Co-creation Mechanisms in Digital Service Supply Chains: A Performance Measurement Approach

Abstract

Performance measures are effective in managing supplier–buyer relationships; although, there is limited performance measurement research examining co-creation mechanisms within a digital service context. This chapter aims to elucidate co-creation mechanisms in performance measurements in supply chains formed around digital services. The empirical evidence is based on a case study conducted at a small, rapidly growing information technology company that provides digital services. Data were collected through focus groups, interviews, and participant observation during meetings. The results revealed three main factors that characterize the co-creation mechanisms in performance measurement: the importance of acknowledging the position in the supply chain, the dynamics between parties, and the subjectivity of performance measurement information. Specifically, position in the digital service supply chain defines the expected co-creation mechanisms in performance measurement. The supplier drives co-creation mechanisms in performance measurements because of the buyer’s enablement and initiation. This reflects the dynamics between the parties and influences buyers’ propensity to contribute resources to increasing suppliers’ understanding of the customer. Finally, subjectivity in performance measurement shapes the co-creation mechanisms between the supplier and other parties in the digital service supply chain. Managers should consider position in the supply chain because it determines the mechanisms and levels of co-creation.