution (Nie and Kellog 1999). Services operations management and services

marketingprovideotherperspectivestoservices.Definitions of service (and what constitutes a service)range from the narrow to the broad. In 1960the Definitions Committee of the American Marketing Association (1960) defined services asActivities,benefits,or satisfactionswhichareoffered forsale,orareprovided,inconnectionwiththesale of goods'.Examples ofa service include: amusements, hotel service, electric service, transportation, theservices ofbarber shops and beauty shops, repair and maintenance service, and the work ofcreditratingbureaus.Judd (1964) and Rathmell (1974) promoted the service sector of the economy, and the true nature ofservices. Murdick and Render, et al., (1990) and Quinn and Baruch, et al., (1987) broadened servicesdefinitions to include all economic activities where output was not a physical product or construction,and was usually consumed when produced, and delivered as an intangible, added value to thecustomer.forexample,travelcomfort.Againserviceswere redefined.Services are deeds, processes, and performances' (Zeithaml, Berry, et al, 1988), but they may also betangible.Czinkota and Ronkainen, et al., (2005) split services into tangible areas involving:1)people (fitnesscentres);or2) possession processing (like freight transportation), and intangible areas involving3) mental stimulus like (education and religion); and4)informationprocessing(likebanking,data processing)Often services are integrally enmeshed with manufactured goods, or to the delivering (or enabling)of goods. Thus the distinction between goods and services is imprecise, and no clear boundarybetween manufacturing and service firms exists (Berry and Parasuraman, 1991). According to Levitt(1972), There is no such thing as a service industry. There are only industries whose servicecomponents are greater or less than those ofother industries. Everybody is in service. Taken to itslogical conclusion, it could be suggested that all manufacturing is indeed a service, as it deliverssomething!Encyclopedias including Britannica, Columbia, Encarta; and dictionaries including Oxford andMacquarie, offer a range ofdefinitions of service. To meet these diversities we follow Rust andMetters (1996)'topologies’ approach to group some ofthe complexities of services down ontomodels

marketing provide other perspectives to services. Definitions of service (and what constitutes a service) range from the narrow to the broad. In 1960 the Definitions Committee of the American Marketing Association (1960) defined services as Activities, benefits , or satisfactions which are offered for sale, or are provided, in connection with the sale of goods'. Examples of a service include: amusements, hotel service, electric service, transportation, the services of barber shops and beauty shops, repair and maintenance service, and the work of credit rating bureaus. Judd (1964) and Rathmell (1974) promoted the service sector of the economy, and the true nature of services. Murdick and Render, et al., (1990) and Quinn and Baruch, et al., (1987) broadened services definitions to include all economic activities where output was not a physical product or construction, and was usually consumed when produced, and delivered as an intangible, added value to the customer.for example, travel comfort. Again services were redefined. Services are deeds, processes, and performances' (Zeithaml, Berry, et al., 1988), but they may also be tangible. Czinkota and Ronkainen, et al., (2005) split services into tangible areas involving: 1) people (fitness centres); or 2) possession processing (like freight transportation), and intangible areas involving: 3) mental stimulus like (education and religion); and 4) information processing (like banking, data processing). Often services are integrally enmeshed with manufactured goods, or to the delivering (or enabling) of goods. Thus the distinction between goods and services is imprecise, and no clear boundary between manufacturing and service firms exists (Berry and Parasuraman, 1991). According to Levitt (1972), `There is no such thing as a service industry. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.' Taken to its logical conclusion, it could be suggested that all manufacturing is indeed a service, as it delivers something! Encyclopedias including Britannica, Columbia, Encarta; and dictionaries including Oxford and Macquarie, offer a range of definitions of service. To meet these diversities we follow Rust and Metters (1996) `topologies' approach to group some of the complexities of services down onto models

2.ServiceTypologiesFrom an operations and marketing perspective topology schemes for services have generally lackedempirically tested works. Empirical works (Verma and Boyer, 2000, Akkermans and Vos, 2003, ChenandPaulraj,2004),offersomekeyexceptions,butoverallempirical servicesrelatedresearchisinitsinfancy.A topologies approach, based on recent service industry models identifies keyknowledgegaps, and establishes possible empirical research areas.3.ServiceModelsFigure 1 presents Rust and Metters (1996) view of services.They grouped service modelsas customer models (external) or service provider models (internal).Each model was then segregated, as shown in Figure 1, into two of the three models:1)customer behavior models dynamic models ofcustomer retention (like loyalty)and stochasticmodelsofcustomerbehavior(likesatisfaction),andofcustomerbehavior(likechurnrateorlossofaspecific customer during a single service encounter);2) service quality impact models'-aggregate seance models(like customer satisfactioneffects)and disaggregated models (like financial impacts of a service component);3)'normative service models'-organizationally focused marketing models'(like incentiveschemes and trade-offs between satisfaction and productivity), and operations models (like queuing)In 1999, Cook Goh and Chung developed the integrated schematic representation of services'matrix. Figure 2 displays this integrated services schematic.They recognized that services could be split into marketing (product) or operations (process)orientations. They believed that in delivering a final'customized' solution their remained a need tointe grate and interact with both orientations. They suggested research in the interaction andintegration' area may articulate strategies and tactics for improving services.Roth and Menor (2003) delivered a further addition to the services topologies. Their'service strategytriad' (displayed in Figure 3) separated the 'what, the "how, and the 'who' of service encounters. Itoffered a newperspective to advance an understanding of services operations management.Thewho'was the right customers (and not just a customer segment). These targeted customers could be definedby techniques like Forrester's 'technographics', 'psychographics, and psychographic profiling groupsofcustomers.Theinterpretationof suchtarget markets provided a means to enhance both service and performance standards, and to allow thebusiness to competitively align its chosen degree ofcustomer targeting with its offered

2. Service Typologies From an operations and marketing perspective topology schemes for services have generally lacked empirically tested works. Empirical works (Verma and Boyer, 2000, Akkermans and Vos, 2003, Chen and Paulraj, 2004), offer some key exceptions, but overall empirical services related research is in its infancy. A topologies approach, based on recent service industry models identifies key knowledge gaps, and establishes possible empirical research areas. 3. Service Models Figure 1 presents Rust and Metters (1996) view of services. They grouped service models as customer models (external) or service provider models (internal). Each model was then segregated, as shown in Figure 1, into two of the three models: 1) customer behavior models' dynamic models of customer retention (like loyalty) and stochastic models of customer behavior (like satisfaction), and of customer behavior (like churn rate or loss of a specific customer during a single service encounter); 2) service quality impact models'-aggregate séance models(like customer satisfaction effects)and disaggregated models (like financial impacts of a service component); 3)’normative service models’-organizationally focused marketing models’(like incentive schemes and trade-offs between satisfaction and productivity), and operations models (like queuing). In 1999, Cook Goh and Chung developed the integrated schematic representation of services' matrix. Figure 2 displays this integrated services schematic. They recognized that services could be split into marketing (product) or operations (process) orientations. They believed that in delivering a final `customized' solution their remained a need to integrate and interact with both orientations. They suggested research in the `interaction and integration' area may articulate strategies and tactics for improving services. Roth and Menor (2003) delivered a further addition to the services topologies. Their `service strategy triad' (displayed in Figure 3) separated the `what', the `how', and the `who' of service encounters. It offered a new perspective to advance an understanding of services operations management. The `who' was the right customers (and not just a customer segment). These targeted customers could be defined by techniques like Forrester's `technographics', `psychographics, and psychographic profiling groups of customers. The interpretation of such target markets provided a means to enhance both service and performance standards, and to allow the business to competitively align its chosen degree of customer targeting with its offered

service products and delivery systems.CustomerBehaviourModelsDynamicModelsofRetentionStochastic Models of BehaviourExternalCustomerModelsServiceQualityImpactModelsServiceAggregate ModelsModelsDisaggregate ModelsInternalServiceProviderNormative Service ModelsModelsMarketingModelsComplaint ManagementCustomerSatisfactionQuality-productivity trade-offOperationsModelsFigure1Mathematicalmodelsof serviceRothandMenoroperationallydefinedtheirservicestrategytriad'into5elements:I)thesupportingfacilities(physicalandstructuralresources),2) the facilitating goods (materials and supplies that are consumed);3)thefacilitating information (supportingthe explicit services):4)theexplicit services (customer experientialand sensualbenefits);5) the implicit services (psychological benefits).Theyrealized the total service concept by the customer, may differfrom the service offered by theserviceprovider.To overcomethis, a feedback loop (execution,assessmentofgaps, renewal)wasproposed

service products and delivery systems. Roth and Menor operationally defined their `service strategy triad' into 5 elements: 1) the supporting facilities (physical and structural resources); 2) the facilitating goods (materials and supplies that are consumed); 3) the facilitating information (supporting the explicit services); 4) the explicit services (customer experiential and sensual benefits); 5) the implicit services (psychological benefits). They realized the total service concept by the customer, may differ from the service offered by the service provider. To overcome this, a feedback loop (execution, assessment of gaps, renewal) was proposed

OrganizationalMarketing OrientatedOwnership(7)Tangibility (2)Differentiation (10)Object of service(5)-PeopleForProfit-GoodsType of Customer (11)-IndividualProduct-InstitutionalCommitment(8)Interaction andintegrationPrivateServicesNot-for-ProfitCustomization(9) QualityOperations OrientatedProcessCustomer Contact (1)Capital Intensity (4)-People-basedPublic·EquipmentbasedCustomer involvement (3ProductionProcess(12)EmploveeDirections(6)MacroViewMicroViewSocio-EconomicEnvironmentFgure2Integrated schematic of servicesRoth and Menor's'service delivery systems architecture' model, displayed in Figure 4, allows aframeworktoinvestigatethreeinterrelatedanddynamiccomponentsofservicedeliverysystems1) the strategic service design (portrayed as structural, infrastructural and integration, and basedon choicesbetween time-phased content portfolios ofmajor supply,2)the service deliveryexecution system (exemplified byprograms,policies and behavioralaspects deliver complimentary areas of customer focusl, possibly using balanced scorecardapproaches;3)the customer perceived value of the total service concept (intangibles and other effectivenessaspectsofthe service)These features, delivered upstream by the external integration ofthe service supply chaincombined with the linked internal integration of the operational functional areas, and the adaptivemechanismsavailabletotheintellectual capabilitiesprovidenewavenuestoperceivedcustomervalueHere the artificial learning and intelligence capabilities of the system, the fuzzy logic approaches toapproximate answers, and the rapid absorption of skilled human capital talents may deliver targetedboundaries which offer enhanced potential to the service encounter The assessment execution and

Roth and Menor's `service delivery systems architecture' model, displayed in Figure 4, allows a framework to investigate three interrelated and dynamic components of service delivery systems: 1) the strategic service design (portrayed as structural, infrastructural and integration, and based on choices between time-phased content portfolios of major supply; 2) the service delivery execution system (exemplified by programs, policies and behavioral aspects deliver complimentary areas of customer focus], possibly using balanced scorecard approaches; 3) the customer perceived value of the total service concept (intangibles and other effectiveness aspects of the service). These features, delivered upstream by the external integration of the service supply chain, combined with the linked internal integration of the operational functional areas, and the adaptive mechanisms available to the intellectual capabilities provide new avenues to perceived customer value. Here the artificial learning and intelligence capabilities of the system, the fuzzy logic approaches to approximate answers, and the rapid absorption ofskilled human capital talents may deliver targeted boundaries which offer enhanced potential to the service encounter. The assessment execution and

renewalfactorsencountereddefinethepotentialeffectivenessoftherealized serviceencounter.Thesechoices are the basis for forming competitive capabilities, in such strategic arenas as the Internet, themanufacturingarena, Internetmarketing,andthe servicesarea冷Target MarketWho are the rightCustomers?ServiceEncountersWhathappenswhen service andcustomermeetandinteract?Service DeliveryServiceConceptSystemDesignWhat is theproductChoicesbundle offered?Howwill servicesbe delivered?Figure3Service strategy triadThe degree of service competitive capabilities such as consistent quality, supply chainmanagement,convenience,accessibilitytochannes,customizationone-on-onecustomerizationoperationalefficiency and low costs are used by customers to make choices among competitors.The above models, when considered with other factors like customer demand-driven supplychains, the effect ofthe Internet, bus iness solutions, virtual service organizations and technologyoptions,along with their interrelated, and interconnected links, can be drawn into a newtopologymodeltermedthe'servicevaluenetworkencountermodel

renewal factors encountered define the potential effectiveness of the realized service encounter. These choices are the basis for forming competitive capabilities, in such strategic arenas as the Internet, the manufacturing arena, Internet marketing, and the services area. The degree ofservice competitive capabilities such as consistent quality, supply chain management, convenience, accessibility to channels, customization, one-on-one customerization, operational efficiency and low costs are used by customers to make choices among competitors. The above models, when considered with other factors like customer demand-driven supply chains, the effect of the Internet, business solutions, virtual service organizations and technology options, along with their interrelated, and interconnected links, can be drawn into a new topology model termed the `service value network encounter model

StrategicDesign Choices"Structural-Facilities and Layout-Technologyand EquipmentRenewal-Aggregate CapacityPlanning-Service Product-ProcessInterfacesCustomer"Infrastructural'RealizedPerceived-PeopleExecutionServiceValue of-Policies-PracticesDeliverythe Total-ProcessesSystemService-Performance SystemsConceptIntegration-OperationsOrganizationsCoordinationAssessment-Service Supply Chainsof Gaps-Integration technologies-Learning and AdaptiveMechanismsFigure4Servicedeliverysystemsarchitecture4. Service Value Network Encounter ModelThe'servicevaluenetwork encounter offerstheframeworkfora newresearchmodel This modelisdisplayed inFigure5.Theoperational, services and customer strategiesofthebusinessaredrawntogetheras interconnected data sharingmodelsdeliveringuniquecustomer services encounters-onesaiming to exceed customer expectations! This busine ss system learns from its customer encounters,and improvesitsservicesdatabaseofferingsreadyforadditionalormorespecific,customerencounters.This model meshes with:1)earlier worksabove;2)otherworks(HofmanandNovak.2000.ChenandWells.1999.BioccaandLietal..2002)3)commercialservicesbusinesssolutionsproviders(Gartner,2002,Convergent,2003);4)softwaredevelopers includingMicrosoftandIBM.Theoperations concept model' component delivers the business's latest service value-chains,networked information systems,data storage and retrieval systems.It incorporates latestweb metrics(Sterne,2002),fuzzy logic(Louvieris andDriver,2001)and artificial intelligence(Kemp and Schot etal., 1998) tools, to:1)interrogate its internal and external databases;

4. Service Value Network Encounter Model The `service value network encounter offers the framework for a new research model' This model is displayed in Figure 5. The operational, services and customer strategies of the business are drawn together as interconnected data sharing models delivering unique customer services encounters-ones aiming to exceed customer expectations! This business system learns from its customer encounters, and improves its services database offerings ready for additional, or more specific, customer encounters. This model meshes with: 1) earlier works above; 2) other works (Hoffman and Novak, 2000, Chen and Wells, 1999, Biocca and Li et al., 2002); 3) commercial services business solutions providers (Gartner, 2002, Convergent, 2003); 4) software developers including Microsoft and IBM. The `operations concept model' component delivers the business's latest service value-chains, networked information systems, data storage and retrieval systems. It incorporates latest web metrics (Sterne, 2002), fuzzy logic (Louvieris and Driver, 2001) and artificial intelligence (Kemp and Schot et al., 1998) tools, to: 1 )interrogate its internal and external databases;

2)sortandinterpretavailableinformation3) deliver customized (or personalized) solutions capable of targeting perceivedphysicalorvirtualcustomerexpectations.CustomerTargeted+PhysicalExternal1-ServiceCustomerCustomer1ServicesEncounter----→ServiceServicesConcept↑Customer--Customer--CustomerInternalVirtual111Services-1ServiceCustomerProvision-Encounter-CustomerOperationsCustomerConceptCustomerFigure5Physical&virtual servicevaluenetwork encountermodelThis'renewal and learning networked system is verydifferent to the normal rigid corecomponent'experienced innormal websiteserviceofferings(Leonard-Barton,1995).Italsoincorporateissuesrelated to failures and recovery (Miller and Craighead et al, 2000). In short, the'operations conceptmodel component delivers thehow to the service value encounter.The'services concept model component is integrated with both the operations concept modelandthecustomertargetedmodelanddeliversmulti-dimensionalinformationfromthebusinessanditsvalue adding partners, in a quality manner, such that the greater the depth of information sought, thegreater the quality, and the more realized (Mintzberg, 1978) is the customer's experience. In short, the'services concept model' component delivers the 'what' to the service value encounterThe'customer targeted model component establishes a relationship to the service being offeredintermsof itsefficiency,relevance,scopeandperformance(Srinivasanand Jagannathanetal,2002)This requires the cognition to recognize, and then target, the specific customer group. In some cases it

2) sort and interpret available information; 3) deliver customized (or personalized) solutions capable of targeting perceived physical or virtual customer expectations. This `renewal' and learning networked system is very different to the normal `rigid core component' experienced in normal website service offerings (Leonard-Barton, 1995). It also incorporate issues related to failures and recovery (Miller and Craighead et al., 2000). In short, the `operations concept model' component delivers the `how' to the service value encounter. The `services concept model' component is integrated with both the operations concept model and the customer targeted model and delivers multi-dimensional information from the business and its value adding partners, in a quality manner, such that the greater the depth of information sought, the greater the quality, and the more realized (Mintzberg, 1978) is the customer's experience. In short, the `services concept model' component delivers the `what' to the service value encounter The `customer targeted model' component establishes a relationship to the service being offered in terms of its efficiency, relevance, scope and performance (Srinivasan and Jagannathan et al., 2002). This requires the cognition to recognize, and then target, the specific customer group. In some cases it

allows fordegrees of customization (or even one-on-one'customerization'),ofthe customer serviceproduct The understanding of the target markets) remains an important consideration as it enables aviewpoint for new service development (Heskett and Sasser et al., 1990). In short, the 'customertargeted model component delivers the'what appropriately targeted to thewhom'.These three component models and their downstream areas house much of the business'sintellectual property. They remain integrally linked downstream via a modern 'service value network'Downstream business supply chain partners, logistics support, peripheral partners and other externaldata sources are interconnected and interrogated across the business integrated IT networks. Hereinternal and external data, logistics, and the like are pooled, shared, cross-model, and then applied toprovide new business systems learning, and new, improved, upstream customer solutions. Thecustomer and the business network come together at the service encounter'touch-point Thus, thebus iness aims to deliver the 'best, customer demand chain driven, customer value chain response,possible from the available value adding set ofdatabases at its disposal.The'serviceencounterhastwocomponents:1) a'physical (tangible) encounter between the customer and a business contact person orpersons;2) a'virtual (intangible) encounter with and electronic based structure, which is often visuallyconnectedviaits internalorexternalbusinesswebsite.Inbothcasesinformationflowsfromcustomerto business and business responds sourc ing relevant, allowable (non-sensitive), correct informationBusiness then delivers customer requested, value chain sourced information(in a timely flow),across the service encounter interface and through to the customer Chinese University of Hong Kongand National Sun Yat-Sen University research (Lung, 2003) indicates customers in the US buy usingmultiplechannelsincluding stores, catalogues, and on-line activities. The service value network operates acrossboth physical and information pathways and networks. It is a key part of the operations managementequation. Such viewpoints support the physical and virtual service value encounter model Sterne(2002), a world authority on web metrics, supports the notion that businesses offering both thephysical and virtualencounter options tend, in the current market to be more successful, but that bothmodelsmayalsooperateindependently.Businesses today are increasingly developing extensively networked on-line offerings, combinedwith high levels of interconnectivitybetween partners, alliances, and associated value adding

allows for degrees of customization (or even one-on-one `customerization'), of the customer service product. The understanding of the target markets) remains an important consideration as it enables a viewpoint for new service development (Heskett and Sasser et al., 1990). In short, the `customer targeted model' component delivers the `what' appropriately targeted to the `whom'. These three component models and their downstream areas house much of the business's intellectual property. They remain integrally linked downstream via a modern `service value network'. Downstream business supply chain partners, logistics support, peripheral partners and other external data sources are interconnected and interrogated across the business integrated IT networks. Here internal and external data, logistics, and the like are pooled, shared, cross-model, and then applied to provide new business systems learning, and new, improved, upstream customer solutions. The customer and the business network come together at the service encounter `touch-point' Thus, the business aims to deliver the `best', customer demand chain driven, customer value chain response, possible from the available value adding set of databases at its disposal. The `service encounter' has two components: 1) a `physical' (tangible) encounter between the customer and a business contact person or persons; 2) a `virtual' (intangible) encounter with and electronic based structure, which is often visually connected via its internal or external business website. In both cases information flows from customer to business and business responds sourcing relevant, allowable (non-sensitive), correct information. Business then delivers customer requested, value chain sourced information (in a timely flow), across the service encounter interface and through to the customer. Chinese University of Hong Kong and National Sun Yat-Sen University research (Lung, 2003) indicates customers in the US buy using multiple channels including stores, catalogues, and on-line activities. The service value network operates across both physical and information pathways and networks. It is a key part of the operations management equation. Such viewpoints support the physical and virtual service value encounter model. Sterne (2002), a world authority on web metrics, supports the notion that businesses offering both the physical and virtual encounter options tend, in the current market to be more successful, but that both models may also operate independently. Businesses today are increasingly developing extensively networked on-line offerings, combined with high levels of interconnectivity between partners, alliances, and associated value adding

organizations. In addition, they are moving their supply chains into high-tech, networked, intelligentsolutions-termed service value-chains (Barlow-Hills and Sarin, 2003). These service value-chains arenetworked and thus the service value network is a better terminology.The'servicevaluenetwork'maybedefined astheflexible,dynamic,deliveryofaservice,orproduct, by a business's coordinated value chains (supply chains and demand chains working inharmony), such that a value-adding, specific, service solution is effectively, and efficiently, deliveredto the individual customer in a physical or virtual manner.In 2003, Australia's 'business to business' and 'business to consumer e-commerce was valued at$11.3B (DI Gregorio and De Montis, 2003), and it was growing rapidly. It ranked Stn in the worldregarding its potential to use the Internet economy! At this time, thirty five percent of Australianbus inesses purchased on-line and eighty nine percent of Australian businesses were on-line. Australianbus inesses (with more than ten employees) recorded near ubiquitous Internet adoption(DI Gre gorioand De Montis, 2003). The Internet has transformed many ofAustralia's key business and agencyfunctions including services delivery, customer relationship management, organizationaladministration, supply chain management and knowledge (or data) management. In January 2004 overforty six millionweb serversworldwidewereglobally connected totheInternet,withninety sixpercent connecting with the browser Internet Explorer. Thus, for many countries like Australia theopportunity remains to deliver high-value service offerings to virtual bus iness customersThe business website offers a range ofcustomer'touch-points'. These customer encounter pointshave several performance and value effector blocks. These are displayed in the'virtual serviceencounter model, which is displayed in Figure 6. This e-service encounter environment presentsseveral potential virtual customer services related weaknesses and several points of researchincluding:1) amplification effects;2)e-services;3) the web interface,4) valuechain modeling;5) customer targeting,6)information communication technologies;7) bottleneck effects;8)business strategies

organizations. In addition, they are moving their supply chains into high-tech, networked, intelligent solutions-termed service value-chains (Barlow-Hills and Sarin, 2003). These service value-chains are networked and thus the service value network is a better terminology. The `service value network' may be defined as the flexible, dynamic, delivery of a service, or product, by a business's coordinated value chains (supply chains and demand chains working in harmony), such that a value-adding, specific, service solution is effectively, and efficiently, delivered to the individual customer in a physical or virtual manner. In 2003, Australia's `business to business' and `business to consumer' e-commerce was valued at $11.3B (DI Gregorio and De Montis, 2003), and it was growing rapidly. It ranked Stn in the world regarding its potential to use the Internet economy! At this time, thirty five percent of Australian businesses purchased on-line and eighty nine percent of Australian businesses were on-line. Australian businesses (with more than ten employees) recorded near ubiquitous Internet adoption (DI Gregorio and De Montis, 2003). The Internet has transformed many of Australia's key business and agency functions including services delivery, customer relationship management, organizational administration, supply chain management and knowledge (or data) management. In January 2004 over forty six million web servers worldwide were globally connected to the Internet, with ninety six percent connecting with the browser Internet Explorer. Thus, for many countries like Australia the opportunity remains to deliver high-value service offerings to virtual business customers. The business website offers a range of customer `touch-points'. These customer encounter points have several performance and value effector blocks. These are displayed in the `virtual service encounter model', which is displayed in Figure 6. This e-service encounter environment presents several potential virtual customer services related weaknesses and several points of research including: 1) amplification effects; 2) e-services; 3) the web interface; 4) value chain modeling; 5) customer targeting; 6) information communication technologies; 7) bottleneck effects; 8) business strategies