272 Int. J. Services Technology and Management, Vol. Copyright © 2009 Inderscience Enterprises Ltd. Improving service quality and productivity: exploring the digital connections scaling model Cheng Hsu* Decision Sciences and Engineering Systems, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA E-mail: hsuc@rpi.edu *Corresponding author James C. Spohrer Service Research, IBM Almaden Research Center, 650 Harry Road, San Jose, CA 95120-6099, USA E-mail: spohrer@almaden.ibm.com Abstract: The basic model argues that Digital Connections Scaling (DCS) of customers, providers and/or resources is a fundamental way to reduce service cycle time and transaction cost, and thereby to improve service quality and productivity. Digitisation makes entities connectable, and scaling decreases the marginal cost for the customer and the provider to cocreate new values. Three types of economies of DCS are postulated: the accumulation effect, the networking effect and the ecosystem effect on facilitating value propositions and cocreation. The paper also presents enterprise engineering principles, new micro-economic production functions, and an extended cyber-infrastructure model to substantriate DCS. Keywords: service science; service quality and productivity; digital connections; enterprise engineering; cyber-infrastructure; production function for extended enterprises. Reference to this paper should be made as follows: Hsu, C. and Spohrer, J.C. (2009) ‘Improving service quality and productivity: exploring the digital connections scaling model’, Int. J. Services Technology and Management, Vol. Biographical notes: Cheng Hsu earned his PhD and MS from the Ohio State University, and BS from Tunghai University in Taiwan. He is a Professor of Decision Sciences and Engineering Systems, and a Professor of Information Technology at Rensselaer. His current research is concerned with service science and innovation in knowledge-based economies. His past research covers information integration and enterprise engineering for e-business and manufacturing. James C. Spohrer earned his PhD and MS from Yale, and BS from MIT. He is the director for service research at IBM Almaden Research Center. He has been instrumental to IBM’s initiative on Service Science, Management,