Flexibilization of Service Processes : Toward an Economic Optimization Model

Abstract

Although the importance of flexibility has long been recognized in the service industry, scholars and practitioners alike still struggle to express the value of flexible services in economic terms. We perceive that many service providers tend to strive for very flexible service processes no matter in which ecosystem they are embedded. They invest huge amounts of money in flexibilization projects without being able to justify their decisions in line with economic criteria. Scholars, in contrast, advise against investing as much as possible in flexibilization. Concrete recommendations, however, are missing. Especially insights into the positive economic effects of flexible service processes require more attention. Against this backdrop, we propose an economic optimization model as a first step to capture the general relationships that govern the flexibilization of service processes. The optimization model enables service providers to estimate appropriate levels of volume and functional flexibility and to select flexibilization projects accordingly. We also provide first insights into the applicability of the optimization model via a demonstration example.

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