IT ENABLED SERVICE INNOVATION: STRATEGIES FOR FIRM PERFORMANCE

Abstract

This dissertation seeks to understand firm strategies and implications for sustainability and success in the context of IT-enabled service innovations.

The first essay examines how business models evolve to influence the financial sustainability and maturity of health information exchanges (HIE), a new organizational form in the United States healthcare landscape to facilitate electronic health information sharing across multiple stakeholders such as hospitals, doctors, laboratories, and patients. The study focusses on two components of business models of HIEs: the customer value proposition that is manifested through three categories of service offerings (e.g., foundational, vendor driven and advanced), and two revenue model approaches to earn profits (e.g., subscription and transaction-based revenues models). Using an unique archival data set constructed from surveys of HIEs in the US from 2008 to 2010 for empirical analysis; we find that foundational IT enabled service offerings have higher positive influence on operational maturity and financial sustainability, compared to vendor driven or advanced service offerings. Further, findings show subscription-based revenue models are more advantageous for sustainability in early stages, while transaction-based revenue models lead to higher operational maturity in later stages.

The second essay investigates how two dimensions of IT enabled service augmentation, i.e., value added service and customer care, interplay with core services to influence customer satisfaction with cell phone services in base-of-the-pyramid (BOP) markets. Arguing for price- and relational- evaluations, we develop hypotheses for a substitution effect of value added services, and a complementary effect of customer care, on the relationship between core service and customer satisfaction. Specific to the BOP market context, we further proposed a differentiated influence of service augmentation for different categories of providers based on their institutional contexts and investment strategies. We empirically examine and find support for the hypothesized relationships using an archival data set from surveys of over 3,400 cell phone customers across 34 providers in seven South Asian countries.

The two studies contribute to existing literature in exploring the factors associated with firm performance, and derive managerial implications to effectively manage and profit from IT enabled service innovations. Overall, the dissertation has research and practice implications to gain an understanding of the appropriate strategies to increase firm performance in the context of IT enabled service innovations.