challenges of service design & new service development

5/20/2018 Challenges of Service Design & New Service Development

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Challenges of Service Design &

New Service Development


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Challenges: Service Design

1. Difficult to Describe & Communicate:

Services are intangible & process oriented

Complexity of services increase over a long period

2. Variable in Nature:

No Two services are delivered in the same way

3. Risk of relying on Words Alone to Describe Services


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Risk of Relying on Words Alone to Describe Services

Oversimplification: Words may not always be sufficient to describe a

complex service system. (Eg. Service by tour operator for Industrial Visit)

Incompleteness: People tend to omit details with which they are not

familiar. (Eg. Tour operator if he does not know much about conducting

the IV, he may not include some essential service in his package which will

make the tour package service for IV incomplete)

Subjectivity: Persons may be biased with their personal experiences. Eg. A

tour operator who would have experienced IV may describe in one way

but students who are the customers may have different perception

towards the same and perhaps teachers accompanying the students for IV

would have different opinion about the same.

Biased Interpretation: People interpret the words in different ways.

Employees of the same service organization may interpret the same word

in different ways. Eg. Satisfaction in case of IV Tour Service, different

employees would define satisfaction in their own way. One may feel

good industries as a satisfying factor, while another may consider food,stay and transport as satisfying factors.


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New Service Development

Some Hardcore Facts:

1. Products or services needs to be designed within

a structured planning framework.

2. A New Service Development must be: Objective not subjective,

precise not vague,

fact driven not opinion driven &

methodological not philosophical

3. Thus service design must be in a structured way

but it should not be rigid & bureaucratic


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New Service DevelopmentSome Hardcore Facts: contd.

4.A new service development shall involve both: Employees aswell as Customers

5. Involvement of employees is necessary because (i) employeesdeliver the service & they know better about it and (ii) theyare in contact with the customers so identifying their(customers) requirements is easy. (Eg. KFC involves itsemployees in service design process specially front endhandling.)

6. Involvement of Customers is necessary because they are thepart of service delivery as they accepts the service deliveryand consume the service. (Eg. TV channels acceptssuggestions from customers with regards to certain aspects ofprograms telecasted.Anandi in Balika Vadhu, Name of Naitik& Aksharasson in Yeh Rishta kya kehlata hai


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Types of New Services

Start-up business

New services for the currently served market

Service line extensions Service improvements

Style Changes

Major or Radical Change


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Start-up business

New services for a market that is already servedby existing products

- Meru Cabs offering door to door services (Existing

Market: taxis, Buses, Autorickshaws)- Introduction of Chinese food, Pizza & Burger in

India by the foreign food chains (Existing Market:South Indian, Bombay Chaat like bhelpuri,

Paavbhaji, etc.)

- Introduction of Courier Services (existing market:Postal Services)


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New Services for the currently served market

Offering existing customers with new services

which were not previously available

- Gym Providing Nutrition Classes

- Theatres providing food service on the seat

- Libraries providing coffee services

- Restaurants providing special cabins forLuncheon meetings for corporates

- Restaurant organising birthday parties


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Service Line Extensions

Augmentation (Extension) of existing Service Line,

-Restaurant adding menu items

-Airlines offering additional routes

-College providing additional degrees or courses

-Tour operator adding tour destinations in service

-specific hospital getting converted into multi

specialty hospital


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Service Improvements

Bringing changes in the services for improving

their speed and other characteristics

-adding hotel rooms improves the serving

capacity of hotels

-Hospitals using Tech support devices for

recording Patients data

-Wi-fi in college campus


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Style Changes

Effect on customers perceptions, emotions

and attitudes.--- A case of change in style

- Changing interiors of Premises - NIIT

- Changing logo of the businessAirtel

- Most of the nationalised banks have changed

their interiors


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Major or Radical Innovation

New services for markets yet undefined

-home based shopping

- Buying t-shirts online with your choice of printselected from website

- Banks providing various facilities apart from

banking business are the major innovationalservices offered by the banks now-a-days


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New Service Development Process

Business Strategy development or revie

New Service Strategy Development

Idea Generation

Concept Development & Evaluation

Business Analysis

Service development & Testing

Market testing

Commercialization

Post Introduction Evaluation


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Business Strategy Development or Review

Review the mission & vision

The new service must fit within the mission & vision of the

organization

Companys orientation towards growth also affects the new service

development

Four strategic orientation towards growth taken by the co.:

1. Prospectors: innovative, search new opportunities, takes risk

2. Defenders: experts in their own areas, do not search opportunities

outside their domain of expertise

3. Analyzers: maintain stability in areas of operation, willing to search

for new opportunities & go on experimenting

4. Reactors: make adjustments because of pressure from environment

Another Perspective on growth orientation:

Cost leadership strategy, Differentiation strategy, Focused strategy


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New Service Strategy Development

Product Portfolio Strategy & Organization

structure for new service development are to

be focused upon

The type of new service that will be apt will

depend upon the organizations goals, vision,

capabilities & growth plans

Matrix for identifying growth opportunities:


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Idea Generation

Searching for new ideas

Many methods & ways are available

Eg. Brainstorming,asking for ideas from employees & customers,

Market Research,

competitors offerings,collaborating with outsiders or developing

licensing agreements


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Service Concept Development & Evaluation

Ready for initial development In case of products drawing designs of products &

checking reaction of people can be done

In services its not possible as services are

intangible, simultaneously produced &consumed, more complex.

So we need to define what exactly the oncept is.

While we involve many people in developingservice concept, opinions or views may not besame. However, by involving multiple parties onlyclear deffinition of service concept could befinalised after n number of agreements &

disagreements


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Next in this phase is to produce the description ofservice with its features & determine initial responsesfrom people say employees or customers

The service design document is essential as it would letus know the diffciulties in executing the service, discussthe reasons for offering the new service, itemize theservice process & its benefits

Role of consumers & employees would also be defined

Finally evaluation will take place by asking customersabout the concept of service, its acceptability andbenefit in terms of providing satisfaction

Service Concept Development & Evaluation


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Business Analysis

Estimating economic feasibility & potential

profit implications Demand analysis, Revenue Projections, cost

analyses, operational feasibility are checked


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Service Development & Testing

In product development, testing involves construction of

product prototype & testing for cosnumer acceptance. Butagain this is not possible in case of services & hence thisstage is also challenging

Involve everyone who have stake in the service, eg.Customers, employees, and functional area experts.

Here the service blueprint for implementation could beproduced.

Blueprint is likely to evolve over a series of iterations basedon inputs from all parties

Eg. Banks going modernised

Converting the blueprint into final implementation plan

All parties must work together for careful description &explanation of the new service.


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Market Testing

It is difficult to test new service in isolation

Moreover in some services there is only onepoint of service delivery eg. Hospitals orRestaurants or Colleges

Thus new methods are required For eg. Offering new service to the families of

employees & checking their response

or delivering the service to the real customers

under varying situations by changing pricing orpromotion policy

Pilot run is necessary


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Commercialization

Service goes live & is actually introduced atthe market stage

The main objective is to build & maintainacceptance of the new service among large

no. of service delivery personnel who areresponsible for service delivery with quality.

Another important objective is to monitor all

the aspects of the service during introduction& through the complete service cycle. Everydetail of the service shall be assessed.


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Post introduction Evaluation

Info gathered during above stages of

implementation specially commercialization

can be reviewed and changes made to

delivery process can be made

It is very much necessary to introduce the

formal evaluation & review process as service

quality is to be adhered or improved


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Service Blueprinting


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What is Service Blueprinting..??

It is a useful tool for designing & specifying

intangible service processes.

A service blueprint is a picture or a map that

accurately portrays the service system so that

the different people involved in providing it

can understand & deal with it objectively

regardless of their roles or their individualpoint of view.

Benefits of Service Blueprinting


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Benefits of Service Blueprinting Brings customer oriented focus among the employees as it provides

overview to every employee about his part of service delivery and

service as a whole.

Helps in quality improvement by identifying weak links in the servicedelivery process.

Clearly brings into picture where and what makes customer satisfied

with the service through Line of interaction

Line of visibility promotes a decision with regards to what customers

should see & which employees will be in contact with customers.

Line of internal interaction clarifies the interdependencies within the

departments within the organization and signifies quality improvement

need.

Brings into picture the clear idea of role of every employee in serviceproviding and delivery through connections and various elements.

Helps in identifying & assessing cost, revenue and capital invested in

each element of service.

Constitutes a rational basis for internal & external marketing.

Facilitates top down and bottom up approach to quality improvement.


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Components of Service Blueprints

Customer Actions

Line of interaction

__________________________________________________________________________

Onstage contact Employee ActionsLine of visibility

__________________________________________________________________________

Backstage contact Employee Actions

Line of internal interaction

__________________________________________________________________________

Support Processes

C f S i Bl i


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Components of Service Blueprints

Customer Actions: This area includes the activitiesperformed by the customer in process of purchasing,

consuming & evaluating the service. Generally, in this areacustomer experience can be easily noticed.

Onstage Contact employee actions: The steps andactivities performed by the contact employee and are

visible to the customer are the part of this area.

Backstage Contact employee actions: this area include allthose actions that occur behind the scene to support theonstage activities.

Support Processes: This section covers the internalservices, steps and interactions that take place to supportthe contact employees in delivering the service.

Th 3 H i t l Li


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The 3 Horizontal Lines:

Line of interaction:This line represents direct

interactions between the customer & theorganization.

Line of Visibility:This line separates all those

service activities that are visible to the customerfrom those that are not visible . This line alsoseparates what the contact employees doonstage from what they do back stage.

Line of internal interaction:This line separatescontact employee activities from those of other

service support activities & people

challenges of service design & new service development

Documents

tour service

service organization

service design1

service deliveryand

essential service

service design process

tour package service

thepart of service delivery