Reliability and validity evaluations and other remarks

The terms reliability and validity describe issues involved in evaluating the quality of measurements.

5.3.1 Reliability

Reliability is concerned with questions of stability and consistency or the extent to which a measurement does not contain random error — is the measurement measuring ‘something’ consistently and dependably? Is the measurement repeatable? (Ketokivi 2015:97; Metsämuronen 2009:74). Empirically, reliability can be analysed using various methods, such as test-retest reliability or the internal consistency method, where the same argument is tested by many indicators.

This research applies the internal consistency method. The reliability of the research results has been analysed and tested by questionnaires and supported by in-depth interviews and financial analyses, as well as service companies’

operational actions and performance analysis. All these results are in alignment and support the summarized results.

5.3.2 Validity

Measurement validity refers to the congruence or ‘goodness of fit’ between an operational definition of measurement and the concept it is purported to measure (Singleton & Straits 2005:131). There are two methods of validity assessment based on the subjective evaluation of an operational definition: face validity and content validity. Face validity refers simply to a personal judgement that an operational definition appears, on the face of it, to measure the concept that it is intended to measure (Singleton & Straits 2005:138). In this survey, the

researcher’s long business experience of the service business constructs the validity of the research scope and content. Also, during the research, representatives of both customer and service companies have been interviewed face to face. These documented discussions have given strong support to the conclusions of the research results.

Content validity concerns the extent to which a measure adequately represents all facets of a concept (Singleton & Straits 2005:139). Content validity can be sub-divided into construct validity, criterion or criterion-oriented validity and concurrent validity (Metsämuuronen 2009:2009–2010). The survey applied the concurrent validity method — for example, many questions were asked and evaluated among different target groups (customers, service industry and service companies). The evaluation measurements were the same. The following questions are given as examples:

- Are there conflicts between customers’ and service providers’ targets?

- How can win-win positions between service providers and customers be created?

- What is the role of the authorities?

- What are the future service models and needs?

- What are the critical success enablers for industrial service companies?

- How can service company SCA be created?

- Is the service company part of an energy group — what are the influences?

The strong validity of the research measurements is created by the above-described concurrent content method and supported by the face validity method.

In addition, during the research project a sub-project for the Electricity Research Pool was carried out related to the topics of this study (Kontu et al. 2018). The steering committee of this project was nominated by six service company managers responsible for their service function either in customer or service provider companies. They actively controlled the validity of the project related to empirical experiences and gave advice and remarks to ensure the validity of this sub-project.

5.4.3 Other remarks

The three research hypotheses were presented in the section 1.5. The research resulted following comments on these as follows:

H1: The surveyed service companies have no differentiation strategy; their businesses are low-profit and compete on price, and SCA has not been achieved.

This hypothesis was the fact as has reported in the results (see section 4.4 and4.7.1 D), investments on service development is very limited in the industry and so very limited differentiation activities have not developed and executed.

H2: Customers and service providers have different CA targets, giving rise to conflict.

This is just a partly truth, operational and quality targets are the same both by customers and service providers, but some conflicts in financial target, which is natural in an open market position (see section 4.7.2).

H3: A sustainable win-win situation can be co-created by service providers and customers.

This is also the fact, but partners (customer – service provider) do not know each other’s value chains and there is great efficiency potential to achieve through total service process value chain (see the section 2.3.3). Partners have interested in this approach.

The research made the following other findings and observations through interviews, questionnaires, data collection and their analysis of the studied industrial service business: adequate liquidity/solvency resources from owners is required for project guarantees and better cash management; changes in ownership have had little effect on businesses; more market-based thinking is required: service companies connected to energy groups restrict the development of the total service market, which is still partly captive; innovation incentives in the regulation model do not create the motivation for new service development;

the surveyed businesses anticipate that digitalization/IoT will improve processes and services, but there are currently limited resources/investments; both customers and service companies expect more business consolidations. Moreover, disturbance resource reservation systems/contracts need to be discussed and customer service companies’ co-operation improved. Project and service businesses have different business models and drivers. Some service companies have selected which to concentrate on. Can both be selected?