Abstract: Service innovations are central concerns in fast
changing environment. Due to the fitness in customer demands and
advances in information technologies (IT) in service management, an
expanded conceptualization of e-service innovation is required.
Specially, innovation practices have become increasingly more
challenging, driving managers to employ a different open innovation
model to maintain competitive advantages. At the same time, firms
need to interact with external and internal customers in innovative
environments, like the open innovation networks, to co-create values.
Based on these issues, an important conceptual framework of e-service
innovation is developed. This paper aims to examine the contributing
factors on e-service innovation and firm performance, including
financial and non-financial aspects. The study concludes by showing
how e-service innovation will play a significant role in growing the
overall values of the firm. The discussion and conclusion will lead to a
stronger understanding of e-service innovation and co-creating values
with customers within open innovation networks.