Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Syllabus
MIS 714 – Service Innovation
Semester Day of Week/Time
Spring 2013 Tuesdays, 6:15-8:45
Dr. Michael zur Muehlen Office Hours:
Stevens Institute of Technology By appointment
Howe School of Technology Management
Babbio 639 Class Website:
Moodle

Catalog Description
This course leads students through the identification, analysis, definition, and
deployment of service opportunities within public and private organizations. Each of
these phases is analyzed in detail to encompass the principal activities, methods, tools
and techniques applied in the respective phase. Students will learn how to identify
appropriate supporting techniques and information technologies for the different
phases of the service life cycle, assess the role of technology, and gauge the
organizational impact of service-focused operations. The objective of the course is to
enable students to identify, implement and evaluate innovative service offerings in
their organization.

Prerequisite course: none

Overview
This course prepares students for positions in service-centric organizations, ranging
from the traditional service sector (e.g., finance, logistics, professional services) to
public administration and product-oriented services organizations. Students will be
able to assess the service portfolio of their organization, evaluate opportunities and
emerging service trends, and learn the formal analysis and modeling techniques that
are essential to realize new service offerings.

The course primarily addresses the needs of public and private organizations with
service offerings. It covers topics relevant for IT staff that is participating in designing
support systems for services, Business personnel involved in service modeling projects,
and executives involved in service selection and portfolio decisions. The course makes
use of real-world case studies to illustrate specific aspects of service analysis,
specification, and implementation, and to test student comprehension of the material.

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Introduction to Course

A service is a means of delivering customer value by providing certain outcomes that

customers want to achieve without the need to own specific assets, costs, or risks.
Services represent an increasing share of the GDP of developed nations, and a rapidly
climbing source of revenue for organizations in all sectors of the economy. There is a
fundamental shift for goods- and parts-producing organizations to restructure their
offerings around the needs of their customers and to include supply, maintenance, and
in-field operations to their services portfolio. Professional service organizations are
increasingly taking over roles that members of their client organizations used to play,
and within companies shared service centers allow for the effective deployment of
service solutions that otherwise would have required large training or contracting
expenditures. It seems that anything can be made a service, but few know in detail how
this can be done.

As organizations are shifting from requirements-driven product design to needs-

focused service design, they need to understand the full lifecycle of service
identification, design, transition, and operation, supported by continual service
improvement. They need to synchronize the different lifecycles of products, customers,
and services. The course highlights case studies of organizations that have successfully
engineered service offerings in product-centric, technology-centric, information-centric
and people-centric environments. Students will learn how to identify and realize
innovative service opportunities and how modern information technology enables
service innovation. The concepts conveyed in this course are applicable to enterprises
in traditional service industries (e.g. finance, healthcare, telecom, logistics, professional
services), as well as organizations in traditionally product-focused industries (e.g.
manufacturing, high technology).

The modules – and the areas of focus for the course - are:
– Module 1: Overview of the Service Economy and Service Organizations
– Module 2: Product-, Technology-, Process- and People-centric Services
– Module 3: Techniques for Service Analysis and Specification
– Module 4: Technology Support for Service Innovation

Relationship of Course to Rest of Curriculum

This course is part of the MS in Service Management curriculum and can be taken as
part of the four-course concentration in Business Process Management & Service
Innovation, or as an elective within the MSIS program.

The course leverages the existing research program around Business Process
Management in the Howe School to incorporate aspects of Service-Oriented

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Architectures and Process-as-a-Service offerings, and uses partnerships with

academics and industry to incorporate new research findings and technology into the
curriculum.

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Learning Goals
After taking this course:

1. Remembering: Students will be able to name the characteristics of services, and

the different areas of service innovation organizations can engage in.
2. Understanding: Students will be able to explain the features of successful
service designs.
3. Applying: Students will be able to apply the lessons learned in the course case
studies to their own organizations or to other organizations in different industry
sectors.
4. Analyzing: Students will be able to specify data, process, and organizational
requirements that emerge from a service initiative. They will be conversant in
both mainstream and specialized documentation techniques, such as Service
Blueprinting, BPMN, Entity-Relationship Modeling and Speech-Act Modeling
5. Evaluating: Students will be able to determine the economic rationale behind a
service offering and will be able to provide a qualitative assessment of the
service potential of an organization.
6. Creating: Students will apply the lessons learned in this course to their own
organization and prepare a service innovation proposal as the final project of the
course.
7. Students will improve their ability to communicate in group and presentation
settings.

Pedagogy
- Lecture, reinforced through online discussion
- Case Studies
- Guest speakers from industry
- Hands-on student exercises
- Student individual and team presentations
- Readings from texts and selected relevant articles and publications

Required Cases
– Lynda M. Applegate; Robert D. Austin; Kalle Lyytinen; Esko Penttinen; Timo Saarinen: F-
Secure Corporation: Software as a Service (SaaS) in the Security Solutions Market. Harvard
Business School Case 9-809-099
– Thomas J. Delong, Ashish Nanda, Monica Mullick: &Samhoud Service Management.
Harvard Business School Case 9-801-389
– Sandra J. Sucher, Stacy McManus: Ritz-Carlton Hotel Co. Harvard Business School Case 9-
601-163
– P. Hemp, “My week as a room service waiter at the Ritz,” Harvard Business Review, 80,
2002, pp. 54.
– F. Warren McFarlan, Guoqing Chen, Kai Reimers, Xunhua Guo: Digital China Holdings
Ltd.: Managing the Transition from a Product-Oriented Towards a Service-Oriented

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Company. Harvard Business School Case 9-307-093

– Vanita Yadav, Sangeeta S. Bharadwaj, K.B.C. Saxena: Tecnovate: Challenges of Business
Process Outsourcing. University of Hong Kong Teaching Case HKU611

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Required Readings (will be provided as PDF)

– S. Alter, “Service system fundamentals: Work system, value chain, and life cycle,” IBM
Systems Journal, 47, 2008, Armonk, NY: International Business Machines Corp, pp. 71-86.
– R. C. Basole, and W. B. Rouse, “Complexity of service value networks: Conceptualization
and empirical investigation,” IBM systems journal, 47, 2008, IBM, pp. 53.
– L. L. Berry et al., “Improving Service Quality in America: Lessons Learned [and Executive
Commentary],” The Academy of Management Executive (1993-2005), 8, 1994, Academy of
Management, pp. 32-52.
– L. L. Berry et al., “Creating new markets through service innovation,” MIT Sloan
Management Review, 47, 2006, Sloan Management Review Association, pp. 56.
– M. J. Bitner, A. L. Ostrom, and F. N. Morgan, “Service blueprinting: A practical technique
for service innovation,” California Management Review, 50, 2008, University of California,
pp. 66ff.
– R. J. Clarke, and A. G. Nilsson, “Business services as communication patterns: A work
practice approach for analyzing service encounters,” IBM Systems Journal, 47, 2008, IBM,
pp. 129-142.
– T. H. Davenport, “The coming commoditization of processes,” Harvard Business Review,
83, 2005, pp. 100-108.
– F. Frei, “The four things a service business must get right,” Harvard Business Review, 86,
2008, pp. 70.
– J. M. Hall, and M. E. Johnson, “When should a process be art, not science,” Harvard
Business Review, 87, 2009, pp. 58-65.
– M. Hammer, and S. Stanton, “How process enterprises really work,” Harvard Business
Review, 77, 1999, pp. 108-120.
– M. Komssi et al., “Transforming a Software Product Company into a Service Business: Case
Study at F-Secure,” 2009, IEEE Computer, pp. 61-66.
– F. Leymann, D. Roller, and M. T. Schmidt, “Web services and business process
management,” IBM systems Journal, 41, 2002, IBM Corp, pp. 198-211.
– P. P. Maglio et al., “Service systems, service scientists, SSME, and innovation,”
Communications of the ACM, 49, 2006, ACM, pp. 85.
– I. Miles, “Patterns of innovation in service industries,” IBM Systems Journal, 47, 2008,
Citeseer, pp. 115.
– K. Moller, R. Rajala, and M. Westerlund, “Service innovation myopia? A new recipe for
client-provider value creation,” California Management Review, 50, 2008, pp. 31.
– A. Parasuraman, V. A. Zeithaml, and L. L. Berry, “A conceptual model of service quality and
its implications for future research,” The Journal of Marketing, 49, 1985, American
Marketing Association, pp. 41-50.
– H. A. Reijers, S. Limam, and W. M. P. Van Der Aalst, “Product-based workflow design,”
Journal of Management Information Systems, 20, 2003, ME Sharpe, pp. 229-262.
– M. Sawhney, R. C. Wolcott, and I. Arroniz, “The 12 different ways for companies to
innovate,” IEEE Engineering Management Review, 35, 2007, IEEE, pp. 45-52.
– V. Shankar, L. L. Berry, and T. Dotzel, “A Practical Guide to Combining Products and
Services,” Harvard business review, 2009,
– J. Sheehan, “Understanding service sector innovation,” Communications of the ACM, 49,
2006, ACM, pp. 47.
– M. zur Muehlen, and D. T. Ho, “Service process innovation: a case study of BPMN in

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

practice,” 2008, IEEE Computer Society, pp. 372.

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Additional Readings (Optional References)

– E. Brynjolfsson, Y. Hu, and M. D. Smith, “From niches to riches: Anatomy of the long tail,”
MIT Sloan Management Review, 47, 2006, Sloan Management Review Association, pp. 67.
– L. L. Berry, V. A. Zeithaml, and A. Parasuraman, “Five imperatives for improving service
quality,” Sloan Management Review, 31, 1990, pp. 29-38.
– H. Chesbrough, and J. Spohrer, “A research manifesto for services science,”
Communications of the ACM, 49, 2006, ACM, pp. 40.
– H. W. Chesbrough, and A. R. Garman, “How open innovation can help you cope in lean
times,” Harvard business review, 87, 2009, pp. 68.
– B. Dietrich, “Resource planning for business services,” Communications of the ACM, 49,
2006, ACM, pp. 64.
– N. S. Caswell et al., “Estimating value in service systems: A case study of a repair service
system,” IBM Systems Journal, 47, 2008, Armonk, NY: International Business Machines
Corp, pp. 87-100.
– L. C. Harris, and E. Ogbonna, “Service sabotage: The dark side of service dynamics,”
Business Horizons, 52, 2009, pp. 325-335.
– W. B. Rouse, and M. L. Baba, “Enterprise transformation,” Communications of the ACM,
49, 2006, ACM, pp. 72.
– R. T. Rust, and C. Miu, “What academic research tells us about service,” Communications
of the ACM, 49, 2006, ACM, pp. 54.
– A. Majchrzak, and Q. Wang, “Breaking the functional mind-set in process organizations,”
Harvard Business Review, 74, 1996, pp. 92-101.
– S. Michel, S. W. Brown, and A. S. Gallan, “Service-logic innovations: How to innovate
customers, not products,” California Management Review, 50, 2008, University of
California, pp. 49.
– P. P. Maglio, and J. Spohrer, “Fundamentals of service science,” Journal of the Academy of
Marketing Science, 36, 2008, Springer, pp. 18-20.
– Parasuraman, V. A. Zeithaml, and L. L. Berry, “Understanding customer expectations of
service,” Relationship marketing, 2005, Sage Pubns Ltd, pp. 336.
– F. Payne, K. Storbacka, and P. Frow, “Managing the co-creation of value,” Journal of the
Academy of Marketing Science, 36, 2008, Springer, pp. 83-96.
– G. Piccoli et al., “Process completeness: Strategies for aligning service systems with
customers’ service needs,” Business Horizons, 52, 2009, Elsevier, pp. 367-376.
– P. G. Raverdy et al., “Service Lifecycle Management,” 2009, EU Project Report.
– J. Spohrer, and P. P. Maglio, “The emergence of service science: Toward systematic service
innovations to accelerate co-creation of value,” Production and Operations Management,
17, 2008, POMS, pp. 238-246.
– K. Swank, “The lean service machine,” Harvard Business Review, 81, 2003, pp. 123-130.
– V. A. Zeithaml, A. Parasuraman, and L. L. Berry, “Problems and strategies in services
marketing,” The Journal of Marketing, 49, 1985, American Marketing Association, pp. 33-
46.

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Assignments
The course consists of nine weekly assignments and a final project. The weekly
assignments focus on the course content taught in the respective week and serve to
reinforce and expand the lessons learned. Students are asked to identify organizations or
examples of specific types of service innovation, perform blueprinting and other types of
analysis and report their findings in short papers or presentation.

The final project is a service innovation proposal that the students prepare either for their
own organization (for part-time students), or an organization of their choice (for full-time
students). This proposal combines the content taught in the course with an analysis of an
actual organization and its market offerings. The final project consists of a paper and a
presentation.

Assignments Due
Weekly Assignments Week 2-11
Final Project Report Week 14

Grading
Grading for each deliverable will be done on a scale from 0-100. The final grade will be computed
based on the weighting of the deliverables according to the following resolution:

Points (100 scale) Grade Types of Assignments Final Grade Weight

96-100 A Weekly Assignments 60
90-95 A- Final Project Report 30
85-89 B+ Reliability and Participation 10
80-84 B Total Grade 100
75-79 B-
65-74 C+
55-64 C
50-54 C-
0-49 F

Ethical Conduct

The following statement is printed in the Stevens Graduate Catalog and applies to all students
taking Stevens courses, on and off campus.

“Cheating during in-class tests or take-home examinations or homework is, of course, illegal
and immoral. A Graduate Academic Evaluation Board exists to investigate academic
improprieties, conduct hearings, and determine any necessary actions. The term ‘academic
impropriety’ is meant to include, but is not limited to, cheating on homework, during in-class
or take home examinations and plagiarism.“

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu

 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Consequences of academic impropriety are severe, ranging from receiving an “F” in a course, to
a warning from the Dean of the Graduate School, which becomes a part of the permanent
student record, to expulsion.

Reference: The Graduate Student Handbook, Academic Year 2009-2010 Stevens

Institute of Technology, page 10.

Consistent with the above statements, all homework exercises, tests and exams that are designated as
individual assignments MUST contain the following signed statement before they can be accepted for
grading. ____________________________________________________________________

I pledge on my honor that I have not given or received any unauthorized assistance on this
assignment/examination. I further pledge that I have not copied any material from a book, article, the
Internet or any other source except where I have expressly cited the source.

Signature ________________ Date: _____________

Please note that assignments in this class may be submitted to www.turnitin.com, a web-based
anti-plagiarism system, for an evaluation of their originality.

Course Schedule
Assignment
# Title Description Reading
Due
 A. Parasuraman, V. A. Zeithaml, and L. L.
Berry, “A conceptual model of service
quality and its implications for future
research,” The Journal of Marketing, 49,
What is the difference 1985, American Marketing Association, pp.
41-50.
Introduction and between Goods- and
1 Overview Service-centric
 P. P. Maglio et al., “Service systems,
service scientists, SSME, and innovation,”
organizations? Communications of the ACM, 49, 2006,
ACM, pp. 85.
 F. X. Frei, “The four things a service
business must get right,” Harvard business
review, 86, 2008, pp. 70.
 M. Sawhney, R. C. Wolcott, and I. Arroniz,
Technical and What can an organization “The 12 different ways for companies to
Description of a innovate,” IEEE Engineering Management
Organizational change in order to innovate
2 Levers for Service its service offerings?
Service-centric Review, 35, 2007, IEEE, pp. 45-52.
Organization  J. Sheehan, “Understanding service sector
Innovation innovation,” Communications of the ACM,
49, 2006, ACM, pp. 47.

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu


# Title Description
What are typical
characteristics of people-
focused service
People-Centric organizations, such as
3 Services Professional Service
businesses?
Case Study: Ritz Carlton
What matters to the
Techniques for customer?
4 Service Analysis: What happens in front of and
Service Blueprinting behind the line of visibility?
How do product-centric
organizations move from
selling products to selling
Product-Centric
5 Services
services?
Case Study: Digital China
Holdings Ltd.
How can we analyze the
Techniques for interaction between service
6 Service Analysis: provider and consumer, and
Work System Method identify issues?
How can organizations
leverage technical
Technology-Centric competencies to sustain a
7 Services service advantage?
Case Study: F-Secure
How do process-as-a-service
Process-Centric organizations work?
8 Services Case Study: Tecnovate
Techniques for How can data be the source
9 Specifying Services: for service offerings?
Data-as-a-Service
Castle Point on Hudson, Hoboken, New Jersey 07030
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Assignment
Reading
Due
 Ritz Carlton HBS Case
Case Analysis:  P. Hemp, “My week as a room service
Ritz Carlton waiter at the Ritz,” Harvard Business
Review, 80, 2002, pp. 54.
 M. J. Bitner, A. L. Ostrom, and F. N.
Morgan, “Service blueprinting: A practical
technique for service innovation,” California
Management Review, 50, 2008, University
of California, pp. 66.
Case Analysis:  Digital China Holdings Ltd. HBS Case
 V. Shankar, L. L. Berry, and T. Dotzel, “A
Digital China
Practical Guide to Combining Products and
Holdings Ltd. Services,” Harvard business review, 2009,
 S. Alter, “Service system fundamentals:
Work system, value chain, and life cycle,”
IBM Systems Journal, 47, 2008, Armonk,
NY: International Business Machines Corp,
pp. 71-86.
 F-Secure HBS Case
 M. Komssi et al., “Transforming a Software
Case Analysis: F-
Secure
Product Company into a Service Business:
Case Study at F-Secure,” 2009, IEEE, pp.
61-66.
 Tecnovate UHK Case
 T. H. Davenport, “The coming
commoditization of processes,” Harvard
Business Review, 83, 2005, pp. 100-108.
Case Analysis:  M. zur Muehlen, and D. T. Ho, “Service
Tecnovate process innovation: a case study of BPMN
in practice,” Proceedings of the Hawai’i
International Conference on System
Sciences 2008, IEEE Computer Society,
pp. 372.
 H. A. Reijers, S. Limam, and W. M. P. van
der Aalst, “Product-based workflow design,”
Journal of Management Information
Systems, 20, 2003, ME Sharpe, pp. 229-
262.
www.stevens.edu
 Howe School of Technology Management

Center for Business Process Innovation

Tel +1 201 216 8293

Fax +1 201 216 5385

Assignment
# Title Description Reading
Due
 M. Hammer, and S. Stanton, “How process
enterprises really work,” Harvard Business
Techniques for How can processes become Analysis of Data- Review, 77, 1999 pp. 108-120.
 J. M. Hall, and M. E. Johnson, “When
10 Specifying Services: services? as-a-Service
should a process be art, not science,”
Process-as-a-Service provider Harvard Business Review, 87, 2009, pp.
58-65.
 BPMN 2.0 Poster from HPI Germany
Techniques for What is the role of  R. J. Clarke, and A. G. Nilsson, “Business
Analysis of services as communication patterns: A
Specifying Services: relationship management in
11 Actor-oriented service innovation?
Process-as-a- work practice approach for analyzing
Service provider service encounters,” IBM Systems Journal,
Analysis 47, 2008, IBM, pp. 129-142.
A Technical View of What are the ideas,
Services: concepts, technologies, and  SOA articles from OMG.org and W3C.org,
12 Leveraging IT in the standards behind a Service- TBA
Services Enterprise Oriented Architecture?
A Technical View of
How can basic services be  F. Leymann, D. Roller, and M. T. Schmidt,
Services:
bundled and orchestrated to “Web services and business process
13 Services
achieve higher-level management,” IBM Systems Journal, 41,
Orchestration and 2002, IBM Corp, pp. 198-211.
offerings?
Choreography
How can the value of a
service offering be evaluated  R. C. Basole, and W. B. Rouse,
An Economic View of Service “Complexity of service value networks:
and enhanced?
14 Services: Service
What are the stages of the
Innovation Conceptualization and empirical
Value Networks Proposal investigation,” IBM systems journal, 47,
service value chain? 2008, IBM, pp. 53.

All assignments are due as noted. In fairness to others, late work will be penalized 10%
per week overdue.

Castle Point on Hudson, Hoboken, New Jersey 07030 www.stevens.edu