Performance Benchmarking of Interaction Routines – Managing Trade-offs in Service Co- Creation with the Data Envelopment Analysis

The co-creation of value involving service provider and service customer is one of the most widely acknowledged properties of ‘service’. From an operations view, a central challenge is to organize the co-creation of service(s) in the most efficient way. Previous literature in supply chain management and economics is focused on developing various simulation approaches and analytical models, but takes insufficient account of the basic properties of service. The purpose of this article is to conceptualize service co-creation as performed in stable interaction routines between service providers and customers that can be purposefully designed and optimized for efficiency. We argue that finding the most efficient interaction routine is subject to solving a trade-off decision between a set of performance factors such as service quality, cost, and customer involvement. This trade-off decision can be resolved with the Data Envelopment Analysis (DEA), allowing service providers to optimize their interactions with their customers by shifting activities in the service process towards the customer, into the service provider’s front stage, or into the service provider’s back stage. We demonstrate that the proposed approach is usable in this context, discuss its theoretical properties, and suggest research directions for its further development.