Improving PSS Costing based on Customer Integration

A company's economic survivability depends on the trust customers have into the company and its offered solutions. Consequently a company tries to act as a trustworthiness business partner. A difficult task, when customers cannot check the outcome and quality of an offered solution. Especially for Product Service Systems (PSS), the service part represents such an intangible performance, which cannot be used and verified by customers before consumption. Consequently, customers must trust a company's promised performance quality before they can experience the service. Service production always involves the customer into the service provision process, as the value is co-created. That is why, the service provider´s performance and thus its service production costs rely trusting a customer´s input. As trust plays such an important role we integrate it into service costing. In our work we present and evaluate a risk-based costing approach for PSS. The benefit of our cost model is to include risk factors associated with the trustworthiness of customer input. Our contribution to service science is the computation of service costs by the extension of standard Time-Driven Activity-Based Costing (TDABC) including the expected loss due to customer input. In our work we demonstrate the successful inclusion of trust-based risk factors into service costing to improve service cost management in the context of PSS.