New Service Development and Process Design

New Service Development Cycle

Full-scale launch Post-launch review

Full Launch

Enablers

Development
Formulation of new services objective / strategy Idea generation and screening Concept development and testing

People

Product Service design and testing Process and system design and testing Marketing program design and testing Personnel training Service testing and pilot run Test marketing

Technology
Tools

Systems

Design

Analysis
Business analysis Project authorization

Levels of Service Innovation

Radical Innovations
Major Innovation: new service driven by information and computer based technology Start-up Business: new service for existing market New Services for the Market Presently Served: new services to customers of an organization

Incremental Innovations
Service Line Extensions: augmentation of existing service line (e.g. new menu items) Service Improvements: changes in features of currently offered service Style Changes: modest visible changes in appearances

Technology Driven Service Innovation

Power/energy Volvo Bus service between Ahmedabad and Mumbai by Raj Travels. Physical design Health Spa with all amenities Materials Vending machines provided in a library which could be used for refreshment Methods - JIT and TQM Information - E-commerce using the Internet

Classification of Service Automation

Fixed-sequence (F) - Automatic gate ( opening/closing) for better queue management. Variable-sequence (V) - ATM Playback (P) - answering machine Numerical controlled (N) - animation Intelligent (I) Robots Expert system (E) - medical diagnosis Totally automated system (T) - EFT

Adoption of New Technology in Services

Challenges of Adopting New Technology The Process is the Product Back Office vs Front Office Changes Need for Standardization Managing the New Technology Adoption Process Ten step process with concern for employees and customers

Service Blueprint of Luxury Hotel

Strategic Positioning Through Process Structure

Degree of Complexity: Measured by the number of steps in the service blueprint. For example a clinic is less complex than a general hospital. Degree of Divergence: Amount of discretion permitted the server to customize the service. For example the activities of a tour operator for a couple with that of large groups.

Taxonomy of Service Processes

Degree of Customer Contact Low Divergence (Standardized Service) Processing of Goods Processing of Information or Images Check processing Billing for a credit card Ordering groceries from a home computer Phone-based account balance verification Operating a vending machine Assembling pre-made furniture Food serving in a restaurant Car washing Withdrawing cash from an automatic bank teller Taking pictures in a photo booth Giving a lecture Handling routine bank transactions Operating an elevator Riding an escalator Sampling food at a buffet dinner Bagging of groceries Processing of People High Divergence (Customized Service) Processing of Goods Processing of Information or Images Computer programming Designing a building Supervision of a landing by an air controller Bidding at a TV auction Processing of People

No Customer Contact

Dry cleaning Restocking a vending machine

Auto repair Tailoring a suit

Indirect Customer Contact

Direct Customer Contact

No customerservice worker interaction (self-service)

Documenting medical history at a clinic Searching for information in a library Portrait painting Counseling

Driving a rental car Using a health club facility

Customerservice worker interaction

Providing public transportation Providing mass vaccination

Home carpet cleaning Landscaping service

Haircutting Performing a surgical operation

Generic Approaches to Service Design

Production-line Limit Discretion of Personnel Division of Labour Substitute Technology for People Standardize the Service Customer as Coproducer Substitution of Customer Labour for Provider Smoothing Service Demand Customer Contact Degree of Customer Contact Separation of High and Low Contact Operations Information Empowerment Employee and Customer