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IPAS Deliverable I15.6

Review of Service Design Methods Version 0.5

Peter J Wild This report should be cited as Wild, P.J. (2007) Review of Service Design Approaches. IPAS Deliverable I15.6 Report, University of Cambridge, Cambridge. Minor updates undertaken in June 2009

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CONTENTS
CONTENTS .................................................................................................................. 2 1 INTRODUCTION..................................................................................................... 3 2 SOME SERVICE MODELLING AND DESIGN APPROACHES ..................... 4 2.1 SERVICE BLUEPRINTING .................................................................................... 4 2.1.1 Components of Contemporary Service Blueprinting .................................. 5 2.1.2 Applications of Blueprinting ....................................................................... 6 2.2 FUNCTIONAL PRODUCTS .................................................................................... 8 2.3 PRODUCT SERVICE SYSTEMS ............................................................................. 10 2.4 THE JOURNEY TO THE INTERFACE ..................................................................... 11 2.4.1 Measurements & Qualities. ......................................................................... 11 2.4.2 Design Techniques ...................................................................................... 12 3 PHASES OF SERVICE DEVELOPMENT ........................................................... 14 3.1 INTRODUCTION................................................................................................... 14 4 MISCELLANEOUS APPROACHES ..................................................................... 16 4.1 HOLLINS TIPS FOR SERVICE DESIGN................................................................ 16 4.2 SMART SERVICES ............................................................................................... 16 4.2.1 Embedded Innovator ................................................................................... 17 4.2.2 Solutionist .................................................................................................... 17 4.2.3 Aggregator .................................................................................................. 17 4.2.4 Synergist ...................................................................................................... 18 4.3 ORGANISATIONAL ISSUES .................................................................................. 18 4.3.1 Traits of Successful projects ........................................................................ 19 5 SUMMARY AND CONCLUSIONS ....................................................................... 21 REFERENCES ............................................................................................................. 22

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1 INTRODUCTION
A number of authors have written explicitly about methods for the design of services (e.g. Alonso-Rasgado et al. 2004b, Morelli 2006b); there are modelling approaches developed that are explicitly associated with services (Polonsky and Garma 2006, Shostack 1982); and others have adapted and merged existing approaches such as personas into a service design approach (Parker and Heapy 2006). This report surveys a number of such methods / methodologies for the design of services. In section 2, we present a number of service-design approaches. We cover the Service Blueprinting and work on approaches such as Functional Products (AlonsoRasgado and Thompson 2007, Alonso-Rasgado et al. 2004b), Product Service Systems (McAloone 2006, Morelli 2006a); and Journey to the Interface (Parker and Heapy 2006). After this in section 3, we consider how a number of service design methodologies compare against different stages of the V model. Finally, in section 5 we report on a number of miscellaneous issues, such as Allmendinger and Lombreglias notion of Smart Services (2005); Hollins guidance on service design (Hollins 2006), and some consideration of the organisational factors that support service development (de Jong and Vermeulen 2003, Edgett 1994).

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2 SOME SERVICE APPROACHES

2.1 SERVICE BLUEPRINTING

MODELLING

AND

DESIGN

Service Blueprinting was an approach developed by G. Lynn Shostack (Shostack 1984). Her 1984 paper discussed the basic principles with the intention of encouraging thoughtful enquiry and further research (p. 58). Later publications have refined the work (Kingman-Brundage 1989 Bitner et al. 2007 Flie and Kleinaltenkamp 2004, Sutton and Klien 2003). 1 Service Blueprinting is described in a number of services marketing textbooks; and has been elaborated in Flie and Kleinaltenkamp (2004) and Bitner et al. (1992). Shostacks work was motivated to identify and represent service functions; benefits; standards and tolerances. An example blueprint can be seen in Figure 1.

Figure 1:- An Example Blueprint (from Shostack 1984, p. 59)

In Figure 1 we see a number of elements that recur across all forms of service blueprinting. Temporal order Timings

Both Shostack and Kingman-Brundage remain elusive, having neither a current affiliation or website. Getting hold of Kingman-Brundages work is also difficult.

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The Line of visibility

Since Shostacks original work there has been evolution of Service Blueprinting. Flie and Kleinaltenkamp (Flie and Kleinaltenkamp 2004, p. 396-8) note three major stages in the development of Blueprinting. The first stage of Service Blueprintings development combined the customers view with the service providers view allowing the identification of: 1) customer contact points; 2) the line of visibility; and 3) time and cost information. The application of Service Blueprinting increased effectiveness by: integrating the supplier and customer views and actions; establishing time frames; analysing profitability; training employees; modifying service processes; and in creating new services. The second stage of Blueprintings development was concerned with visualising the organisational structure, such as different employees and departments. These developments helped to identify: 1) pitfalls of internal coordination; 2) repeated actions; 3) costly actions; and 4) showing sources of transaction costs. The third stage of Blueprintings development was concerned with introducing new lines that represent: interaction; visibility; internal interaction and implementation. 2.1.1 COMPONENTS OF CONTEMPORARY SERVICE BLUEPRINTING Customer Actions Onstage Contact (employee actions) Backstage Contact (employee actions) Support Processes Physical Evidence

Bitner et al. (2007) describe blueprinting as being composed of five key features

Depending on the flavour of blueprinting used, there are a number of lines of interaction. Shostacks original form included just one, Bitner list three and Flie and Kleinaltenkamp (2004), a further two. The five forms are outlined below. Line of Interaction: separates customer and supplier interaction. Line of Visibility: denotes what customers see. Line of Internal Interaction: separates front and back office capabilities. Line of order penetration: separates activities that are independent and dependent on customers. Line of implementation: separates planning, management, control, and support activities.

Flie and Kleinaltenkamp (2004) provide an example blueprint for that makes use of these lines. Figure 2 replicates this.

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Figure 2:- Blueprint of a simplified process for acquisition (from Flie and Kleinaltenkamp 2004, figure 3)

2.1.2

APPLICATIONS OF BLUEPRINTING

Blueprinting has been adopted within the marketing and engineering communities (Boughnim and Yannou 2005). There has been some application outside of these fields (Flie and Kleinaltenkamp 2004, Polonsky and Garma 2006) The following papers report on the use of Blueprinting:
Bitner, M.J., Ostrom, A.L., and Morgan, F.N. (2007) Service Blueprinting: A Practical Tool for Service Innovation. Innovation in Services Conference, Berkeley, April 26-28. Boughnim, N., and Yannou, B. (2005) Using Blueprinting Method for Developing Product-Service Systems. ICED05, 15th International Conference on Engineering Design, Melbourne, August 15-18. Flie, S., and Kleinaltenkamp, M. (2004) Blueprinting the service company: Managing service processes efficiently. Journal of Business Research, 57 (4), pp. 392-404. Kingman-Brundage, J. (1989) The ABC's of service system Blueprinting: Designing a winning service strategy. Proceedings of the 7th annual Services Marketing Conference, Kingman-Brundage, J. (1992) The ABCs of service system blueprinting. Lovelock, C. (Ed.) Managing services: Marketing, operation sand human resources. Prentice-Hall. pp. 96-102. Laws, E. (1998) Conceptualizing visitor satisfaction management in heritage settings: an exploratory blueprinting analysis of Leeds Castle, Kent. Tourism Management, 19 (6), pp. 545-554. Morelli, N. (2006) Developing new product service systems (PSS): methodologies and operational tools. Journal of Cleaner Production, 14 (17), pp. 1495-1501. Polonsky, M.J., and Garma, R. (2006) Service Blueprinting: A Potential Tool for Improving Cause-Donor Exchanges. Journal of Nonprofit & Public Sector Marketing, 16 (1-2), pp. 1-20. Sutton, D., and Klien, T. (2003) Enterprise Marketing Management: The New Science of Marketing. Hoboken: John Wiley.

Box 1:- Sources that have used Service Blueprinting

There is no known conceptual or empirical comparison of Service Blueprinting with other methods for mapping processes or analysis of tasks (e.g., IDEF, BMPN). There are no known studies on the efficacy of Service Blueprinting or its perceived or actual usability by end users of a service.

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A number of other papers suggest the use of blueprinting within service methodologies (e.g., Alonso-Rasgado and Thompson 2007, Alonso-Rasgado et al. 2004a, Alonso-Rasgado et al. 2004b, Mller and Blessing 2007). Bitner et al. (2007) outlined a set of insights into the application of Service Blueprinting. Box 2 outlines these insights.
PROVIDING A PLATFORM FOR INNOVATION Blueprinting provides a common representation for all stakeholders, to participate in the process. People are able to gain insights into how their roles fit into the integrated whole. Overall, this supports organisational vision. RECOGNIZING ROLES AND INTERDEPENDENCIES The process of blueprinting can generate insights into roles and interdependencies. By representing customer actions, the service designers can identify events when the customer experiences service quality. This can reveal strengths and weaknesses, and can demonstrate areas where the overall process is let down by one factor, despite 2 others being strong. FACILITATING BOTH STRATEGIC AND TACTICAL INNOVATIONS Bitner et al. (2007) report that Service Blueprinting is generally well received at all levels of an organisation that adopts it, and can be used for high and low level modelling of services. TRANSFERRING AND STORING INNOVATION KNOWLEDGE Service blueprints act as a knowledge representation that can be stored and replicated relatively easily. This can be shared and modified by various stakeholders. DESIGNING THE MOMENTS OF TRUTH Service Blueprinting through the representation of touchpoints between customers and suppliers allows the investigation of such moments-of-truth. Decisions about how the traditional split between front and back office operations can be examined in the light of customer experience. Whether changes in such practices, whilst going against expectation can be considered innovative can also be examined. CLARIFYING COMPETITIVE POSITIONING Service blueprinting allows the comparison of actual / desired service design with those of the competition.

Box 2:- Insights for Service Innovation Practice (after Bitner et al. 2007)

Shostack and Kingman-Brundage (1991), suggested a life cycle for the application of Service Blueprinting. The approach is essentially a spiral model (c.f., Boehm 1988, Bullinger et al. 2003) for service development. The application of such a spiral model allows the development of initial, albeit intermediate models at an earlier stage in the service design process than would happen if following a sequential model. However, there are a range of service design activities that need to undertaken prior to and after Service Blueprinting. To consider these in more depth we examine service design methodologies, starting with the Functional Products approach in section 2.3.

Pereyra (2007) for example notes the distinction between two touch points, one being a website with high usability, and the second being the actual customer services department, with badly motivated and un-knowledgeable staff.

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Figure 3:- Life cycle for the Application of Service Blueprinting (after Shostack and KingmanBrundage 1991)

2.2

FUNCTIONAL PRODUCTS

The term Functional products was first used in Brnnstrm et als ICED paper (2001). Later work provided an expanded vision of functional products and have outlined an FP methodology (Alonso-Rasgado and Thompson 2007, AlonsoRasgado et al. 2004a, Alonso-Rasgado et al. 2004b). Within the FP approach service systems are defined as all actions that are required to ensure that a certain function is provided to a customer. The service is a total support system that includes: actions on hardware (remanufacture, spares provision, on-site work); decision-making, forecasting; operations planning, data collection storage; intellectual property (education of users and suppliers) (p.518). The work is largely synthetic, with Alonso-Rasgado et al. (2004b) drawing on a lot of material from services marketing and other areas. We provide an outline of the approach. The FP methodology is composed of five stages (2004b, p.519), each of which undertakes a number of other activities: 3 1) CONCEPT CREATION FOR THE SERVICE SUPPORT SYSTEM

Somewhat confusingly, a later paper has reduced the number of stages to three, (Concept Development, Systems Design and Testing and Implementation). The bulk of the paper outlining this rapid approach to service design replicates material found in the previous paper.

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From the work presented (e.g. Alonso-Rasgado and Thompson 2007, AlonsoRasgado et al. 2004a, Alonso-Rasgado et al. 2004b), Concept Creation embraces five activities: 1) Collect Voice of Customer; 2) Requirements Ranking; 3) Concept Generation; 4) Concept Selection; and 5) Concept Creation. Given their importance these are relatively poorly documented in the work. 2) IDENTIFICATION OF REQUIRED SUBSYSTEMS The activities within this phase concern the identification of the specific components that go to make up the design and the interaction between them (p. 524). This phases primary concern is to outline the architecture of the Functional Product. Alonso-Rasgado et al see four key subsystems for an FP: Operations planning; hardware maintenance and remanufacture; data storage and decisionmaking; and service processing.

Figure 4:- Example of the four core subsystems (after figure 4 Alonso-Rasgado et al. 2004b)

In addition to the four core subsystems, additional subsystems can be added to the service system. The authors suggest Education/training; Design Maintenance Development; and Performance Improvements. 3) INTEGRATION OF THE SUBSYSTEMS THAT TOGETHER WILL PROVIDE THE SERVICE After concepts have been developed, and subsystems have been identified effort needs to made to integrate the subsystems. Which comes down to choosing the combination of hardware and service to provide the best solution for all parties involved (p. 526). These options range from high risk (novel hardware and service) to low risk involving known hardware and services. 4) MODELLING OF THE PROPOSED SERVICE SYSTEM In their discussion on service modelling Alonso-Rasgado et al cover a range of modelling approaches such as molecular modelling, Service Blueprinting and SADT. As an afterthought to this review, is the assertion that The main reason for modelling is to test the functionality of a service system (p. 530).

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5) TESTING AND IMPLEMENTATION The testing and implementation phase of the FP process takes the documents, concepts models etc from the previous phases and in some way test them. AlonsoRasgado et al. (2004) draw on a number of sources for how to carry out this activity. After Murphy and Robison (1981), testing of a new service concerns whether a user of a service understands three things: 1) understanding the idea of the proposed service; 2) whether they react favourably to it; and 3) feel that it offers benefits that answer needs. In turn Shostack (1984) suggested that implementation should be undertaken through three phases: 1) of the operation plan; 2) of the communication strategy; and 3) market introduction. Once the service system is actually implemented this opens up the opportunity for actual testing rather than conceptual testing. No case studies on the application of the Functional Products methodology have appeared in the literature, nor is there is not any tutorial material. 2.3 PRODUCT SERVICE SYSTEMS

The term Product-service systems seems to have first appeared in 1999 with publication of Goedkoop et als report (1999). Although Shostack (1977) proffered the term Marketable offerings for combinations of products and services. Several papers have outline tentative methodologies, although many others manage to discuss the notion without any explicit case study of their suggested methodologies (e.g., Christof et al. 2007, Cook et al. 2006, Manzini et al. 2001, Maussang et al. 2007, Shehab and Roy 2006). Morelli presented one of the first case studies in service design, focusing on a telecommunications centre for mobile workers. Morelli offers simple definition of a PSS as a marketable set of products and services capable of jointly fulfilling a users need (p. 74). In his 2003 paper 6 phases are essential to the development of a PSS, by 2006, he had reduced this list to 3; it is not clear how the previous activities wrap into this newer structure. In turn, McAloone and colleagues (McAloone 2006, McAloone and Andreasen 2002, Tan and McAloone 2006, Tan et al. 2007) have undertaken case studies in PSS and he has also been involved in teaching PSS design to design students (McAloone 2006). Within this section, we try to integrate the activities that these researchers suggest as essential for the development of a PSS.

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Phase / Researcher McAloone 2006

VALUE PROPOSITION Create a product life gallery

ACTOR ANALYSIS Sketch the Actor Network

ENVISAGEMENT

REQUIREMENTS SPECIFICATION Identify the functional unit provided by the product Carry out an Analysis, Diagnosis, Focussing, and Goal Setting exercise

OUTLINE OF ARCHITECTURE Describe the necessary physical artefacts

Identify and Sketch the Consumer Activity Cycle

Morelli 2006a

Identify Actors

Envisage Product Service System (Use Case and Scenarios) Use Case Development Functional Requirements

Represent the Structure (Blueprinting)

Morelli 2003

Value proposition Market Analysis (Similar and Related Services)

Definition of PSS Stakeholders Market Analysis (User Analysis)

Tentative Architecture

Table 1:- Synthesis of Design Activities with PSS papers (after McAloone 2006 Morelli 2006a Morelli 2003)

Overall, despite the buzz around the notion of PSS, there are few validated prescriptive methods to work with, a view echoed by another review of PSS (Baines et al. forthcoming). McAloones paper, whilst describing a seemingly rich approach is didactic, and does not appear to have been developed with practitioners in mind. Morelli has only reference to one case study, that of a telecentre. Overall, given the paucity of methods and methodologies associated with the term Product Service System we have to conclude that it is an idea within academia that has so far failed to realise a truly pragmatic outcome. 2.4 THE JOURNEY TO THE INTERFACE

DEMOS (Parker and Heapy 2006) has published a length pamphlet on the nature of service design in public services. Much of the ethos was covered in deliverable I15.5 (Review of Service Design Definitions). Here we outline some of the design techniques that are discussed in the work. Many of the techniques are well documented within other bodies of work (e.g. Preece et al. 2002), our focus here is on the Design Techniques and Measurements & Qualities, starting with the latter. 2.4.1 MEASUREMENTS & QUALITIES.

EXPERIENCE METRICS Experience metrics should be derived from users and enable organisations to design and measure the performance of a service against customers / clients values, rather than just those values held by the organisation and its staff. As such, experience metrics are not measures of high-level outcomes but of the quality of the experience at the interface.

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EXCELLENCE PROFILES These go beyond job descriptions and describe service roles as aspirations, values, and behaviours. It is argued that they can then be used to guide staff to deliver a quality service. For Parker and Heapy, excellence is the ability to understand practically what it means to do your job well. Experience profiles are designed to enable organisations to distribute the accountability for excellent service amongst people, and are an open resource accessible to anyone in the organisation. MY-METRICS Targets are always criticised for creating unintended consequences, however Parker and Heapy argue that it is not the targets themselves, but the focus of said targets. By explicitly labelling some targets My-metrics service designers can provide a powerful counterpoint to other operational measures. 2.4.2 DESIGN TECHNIQUES

SERVICE ENVIRONMENTS A service environment encompasses all spaces and places in which service is carried out. Viewing buildings as places in which service is performed can be a valuable conceptual step to make for designers, rather than thinking in abstract terms, design can focus around how the physical environment can provide a setting for service execution. PERSONAS Organisations can use personas to experiment with how they might interact with the service. Personas are an approach most commonly associated with Cooper (1999) and are essentially are fictitious character created to represent different user types within a user group for product or service. Parker and Heapy argue that in the context of service design Creating real people can really animate discussions and enable service providers to engage emotionally as well as rationally with their users. The methodology of personas can also be used to better understand the experiences and needs of staff (p. 106). PROTOTYPING Because personal and organisational needs are complex services should respond to that complexity rather than avoiding it or trying to drive it out. Prototyping a design is a common practice in a number of design fields. The less tangible nature of services can make it harder for designers and clients to visualise / consider that nature of a service or service concept. Enactment or prototyping of the elements of a service can help remedy this. In addition trying to get a complex service such as health care or engine availability right first time is difficult and prototypes can help the learning cycle. RELATIONSHIP MAPS For Parker and Heapy the main components of services touchpoints, systems and resources which are instantiated through the relationships between individuals, communities and organisations. It is essential that the critical relationships between people are mapped. Through this process, opportunities emerge to make change happen (p.108). They offer no specific techniques but the developed form of Service Blueprinting (see section 2.1) would allow designers and service users to visualise such relationships.

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However, the concepts of section 2.4.1 whilst novel and appealing have few concrete examples available. Whilst the concepts appear in the main body of parker and Heapys pamphlet, they are generally alluded to, rather than explained in any depth.

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3 PHASES OF SERVICE DEVELOPMENT

3.1 INTRODUCTION It would appear that discussion of life cycle phases cannot be undertaken without reference to the Waterfall Life cycle. As the names suggest the life cycle of a designed entity (whether hardware, software or service) can be conceptualised as a series of discrete events that lead into each other. Somewhere the notion of a waterfall life cycle become solidified as being a prescription for successful design , despite it being rejected by the first person to introduce and discuss it (see Royce 1970). 4 Since then a number of other life cycle models have evolved: including the spiral model (Boehm 1988); star model (Hix and Hartson 1993); and incremental delivery (Gilb 1988). We can make a number of observations on life cycle models. :- iteration between stages is generally necessary; :- iteration maybe more likely as services tend towards being more intangible, variable etc. :- there maybe recursive relationships between stages, for example there maybe a whole series of design activities to support the operation and maintenance of a product. By drawing upon the V-model (V-Modell XT: Part One Fundamentals of the VModell 2004, Sage and Armstrong 2000), we have a model that has the recognised design and development phases, but also has acknowledgement of these issues. The V-model is chosen to structure comparison for three reasons: a) it has considerable crossover with other phased models; b) the approach covers project management issues as whole. We focus on the stages presented by Sage and Armstrong (2000) as a text that remains well used and accessible. Requirements and Specification Preliminary Conceptual Design Logical Design and Architecting Detailed Design and Testing Operational Implementation Operational Test and Evaluation Operation and Maintenance

Table 2 compares the service design methodologies of a number of authors with the phases of the V-Model. The columns covering approaches by Edvardsson and

Royce's original waterfall modelled the following phases: 1) Requirements specification; 2) Design; 3) Construction; 4) Integration; 5) Testing and debugging; 6) Installation; and 7) Maintenance

V-Model

Edvardsson Alonso-Rasgado Alonso-Rasgado Bullinger et al. and Olsson et al. 2004b and Thompson 2003 1996 2007 Concept Requirements Analysis

REQUIREMENTS Service AND Concept SPECIFICATION Development PRELIMINARY CONCEPTUAL DESIGN LOGICAL Service DESIGN AND System ARCHITECTING Development Service Process DETAILED Development DESIGN AND TESTING Integration of subsystems Modelling Service Systems Implementation Identification of subsystems System Design Concept Creation Idea generation Concept Development

OPERATIONAL IMPLEMENTATI ON OPERATIONAL TEST AND EVALUATION OPERATION AND MAINTENANCE Testing Service Systems Implementation Testing & Implementation

Olsson (1996) and Bullinger et al. (2003) are not covered in any depth in this report, but are included to give a flavour of the structure of other approaches. The middle two columns are covered in section 2.2.
Market Launch

Table 2:- Comparison of Stages of the V-Model against Service Design Methodologies

Post-Launch Interview

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4 MISCELLANEOUS APPROACHES
4.1 HOLLINS TIPS FOR SERVICE DESIGN Hollins Service Design guide for the design council (see Hollins 2006) includes a range of tips for effective design of services. Box 3 summarises his tips. Design is a total process Design begins with an idea rather than a concept Identify which stages can be undertaken concurrently Use specifications to control the design process Use BS7000 Failure for services is the same as products Consider wider measures than profitability alone Eliminate potential failures ASAP and pursue potential successes People buy benefits, align these with the service and its marketing Use blueprints with touchpoints, use wider issues of experience Customers who are queuing may not come back Train those who do the job Service quality has five identifiable parameters
Box 3:- Summary of Hollins Top Tips for Service Design

4.2

SMART SERVICES

Allmendinger and Lombreglia (2005) present four kinds of smart services for consideration by manufacturers and service suppliers. Their argument centres on going beyond the kinds of upkeep and upgrades you may be bundling with your products, both in their value to customers and in their cost efficiency to you (p. 131). They provide the exemplar of Heidelberger Druckmaschinen, who installed monitoring equipment on their installed printers and found "it could provide maintenance much more cost effectively (p.132)." They go on to say that "with its machines communicating continuously over the Internet, relaying information about their status between the print shops and Heidelberg's regional and global technical support specialists, the company has the access and insight to optimize printing performance in customers' shops (ibid). Allmendinger and Lombreglias (2005) concern is to learn from those companies that are further along the path to smart services. To do this they outline the nature of smart services and outline four forms of smart services; the Embedded Innovator; the Solutionist; the Aggregator; and the Synergist. The biggest differentiator between smart services and previous services offerings is that the use of connectivity and awareness technologies allows pre-emptive servicing. Evidence can be gathered that a device machine product etc., is about to

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fail, allowing intervention before this happens. This creates a new value for customers, that of not being surprised by unexpected breakdowns. In addition to this manufacturers gain unprecedented feedback about their product in use. Allmendinger and Lombreglia suggest a number of uses for smart services and these are summarised in Box 4.
Status applications capture and report on the operation, performance, and usage of a given product or the environment being monitored. Diagnostics applications enable a product to self-optimize or allow a service person to monitor, troubleshoot, repair, and maintain devices. Upgrade applications can augment the performance of a given product. They can prevent problems with version control, technology obsolescence, and product failure. Control and Automation applications coordinate the sequenced activity of several products. They can also cause devices to perform one off, discrete actions. Profiling and Behaviour Tracking applications monitor variations in the location, culture, performance, usage, and sales of a product. These applications can create more customized or predictive responses for end users. Replenishment and Commerce applications monitor consumption of a device and buying patterns of the end user. These applications can initiate purchase orders or other transactions when replenishment is needed. Location Mapping and Logistics applications track and optimize the service support system for a device. These applications also support supply chain and sales activities.

Box 4:- What a Connected Device Can Do (adapted from Allmendinger and Lombreglia 2005, p. 133)

Overall, smart services are a way of adding intelligence to products via awareness and connectivity. Controversies aside about the nature of machine intelligence, the following four forms of smart services are suggested; the Embedded Innovator; the Solutionist; the Aggregator; and the Synergist. 4.2.1 EMBEDDED INNOVATOR

With this strategy, the product is enhanced to aid service and this is the most product-centred of the four strategies, and Allmendinger and Lombreglia suggested that customers would still perceive the product to be the primary source of value. There may also be an expectation that they continue to receive support that they are used to such as warranties and service as there is a tradition that the product is sold with these as a package. 4.2.2 SOLUTIONIST

Within this strategy, the single product remains a key component of the productservice offering. However, the scope of activities associated with the product are expanded, value is added through these additional activities. Allmendinger and Lombreglia list 13 activities associated with an MRI scanner, and note that only four are medical matters and the remaining 9, are, potential profit and value opportunities. 4.2.3 AGGREGATOR

The aggregator is one of two strategies that are business opportunities that cannot be undertaken by a single manufacturer. An aggregator strategy is needed when a product collects data but this needs to be aggregated with other data from other products. It is only when a number of potentially disparate devices are connected that value can be created. Whilst it is possible to monitor a single device for issues such as power consumption few people would worry about a single desk lamp. But a

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system that offered the opportunity to monitor power wastage across a home, community or workplace would be of value to many. A key issue is deciding whether a manufacturers product acts in a central or peripheral role. Investment in data processing and warehousing is likely to accompany the application of this strategy. 4.2.4 SYNERGIST

The Synergist is the second of the two strategies that cannot be undertaken by a single manufacturer. Overall, the synergist strategy is defined as one where you set out to create a product that can contribute valuable data or functionality to other connected products (p. 144). Allmendinger and Lombreglia point to the lighting ballasts and controls division of Philips which is creating a group of companies that provide products capable of generating common information. 4.3 ORGANISATIONAL ISSUES

There is a growing body of work on Organisational Issues in relation to service development (de Jong and Vermeulen 2003, Edgett 1994, Edvardsson and Olsson 1996, Froehle and Roth in press, Johne and Storey 1998, Scheuing 1989, Silvestro and Silvestro 2003). To give a flavour of this work we present a summary of a study by Edgett (1994), which represents one of the most rigorous studies undertaken. Edgett applied a questionnaire composed of 78 questions (in 11 categories) each on a 7-point likert scale ranging from strongly disagree (1) to strongly agree (7). The questionnaire was applied to 148 projects within financial services of which 78 were considered successes and 70 failures. Figure 5 provides one summary of the data, overall there were significant differences in answers between successful projects and unsuccessful projects (47 at p 0.05 level, all others at 0.01 or 0.0001 level.

Figure 5:- Differences in scores between successful and un successful projects (after figure 1 Edgett 1994)

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4.3.1

TRAITS OF SUCCESSFUL PROJECTS

Edgett concludes his paper by suggesting a number of successful traits. Box x summarises these for the 11 categories of questions.
ORGANIZATIONAL A high level of coordination exists among the people and departments involved; People involved in the project know why they are involved and what benefits the project will bring to the company; Project members are well qualified for their tasks and display high levels of commitment and enthusiasm; There is high awareness within the company that the new service is being developed, backed up with a strong marketing case; There is strong and visible senior management support. RESOURCE ALLOCATION Sufficient financial resources are allocated during the development phase; Enough time and effort is spent on the actual design and development of the new service to ensure that product features are what the consumer wants; The market launch receives strong support in the form of time, money and people. FORMALIZATION Have development processes which became more formal as the projects progressed; Have a well established idea-screening process in place to determine which new ideas will be given the go-ahead; Have a system in place to ensure that branch staff are well trained and committed to selling the new service. PRELIMINARY ASSESSMENT & DESIGN TESTING (MERGED)

Conduct a market assessment early in the process; Develop a clear understanding of who is the target market; Determine early whether the project is technically feasible; The market and technical assessment are properly funded with enough time allocated to get the job done properly; Thorough testing is conducted to ensure the new service does what it has been designed to do. MARKET RESEARCH & MARKET POTENTIAL (MERGED) Have a good, solid understanding of the type of information required before conducting any research; Develop clear, objective measures before conducting the actual research; Have a firm understanding of the potential size of the market. BUSINESS/FINANCIAL ANALYSIS & PROJECT UPDATE (MERGED) A clear understanding of the desired objectives before the business/financial analysis; A realistic business/financial analysis is conducted; A review is conducted after the numbers become available to determine the probability of the project actually achieving its objectives. MARKET SYNERGY A superior product; A good fit with the existing image of the company; A strong understanding of the consumers wants and needs and how the purchase decision is made; A strong consumer need for the product; A high growth market; Branch efforts which are supportive of the new service. LAUNCH EFFECTIVENESS A launch effort which is well planned and coordinated; Various communication materials ready and in place at the time of launch; The marketing aspects of the launch targeted correctly and backed up with sufficient resources.

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Box 5:- Summary of Edgetts Recommendations for Successful new service development (Edgett 1994)

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5 SUMMARY AND CONCLUSIONS

This report has attempted to provide the reader with a flavour of the approaches to service design that are in the literature. We have covered a number of service-design approaches. Including Service Blueprinting, Functional Products, Product Service Systems and Journey to the Interface (Parker and Heapy 2006). We considered how a number of service design methodologies compare with different stages of the V model. We also reported on a number of miscellaneous issues, such as Allmendinger and Lombreglias notion of Smart Services (2005); Hollins guidance on service design (Hollins 2006), and some consideration of the organisational factors that support service development (de Jong and Vermeulen 2003, Edgett 1994). A key observation is that there appears to have been little systematic consideration of what design techniques are needed to specify the elements of a service system. By this we mean that no one has worked backwards from the elements of product-service systems or Functional Product to the design processes that are needed to generate their requirements, specify the design and evaluate the resulting service.

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