Value Creation in Knowledge-Intensive Service Firms

Abstract

Digital technology changes how value creation is done in firms, and reshapes how knowledge-workers conduct their work. The focus on digitalization in firms holds great promises but has, in some cases, become a source of frustration. Firms relying on knowledge work struggle to optimize the use of digital technology in the value creation processes. Improvement of the value creation processes is important because a firm’s value proposition is a direct result of the value creation processes. Through a 17 week research project, we collaborated with a shipping company and examined how their knowledge workers (charter managers) create value in interplay with digital technology. This thesis highlights how standardizable and non-standardizable resources affect the degree a company can standardize services while still meeting customer demands.We contribute to existing theory with a standardization continuum for a better understanding of where standardization is beneficial and where human interaction is needed. Decoupling the service into company resources and activities enables managers to assess where standardization of processes is needed and where the skills of knowledge workers remain superior. Only then can digital technology be used to optimize the value proposition.

Digital technology changes how value creation is done in firms, and reshapes how knowledge-workers conduct their work. The focus on digitalization in firms holds great promises but has, in some cases, become a source of frustration. Firms relying on knowledge work struggle to optimize the use of digital technology in the value creation processes. Improvement of the value creation processes is important because a firm’s value proposition is a direct result of the value creation processes. Through a 17 week research project, we collaborated with a shipping company and examined how their knowledge workers (charter managers) create value in interplay with digital technology. This thesis highlights how standardizable and non-standardizable resources affect the degree a company can standardize services while still meeting customer demands.We contribute to existing theory with a standardization continuum for a better understanding of where standardization is beneficial and where human interaction is needed. Decoupling the service into company resources and activities enables managers to assess where standardization of processes is needed and where the skills of knowledge workers remain superior. Only then can digital technology be used to optimize the value proposition.