roles and relationships

social

network i n g

open source

^{Mass es}

Periphery

(Customers)

(Prosumers)

Kernel

(Developers)

(end users)

 

value of a good. In contrast, “service” is now considered “a process of doing something for another party.” ²⁷ This service-dominant logic requires a shift on the part of businesses to viewing customers not as passive recipients of goods but as co-creators of value. This implies more than just a move from goods to services but a reframing of the purpose of the enterprise and its role in value creation. The service-dominant perspective has profoundly changed how organizations think about their relationships with their customers—“the crowds”—and how they leverage them and their resources. This shift in perspective greatly challenges traditional methods of system development.

Traditionally, system analysts are trained to focus on the “value propositions” of firms, not on “value co-creation.” At best, “co-production” with

customers has been used in such design methodologies as Joint Product Design, Joint Application Design, Rapid Application Development, and, more recently, agile methods in which customer requirements are solicited and modeled through an iterative process that incorporates immediate customer feedback. But this still reflects a goods-dominant logic. Product-focused and goods-focused design treats customers as isolated entities—recipients of value—neglecting the customers’ own resources and networks for dynamic collaborative value co-creation. Service-dominant design, on the other hand, considers resource integration from various entities, including customers and firms and their suppliers and networks, for value co-creation. ⁶ Examples of co-creation have emerged, from OSS to Wikipedia, Facebook, Amazon’s Me-

chanical Turk, and many other community-based service systems (CBSSs). ¹⁵ Each is a complex software-intensive or software-enabled system co-created by its participants—the crowds. ⁴

Our existing models of software and system development are of little help in understanding and managing this new form of value co-creation. The older models all contain a “closed world” assumption—that projects have dedicated finite resources, management “manages” these resources, requirements are known, and systems are developed, tested, and released in planned increments. However, these assumptions all break down in a crowdsourced world.

Here, we offer a set of principles on which a new system-development model—more appropriate for the service-dominant, crowdsourced world—