Research On Information And Decision-making Between Service Provider And Service Outsourcer In The Service-Oriented Supply Chain

The Internet and related information technologies have recently enabled the rapid development of service-led economy and necessitated a new research area: Service Science (SS). Service Science emphasizes using fundamental science, models, theories and methods to manage the organization processes and resources of service activities, not only from the traditional service sector, but from the industry sector in so-called service-led economy environments. Traditional supply chains, which transform natural resources, raw materials and components into a generalized product are fast becoming science enriched Service-Oriented Supply Chains (SSC), in which any involved enterprise can no longer perform service activities independently. Service Outsourcing (SO) is the leading coordination method between any pair of enterprises related within the chain. The management and organization of such a Services Supply Chain presents a fundamental challenge in Service Science research.This dissertation applies the theories and approaches in Differential Equation and Stability Theory, Stochastic Process, Decision Science, Game Theory, Econometrics, and Information Security to the research on some information and decision-making issues which are encountered by Service Providers and Service Outsourcer involved in SSC when practicing strategic transformation. The dissertation includes the following parts:(1) Literature Review of Service Science, Service-Oriented Supply Chains, and Service OutsourcingBased on the backgrounds of service-led economy environments, we summarize related work in the newly developed research area of Service Science. We study the definitions, characteristics and connotations of service, generalized product, modern service sector, as well as service oriented businesses. We also recall achievements in the research of Service-Oriented Supply Chains and Service Outsourcing, indicate an outlook for future work, and present the research framework of this dissertation.(2) Whether an enterprise should outsource its service activities to a third-party service provider?This part illustrates the backgrounds of Service Outsourcing, the advantages and risks that businesses face when outsourcing service activities. It addresses the decision-making problem of service outsourcing and proposes a new group decision-making support approach to accelerate decision-makers towards reaching a consensus. An IT service outsourcing example is used to explain the implementation of such a Markov-based approach.(3) Once the service outsourcing is decided, how should the outsourcer choose and collaborate with its service provider to achieve a win-win partnership?Traditional outsourcing is transactional and aims only at lowering the cost for this activity. Therefore, service outsourcers simply compare the prices quoted to them by different service providers, and then choose the provider with the lowest price when making decisions. However, as the competition between outsourcers strengthens, along with the dependence among participants in the service-led economy environments, service outsourcing has evolved from the single aim of lowering cost to involving multiple objectives which consist not only of outsourcing cost, but profit and potential development opportunities as well. This part investigates service collaboration relationships in the Service-Oriented Supply Chain and the evolution of participants'behaviors in service outsourcing, and then analyzes the evolutionary game features of service outsourcing activity. Based on cooperative game theory and evolutionary game theory, we set up an evolutionary game model for service outsourcing, analyze its Evolutionarily Stable Strategy (ESS) in terms of Lyapunov's nonlinear stability theory, and also probe into the pricing ranges for a win-win strategy in sustainable development of service outsourcing.(4) How to strengthen risk control in the process of service outsourcing?There are many risks generated from service outsourcing, the most important of which are information release, out-of-control cost and service quality, and the delay of predefined deadline. These risks are caused by various reasons and therefore the control methods for these risks are different from each other. For example, the information security risk involved in outsourcing IT services in the Service-Oriented Supply Chain is not confined to only the involved service outsourcers and service providers, but also to some other third parties, invisible and unpredictable, such as hackers. This part addresses the security of outsourced information systems, such as databases, from the perspective of cryptology. A database encryption/decryption model is put forward, which uses the field of a record from a database as the basic encryption granularity. This style of cryptography is referred to as the Pinion-Rack (PR) encryption and decryption model, and we also present implementation issues encountered when adopting this model. The computational complexity and system performance of the PR model are also analyzed.(5) What are the factors deciding the dissemination of service quality evaluation? How does it affect collaborations between service providers and service outsourcers?Service quality is one of the key risks in service outsourcing. The quality of a service activity depends mainly on customers'perception for the sake of the intangible features of service. Customers'perception of service quality decides the dissemination of service quality evaluations. Such evaluations affect both customers'buying attitudes and buying behaviour, and therefore business profits. This part studies the dissemination of service quality evaluations and develops a model for this kind of problem based on the Epidemic Dynamics Theory. It also analyzes how the following four arguments will affect simulation results of the service quality dissemination model, which includes the transmission rate of service quality evaluations, customers'tolerance degree of bad service quality, mobility rate of customer population, and the change rate of customers having an apathetic approach to evaluation service quality to active participation in the evaluation process. Then this part further introduces Hooke's law of elasticity into the model and studies a kind of periodically changing transmission rate, puts forward a corresponding model and presents its simulation results.(6) How does product warranty time affect business profit? How to make decisions on optimal product warranty time and optimal product price?This part addresses service strategies and service costs in the Service-Oriented Supply Chain. It exemplifies the reason for studying the relationship between generalized product warranty time and product price, summarizes product failure ratio curves, and then sets up a general function of the warranty time and the warranty cost. Using product warranty time and product price as decision-making arguments and business profit as the decision-making objective, this part finally puts forward a decision-making model to solve the optimal product warranty time and optimal product price, and analyzes the decision-making processes for both service providers and service outsourcers with such a model.The main contributions of this dissertation are to:(1) Present a new group decision-making support approach for supporting service outsourcing decision-making. Prior studies in the research literature have not considered group decision preference adjustment as a continuous process and neglected its impact on group decision-making. This approach intends to address this neglected issue and is based on Markov chain models. Furthermore, we also present a new group decision weight allocation method which is shown to be more fair by taking into account both the individual decision-maker's carefulness and the differences among the individual's preference and other's preferences.(2) Set up an evolutionary game model for service outsourcing based on game theory and dynamics, give the corresponding non-linear differential equations, analyze the Evolutionarily Stable Strategy (ESS) of the model, and probe into the pricing ranges for a win-win strategy in sustainable development of service outsourcing.(3) Put forward a new database encryption/decryption model to enhance database security in outsourced information systems. Better than traditional methods using a single algorithm with long keys to acquire data confidentiality, our model, termed as the pinion-rack encryption and decryption model, uses shorter length keys and simpler algorithms to acquire better data confidentiality without incurring too much negative effect on system performance. On the other hand, our approach exclusively involves sensitive data, in order to minimize the number of necessary encryption and decryption operations, thus being likely to further lower cryptographic overload.