presentation on similarities and differences in business and operating model between customized information services for consumer or individual preferences, and those for firm or organizational needs.
RSA Conference Exhibitor List 2024 - Exhibitors Data
Robbins Mass Cusotmization in b2 b information services-2011
1. Is Mass Customization and
Personalization in Business-to-
Business Services Different?
Lessons and Implications from the
Evolution of the Information Services
Industry
Jane Robbins, PhD
McGuire Center for Entrepreneurship/Eller College of Management
2. From a mass customization and
personalization standpoint, are business-
to-business services different from those
aimed at the retail or individual market?
• Value proposition?
• Value creation model?
• Operating model?
• Potential to expand in scale or scope?
McGuire Center for Entrepreneurship/Eller College of Management
3. Using the case of information to
examine differentiation questions
• Whether serving strategic business objectives is
operationally different from serving individual
user preferences
• Whether high-value-added business-to-business
services implies a more nuanced view of what it
means to mass-customize, personalize, and
engage in open innovation to co-create value
– And what the risks are to those who seek to bridge
both worlds
4. Information as the ultimate user-
customized product
• Consider the Sunday paper
– Various concepts of use value
– Early electronic versions sought to maintain this flexibility
in preferences
• Allows us to unpack variables that characterize most
service-embedded products that lend themselves to
mass customization and personalization for individuals
• These variables in turn allow distinction between
– true co-creation of value and user-generated value from
modification or participation, or: co-production v. co-
creation (Vargo and Lusch 2008)
McGuire Center for Entrepreneurship/Eller College of Management
5. Analysis of information services industry from early
days of knowledge economy suggests that:
• Products and services mass-customized and
personalized for businesses and individuals
share some characteristics, but not others,
particularly in value creation process.
• Firms seeking to develop and provide
sustainable services for business should be
cautious about emulating firms providing
direct-to-consumer services.
McGuire Center for Entrepreneurship/Eller College of Management
6. Third-party
revenue
generation
(advertisers,
data buyers)
Product/Service
• News, data
• Social media
• Downloads
• Customized
design
I
N
T
E
R
M
E
D
I
A
R
Y
Users:
linked
or not
• Store
• Broker
• Distributor
• Internet platform/
interface
Business to Consumer: “Retail” or Individual
-Primary transaction relationship
-Knowledge source/flow (indirect)
-Secondary/potential transaction
relationship
7. Key related factors in MCPC of Individual-user
Services
Factor Description
Mediation Potential to distribute through many, and
competing channels, inc. secondary links.
Potentially diluting.
The platform is
the product.
Inputs and outputs fixed, often
technological. User may be
indifferent/loosely coupled to provider.
Loyalty may be low.
All value is
present/short-
term value.
No or minimal investment value for the
future (Shapiro and Hahn). Preferences
change. Applies to advertisers as well users
Competition Entry and branding costs low, particularly
in services built around “community”
(Mangelsdorf 2009); maintaining users
could be costly.
Ownership and
control
Provider ownership and/or control of
value; content loses value quickly; public
8. Do each of these variables apply when users are
the collective of a business rather than an
individual? Are there others that apply only to
business services?
• Content
• Bundling/unbundling
• Modularity
• Individual preference or taste
• Externality
• Simple exchange relationship (inc. through intermediaries)
• Single-consumer marketing/distribution—the universal
“one”
McGuire Center for Entrepreneurship/Eller College of Management
9. Case study of the electronic information services
industry, 1970-2005, with focus on financial and
energy market information
• Transitioned from
– technology-driven to content-driven and
technology-enabled
– provider-focused to user-focused; function-
specific to strategic
– Time charges to service charges (including value
pricing)
– commodity product to high-value-added product,
including customized and custom
McGuire Center for Entrepreneurship/Eller College of Management
14. Key related factors in MCPC of Business-to-
Business Services
Factor Description
Direct/
unmediated
Computer-to-computer; principal to principal
Inputs and outputs
are cognitive
Expert knowledge on both sides, merged to
achieve a vision (usually of provider for client
market) for improved decisions or solutions
The platform is the
foundation of a
relationship.
Expertise of “provider” is matched to firm need
and firm expertise. Conversion process is shared,
but managed primarily by provider.
All value is shared
and cumulative .
Investment by both parties into their futures,
creating bilateral wealth (increased performance):
profits, learning, competitive advantage for both
Competition limited
by reputation/skills
Entry and branding costs high; loyalty high and
switching costs high.
Ownership and
control
Each maintains ownership of own contributions.
Exclusive, perfect confidentiality.
15. Differences in inputs, conversion
process, and outputs
Business-to-Business
• High level of trust
• complex info-sharing for true co-
creation
• Based on need/problem:
performance improvement
• Content expertise from both
parties—extended
complementarity of assets
• Non-mediated distribution
• Security, privacy
• True custom possible
• Wealth creation for both parties;
cumulative
• Loyalty; high switching costs
Business-to-Consumer/individual
• Unimportant or negative trust
• information flow uni-directional
• Based on preferences/want
• Content expertise on one, usually
distribution side
• Mediated distribution
• Public
• Customization within mediation
framework
• Wealth creation for mediating
party; speculative for advertisers;
loses value quickly
• Fickleness; switching costs may be
low
McGuire Center for Entrepreneurship/Eller College of Management
17. A Virtuous Value Cycle
Trust/
relationship
Shared
expertise
Co-creation
Learning,
Improved
Performance
Innovation in
Partner
operations
McGuire Center for Entrepreneurship/Eller College of Management
18. Opportunities in Professional and
Intangible Services
• Professional services and software, esp. in specialized legal,
financial, and consulting practice areas
– Product development; compliance; performance optimization
– Dynamic analysis of client operations/cases
• Medicine and Science
– Product and solution development (without mergers). Trust
issues.
– Closer organized patient involvement in research and practice
• Higher education
– co-creation of custom curriculum and/or individualized
curriculum within universities; instructional technologies,
learning systems. Very large opportunity here if trust issues can
be overcome.
McGuire Center for Entrepreneurship/Eller College of Management
19. Cautions to firms that seek to provide business-
to-business information services
• Brand or reputation in a technological or data area
alone no substitute for domain-specific expertise in
client’s market; expertise is a high barrier to entry that
$ can’t overcome
• Initial growth takes time, but word-of-mouth spurs
scaling when reputation established
– Trust, mutual respect
– Educational sale
• Niche; acquisitions and scope expansion to reach large
size. Offset by highly profitable, recession-proof.
• Ethics/reputation capital essential; cannot deviate from
mission
McGuire Center for Entrepreneurship/Eller College of Management
20. Questions for the future
• Are business-to-consumer markets beginning to
experience pressure from third parties for more
biz-to-biz characteristics, creating strategic
tension, business model risk, and increased
costs?
• Will we see acquisitions by owners of information
platforms of professional service firms in order to
gain expertise? Mergers?
• In what other sectors might the business-to-
business service model be applicable?
McGuire Center for Entrepreneurship/Eller College of Management