Virtual Customer Environments: IT-Enabled Customer Co-innovation and Value Co-creation - Information Technology and Product Development - page 105

design and prototyping centers and enhance the richness of customers' interactions
with one another and with the company (Nambisan, 2002; Sawhney, Verona, &
Prandelli, 2005).
The strategic importance of such initiatives to co-opt customer competencies for
value creation has become very clear (Prahalad & Ramaswamy, 2003; Thomke &
von Hippel, 2002; Vargo & Lusch, 2004). Evidence from companies such as Audi,
Ducati, Microsoft, Nokia, and Adidas-Salomon suggests that customer participa-
tion in VCEs offers important innovation-related benefits to the companies that
host them (Fuller, Bartl, & Muhlbacher, 2006; Jeppesen & Molin, 2003; Verona,
Prandelli, & Sawhney, 2006). By interacting with customers, for example, Nokia
has been able to tap into innovative design concepts. Similarly, Volvo has been
able to accelerate product development by involving customers in virtual product
concept tests. Microsoft, meantime, has realized considerable savings by embrac-
ing “expert” customers as partners in providing product support services to other
customers. Such advantages, combined with the availability of powerful and inex-
pensive information technologies, help explain the rapid growth of VCE initiatives
in both the United States and Europe.
Given such potential to derive benefits and the increasing investments made
in VCEs, it is imperative that companies develop a deeper understanding of the
design and deployment of VCEs. This chapter provides an introduction to the
different research themes and issues that arise from the emergence of VCEs.
Specifically, four broad set of research issues assume importance and will be
discussed here.
First, what are the specific ways in which customers can partner with companies
in VCEs for innovation and value creation? In other words, what are the differ-
ent customer co-innovation and value co-creation roles that are enabled by IT?
A clear understanding of these customer co-innovation roles could help organiza-
tions deploy specific organizational mechanisms to integrate the roles with internal
product-development systems and processes.
Second, while the benefits to hosting companies from VCEs are clear, another,
closely related issue has received far less attention: Why do customers participate
voluntarily in innovation and value-creation activities in VCEs?
Identifying the motivating factors - the actual or anticipated benefits to cus-
tomers from participating in VCEs - is crucial from the point of view of designing
such online forums so as to be maximally appealing to potential contributors. The
broader related question of “why individuals help other individuals” through their
participation in electronic networks has been examined before in the context of
open source communities (e.g., Lakhani & von Hippel, 2003; Hertel, Niedner, &
Hermann, 2003) and communities of practice (e.g., Constant, Sproull, & Kiesler,
1996; Wasko & Faraj, 2005). However, unlike both open source communities
and communities of practice, the customer-firm relationships that underlie the
VCE context raise unique issues and implications related to customer participation
in VCEs.
Third, recent research has suggested the importance of understanding customers'
value co-creation experience (Prahalad & Ramaswamy, 2003) as such customer