Eindhoven, April 2011

Student identity number 0618328

in partial fulfilment of the requirements for the degree of

Master of Science

in Innovation Management

Supervisors: Dr. Ing. J.P.M. Wouters, TU/e, ITEM Dr. S. Rispens, TU/e, HPM

Interfunctional cooperation in NSD process of

technology oriented service organizations:

An empirical field research of contribution, antecedents and consequences. by Frank Peters

TUE. Department of Industrial Engineering & Innovation Sciences. Series Master Theses Innovation Management Subject headings: Service(s), service innovation(s), new service development (NSD), interfunctional cooperation, antecedents and consequences.

“ Coming together is a beginning, keeping together is progress,

working together is success”

Henry Ford

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Abstract

Previous research has predominantly focused on the antecedents and consequences of interfunctional cooperation in the NPD context of manufacturing organizations. Recently the popularity of NSD and services as a research-area have increased. Within the NPD context, it is commonly recognized that interfunctional cooperation between units is important to obtain success. The main objective of this research is taking into consideration the identified gap in the literature; interfunctional cooperation in service organization during NSD. This research tries to fill this gap by providing insights of the contribution, antecedents and consequences of interfunctional cooperation in technology oriented service organizations. The findings suggest that interfunctional cooperation should be included in the NSD process and that interfunctional cooperation positively influences the service performance. It provides new theoretical contribution and service organizations can use the findings to increase the effectiveness of the development process.

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Acknowledgements

This report is the result of my Master Thesis project in completion of the Master of Science degree in Innovation Management at the Eindhoven University of Technology. This research provided me the opportunity to develop new knowledge and to share it with others. The completion of this research would not have been possible without the help of other people. Without them, I would not have been able to make this research to a success. Therefore, I would like to use this opportunity to thank several people. First of all, I would like to thank my first supervisor Dr. Ing. J.P.M. Wouters for his guidance and support. His enthusiasm and drive has stimulated me during the different stages of this research. Furthermore, his criticism, accurate and precise feedback was vital to the completion of this research. Secondly, I would like to thank Dr. S. Rispens to assist as second supervisor. She assisted in several stages that lead to this research. Her knowledge about research method, (scale) measurement and analysis issues were necessary in this project. Furthermore, I would like to thank all the master thesis supervision group members for their supervision sessions. A word of thank also goes out to Y. Kim for her support and assistance during the analysis phase of this research. Finally, a special word of thanks goes to my mother, father, sister, brother-in-law, friends and especially my girlfriend for their (financial) support and confidence during my entire life as a student. Thank you all, Frank Peters

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Summary

This research is the documentation of the master thesis project performed at the University of Technology Eindhoven. The new service development (NSD) process has become vital to survive in highly competitive service sectors. Little attention is given in the literature on the interfunctional cooperation mechanism in the NSD process of (technology oriented) service organizations. The research on interfunctional cooperation in the NSD process of service organizations is relative sparse when compared to the NPD process. Services have distinguishing characteristics between services and physical products or goods; the intangibility of services, the high degree of customer involvement during NSD and real-time production and consumption of services and the important role of front-line employees. Interfunctional cooperation plays a important role in the success of tangible produced products. This research addresses and investigates the interfunctional cooperation mechanism in the NSD process of technology oriented service organizations (ICT/IT services). This has lead to the following research problem:

“Would the nature of technology oriented services (iterative process, important

role of customers and employees, high knowledge intensity etc.) suggest that

organizations could benefit (higher level of success) from interfunctional

cooperation during NSD?”

A literature review is performed on services, service innovations, new service development, interfunctional cooperation in the NPD and NSD context. Based on academic literature and three existing interfunctional cooperation models in the NPD context, a conceptual model was determined that focused on antecedents and consequences of interfunctional cooperation in the NSD context. Figure 1 graphically presents this conceptual model. Interfunctional cooperation in this research is defined as; “A group of people representing a variety of departments, disciplines, or functions, whose combined effort is required to achieve the team’s purpose (Wang and He, 2008).”

Figure 1: Conceptual model

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First of all, this research investigates the relationship between internal manageable antecedents on interfunctional cooperation. Personal related antecedents will be measured by two variables; 1) Functional expertise power and 2) Department power. Project related antecedents will be measured by three variables; 1) Innovativeness, 2) Complexity and 3) Importance. Organizational antecedents will be measured by three items; 1) Technology orientation, 2) Fomalization and 3) Culture. Interfuntional cooperation will be measured by information sharing and interfunctional coordination. Hypothesis 1 proposes that functional expertise would positively and department power would negatively relate to information sharing and interfunctional coordination. Hypothesis 2 proposes that innovativeness, complexity and importance would positively relate to information sharing and interfunctional coordination. Hypothesis 3 proposes that technology orientation would negatively and that formalization and culture would positively relates to information sharing and interfunctional coordination. Furthermore, this research investigates the relationship between interfunctional cooperation and service performance. Therefore, hypothesis 4 proposes that information sharing and interfunctional coordination would positively relate to service performance. A field research and a quantitative questionnaire will be conducted in order to test the underlying relations in the conceptual model. The hypotheses were tested on a sample of 93 respondents from 88 different ICT/IT service organizations in the Benelux. Prior to the questionnaire, two preliminary interviews were conducted. These were conducted to test if the respondents understand the questionnaire. The variables/constructs will be measured by using scales from prior research. After the data collection, the data will be tested on reliability and validity analysis with SPSS and the proposed hypotheses will be tested by using Structural-Equation-Modeling (SEM) technique and the computer application SmartPLS. The analyses in SmartPLS revealed that ten of the eighteen relations were statistically significant. Nine of the eighteen hypotheses were accepted. In line with the expectations, it was found that functional expertise, formalization and culture positively relates to information sharing. Department power negatively relates to interfunctional coordination. In addition it was found that, innovativeness, importance, technology orientation and formalization positively relates to interfunctional coordination. The main finding which is in line with the expectations is that information sharing and interfunctional cooperation both positively relates to service performance. The empirical findings of this research provide strong validation and point to the important role of the interfunctional cooperation mechanism in the NSD process of ICT/IT service organizations. Moreover, the research model accounted for the variances in the independent variables; 1) Information sharing, 2) Interfunctional coordination and 3) Service performance. The R2 represents the variance in the independent variable and the value varies between 0 and 1. Knowing the values of functional expertise, formalization and culture, this can explain 34,9% of the variance in information sharing. This mean that the factors were well chosen to interpret the relationship with information sharing. Knowing the values of department power, innovativeness, service importance, technology orientation, formalization and size of the organization (# of employees), this

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can explain 44,4% of the variance in interfunctional coordination. This means that the factors were well chosen to interpret the relationship with interfunctional coordination. Knowing the values of information sharing, interfunctional coordination, structure of the organization and completed projects a year, this can explain 29,2% of the variance in service performance. This means that the interfunctional cooperation mechanism can interpret the service performance. Given the critical role of interfunctional cooperation in the NSD process of ICT/IT service organizations, organizations should understand the implications of the findings. First, the insights into the relationship between personal antecedents and interfunctional cooperation imply that functional expertise plays a critical role in information sharing during the NSD process. In addition, service organizations needs to control the level of department power in the interfunctional cooperation in the NSD process because of the negative relationship to the level of interfunctional cooperation. Second, service organizations should know the level of innovativeness and the importance of the service, because more innovative and important services need a higher level of interfunctional cooperation. Third, it is important to focus on the organizational antecedents because in general it seems beneficial for service organizations to integrate a more formalized structured or structured parts of the NSD process. In addition, organizations should also be aware of the fact that if the organization has a higher level of technology orientation and an entrepreneurial and collaborative culture the need for interfunctional cooperation will be higher. Finally, this research suggest that ICT/IT service organizations need a certain level of interfunctional cooperation in the NSD process to achieve service performance.

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Table of contents

Abstract ............................................................................................................................... I

Acknowledgements .......................................................................................................... II

Summary .......................................................................................................................... III

List of tables and figures ............................................................................................. VIII

1 Introduction ............................................................................................................... 1

1.1 Research context ................................................................................................. 1

1.2 Problem statement and research questions ......................................................... 1

1.3 Research objectives and contributions ................................................................ 2

1.4 Structure of the research ..................................................................................... 2

2 Theory review ............................................................................................................ 3

2.1 Service description .............................................................................................. 3

2.2 Service innovation .............................................................................................. 3

2.3 Development of services ..................................................................................... 4

2.4 Interfunctional cooperation ................................................................................. 5

2.4.1 Interfunctional cooperation in the NPD context ........................................... 6

2.4.2 Interfunctional cooperation in the NSD context ........................................... 7

2.5 Concluding comments ........................................................................................ 9

3 Conceptual model and hypotheses development .................................................. 11

3.1 Antecedents of interfunctional cooperation ...................................................... 11

3.1.1 Personal related antecedents ....................................................................... 11

3.1.2 Project related antecedents .......................................................................... 13

3.1.3 Organization related antecedents ................................................................ 15

3.2 Consequences related dimension ...................................................................... 17

3.3 Control variables ............................................................................................... 18

3.4 Overall table of the dimensions ........................................................................ 19

3.5 Graphical representation of the conceptual model............................................ 20

4 Research methodology ............................................................................................ 21

4.1 Research design ................................................................................................ 21

4.2 Questionnaire design ......................................................................................... 22

4.3 Sample design ................................................................................................... 24

4.4 Data collection and analyzing ........................................................................... 25

4.5 Scale validity and reliability ............................................................................. 26

5 Results and analysis ................................................................................................ 27

5.1 Descriptive statistics of the sample ................................................................... 27

5.2 Type of projects and departments in the NSD process ..................................... 27

5.3 Dataset preparation for hypothesis testing ........................................................ 31

5.4 Reliability and Validity assessment of the construct(s) .................................... 33

5.4.1 Assessment of the construct(s) reliability ................................................... 33

5.4.2 Assessment of construct(s) validity ............................................................ 34

5.4.3 Assessment of discriminant validity and composite reliability .................. 36

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5.5 Model analysis .................................................................................................. 37

5.5.1 Hypothesis testing ....................................................................................... 37

5.5.2 Significant level .......................................................................................... 38

5.5.3 Results of model with SmartPLS ................................................................ 38

5.5.4 Model findings ............................................................................................ 38

6 Discussion and conclusion on findings .................................................................. 40

6.1 Discussion ......................................................................................................... 40

6.1.1 Interfunctional cooperation in the NSD context ......................................... 40

6.1.2 Antecedents of interfunctional cooperation in the NSD context ................ 41

6.1.3 Consequences of interfunctional cooperation in the NSD context ............. 44

6.2 Main conclusions .............................................................................................. 44

6.3 Theoretical contribution and (managerial) implications ................................... 46

7 Limitations and suggestion for future research ................................................... 49

7.1 Limitations ........................................................................................................ 49

7.2 Suggestions for future research ......................................................................... 50

References ........................................................................................................................ 51

Appendices ....................................................................................................................... 56

Appendix 1: Tangibility spectrum services .................................................................. 56

Appendix 2: Model of Atuahene-Gima and Evangelista (2000) .................................. 57

Appendix 3: Model of Song et al. (1997) ..................................................................... 57

Appendix 4: Model of Cohen and Bailey (1997) .......................................................... 58

Appendix 5: Hypotheses ............................................................................................... 59

Appendix 6: Dutch version questionnaire ..................................................................... 60

Appendix 7: English version questionnaire .................................................................. 68

Appendix 8: List of potential organizations .................................................................. 75

Appendix 9: Letter mailing ........................................................................................... 80

Appendix 10: Letter reminder mailing ......................................................................... 81

Appendix 11: Team size vs. Departments involved ..................................................... 82

Appendix 12: Comparing NPD and NSD ..................................................................... 84

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List of tables and figures

Tables

Table 1: Different characteristics between services and goods .......................................... 3

Table 2: Summarized table of the dimensions in this research ......................................... 19

Table 3: Summarized sample descriptives ........................................................................ 27

Table 4: Types of service innovations .............................................................................. 28

Table 5: Departments involved during NSD process ....................................................... 29

Table 6: Summarized table of department in NSD stages ................................................ 30

Table 7: Assumption testing of factor analysis ................................................................. 32

Table 8: Construct(s) reliability analysis .......................................................................... 34

Table 9: Construct(s) validity via factor analysis ............................................................. 36

Table 10: Discriminant and composite reliability test ...................................................... 36

Table 11: Hypotheses testing in SmartPLS ...................................................................... 38

Figures

Figure 1: Conceptual model .............................................................................................. III

Figure 2: Overall design of the conceptual model ............................................................ 20

Figure 3: Model findings with SmartPLS ......................................................................... 39

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1 Introduction

1.1 Research context

In half of the developed economies, services dominate the amount of the gross domestic product and in the 21st century the economic and job growth will be dominated by the service sector. In the Netherlands, the service sector is growing fast while the product sector is stagnating (Kox, 2000). Therefore, the new service development (hereafter also referred to as ‘NSD’) process has become vital to survive in highly competitive service sectors (Johnson et al., 2000; Fitzsimmons and Fitzsimmons, 2000). The NSD process is often suggested as an ad-hoc / iterative development process and is a less structured approach as the new product development (hereafter also referred to as ‘NPD’) process (Kelly and Storey, 2000; Akamavi, 2005). In an iterative process, customers and key staff from different functions are involved in key aspects of the development process. Services have distinguishing characteristics between services and physical products or goods; e.g. the intangibility of services, the high degree of customer involvement during NSD and real-time production and consumption of services and the important role of front-line employees. This research will focus on technology oriented service organizations which are operating in the Benelux. The ICT/IT sector was chosen as the research field because most organizations in this sector develop technology oriented services and deliver Software as a Service (SaaS). According to Bilderbeek et al. (1998), IT services consist of a high knowledge-intensity nature and in such environment new combination of knowledge and competencies are needed. A key mechanism in realizing and managing the new product development process of successful products is the involvement of a structured interfunctional cooperation approach (Lovelace et al., 2001; Ancona and Caldwell, 1992; Hoegl and Gemuenden, 2001). Moreover, a lot of research has been done on the influence of interfunctional cooperation on the success of tangible products, for example Pinto et al.(1993), Song et al. (1997), Kirkman and Rosen (1997), and Atuahene-Gima and Evangelista (2000).

1.2 Problem statement and research questions

So far, the research on interfunctional cooperation in the NSD process of service organizations is relative sparse when compared to NPD (Fitzsimmons and Fitzsimmons, 2000). Past research has demonstrated the importance of interfunctional cooperation in a variety of NPD contexts. No stable link has been established until now between the planned and structured interfunctional cooperation mechanism in the (iterative nature of the) NSD context of technology oriented service organizations. Therefore, the following problem statement will be used during this research:

“Would the nature of technology oriented services (iterative process, important role of

customers and employees, high knowledge intensity etc.) suggest that organizations could

benefit (higher level of success) from interfunctional cooperation during NSD?”

To identify and answer this research problem, two research questions are determined: 1. Will technology oriented service organizations benefit from interfunctional cooperation

during the new service development (NSD) process?

2. What could be antecedents and consequences of interfunctional cooperation in the new

service development (NSD) process?

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1.3 Research objectives and contributions

This research aims to bridging the gap between researchers and practitioners about the interfunctional cooperation mechanism in the NSD context of technology oriented service organizations. This research has two goals; 1) contribution to scientific research as well as to 2) practitioners’ field. First, this research will cover an aspect which has been neglected in literature until now and contributes to the research topic of interfunctional cooperation in NSD (Fitzsimmons and Fitzsimmons, 2000). This research aims to explore the relation between interfunctional cooperation and service performance in the NSD process of ICT/IT organizations. Subsequently, this research investigates factors that enhance or hinder the interfunctional cooperation mechanism in the NSD context of technology oriented service organizations. Furthermore, this research tries to compare the results of interfunctional cooperation in technology oriented service organizations with the result of interfunctional cooperation in the tangible product organizations. Second, this research provides managerial implications for the implementation of interfunctional cooperation in NSD of technology oriented service organizations. Moreover, organizations can use the findings to improve the management of the NSD process of innovations.

1.4 Structure of the research

This research is structured as follows. In chapter 1, an introduction and the context of this research are presented. This is followed by chapter 2, which describes the literature review. In chapter 3, the development of the conceptual model and the hypotheses are given. Chapter 4 discusses the research methodology. Chapter 5 presents the validation, findings and results of the survey. In chapter 6, the discussion, conclusions, contribution and (managerial) implications are given. The research ends with limitations and suggestions for further research in chapter 7.

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2 Theory review

In this chapter the existing theory about services, service development, innovations (in service organizations) and interfunctional cooperation will be summarized. This theory will be used to construct a conceptual model regarding antecedents and consequences of interfunctional cooperation in technology oriented service organizations.

2.1 Service description

Research on service innovations is a topic that is increasingly recognised, but it is still one of the least studied areas in management literature. The larger part of employment and output in most industrial countries is constituted by services (Fagerberg et al. 2006; Eurostat, 2008). The service sectors in those economies are important for productivity, competitiveness and quality of life. In practise, there are a wide range of definitions of services going around in both scientific and managerial circles. In this research, a service is defined as:

“An activity or series of activities of more or less intangible nature that

normally, but not necessarily, take place in interactions between customer and

service employees and/or physical resources or goods and/or systems of the

service provider, which are provided as solutions to customer problems

(Gronroos, 1990).”

This definition is adopted because this definition contains different components; people, processes, software and hardware. Services have the following (summarized in table 1) four distinguishing characteristics between services and physical products or goods. Table 1: Different characteristics between services and goods

To give an impression of the positioning on the (in)tangibility spectrum scale, ICT/IT service organizations and their services are represented in the fourth or fifth category. The spectrum scale is based on research of Shostack (1977) and Kotler (1997). The spectrum is graphically presented and explained in appendix 1.

2.2 Service innovation

Innovation has long been recognized as a key to economic growth, but its role in the service sector has been underappreciated (Ojasola et al., 2008). Although it was argued that service innovations are often non-technological, this is still the center of much analysis (Kandampullty,

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2002). Service innovations often involves small and incremental changes in processes and/or procedures (De Jong et al, 2003). There are numerous definitions of innovations in services going around in both scientific and managerial circles. In this research, a service innovation can be described as:

“Innovation in services is an offering not previously available to a firm’s

customers resulting from additions to or changes in the service concept

(Menor et al., 2002).”

Service innovations can also be described along the degree of newness. De Jong et al. (2003) interpreted the degree of newness as the difference between “evolution” and “revolution”. Evolution innovations can be seen as incremental innovations in the manufacturing organizations. In evolutions, some parts (characteristics) of the service are replaced or added without changing the core of the service. This could also include the development of solution for a specific problem in cooperation with the customer (de Jong et al., 2003). Revolution innovations can be seen as radical innovations in manufacturing organizations. According to de Jong et al. (2003), they expect that radical innovations in services are usually developed in large scale, formally managed processes. Those innovations look almost the same as R&D projects in manufacturing organizations. It can be stated that service innovations often appear to be a mix of minor and major changes and improvements of existing services. The distinction of product and process innovation is less clear in services (Bitran and Pedrosa, 1998). De Jong et al. (2003) suggested when service organizations use a more structured or structured parts in the NSD process, they should be able to recognize innovation opportunities more easily. Well-educated co workers fulfil a key role in the success of service innovations (Sirilli and Evangelista, 1998). Johne and Storey (1998) argued that individuals involved within the NSD process as one of the key areas for innovation success. Employees play an essential role in translating the customer needs into new services. Front-line employees are often the intermediary between the customer and the service organizations. They have lot of contact with the end-user/customers of the service and are very important to understand the needs and wants of the customers (De Brentani, 2001). Concluding, when studying the definition of innovation in services, it can be seen that like innovation in products it is about change and the development is highly dependent on inner workings and expertise. The next paragraphs will elaborate on the development of services and interfunctional cooperation mechanism in the NPD and NSD process.

2.3 Development of services

The new service development literature is still less extensive compared to the field of new product development. According to de Jong et al. (2003), the development of services in many firms just “happens”. It is most of the time an ad hoc process (Gallouj and Weinstein, 1997; Kelly and Storey, 2000). As stated by Ruitenbeek (2007), there exist roughly two different types of development models. The first ones are the simple phase models and the second ones are the interaction models. NSD phase models tries to capture the process behind new service development and are, to a certain extent, based on models from the NPD literature. Interaction models are NSD models that capture more and more assets of the service development process as a whole (Ruitenbeek, 2007). They act more as a system that has interaction with different aspects during the development stage. According to researchers, firms being most successful in providing new services when prevent their innovation process from being ad hoc (De Brentani,

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2001; Kelly et al., 2000). Therefore, researchers argue for a systematic and overlapping service development process (Bitner et al., 2008; Edvardsson et al., 1995; de Jong et al., 2003). Also other researchers argue for a more structured NSD process or structured parts of the NSD process (Nägele, 2006; Ojasola, 2008; Stevens et al., 2005; Smith et al., 2007). The NSD process involves activities that are carried out from an idea up to the launch of the new service in the market (Urban and Hauser, 1993). According to Menor et al. (2002), the NSD process cycle exists of a series of different stages; planning, design, analysis and execution. Concluding, it seems that the following stages/steps can be found more or less in every NSD process; 1) Idea generation, 2) Idea screening, 3) Business and marketing analysis, 4) (Technical) development, 5) Testing and 6) Launching/commercializing. The NSD process is as the NPD process the transformation of inputs about needs and market opportunities into a solution. The NSD process starts always with an idea. A key issue in realizing services and the NSD process are the inner workers, expertise and cooperation between different functional units (Johne and Storey, 1998). Thus, employees are responsible for ideas, concepts and specifications for successful innovations. Therefore, having the right individuals is the first, uniting them to good teams is the second step. The next paragraphs will elaborate on interfunctional cooperation.

2.4 Interfunctional cooperation

Interfunctional cooperation in innovation is an important topic. Interfunctional cooperation is a method of choice by which organizations generate new products and processes and can have competitive forces (Keller, 2001; Denison et al., 1996). According to Keller (2001), the involvement of interfuntional cooperation provides advantages of multiple sources of communication, information and perspectives. Some of the advantages of interfunctional cooperation within innovations are the clearer line of sight to the customer, speed to market and shorter development times. There are numerous terms and phrases that have been used analogously for interfuntional cooperation, such as cross-functional cooperation, integration and teamwork (Pinto and Pinto, 1990). They stated that the lowest common dominator which integrates the four concepts is ‘joint behaviour toward some goal of common interest’. In this research, the term interfunctional cooperation is used and can be described as:

“A group of people representing a variety of departments, disciplines, or

functions, whose combined effort is required to achieve the team’s purpose

(Wang and He, 2008).”

Therefore, interfunctional cooperation in this research refers to information sharing and coordination between various organizational units or functions (marketing, sales, engineering etc.). There are many advantages of teamwork. One of the greatest advantages is that knowledge will be created because of the interaction between the actors (Stevens et al., 2005). Those teams are able to use a broad array of external information and knowledge and can facilitate creativity, because of the combination of individuals with different expertise. Therefore, organizations increasingly rely on interfunctional teams to develop the innovative products and processes, because interfunctional teams are generally expected to develop the innovative products and processes efficiently (Lovelace et al., 2001). The interfunctional teams which develop the innovation should be configured of multiple disciplines (Avlonitis et al., 2001; Johne et al., 1998; de Jong et al., 2003; Stevens et al., 2005; Wilson et al., 2008). In

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the next paragraphs, interfunctional cooperation in the NPD and in the NSD contexts will be shortly described.

2.4.1 Interfunctional cooperation in the NPD context

According to Shaw and Schneier (1995), interfunctional cooperation can speed up product development and turnaround on customer requests, improve an organizations’ ability to solve complex problems, serve as a vehicle for organizational learning, and act as connecting points of contact for projects with customers when the teams are effective organized. Song et al. (1998) stated that NPD tasks require input and interfunctional cooperation from multiple functions to reduce uncertainty and improve the quality of decisions. Studies found that the involvement of multiple functions in new product development (NPD) has a positive effect on performance (Dougherty, 1992; McDonough and Griffin, 1997). However, other studies argued for a less clear-cut relationship between the use of interfunctional cooperation and product performance (Ancona and Caldwell, 1992; Clark and Wheelwright, 1992). McDonough (2000) indicated commitment to the project, ownership of the project, respect and trust among involved employees, appropriate project goals, a stage-setting step and good team leadership as important behaviours in achieving the success of the cooperation. In other words, organizations must work in all dimensions to maximize the success of the interfunctional cooperation (McDonough, 2000). Interfunctional teams are mostly used within high-technology oriented organizations, which generate novel products (Keller, 2001). The backside of the advantage of interfunctional teams is the necessity of coordination and communication between interfunctional team members. Moreover, NPD often requires the involvement of customers and business partners which make coordination and communication difficult as well (Ozer, 2000). Concluding, interfunctional cooperation may simply work in particular circumstances and contexts but not in others. Reasons that may cause to fail the interfunctional cooperation can be the different orientations, goals, departmental cultures, languages that each involved functional representative brings with them to the cooperation and the organizations’ ineffective internal infrastructure (Ancona and Caldwell, 1992; Song and Parry, 1992). Nevertheless, an extensive body of the physical product literature emphasizes the importance of interfunctional teams and effective cooperation within those teams as one of the most important success factors for new product development projects (Song and Parry, 1992; Cooper, 2001; Lovelace et al., 2001). The topic of drivers and consequences of interfunctional cooperation in NPD has gained increasing interest. This research focused on the antecedents and consequences of interfunctional cooperation in the NPD context to investigate the roles and influences of these antecedents and the consequences in the NSD context. Particularly, this research is interested in the role of interfunctional cooperation in NSD. Subsequently, this research looks for plausible connections of the antecedents and consequences in the NSD context. Therefore, the next paragraph elaborate on interfunctional cooperation models in the NPD context. There exist studies in the physical product sector which describe antecedents and consequences of interfunctional cooperation in the NPD process. Three studies which included antecedents and consequences of interfunctional cooperation are reviewed. These three are selected because those studies included antecedents, success factors, interfuntional teams, performance and consequences in their model. The models are shortly explained in the next paragraphs in order of practically usefulness for this research.

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• Model of Atuahene-Gima and Evangelista (2000) The empirical research of Atuahene-Gima and Evangelista (2000) examined the effects of marketing and R&D influence and participation on new product performance and the differential effects of personal, new product and organizational factors on their influence in the NPD process as seen from each other’s perspective. They found that the new product performance was directly influenced by the influence of marketing and R&D. In their model, they suggested that expert power, R&D’s department power and stakeholders are direct antecedents on the influence of marketing and R&D. They also suggested that product innovativeness, new product complexity and new product importance are direct antecedents of the influence and participation of marketing and R&D. Furthermore, a technology oriented culture and formalization of the NPD process were also direct antecedents of the marketing and R&D influence and participation. The model is graphically depicted in appendix 2. • Model of Song et al. (1997) Song et al. (1997) developed a model in order to understand cross-functional cooperation and the interdependency among the functional areas in the NPD process. In their empirical research, they listed marketing, research and development (R&D) and manufacturing as critical functional areas in the NPD process. The results of their study indicate that the relationships concerning the effects of internal facilitators on interfunctional cooperation and performance were supported. The results also showed that the positive effect of interfunctional cooperation on new product performance is supported. The model demonstrates that effective interfunctional cooperation is a significant driver of new product performance. The study found that the primary determinants of interfunctional cooperation and new product performance are the internal facilitators. The influence of the factors related towards external forces is not related towards interfunctional cooperation and new product performance. The model is graphically depicted in appendix 3. • Model of Cohen and Bailey (1997) The literature review of Cohen and Bailey (1997) discusses the research on teams and groups in organization settings published from January 1990 to April 1996. Their literature focused on empirical studies of (interfunctional) teams in organizational settings. The organizational settings consist of teams which produce tangible products, recommend improvements and design new products. The authors present a heuristic framework for team effectiveness that illustrates recent trends in the literature. Their model clarified the factors that predict effectiveness for different types of groups. They argued for more complete descriptions of the technology, task, and products associated with teams. Their model did not include the context in which the different teams were operating (the mission, structure, strategic issues, and so on) to interpret the study results. So, their study is missing conditions which could be important in the model. The model is graphically depicted in appendix 4. The next paragraph discusses the interfunctional cooperation mechanism in the NSD context.

2.4.2 Interfunctional cooperation in the NSD context

A reason for examining the involvement of interfunctional cooperation in NSD is that interfunctional cooperation during NSD (of ICT/IT service organizations) is a topic that has been neglected in the literature. Previous research has suggested that the interfunctional cooperation mechanism will work in particular circumstances and contexts. Therefore, the question is if interfunctional cooperation (could) play a role in the NSD context? Arguments, reasons and suggestions will be explained in the next section.

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According to Atuahene-Gima (1996), services and manufacturing organizations focus on similar factors for improving innovation performance. Krishan et al. (1997) stated that he NSD process similar can be viewed as the NPD process, because the NSD process is as the NPD process the transformation of input information about customer needs and market opportunities into output information. In other words, the NSD is very similar to NPD and is a set of stages and activities, actions and tasks that moves the development from idea to deployment and disposal. This argues for the fact that the NSD process will also be highly dependent on the inner workings, expertise and cooperation between employees from different functions involved in the process (Johne and Storey, 1998). This is supported by Mahajan et al (1994), they suggested that the interdependencies between functions influence the NSD process. Furthermore, the objectives of NSD in service organizations are similar to the objectives of NPD in manufacturing organizations, because both will minimize the time to market, maximize the fit between market need and product/service characteristics, competitive the position of the organization and profitability and market share. Tax and Stuart (1997) argued that one of the major limitations of the NSD processes is the non-existent integration and communication between the functional departments. Akamavi (2005) argued that service organizations should follow an iterative process. In an iterative process, customers and key staff from different activities are involved in key aspects of the development process. The NSD process needs to concentrate particularly on the factors that distinguish services from physical products as summarized in table 1; intangibility, co-production and consumption, heterogeneity and perishability. Lievens and Monaert (2000) argued that due the intangibility of services, the high degree of customer involvement and real-time production and consumption of the service it may be difficult to develop new service without a certain level of interfunctional cooperation between functions. IT services consist of a high knowledge-intensity nature (Bilderbeek et al., 1998). The high knowledge-intensity nature of IT-services could argue for interfunctional cooperation because in this situation new combination of knowledge and competencies are needed and offered via interfunctional cooperation to organizations. To enhance efficiency and effectiveness in the NSD process of IT services, organizations should divide up various work tasks between co-workers and provide coordination. Concluding, organizations need to offer the marketplace continuously improved, if not new services, while keeping one step ahead of their competitors and at the same time fulfilling the needs and expectations of their customers. Therefore, services are developed for market share, return on investment or target volumes and goals for the whole organization. In the literature, it has been argued that, the NSD process is very similar to NPD process. Co-workers are the heart of innovation process, come up with ideas and turn these into successful innovations. The issue of co production and consumption should be resolved by involving users and frontline employees at the different stages throughout the NSD process. Then employees can complete each other in the variety of competences, which are needed during the NSD process. The iterative nature of the development process emphasizes the use of key resources or enablers to support and drive the NSD process. Therefore, in this research it is suggested that the NSD context could provide a useful setting, due the need for the diversity of functional goals, to explore the interfunctional cooperation mechanism.

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2.5 Concluding comments

The review of the literature aimed to provide an overview of the field of services, service development, service innovations and interfunctional cooperation in manufacturing and service organizations. First service, service development and innovations are discussed in general and definitions are provided. After this, the interfunctional cooperation mechanism in manufacturing and in service organization was discussed. Some researchers argued that the NSD process is most of the time an ad hoc process but other researchers argued for a more systematic and structured approach. However, there exist roughly two types of NSD models; 1) Simple phase models and 2) Interaction models. The phase models are to a certain extent, based on the NPD models. The interaction models act more as a system that has interaction with different aspects during the development stage. Based on the aforementioned literature, it can be concluded that theory about the interfunctional cooperation mechanism is widely available and applicable in the NPD context. Interfunctional cooperation was most of the time found to be positively related to performance in the NPD context. Additionally, prior research found evidence that interfunctional cooperation can work within high-technology oriented organizations, which generate novel products. From the literature part of this research, there can be some arguments suggested why the interfunctional cooperation mechanism could work in the (iterative) NSD context at least; • Researchers suggested the fact of having more than one individual employee responsible for

the NSD process is necessary; • NSD relies on the expertise and cooperation of different functions; • The NSD process is as the NPD process the transformation of input information about

customer needs and market opportunities into output information; • The NSD process will also be highly dependent on the inner workings, expertise and

cooperation between employees from different functions involved in the process; • The interdependencies between functions influence the NSD; • The objectives of NSD in service organizations are similar to the objectives of NPD; • One of the major limitations of the NSD processes is the non-existent integration and

communication between the functional departments; • Service and manufacturing organizations focus on similar factors for improving innovation

performance; • The issue of co production and consumption should be resolved by involving customers and

different co-workers (e.g. frontline employees) at the different stages throughout the NSD process. Then employees can complete each other in the variety of competences, which are needed during the NSD process.

Based on the above mentioned arguments, it is suggested in this research that the NSD process is also a setting to explore the interfunctional cooperation mechanism. Taking into account the identified gap in existing literature, this research aims to develop and test a conceptual model of the antecedents and consequences in technology oriented service organizations. Specifically for interfunctional cooperation in ICT/IT service organizations, no previous (empirical) research has been found testing antecedents of interfunctional cooperation. This research focused on and will adopt the antecedents and consequences in the NPD context to investigate the roles and influences of these antecedents and the consequences in the NSD context.

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Based on the reviewed interfunctional cooperation models from the NPD context, several antecedents affecting the level of interfunctional cooperation will be analyzed, discussed and assumed as antecedents in the NSD context of technology oriented service organizations as well. Eight internal manageable factors related to interfunctional cooperation are selected from the interfunctional cooperation models. This research does not elaborate on the possible external/environmental characteristics; the focus is on the manageable organizational characteristics only. The literature review provides inside for the next part of this research. In the next chapter the antecedents, interfunctional cooperation and consequences dimensions will be discussed in depth. The next chapter also provides the conceptual model and the hypotheses to be tested in ICT/IT service organizations.

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3 Conceptual model and hypotheses development

This research tries to provide a more complete understanding of interfunctional cooperation in technology oriented service organizations. The ultimate goal is to develop and test a model that includes antecedents and consequences of interfunctional cooperation in the NSD process of service organizations. The model is determined by combining existing models of interfunctional cooperation and the available literature about services into one general model. To find answers to the research problem, a number of hypotheses will be tested. The hypotheses are formulated to test the empirical data and the outcomes will be used to draw conclusions. The next paragraphs describe the categorized antecedents, the consequences and the underlying relationships between the dimensions which are extracted from literature. First, the antecedents and their hypotheses will be described. Second, the interfunctional cooperation dimension, their hypotheses and the consequence will be described. Third, a summarized table of the dimensions will be given. Fourth, the control variables will be shortly discussed. Fifth, the conceptual model is given.

3.1 Antecedents of interfunctional cooperation

As stated earlier, interfunctional cooperation in this research refers to information sharing and the coordination between various organizational units or functions (marketing, sales, engineering, operations etc). It is argued in this research that to effectively and efficiently develop and deliver innovations, a degree of interfunctional cooperation must be achieved. The interfunctional cooperation models from the NPD literature do not point out one dimension that is key important. Different researchers describe specific antecedents that are related as important. The categorizations in these studies and models were used to make a categorization for this research. The models of interfunctional involvement in NPD include often two categories of antecedents; 1) Internal and 2) External factors. Service organizations are able to manage some of these factors. Internal factors are manageable and controllable and external factors are unmanageable. Therefore, in this research the focus will be on the controllable factors/drivers of interfunctional cooperation. The models describe the controllable antecedents and they can be classified and categorized in; 1) Personal, 2) Project and 3) Organizational antecedents. Within the three types, a total of eight antecedents were extracted from literature.

3.1.1 Personal related antecedents

On the first theme, the personal related antecedents, the following two items are argued to be antecedents for interfunctional cooperation in technology oriented service organizations.

• Functional expertise Functional expertise refers to the degree which an individual is regarded as having expert knowledge about relevant issues in the development process (Atuahene-Gima and Evangelista, 2000). In other words, it is the extent to which organizations use human resources for creating, produce and deliver services. For example, the marketing and sales employees know a lot about commercial issues and engineering employees know a lot about design issues. According to Pfeffer (1981), expertise is a source of power, because it ensures control over information in exchange relationships. This fact in the NPD process is also important in the NSD process. Johne and Storey (1998) suggested that the NSD process is highly dependent on the expertise of employees from the different functions. According to Kohli (1989), expertise refers to the extent

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to which an individual is perceived by others as being knowledgeable about relevant issues. Others comply with the functional expertise of such an individual because of their belief that doing so will lead to a better decision. According to Atuahene-Gima (1996), services and manufacturing organizations focus on similar factors for improving innovation performance. Johne and Storey (1998) argued that inner workers and their expertise are a key issue in NSD. In this research it is suggested that the functional expertise is more important in the NSD than in the NPD context. A reason for this can be that new services will be developed and consumed simultaneously. In this situation, the functional expertise of employees becomes very important because they need engineering and marketing knowledge and skills. Front-line employees handle process failures and should respond to customers’ problems, wants and needs. Another reason can be that the ICT/IT services are very high knowledge intensive and less productive oriented. Thus, employees should have a high level of functional expertise when developing solutions. For example, front-line employees have a lot of contact with the end-user/customers of the service. According to Menor et al. (2002), the NSD process cycle exists of a series of different stages; planning, design, analysis and execution. Then, each stage needs specialist expertise since each stage needs a different specialized field of knowledge. Therefore, functional expertise of the different co-workers involved during the NSD process of the project, enhance interfunctional cooperation, because functional expertise provides confidence to team members about usefulness of others’ (important) information. Functional expertise of different employees could, therefore, drive information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that:

H1a: Functional expertise is positively related to information sharing;

H1b: Functional expertise is positively related to interfunctional coordination. • Department power The power of a department in the project describes the degree to which a specific department is perceived to be more powerful than other departments in the NSD process (Atuahene-Gima and Evangelista, 2000). According to Kohli (1989), departmental power refers to the relative importance of a department in an organization. The resource dependency view of organizations suggests that different departments within an organization have varying degrees of power because of their differential ability to obtain resources critical to the organization. In the NPD context, department power is negatively related to the level of interfunctional cooperation. For example, Workman (1993) suggests where R&D is more powerful, they tend to develop marketing knowledge to deal with customers in order to reduce their dependence on marketing. Thus, one department can be more powerful than others in the NPD process. In the NSD context, there can also be a difference in department power. For example, as stated earlier in this research, front-line staff (operational department) should be involved in the NSD process. Therefore, they can be very important and create value in several stages of the NSD process and can be seen as a department which receives more power. In the idea generation, screening and analysis phases of the NSD process, front-line employees are very important to know what customers want and need. Therefore, they are a very important source of ideas and new service opportunities. In the development, test and launch phases of the NSD process, the front-line department can help by the service customization and the diffusion of the service. This can lead to disharmony between departments because the operational department wants to make the decisions and reduce their dependency to interact and exchange information with other

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departments during the NSD process. Thus, the power of this specific department can be a major hindrance to the interfunctional cooperation in the NSD process. In this research it is suggested that the department power factor is more important in the NSD that in the NPD context. A reason for this can be the higher level of customer involvement and simultaneous production and consumption (Martin and Horne, 1993). In other words, the operational department is dealing with the involved clients during service production and delivery. As mentioned before, the operational department is very important and could therefore have more power than other departments in the NSD process. Department power could, therefore, be negatively related to the level of information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that;

H1c: Department power is negatively related to the level of information

sharing;

H1d: Department power is negatively related to the level of interfunctional

coordination.

3.1.2 Project related antecedents

On the second theme, the project related antecedents, the following three items are argued to be antecedents for information sharing and interfunctional coordination in technology oriented service organizations. • Service innovativeness Service innovativeness of the project refers to the extent to which the service is new to the organization and/or to the market. It reflects the degree of experience the organization has with the NSD project. It can be stated that innovation in services is as innovation in manufacturing organizations about change and innovations often appear to be a mix of minor and major changes and improvements of existing services. As innovations in the good sector, the new services can range from incremental/evolution and radical/revolution innovations. According to Den Hertog (2000) and Bilderbeek et al. (1998), the diversity of innovation in services can be described by the changes in the service concept, client interface, delivery system and/or technological changes. In the NPD context, the level of innovativeness changes the level of interfunctional cooperation (Atuahene-Gima and Evangelista, 2000). In this research is it is suggested that the level of innovativeness is less important in the NSD than in the NPD context. A reason for this could be that service innovations often appear to be a mix of minor and major changes and improvements of existing services. In this situation, the service organizations are more familiar with the new incremental services and there are less organizations effort and resources commitment required in the NSD process. In a similar view to innovativeness in NPD, innovativeness in NSD changes the level of information sharing and interfunctional coordination. This suggests that services with a higher level of innovativeness (lower level of familiarity and higher level of uncertainty and risk) enhance cooperation because the experience with the service will be lower. Then, there will be greater need for information sharing and coordination between units to overcome problems and find solutions. Service innovativeness could, therefore, be beneficial to the level of information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that;

H2a: Service innovativeness is positively related to the level of information

sharing;

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H2b: Service innovativeness is positively related to the level of interfunctional

coordination.

• New service complexity Complexity of the project refers to the degree of task difficulty and variability that is needed in the NSD process such as the search for an acceptable solution to a given problem. New product complexity also changes the level of interfunctional cooperation in processes (Atuahene-Gima and Evangelista, 2000). This fact in is equally important in the NSD context as in the NP D context. A reason for this could be the intangible nature of service, because this creates confidence problems for even the simplest services (De Brentani, 2001). Another reason can be the involvement of customers, because services are often customized to meet the specific wants of the individual clients and this can lead to higher level of complexity. In the case of improvements or line extensions of existing services, organizations and employees are familiar with the core service. This can simplify the development and commercialization and probably reduces the level of information sharing and interfunctional coordination. In this research, it is suggested that a higher degree of complexity creates fundamental challenges and uncertainties of solutions for different functions (e.g. sales and engineering). More complex services (one that incorporates complex and unfamiliar processes) creates an environment for interfunctional cooperation because there will be a greater need for information sharing and interfunctional coordination in the NSD process. Service complexity could, therefore, be beneficial to the level of information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that;

H2c: The new service complexity is positively related to information sharing;

H2d: The new service complexity is positively related to interfunctional

coordination.

• Importance of a new service Importance refers to the degree to which it is perceived to have great significance for the organizations profitability. According to the NPD theory, participants will be more proactive in seeking information and using information from each other when the project is considered important to the organization. Task importance leads to commitment and enthusiasm on the part of the influence target comply with demands of an influence source (Atuahene-Gima and evangelista, 2000). In a similar view to NPD, importance of the service in NSD influences the level of information sharing and interfunctional coordination. In this research it is suggested that the level of importance is equally important in the NSD context as in the NPD context. A reason for this could be that service organizations as well as manufacturing organizations need to survive and both can benefit from innovations in the form of new product and service success. Importance of the service could, therefore in this research, be beneficial to the level of information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that;

H2e: The importance of the new service is positively related to information

sharing;

H2f: The importance of the new service is positively related to interfunctional

coordination.

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3.1.3 Organization related antecedents

On the third theme, the organizational related antecedents, the following three items are argued to be antecedents for information sharing and interfunctional coordination in technology oriented service organizations. • The level of technology orientation This refers to the organizations’ value system that promotes technology in the new service at the expense of customers’ needs and wants. Atuahene-Gima and Evangelista (2000) suggested that a more technology oriented organization in the NPD contexts is likely to lead to the promotion of innovative behavior. According to Workman (1993), in a technology oriented culture, marketing is perceived to lack the credibility to provide the necessary input into the project. Hence, the development department is likely to deal directly with the customers. Thus, the level of interfunctional cooperation will be lower. According to Atuahene-Gima (1996), services and manufacturing organizations focus on similar factors for improving innovation performance. In this research it is suggested that the level of technology is less important in NSD as in NPD. A reason for this could be the simultaneous production and consumption of the service and that service innovations often appear to be a mix of minor and major changes and improvements of existing services. In this situation, service organizations are familiar with the core service and its technology, then the technology orientation of the organization probably will be smaller than in the NPD context. In the NSD context, the operational department could undervalues the input of marketing department because they generate, develop and deliver the (technical) solution directly with and to the customer. Technology orientation could, therefore, be negatively related to the level of information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that;

H3a: Technology orientation is negatively related to information sharing;

H3b: Technology orientation is negatively related to interfunctional

coordination.

• Formalization of NSD activities Refers to the extent to which an organization emphasizes a structured/formal NSD approach. According to previous research, firms being most successful in providing new services prevent their innovation process from being ad hoc (De Brentani, 2001; Kelly et al., 2000). Therefore, researchers argue for a systematic development process (Bitner et al., 2008; Edvardsson et al., 1996; de Jong et al., 2003). Martin and Horne (1995) observe that NSD happens rather than that it is formally developed. Other NSD researchers enhance this, since they argue for a structured NSD process or structured parts of the NSD process (Bullinger et al., 2003; Nägele, 2006; Ojasola, 2008, Stevens et al., 2005; Smith et al., 2007). According to Frohle et al. (2000), a formal NSD process stimulates the effectiveness and efficiency of the innovation outcome. Atuahene-Gima and Evangelista (2000) stated that formalization improves the information flow between different functions and the level of interfunctional cooperation because it allows greater clarification of responsibilities, recognition and acceptance of the importance of the involved functions in the project. It is suggested that it are the characteristics of services that affect the need for a formalized development process (De Brentani, 1989). In this research it is suggested that a formalized / structured approach is considered to be less important for NSD than for NPD (De Brentani, 2001). A reason for this could be that ICT/IT organizations deliver unique services

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that ask for an organizational structure with less hierarchy and a higher span of control compared to manufacturing firms. Another reason could be the fact that services involve a high degree of customer involvement during development and delivery, this is the opportunity to optimize the service to clients needs and wants during a less structured development process. Nevertheless, as stated earlier, to enhance efficiency and effectiveness in the NSD process of IT services, organizations should divide up various work tasks between co-workers. Formalization structures in the NSD process could, therefore, be beneficial to the level of information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that;

H3c: Formalization of NSD project activities is positively related to information

sharing;

H3d: Formalization of NSD project activities is positively related to

interfunctional coordination.

• The culture of the organization Refers to the type of culture an organization has during the NSD process. The theory in the physical product industry suggests that successfully implemented interfunctional teams are operating in a more entrepreneurial and collaborative culture (Donnellon, 1993). The more aware the top management of the importance of market knowledge, the stronger the link between different functions is because then top management support the information sharing of this knowledge between different functions. Researchers stated that the vision of the organization must be clear and able to build commitment and to provide a common goal. Senior managers from all different kind of functions must be supportive and give priority to projects of interfunctional teams. According to Trent and Monczka (1994), interfunctional team integration asks for a corporate culture of teamwork in all levels of the organization. Interfunctional cooperation in organizations is greater when senior managers support the use of the creative of participant’s potential (Jassawalla and Sashittal, 1998). Thus, if the organization is more aware of the strength of a corporate culture the interfunctional involvement will be higher in the project. In this research it is argued that the top management supportive culture is a factor that is considered to be more important for NSD than for NPD (Cooper, 2001; De Brentani, 2001). A reason can be that a supportive culture and involvement by senior management can lead to the success of the NSD process because then the NSD process is closely linked to the overall strategic and resource fit. In this situation, organizations encourage entrepreneurship, creativeness and risk-taking of co-workers to solve complex and unique problems. According to Ellinger (2000), the level of top management involvement in interfunctional cooperation has been shown to affect NSD outcomes. The culture of the organization could, therefore, be beneficial to the level of information sharing and interfunctional coordination in the NSD context. Therefore, based on the literature it is hypothesized in this research that;

H3e: The culture and management support of a service organization are

positively related to information sharing;

H3f: The culture and management support of a service organization are

positively related to interfunctional coordination.

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Now antecedents which could play a role on information sharing and interfunctional coordination in the NSD context are discussed. In the next paragraph, the consequences and the accompanying hypotheses are described.

3.2 Consequences related dimension

Interfunctional cooperation is a means to an end. Therefore, the following paragraphs discusses consequences of information sharing and interfunctional coordination. • Information sharing, Doyle (2002) stated that information will have a key role in the efficiency of innovation and will become more important than the product itself. According to Petruska (2004), information gives input to innovations and mediates the changes to the outside environment. Ottum and Moore (1997) have found that sharing information across functional departments is critical to innovation success. The information gets into the organization through different resources. The organization can benefit from the knowledge belonging to each function that is linked through information sharing and cooperation among the functions. Regarding innovations, linking technical and market expertise is the main field of information flow among functions (Petruska, 2004). Information sharing subsystems of the organization are designed to reduce customer, market and technology uncertainty in the development process (Moenaert and Souder, 1990). The NSD process is the transformation of input information about customer needs and market opportunities into output information. De Brentani (1993) suggests "that new services need to be fully tested before and after their market launch to ensure that potential fail points are eliminated and that customer understand the service and are satisfied with it". That is why information sharing is required at least in the NSD process. Searching ideas for new services to meet identified organizations’ objectives and the evaluation of the service concept should be achieved due information sharing activities between different functional units. According to Athuane-Gima (1996), the organization must create, maintain and disseminate an intelligence information system when developing service to meet customers’ needs and wants. On the other hand, information sharing in the NSD process improves the problem-solving capacity and preventing mistakes from being made in the service projects (Van der Aa, 2000). Therefore, in this research it is suggested that information sharing is equally important in the NSD context than in the NPD context. • Interfunctional coordination, Interfunctional coordination refers to the degree of common understanding regarding the interrelatedness and current status of individual contributions. As stated above, successful NPD requires input of people working in different (functional) departments which has to be coordinated (Ozer, 2000). Hoegl and Gemuenden (2001) suggested that interfunctional coordination is one of the important components of the quality of cooperation in interfunctional teams. Harmonization and synchronization of individual contributions is one of the most important components of the quality of cooperation (Tannenbaum et al. 1992, Larson and Schaumann 1993, Brannick et al. 1995). Therefore, to harmonize and synchronize the contributions effectively and efficiently, cooperating teams need to agree on common work-down structures, schedules, budget and deliverables. According to Hoegl and Gemuenden (2001), the coordination is of critical importance to the successful design, development and launching of innovations. According to Atuahene-Gima (1996), the heterogeneity characteristic of services leads to greater interdependence between functions. Therefore, in services organization interfunctional coordination is also equally important.

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Research in the physical product sector indicates that functional integration is a critical determinant of new product performance (Song et al, 1997). In the NPD theory, research suggests that interfunctional cooperation facilitates the completion of projects on schedule, within budget and wit fewer design changes (Song et al., 1997). According to de Jong et al. (2003), service firms can benefit from service innovations in the form of 1) financial benefits, 2) creating customer value and 3) increasing strategic success. It is clear that financial success of organizations depends on any type of innovation. Similar to NPD for manufacturing organizations, the NSD objectives for service organizations are no expectation of this (Kelly and Storer, 2000). Being able to provide innovative services 1) shorter cycle-time, 2) cheaper, 3) higher quality - is a source of strategic success. Tether and Metcalfe (2001), innovations in services transform the state of customers. In service organizations, customers choose future service usage levels on the basis of their evaluations of their current service experiences, and these usage levels have a substantial impact on the long-term profitability of the organization (Bolton and Lemon, 1999). In this research it is suggested that the success or performance in the NSD context is equally important as in the NPD context. A reason for this could be that the NSD process is very similar to NPD process and services and physical products are both developed for market share, return on investment or target volumes and goals for the whole organization. Tax and Stuart (1997) argued that one of the major limitations of the NSD processes is the non-existent integration and communication between the functional departments. As suggested by Lievens and Monaert (2000), a certain level of interfunctional coordination is needed for successful development processes. Therefore, this research suggests that service organizations should recognize the need for interfunctional cooperation to facilitate the completion of the NSD process on schedule, within budget and fewer design changes. Information sharing and interfunctional coordination could, therefore, be beneficial to the level of service performance in the NSD context. Based on the literature it is hypothesized in this research that:

H4a: Information sharing among function positively impacts new service

performance (satisfaction, future use of service, strategic success) in the

market;

H4b: Interfunctional coordination positively impacts new service performance

(satisfaction, future use of service, strategic success) in the market.

3.3 Control variables

In addition to the constructs and relationships discussed, the model also includes three control variables; 1) Size of the organization (# of employees), 2) Completed service project a year and 3) Organization structure. The level of information sharing, interfunctional coordination and the service performance may be affected by particular organization characteristics such as size, the organizations’ structure and the number of completed projects per year. According to Heck and Marcoulides (1993), organization size is an important variable that may be linked to, or intertwined with, levels of productivity. Size of the organization affects a number of intervening processes, and, thereby a number of team outcomes. In addition, Pfeffer and Salancik (1978) suggested that larger organizations have more market power and slack resources. Therefore, in this research there is controlled for the effects of organization size. Size of the organization will be measured as the number of employees in an organization in order to control the level of information sharing, interfunctional cooperation and the service performance.

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All organizations have structure. Hall (1977) suggested that structure has two basic functions, each of which is likely to affect individual behavior and organizational performance; 1) structures are designed to minimize or at least regulate the influence of individual variations on the organization and 2) structure is the setting in which power is exercised, decisions are made and the organizations’ activities are carried out. In addition, van de Ven (1976) highlighted the importance of structure both at the organization and subunit levels for the efficiency, morale, and effectiveness of organizations. Therefore, in this research there is controlled for the effects of organization structure. Organization structure will be measured in nominal variables and analyzed in the following dummy variables;1) Line structure, 2) Divisional structure and 3) Matrix structure. Within the organizations used for this research, the number of completed projects per year is an important variable that may be linked to service performance and interfunctional cooperation. It could be that organizations which develop en launch more projects per year deliver higher levels of NSD process efficiency, morale, and effectiveness. Completed service projects per year will be measure the average number of completed projects to control the level of information sharing, interfunctional coordination and service performance.

3.4 Overall table of the dimensions

The following table summarizes the eight antecedents, the two dimensions of interfunctional cooperation and the consequences depicted in this research. In the table is the importance of the factor in NSD compared with the NPD context presented.

Dimensions in the model

Importance of factor in NSD

compared with NPD context

Personal antecedents 1. Functional expertise +

2. Department power +

Project antecedents 1. (Service) innovativeness −

2. (Service) complexity =

3. Importance of (service) =

Organizational antecedents 1. Technology orientation −

2. Formalization of activities −

3. Culture of the organization +

Interfunctional cooperation 1. Information sharing =

2. Interfunctional coordination =

Consequences 1. (Service) performance =

‘+’ means more important in NSD as in NPD, ‘=’ means equally important in NSD as in NPD and ‘-‘means less important in NSD as in NPD

Table 2: Summarized table of the dimensions in this research

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3.5 Graphical representation of the conceptual model

In figure 2, a graphical representation of the model is depicted. It is a three-stage path analytic model characterizing the internal manageable factors which involved the level of interfunctional cooperation. The model focuses on the relationships among certain internal organizational factors and their impact on performance. In this research, the direct effects on performance of the antecedents is excluded and not discussed. The model includes three categories of internal antecedents: Personal, Project and Organizational antecedents. The purpose is to examine the effect of interfunctional cooperation on new service performance and the differential effects of personal, project and organizational factors on interfunctional cooperation. The framework suggests that information sharing and interfunctional coordination have a direct impact on new service performance. The framework also suggests that information sharing and interfunctional coordination are affected by personal, project and organizational factors. The model also suggests that the control variables affect all the independent variables (information sharing, interfunctional coordination and service performance). The complete conceptual model is graphically depicted in the following figure. Eighteen hypotheses are formulated. The first sixteen hypotheses are specifically aimed at gaining insight to the underlying constructs between the drivers of interfunctional cooperation in the NSD context. The other two hypotheses are aimed to gain insights to the relationship between interfunctional cooperation and service performance. The eighteen hypotheses are explained in preceding paragraphs, summarized in appendix 5 and graphically represented in figure 2.

Figure 2: Overall design of the conceptual model

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4 Research methodology

This chapter will describe the research methodology that is used to answer the question, test the conceptual model and to fulfill the stated objectives. First, the research design will be given. Second, the questionnaire design will be discussed. Third, sample design will be presented. Fourth, the data collection and data analysis, which are guided by the research problem and the conceptual model, will be discussed. Fifth, the quality of this research will be addressed by two important research-oriented quality criteria: reliability and validity (Yin, 2003; Van Aken et al., 2007).

4.1 Research design

Generally, two types of basic research types are identified: exploratory and explanatory. Studies that ascertain causal relationships between variables may be termed explanatory studies (Saunders et al., 2007). An exploratory study is valuable when it is important to clarify the understanding of the problem and to seek new insight (Saunders et al., 2007). The aim of this research is testing or confirming hypotheses, rather than look for the underlying process. Therefore, explanatory research is best suitable for this study. The research question and the hypotheses followed from an exploratory literature review, where new research activities were discovered. The collection of data can be carried out with the help of monitoring and communication processes. Monitoring processes is a way of collecting data in which the researcher only records the activities of behavior of the subject. Communication processes is a way of collecting data in which the researcher questions the subject and collects their responses via questionnaires, telephone or surveys. A questionnaire will be performed in order to test the hypotheses and research question in the field. Therefore, communication processes in the form of questionnaires is best suitable for this study. The extent the researcher controls the variables differ among the type of study. There are two ways in which they can differ; 1) ex post facto or 2) experiment. In an ex post facto design, the researcher is not able to control the variables and is therefore not able to manipulate them. In experiment designed studies, the variables are controlled by the researcher. Therefore, an ex post facto design is best suitable, since the researcher is not able to control the variables studied. Generally, studies can be distinguished into two categories with respect to their scope; 1) statistical and 2) case studies. Statistical designed studies try to capture population characteristics by making inferences from the sample characteristics. The hypotheses are tested quantitatively and generalizations are based on the representativeness of the sample and the validity of the design. Robson (2002, p.178) has defined a case study as ‘a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence’. Therefore, case studies are carried out for more full contextual analysis of fewer subjects, events and characteristics. Therefore, a statistical study is best suitable, since hypotheses are proposed and population characteristics can be captured by studying their causal relationships. Studies can be distinguished into three categories with respect to the research environment; 1) Field, 2) Simulation and 3) Laboratory studies. Field studies can take place in the actual

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environment conditions. In laboratory conditions, the researcher manipulates or controls the variables. Finally the researcher can also choose for a simulation study, where the core of a system or process is replicated and often represented in a mathematical model. Therefore, a study under field conditions is best suitable, since the model will be tested in the field.

4.2 Questionnaire design

In this research, a quantitative questionnaire will be used. Personal, Project, Organization antecedents, Interfunctional cooperation (information sharing and interfunctional coordination) and the Performance variables will be measured with several items on an Likert scale, ranging from 1= ‘highly disagree’ till 5=’highly agree’. The variables to be measured can be divided into four categories: nominal, ordinal, interval and ratio. In this research, the measurement of antecedents, interfunctional cooperation and performance is interval scaled. A measurement instrument or questionnaire is developed for measuring the previously defined antecedents, interfunctional cooperation and consequences in the conceptual model. The generation of variables and items may be the most important part of developing sound measures. Content validity is the main aim of this step. The focus of the generation of items of the contructs to be measured is the content validity (Straub et al., 2003). This means that the measures must capture the intended content through the items in the scale. Here, the judgment of expert(s) is very important in assessing the content validity of the measures. Existing classification schemes or items from prior research are used to develop new items or select existing ones from previous research. The number of items per variable/construct is a delicate balance. More items could contribute towards a more reliable measure. However, increasing the length of the questionnaire could lead to lower response rates or unreliable data as a result of annoyance on the part of the respondent. In the following paragraph the item constructions of the first part of the questionnaire will be explained. • Functional expertise

On the basis of Pfeffer (1981), Atuahene-Gima and Evangelista (2000) and De Luca and Atuahene-Gima’s (2007) studies, functional expertise will be measured by four items reflecting the degree to which individuals was perceived to have the knowledge and skills pertinent to the NSD process. An example item is: “Individuals with expert knowledge about relevant issues in the developing process (e.g. marketeer, developer) are very important and have individual influence in the project “. • Department power

On the basis of the prior studies of Kohli (1989) and Atuahene-Gima and Evangelista (2000), departmental power will be measured with four items that reflect the degree to which a department was perceived to have more power in the NSD process. An example item is: “A specific department tends to dominate others in the affairs of the organization”. • Service innovativeness To measure service innovativeness, respondents will be asked to answer the items/statements drawn from past research (Avlonitis et al., 2001). Using a five-point scale, respondents were asked to indicate their degree of agreement with each of four service innovativeness items/statements. An example item is: “The new service was totally new for the world”.

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• New service complexity On the basis of Hultink et al.’s (2000) research, the complexity will be measured by two items reflecting the degree of complexity of the service, its technology and its development relative to earlier NSD processes. An example item is: “The new service was sophisticated to generate and develop relative to previous NSD projects”. • Importance of a new service On the basis of Atuahene-Gima and Evangelista (2000) and Edgett and Parkinson’s (1994) research, the importance of the service will be measure by three items reflecting its criticality for the organization’s business. An example item is: “If the new service became more important for the organization; departments are more proactive in seeking information and using information of each other”. • The level of technology orientation On the basis of Atuahene-Gima and Evangelista (2000) and Avlonitis et al.’s (2001) research, technology orientation of the organization will be measured by four items. An example item is: “Technology orientation leads to the promotion of innovative behavior”. • Formalization of NSD activities On the basis of Oldenboom and Abratt (2000) and Avlonitis et al.’s (2001) research, the formalization of NSD activities will be measured by four items reflecting the extent to which clear policies existed with respect to the activities. An example item is: “A step-by-step plan was drawn up in the beginning of the new service project”. • The culture of the organization

On the basis of Edgett and Parkinson(1994), Song et al. (1997) and Oldeboom and Albratt’s (2000) research, the culture of the organization will be measured by four items reflecting the extent to which the organization supports the projects and cross-functional cooperation. An example item is: “Senior management placed strong and visible support behind the new service project”. • Information sharing among functions On the basis of previously published studies Kohli and Kaworski (1990), Menon et al. (1997), Sinkula et al. (1997), Lado et al. (1998) Information Sharing will be measured with four items that measuring the amount of information sharing between the different functional areas, by formal and informal procedures. An example item is: “The organization encourages informal exchanges of information between the different functions”. • Interfunctional coordination

On the basis of Hoegl and Gemuenden (2001) interfunctional coordination will be measured with four items that measures the interfunctional coordination in organizations. An example item is: “There were clear and fully comprehended goals for subtasks within the new service project”. • Service performance

On the basis of Song et al.’s (1997) and Avlonitis et al.,( 2001) research, performance will be measured with five items that asked respondents to indicate the extent to which the organization has achieved its development objectives, such as market share and strategic issues. An example item is: “The NSD program has met organizational objectives”. • Control variables All respondents were asked to answer on some control variables. They were asked about their last developed service, organizations’ name, their function, the department they work for, size of the organization, developed service projects a year, number and which departments are presented

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in the service project and the sort of communication line and organization structure is used in their organization. The original questions from existing research were in English. The questionnaire was translated into Dutch, since not every respondent of this research might have a sufficient knowledge of the English language and in order to maximize the possible respondents in the Benelux. The English and the Dutch version are attached in appendix 7 and 6 of this research. In order to avoid any false translation and to ensure that the translated questions resemble the same meaning as the original English questions, the questionnaires are examined by two experts. All questions seemed to be adequately translated, what was confirmed during the data gathering. The surveys were online in Dutch (Appendix 6) and English (Appendix 7) developed and administrated via ‘onderzoek.mwm2.nl’. In appendix 6 and 7 are the reversed scaled items displayed with a (R). And the removed items (by validity and reliability tests) are displayed in italic font.

4.3 Sample design

The main idea of a sample is that by selecting some of the elements in a population, we can draw conclusions about the entire population. In this section of the research design the design of the sample will be discussed. This study will focus on technology oriented ICT/IT service organizations in the Benelux. The service sector and NSD is one of the most promising areas for economic and business growth and development (Kupper, 2001). In the Netherlands, the service sector is growing fast while the product sector is stagnating (Kox, 2000) Therefore, services offer an important contribution to economic growth and employment in the Benelux. The ICT/IT sector was chosen as the research field for several reasons. These are organizations, which do not (directly) produce consumer products. Instead, they produce and develop services which provide support for the technologies they deliver. First, organizations in this industry are developing new programs and services. Second, most organizations in this sector deliver Software as a Service (SaaS) and Application Service Provider (ASP). This is a (software) service on customer demand. A potential sample list of approximately 700 innovative ICT/IT organizations operating in the Benelux was traced by Marqit 2010 and Computable 2010. The names of those organizations are listed in appendix 8. However, the problem with organizations is that they do not answer questions or fill in surveys and questionnaires, employees do. To acquire information about organizations, the right people need to be approached. Since this research is of strategic level, there is a need for research subjects that have a good view of how the organization is performing. Therefore, the relevant population has to be narrowed down to Top managers, CEOs, Marketing managers, Sales managers, Engineering managers, R&D managers, Development managers etc. They should have knowledge of the organizational structure, culture and development activities. In the interest of theoretical accuracy, research on interfunctional cooperation should examine several parties per organization involved in the process (Pinto et al., 1993). The problem with this is that it is time consuming to fill in this survey. Therefore, the potential organizations maybe do not want to deliver more than one respondent per organization for this research. Another problem can be that this research will be constraint by time and budget.

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The sample size is under control of the researcher. Effects of the sample size are seen most directly in the statistical power of testing significance and the generalizability of the outcomes. The sample size is dependent of the statistical power, number of independent variables used and the level of significance (Hair et al., 2006). A rule of thumb is suggested, where the minimum ratio of observations to variables is 5:1, but the preferred ratio is 15:1 or even 20:1, which results in a sample size of 80 organizations (Hair et al., 2006). For the use of data in Structural-Equation-Modeling (SEM), the minimum absolute sample size should be 50 observations, according to Hair et al. (2006).

4.4 Data collection and analyzing

After the selection of the appropriate respondents (Top management, CEOs, Marketing managers, Development managers, Engineers etc.), each is informed via telephone calls, e-mail mailing and reminders that their responses would remain anonymous and their responses would not be linked to an organization or product/service name. The questionnaires are digitally sent to the potential respondents. When potential respondents did not answer after the first mailing a reminder was sent after a week. The letter of the mailing and the reminder are represented in appendix 9 and 10. This procedure has been found to increase response rates considerably (Cooper, 1982). Finally, a summary of the research results will be offered to the participated respondents. This approach increases the motivation of informants to cooperate without fear of reprisals. This procedure should produce a sampling frame of 50 to 80 respondent organizations. Data preparation is performed in SPSS 18. Since the research includes several independent and dependent variables, each consisting of multiple items, multivariate analysis is appropriate. Hair et al.(2006) stated that multiple regression analysis is by far the most applied multivariate technique. Structural-Equation-Modeling (SEM) is a second generation multivariate data analysis technique that enables a single, systematic and comprehensive analysis among multiple independent and dependent constructs. SEM is gaining popularity in behavioral science because of the increase in its application in the journals that are based on a positivist, empirical tradition. This is shown by Gefen et al. (2000). Besides the increased popularity, the possibility to assess latent constructs contributes to its popularity. This multivariate technique estimates the fit between data and a whole system of variables and its interrelations. Therefore, SEM is applicable for testing models that contain latent constructs. Furthermore, the complexity of causal networks that can be assessed is higher than in simple correlation-based techniques. There are two types of SEM: 1) covariance-based techniques (e.g. LISREL, AMOS) and 2) variance or component based or partial-least-squares techniques (e.g. PLS-Graph, SmartPLS). One of the advantages of PLS is that a normal distribution of the data is not needed (Cassel et al., 2000). Another advantage is that PLS does not necessarily need a huge sample size to produce statistically significant results (Cassel et al., 2000). With this technique it is possible to estimate the overall model at once. The variance or SmartPLS technique is chosen, due the fit of the objective (path specific hypothesis rather than overall model fit) of this method. The SmartPLS analyses are preceded by data cleansing, descriptive statistics and factor analyses via SPSS to establish the validity and reliability of the refined items and variables. The next paragraph will discuss how the items/variables are measured in terms of ‘validity’ and ‘reliability’.

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4.5 Scale validity and reliability

The validity of the items/variables will be approached in three ways; 1) content validity, 2) construct validity and 3)discriminant validity. The construct reliability of the items/variables will be determined by computing of Cronbach’s alpha (in SPSS) and the Composite reliability (in SmartPLS). • Content validity Refers to extent the content of the used items are related to the construct/variable they are assigned to (Straub et al., 2003). According to Dunn et al. (1994), to assure a high content validity; all items should be derived from existing literature. All the used items are adopted from existing literature. Therefore, content validity is assured. • Cronbach’s alpha (α) Refers to the measure of reliability and internal consistency of the measured items representing a variable (Hair et al., 2006). Must be established before construct validity can be assessed. • Construct validity Refers to the relationship between constructs and their operationalization (Straub et al., 2004). Constructs are conceptual artificial constructions and not directly observable in reality. Their meaning is inferred from actual measurements. For construct validity the focus lies on the fit of the measures with each other. The items should converge on a construct. In this research, a factor analysis will be performed on every single variable in the dataset. • Discriminant validity Refers to extent to which construct differs from measurement items that are not believed to make up the construct (Hair et al., 2006). It will be tested by comparing the square root of the average variance extracted of a construct to the correlation of the two constructs (Fornell and Larcker, 1981). Discriminant validity is established if the square root exceeds the correlations value. • Composite reliability Provides information on how accurate the scale is that was used to measure the different latent variables.

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5 Results and analysis

This chapter presents the findings, results and the analysis of the data, the conceptual model and hypotheses. First, some descriptive statistics of the dataset are presented. Second, involved functional departments will be discussed. Third, data preparation will be discussed. Fourth, the reliability and validity of the dataset will be presented. Fifth, the assessment of the conceptual model and the hypotheses with SmartPLS will be presented.

5.1 Descriptive statistics of the sample

The following table summarizes some of the sample statistics.

Sample statistics

Frequencies Percent Frequencies Percent

Response rate Experience with teams

Responses Dutch version 90 - High level 76 81,70

Responses English version 3 - Low level 17 18,30

Different ICT/IT organizations 88 12,57 Total 93 100,00

Not-respondent organizations 611 87,43

Function Size of organization

Commercieel 50 53,76 - 1-5 3 3,23

Engineering 16 17,20 - 6-10 7 7,53

Management 22 23,66 - 11-50 32 34,41

Remaining 5 5,38 - 51-100 12 12,90

Total 93 100,00 - 101-300 12 12,90

- 301-500 6 6,45

Organization structure - 500 or more 21 22,58

- Line structure 37 39,78 Total 93 100,00

- Matrix structure 32 34,41

- Segment structure 24 25,81

Total 93 100,00

Table 3: Summarized sample descriptives

5.2 Type of projects and departments in the NSD process

This paragraph gives an overview of the type of service projects the respondent organizations developed. After this, the involvement of which functional units/departments are presented during and in the different stages of the NSD process will be discussed.

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• Type of service projects The results of the descriptions given by the respondents are represented in the following table.

Type of service projects

Short description Frequencies Percent After-sales services of the delivered hardware 1 1,14

Alarming/Notifying as a service on a monthly subscriptionn

1 1,14

Cloud computing solution 11 12,50

Managed service (outsourcing) 2 2,27

Managed services 22 25,00

Missing 1 1,14

Nearshore outsourcing to perform application tests 1 1,14

Remaining 15 17,05

Remote backup (managed services) 6 6,82

Security as a service (SIEM) solution 1 1,14

Software application 1 1,14

Software as a service (SaaS) solution 12 13,64

Video conferencing services 2 2,27

Web based solution 12 13,64

Total 88 100,00

Table 4: Types of service innovations

In the table can be seen that 11 out of the 88 projects are Cloud computing solutions. Cloud computing is the delivering of hosted services. It is sold on demand, typically by the minute or the hour and the service is managed by the provider (Computerworld, 2008). 22 out of the 88 projects are. Managed service solution. An example of a managed services solution can be the remote management by the service provider. 12 out of the 88 projects are Software as a service (SaaS) solutions. SaaS solution are application which are hosted by a service provider and made available via internet. It is a service on demand, often delivered on a subscription bases (Gruman, 2007). 12 out of the 88 projects are Web based solution. An example of a web based solution is full-service solution of website development, e-marketing and network support. ICT/IT service organizations deliver Major services with accompanying products and Pure intangible services in the form of Sofware as a Service (SaaS), Cloud computing and other Software on demand innovations/ solutions.

• Indicated departments by the respondents Almost all the participated organizations and respondents indicated that they work with and in teams of different functions. 83 out of the 93 respondents (89,25%) indicated that Management is involved in the NSD process. 74 out of the 93 (79,57) respondents indicated that Sales is involved in the team during the NSD process. 68 of the 93 (73,12) indicated that marketing is involved in the team. 65 of 93 (69,89%) indicated that R&D is involved in the process. 47 of the

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93 (50,54) indicated that Service development is involved in the NSD process. 43 of the 93 (46,24%) indicated that Financial department is involved. 40 out of the 93 respondents (43,01)

indicated that Operational employees are involved. 37 of the 93 respondents indicated that Service desk is involved. 21 of 93 respondents indicated that Legal department is involved. 4 out of 93 indicated that Human resources is involved. Concluding, Management, Sales, Engineering (R&D, Technological and Service development), Marketing, Financial and Operational department were the most mentioned contributing departments in the NSD process.

Table 5: Departments involved during NSD process

• Team size and indicated different departments All respondents were asked to indicate the team size and the departments involved during the last developed projects. After deletion of outliers, missing values and unreliable cases (i.e. number of indicated departments is higher than the indicated size of the team), the dataset exist of 49 valid cases. In the next section, a summary of the table in appendix 11 will be given. � Team size 4, in most cases management, marketing or sales and engineering (technological

development) were the most mentioned involved departments; � Team size 5, in most cases management, engineering (service development) and operational

were the most mentioned involved departments; � Team size 6, in both cases management, marketing or sales, engineering (R&D and

technological development) and operational were the most mentioned involved departments; � Team size 7, in this case management, marketing and R&D were the mentioned involved

departments. Probably two or more employees per department are involved.; � Team size 8, in most cases management, marketing or sales, engineering (R&D, service or

technological development) and operational were the most mentioned involved departments; � Team size 10, in nine out of ten cases management was involved. Furthermore, marketing,

sales, engineering (technological development) and operational related department were the most mentioned ;

� Team size 11, in this case management, sales, financial and R&D were the mentioned involved departments. Probably two or more employees per department are involved or else this result is not reliable;

� Team size 15, in all three cases management was involved. Furthermore, marketing, sales, engineering (R&D, technological and service development) and in one case operational were the most mentioned involved departments;

� Team size 20, in all cases management, marketing and R&D were involved. Furthermore, sales, financial, engineering (service development and technological development ) and

Departments involved in the NSD process

Frequencies Percent

Management 83 89,25

Sales 74 79,57

Technological development 68 73,12

Marketing 65 69,89

R&D 54 58,06

Service Development 47 50,54

Financial 43 46,24

Operational 40 43,01

Service Desk 37 39,78

Legal 21 22,58

Human resources 4 4,30

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operational were the most mentioned involved departments. Probably two or more employees per department were involved or else the data is not reliable;

� Team size 25, in this case management, marketing, sales R&D, service development, technological development and operational were the mentioned involved departments. Probably two or more employees per discipline were involved;

� Team size 30, in most cases management, marketing, sales, financial and engineering (service development and technological development) and operational were the most mentioned involved departments. Probably two or more employees per discipline were involved;

� Team size 40, in both cases management, sales, R&D, technological development were mentioned departments;

At the end of the table in appendix 11 there are the cases depicted which showed the same team size and the number of indicated involved departments. The results are summarized in the next section. � Team size 2, management and technological development were involved;

� Team size 4, management, marketing, sales and R&D were involved; � Team size 4, management, service development, technological development and operational

were involved; � Team size 5, management, marketing, sales, R&D and technological development were

involved; � Team size 6, management, marketing, sales, R&D, service development and technological

development were involved; � Team size 8, management, marketing, sales, financial, technological development,

operational, service desk and legal were the mentioned involved departments.

Overall, there can be concluded that management, commercieel, engineering and operational disciplines are the most mentioned involved departments in the different team sizes. • Involved departments in the different stages of the NSD Process The respondents were asked to indicate in which stages of the NSD process they were involved. The results are shown in the following table.

Involved functions in the different stages of NSD process

Functions Total

Respon-dents

1. Idea generation

2. Idea screening

3. Analyses 4.

Development 5. Testing

6. Launching

# # % # % # % # % # % # %

Commercieel 50 27 54,00 27 54,00 30 60,00 16 32,00 22 44,00 39 78,00

Engineering 16 7 43,75 4 25,00 7 43,75 9 56,25 9 56,25 12 75,00

Management 22 19 86,36 17 77,27 19 86,36 13 59,09 8 36,36 16 72,73

Remaining 5 2 40,00 1 20,00 2 40,00 3 60,00 2 40,00 2 40,00

Table 6: Summarized table of department in NSD stages

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It seems that, according to the literature, the NSD more or less exist of six different stages. The following conclusions can be drawn from the data and the table. 1. Idea generation; in this stage management, commercieel and engineering functions had a steering role and were the most mentioned. 2. Idea screening; in this stage management and commercieel had a steering role and were the most mentioned involved functional departments. 3. (Market & Business) analyses; in this stage management, commercieel and engineering functions had a steering role and were the most mentioned. 4. (Technical) Development; in this stage management and engineering functions were the most mentioned involved functional departments. 5. Service testing; in this stage commercieel and engineering functions had a steering role and were the most mentioned involved functional departments. 6. Launching/commercializing; in this stage commercieel, engineering and management had a steering role and were the most mentioned involved functional departments.

5.3 Dataset preparation for hypothesis testing

A survey instrument was developed and administered to professionals in order to collect data on the 43 items. The questions were all of the form: “Please indicate your agreement with the following statement(s)”. The scale used for all items were 5-point Likert type scales, ranging from “1= highly disagree” to “5= highly agree”. The wording of the items was discussed with two potential respondents. This led to some minor (textual) revision of items. The survey consisted roughly of two parts. The 43 items (4 of these items are reverse-coded) were divided over the first part. In the first part, the respondents were asked to report on the items in their organizations and in the last developed service. The second part of the questionnaire contained some control variables about the respondent, their organization and their development process. The surveys were online in Dutch (Appendix 6) and English (Appendix 7) developed and administrated via ‘onderzoek.mwm2.nl’. A total of 93 responses and 88 different organizations were collected via telephone calls, e-mail mailing and reminders. This amount is well above the absolute minimum for factor analysis suggested by Hair et al. (2006). The data analysis including data preparation for the hypotheses testing. Data preparation was performed in SPSS. Missing data and outliers

The data was analyzed for missing data, outliers and the prerequisites for multivariate analysis. No cases were omitted from data analysis because of no high proportions of missing data, leaving a total of 93 observations. Overall outliers and missing data was limited (<10%). Apparent distribution of missing data across observations could not be identified. The distribution of missing data by variables/items showed more missing variables and outliers in the second part of the survey. The distribution of missing values was analyzed across cases and variables. Univariate outliers were identified by analyzing the distribution, central tendency and dispersion of each of the variables. Descriptive statistics as mean, median, mode, range and standard distribution were reviewed as well as visual inspection of box plots. As an additional means of identifying outliers, all scores were normalizing, i.e. calculating the Zscore, and a cut-off value was set at +/- 2,5. Several cases were found to exceed these limits. Therefore, those observations or cases were translated into missing values (-99). The outliers are shown in the SPSS dataset. After the data screening the dataset remains 93 cases which will be used for reliability, validity and hypothesis testing in the next paragraphs.

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Assumptions of factor analysis

The dataset should have sufficient correlations to justify the application of factor analysis (Hair et al., 2006). The following approaches are used to test the assumptions: • The Bartlett's Test of Sphericity (Hair et al., 2006) Which test the null hypothesis that the correlation matrix is an identity matrix is rejected if significance <0,05. Then correlation among variables is present. • Measure of Sampling Adequacy (MSA) (Hair et al., 2006) On the other hand, the degree of inter-correlation and the appropriateness of factor analysis using the Kaiser-Meyer-Olkin Measure of Sampling Adequacy (MSA) must exceed 0,50 for both the overall test and each individual variable. The MSA is a measure that varies between 0 and 1, where 1 describes a perfect prediction. A value of 0,5 is a suggested minimum (Hair et al., 2006). The results are summarized in the following table.

Testing Assumptions of Factor Analysis

Variables

Bartlett's Test

of Sphericity

(sig. < 0,05)

Overall

Measure of

sampling

adequacy

(MSA) exceed

0,50

Factor

analysis Excluded

1 Information sharing 0,000 0,800 Yes 2 Interfunctional coordination 0,000 0,701 Yes 3 Functional expertise 0,000 0,701 Yes 4 Departmental power 0,000 0,730 Yes 5 Service innovativeness 0,000 0,541 Yes 6 Complexity 0,614 0,500 Yes 7 Importancy 0,000 0,614 Yes 8 Technology 0,000 0,553 Yes 8.1 MSA 0,335 9 Formalization 0,000 0,637 Yes 9.4 MSA 0,310 10 Culture 0,000 0,618 Yes 10.2 MSA 0,208 11 Service performance 0,000 0,702 Yes

Table 7: Assumption testing of factor analysis

The individual items; 8.1 (In the organization, technology focus was more important than a customer focus), 9.4 (Idea screening was the first review moment in the new service project) and 10.2 (Top management promotes team loyalty over functional loyalty) with an unacceptable MSA (<0,500) were excluded, resulting in a final set of 40 items which will be tested on reliability and divided into a set of constructs via (independent) factor analysis. In appendix 6 and 7 are the reversed scaled items displayed with a (R). And the removed items (by validity and reliability tests) are displayed in italic font.

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5.4 Reliability and Validity assessment of the construct(s)

5.4.1 Assessment of the construct(s) reliability

Reliability of the construct refers to the internal consistency of items in a construct and the stability of the items in construct over time. Reliability of the construct is an issue within a construct (Straub et al., 2004). A commonly accepted internal consistency measure is Cronbach's Alpha. The measure of Cronbach’s Alpha ranges from 0 to 1. George and Mallery (2003) provided the following rules of thumb for Cronbach’s alpha; above 0.5 is a poor reliability and above 0.6 represents a questionable reliability. When Cronbach’s alpha is above 0.7, this reliability is acceptable and above 0.8 is good. When Cronbach’s alpha (α) is below 0.5, this means a unacceptable reliability and the measurement shouldn’t be used (George and Mallery (2003). The Cronbach’s Alpha’s of the constructs are shown in the table 8.

Construct(s) reliability

Contructs Item Cronbach's Alpha

if item deleted

Cronbach's

Alpha

Information sharing Information sharing 1 0,72 0,77 Information sharing 2 0,73

Information sharing 3 0,75

Information sharing 4 0,73

Information sharing 5 0,70 Interfunctional coordination Interfunction coordination 1 0,58 0,65

Interfunction coordination 2 0,54

Interfunction coordination 3 0,47

Interfunction coordination 4 (R) 0,73

Functional expertise Expertise 1 0,53 0,68 Expertise 2 0,59

Expertise 3 0,67

Expertise 4 0,65 Departmental power Department 1(R) 0,79 0,73

Department 2 0,60

Department 3 0,63

Department 4 0,64

Service innovativeness Innovative 1 0,15 0,44

Innovative 2 0,22

Innovative 3 0,38

Innovative 4 0,62 Complexity Complex 1 - 0,10

Complex 2 (R) - Importancy Importance 1 0,51 0,60

Importance 2 0,39

Importance 3 0,58

Technology Technology 2 0,46 0,62 Technology 3 (R) 0,63

Technology 4 0,49

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Formalization Formalization 1 0,62 0,76 Formalization 2 0,67

Formalization 3 (R) 0,73 Culture Culture 1 0,72 0,74

Culture 3 0,70

Culture 4 0,55

Service performance Performance 1 0,57 0,69 Performance 2 0,70

Performance 3 0,65

Performance 4 0,67

Performance 5 0,63

Table 8: Construct(s) reliability analysis

Not all values reported in table are satisfactory considering George and Mallery (2003) guidelines of Cronbach’s alpha; >0.7 (acceptable), >0.6 (questionable), >0.5 (poor) and <0.4 (low reliability and excluded). • Therefore, it can be concluded that the items used to measure the constructs Information

sharing (α= 0,77), Departmental power (α=0,73), Formalization (α=0,76) and Culture (α=0,74) have an acceptable reliability.

• The Cronbach’s alpha of Interfunctional coordination (α=0,65), Functional expertise (α=0,68), Importancy (α=0,60), Technology (α=0,62) and Service performance (α=0,69) provide an questionable internal consistency but still makes the data useable for further analyses.

• The reliability of the four item-scale for innovativeness is below the guidelines (α=0,44). Deletion of item Innovative 4, however, would increase the reliability of the scale to an acceptable level of α=0,62. Therefore, item 5.4 will be excluded for further analyses.

• One construct, complexity, has a Cronbach’s alpha of 0,10, this is far below the guidelines and is an unacceptable internal consistency. Deletion of one item in the construct does not deliver a higher level, because Cronbach’s alpha does not provide reliability estimates for single items. This is particularly troubling because single item reliabilities are generally very low (Gliem and Gliem, 2003).

Therefore, item 5.4(The new service was a modification/ repositioning of an existing service of the organization) and construct ‘6. Complexity’ will be excluded for further analysis. This results in a final set of 37 items which will be tested via (independent) factor analysis. In the next paragraph the factor analysis and the results are shown.

5.4.2 Assessment of construct(s) validity

To test the validity, factor analysis is executed on every single construct used in this research. There exist two types of factor analysis for defining the factors to represents the structure of items: 1) common factor analysis and 2) (principal) component analysis. Both are popular data reduction techniques and if samples are large or communalities are high, both approaches show comparable results. However, component analysis primarily serves the purpose of data summarization and predictions, whereas common factor analysis focuses on understanding the structure the items share in common. Component analysis uses common, specific and error variance, while common factor analysis only uses the common variance. The latter approach uses estimated communalities of the variance of the variables. A (principal) component approach

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is selected for the data analysis. Principal component analysis is used in this research as extraction method. The extraction method is the algorithm to identify the loadings. Varimax

rotation was selected as rotation method. Rotation helps simplify the factor pattern in order to achieve more meaningful theoretical factor structures by rotating the (reference) axis. And rotation is the most important tool in interpreting factors (Hair et al., 2006). Rotation techniques fall into two categories: 1) orthogonal and 2) oblique. With orthogonal rotation the extracted factors are uncorrelated by definition and in oblique rotation this property is relaxed and the factors are allowed to be correlated. The latter is more flexible and arguably closer to social reality. Varimax is an orthogonal rotation method and is chosen due to the clearer separation of factors. The structures among the items are interpreted by the factor loadings in the matrix. An important distinction for considering factor loadings is the difference between practical and statistical significance. The larger the sample or the number of variables, the smaller the loading can be to be considered significant. Although factor loadings of ±0,30 and ±0,40 are minimally acceptable Hair et al. (2006) suggest guidelines in a sample of 85-100; a factor loading of ± 0,50 or greater is required for significance level of 0,05 and power of 0,80 percent and are considered to be practically significant. Loadings of ±0,40 are important. Therefore, mean, S.D. and all loadings above ±0,30 are shown in the following table.

Factor analyses

Constructs Item Mean S.D. Factor

Loading

Information sharing Information sharing 1 3,93 0,81 0,74**

Information sharing 2 3,84 0,87 0,72**

Information sharing 3 3,86 0,81 0,65**

Information sharing 4 4,23 0,75 0,70**

Information sharing 5 3,87 0,84 0,79**

Interfunctional coordination Interfunction coordination 1 3,85 0,61 0,74**

Interfunction coordination 2 3,79 0,71 0,79**

Interfunction coordination 3 3,70 0,82 0,84**

Interfunction coordination 4 (R) 3,25 0,95 0,46*

Functional expertise Expertise 1 3,86 0,79 0,81**

Expertise 2 4,01 0,70 0,76**

Expertise 3 3,98 0,67 0,62**

Expertise 4 3,72 0,82 0,67**

Departmental power Department 1(R) 3,05 1,03 0,51**

Department 2 3,01 1,08 0,84**

Department 3 3,03 1,02 0,81**

Department 4 3,80 0,82 0,81**

Service innovativeness Innovative 1 3,11 1,06 0,85**

Innovative 2 3,59 1,04 0,86**

Innovative 3 3,99 0,85 0,51**

Complexity Complex 1 3,47 0,88 0,73**

Complex 2 (R) 3,34 0,96 0,73**

Importancy Importance 1 3,71 0,64 0,75**

Importance 2 3,66 0,67 0,81**

Importance 3 3,79 0,75 0,68**

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Technology Technology 2 3,85 0,75 0,80**

Technology 3 (R) 3,50 0,85 0,69**

Technology 4 3,91 0,63 0,79**

Formalization Formalization 1 3,31 0,87 0,86**

Formalization 2 3,29 1,00 0,83**

Formalization 3 (R) 3,60 0,91 0,78**

Culture Culture 1 3,81 0,74 0,78**

Culture 3 3,64 0,83 0,79**

Culture 4 3,88 0,82 0,87**

Service performance Performance 1 3,71 0,67 0,83**

Performance 2 3,37 0,87 0,55**

Performance 3 3,73 0,68 0,62**

Performance 4 4,06 0,57 0,66**

Performance 5 3,83 0,67 0,73**

* Item is considered practically relevant, ** item is considered practically relevant and statistically significant (p<0,05) Table 9: Construct(s) validity via factor analysis All values reported in table are satisfactory considering Hair et al.(2006) guidelines of constructs validity; >0.4 (important) and >0.5 (acceptable and statistically significant(p<0.05)). Therefore, it can be concluded that the items used to measure the constructs validity Information sharing, Interfunctional coordination, Functional expertise, Departmental power, Service innovativeness, Importance, Formalization, Culture, Service Performance have all acceptable constructs validity.

5.4.3 Assessment of discriminant validity and composite reliability

Discriminant validity and Composite Reliability

1 2 3 4 5 6 7 8 9 10

1 Info sharing 0,71 2 Interfunctional 0,51** 0,72 3 Expertise 0,45** 0,38** 0,72 4 Department -0,08 -0,32** -0,18 0,81

5 Innovativeness 0,24* 0,32** 0,14 -0,05 0,72 6 Importance 0,22 0,20 0,27* -0,15 0,17 0,60 7 Technology 0,40** 0,40** 0,36* -0,18 0,26* 0,24 0,73 8 Formalization 0,32** 0,40** 0,11 -0,07 0,25* 0,12 0,27* 0,82

9 Culture 0,47** 0,43** 0,45** -0,31** 0,30** 0,37** 0,48** 0,38** 0,81

10 Performance 0,35** 0,31** 0,19** -0,25** 0,32** 0,39** 0,30** 0,39** 0,60** 0,68

Average Variance Extracted (AVE)

0,51 0,51 0,51 0,66 0,51 0,37 0,53 0,68 0,66 0,46

Composite Reliability 0,84 0,80 0,81 0,84 0,76 0,51 0,77 0,86 0,85 0,81

Item means 3,95 3,65 3,89 3,22 3,56 3,72 3,75 3,40 3,78 3,74

Item SD 0,16 0,27 0,13 0,38 0,44 0,07 0,22 0,17 0,12 0,25

Scale mean 19,74 14,60 15,56 12,88 10,68 11,16 11,26 10,20 11,33 18,69

Scale SD 2,94 2,20 2,13 2,95 2,23 1,53 1,70 2,28 1,94 2,34 ** = Correlation is significant at the 0.01 level (2-tailed) and *= Correlation is significant at the 0.05 level (2-tailed). Table 10: Discriminant and composite reliability test

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Discriminant validity needs to be established to ensure the overall validity of the model. Discriminant validity was assessed by means of the Fornell and Larcker (1981) test in which the square root of the Average Variance Extracted (AVE) of each construct is compared to the correlation between the constructs. The square root AVE of a construct should be higher than its correlations with other constructs. The square root AVE (extracted via SmartPLS) of each construct are shown diagonally in bold in table 10. The other cells contain the bi-variate correlations between the constructs (extracted via SPSS). As can be seen in table 10, in all cases does the square root AVE exceed the correlations’ value. This is evidence for existence of discriminant validity. As can be seen in table 10, all but one construct, Importance, does exceed the minimal value of 0,70 of Composite Reliability suggested by Nunnally & Bernstein (1994). The fact that the construct ‘Importance’ in question has an acceptable Cronbach’s Alpha (α=0,60) and practical significance factor loadings still makes the data useable for further analyses.

5.5 Model analysis

In this research SEM is selected as the data analysis method. With this technique it is possible to estimate the overall model at once. The variance or SmartPLS technique is chosen, due the fit of the objective (path specific hypothesis rather than overall model fit) of this method. The results of the measurement test for each construct, Cronbach’s Alpha and Confirmatory Factor Analysis, show acceptable reliability and validity. Seven items (items; 5,4, 6.1, 6.2, 8.1, 9.4 and 10.2) and one construct (Complexity) needed to be eliminated because the construct is valid but not reliable. In SmartPLS, bootstrapping method is used. This is a method in which the model is estimated with multiple samples drawn from the original sample. The bootstrapping method results in t-values for each of the path coefficients, which can be tested for their statistical two-tailed significance at the traditional 0,05 level or smaller (e.g. 0,01 or 0,001) or bigger (e.g. 0,10). The relative fit of the model can be assessed by reviewing the R2 of the endogenous constructs (Hulland, 1999).

5.5.1 Hypothesis testing

SmartPLS offers two options to handle missing values which either substitute the mean over all available cases of a variable for the missing values or which delete those cases with missing data (case wise deletion). Since case wise deletion throws away a lot of useful information and thus leads to lower efficiency, this procedure is not to be recommended. Therefore, substitute the mean is used. In order to proof or reject the relations the T-Values are needed. The following parameters are used in the bootstrapping method (SmartPLS.de, 2011): • Sign changes: Individual changes (to guarantee that the significance of the coefficients in

each resample will be the same as the original sample); • Cases: 88 (according to some posts the number of datasets); • Samples: 1000 (according to some posts and some books, more is better. Is degrees of

freedom) The T-Values in "Path Coefficients (Mean, STDEV, T-Values)" will be used. The relative fit of the model will be assesses due the PLS algorithm method. According to Henseler (2005), from a practical point of view, the choice of a weighting scheme does not matter. The results will be (almost) identical. But to maximize the R2, the path weighting scheme should rather be used.

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5.5.2 Significant level

According to two-tailed t-test (df = 999), the 90 % significance level or p<0.10 requires t-value>=1,648, the 95% significance level or p<0.05 requires t-value>=1,965, the 99% significance level or p<0.01 requires t-value>=2,586 and the 99,9% significance level or p<0.001 requires t-value>=3,300.

5.5.3 Results of model with SmartPLS

Hypotheses and control variables were tested by performing a bootstrapping procedure to obtain the t-values and the path coefficients of the relationships. After the table, a summary of the results will be graphically depicted.

Hypotheses testing

Hypo-

thesis Independent variable Dependent variable T-value

Path

coefficient

Signifi

cance

Hypothesis

supported

H1a Functional expertise Information sharing 2,816 0,293 *** Yes

H1b Functional expertise Interfunctional coordination 1,278 0,135 n.s. No

H1c Department power Information sharing 0,838 0,053 n.s. No

H1d Department power Interfunctional coordination 2,074 -0,152 ** Yes

H2a Innovativeness Information sharing 1,372 0,131 n.s. No

H2b Innovativeness Interfunctional coordination 1,808 0,146 * Yes

H2c Complexity Information sharing Excluded - n.s. No

H2d Complexity Interfunctional coordination Excluded - n.s. No

H2e Importancy Information sharing 0,764 0,061 n.s. No

H2f Importancy Interfunctional coordination 2,397 0,191 ** Yes

H3a Technology Information sharing 0,508 0,037 n.s. No

H3b Technology Interfunctional coordination 2,249 0,210 ** No

H3c Formalization Information sharing 2,339 0,207 ** Yes

H3d Formalization Interfunctional coordination 4,273 0,340 **** Yes

H3e Culture Information sharing 2,587 0,289 *** Yes

H3f Culture Interfunctional coordination 0,222 -0,017 n.s. No

H4a Information sharing Performance 1,976 0,213 ** Yes

H4b Interfunctional coor Performance 1,769 0,200 * Yes Significant level (2-sided):

10%: t>=1,648 * , 5%: t>=1,965 **, 1%: t>=2,586 *** 0,1%: t>=3,300 **** * = Path coefficient significant at 0,10 level; ** = at 0.05; *** = at 0,01; ****= at 0,001 Table 11: Hypotheses testing in SmartPLS

5.5.4 Model findings

A summary of the findings of this research are graphically depicted in figure 3. The relative fit of the model can be assessed by reviewing the R2 of the endogenous constructs (Hulland, 1999) in the following figure.

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Figure 3: Model findings with SmartPLS

As can be seen, ten out of eighteen relationships were supported by significant level. But one of the significant supported relationships was contradictory with the hypothesis. Therefore, nine out of the eighteen hypotheses were supported. According to Henseler et al. (2009), path coefficients can be interpreted as standardized beta coefficients. Lohmoller (1989) suggested a guideline for path coefficients; the value of a path coefficient should be above ±0,1. Therefore, all path coefficients are meaningful. The explained variance (R2 ) of the model showed a value for R2 of the independent variables. The R2 for Service Performance is 29,2%. The R2 of Information sharing and Interfunctional coordination are 34,8% and 44,0%. The positive effects of ‘Functional expertise’, ‘Formalization’ and ‘Culture explain 34,8 % of the variance in the ‘Information sharing’ of an organization in the NSD process. The negative effect of ‘Department power’ and the negative effect of the control variable ‘Size of the organization’ and the positive effects of ‘Innovativeness’, ‘Importance’, ‘Technology’ and ‘Formalization’ explain 44,0% of the variance in the ‘Interfunctional coordination’ of on organization within the NSD process. The positive effects of ‘Information sharing’, ‘Interfunctional coordination’ and the positive effects of the control variables ‘Structure’ and ‘Completed service projects a year’ explain 29,2% of the variance in the ‘Service Performance’ of an service project. Cohen (1988) provided the following rules of thumb for R2; a value of R2 less than 0,15 is small, less than 0,35 medium and greater than 0,35 is large/strong. Therefore, it can be concluded that the R2 for information sharing stands almost for a strong level, the R2 for interfunctional coordination for a strong level and the R2 for service performance stands for a medium level.

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6 Discussion and conclusion on findings

This chapter will feature a discussion of the research findings. Some of the findings were in line with existing literature while others prove their hypothesized relationships wrong. The first paragraphs contain the discussion of interfunctional cooperation, antecedents and consequences. The second paragraph provides the conclusions of this research. At the end of this chapter the contributions and implications will be given.

6.1 Discussion

The purpose of this research was to increase the understanding of the contribution, antecedents and consequences of interfunctional cooperation in the NSD context of technology oriented service organizations. Moreover, this research focused on interfunctional cooperation as a driver of service success. The findings show that there exist significant relationships between the internal manageable antecedents and interfunctional cooperation in the NSD context. This is in line with some findings of interfunctional cooperation in the NPD context. Song et al. (1997) empirically concluded that internal facilitators drive interfunctional cooperation in NPD. As expected and argued in after the literature study, interfuntional cooperation in the NSD process also affected by internal manageable drivers. In the following section the findings will be discussed. First, the findings of interfunctional cooperation will be given. Second, the antecedents will be discussed. Third, the consequences will be discussed.

6.1.1 Interfunctional cooperation in the NSD context

Research on interfunctional cooperation is typically conducted in the NPD context of manufacturing organizations. Moreover, most of the physical product literature emphasizes the importance of interfunctional teams and effective cooperation within those teams as one of the most important success factors for new product development projects (Song and Parry, 1996; Cooper, 2001; Lovelace et al., 2001). Little attention has been given to the effect of interfunctional cooperation in the NSD context of technology oriented service organizations. Some academic literature argues that interfunctional cooperation should be used to manage the NSD process (Johne and Storey, 1998; Tax and Stuart, 1997). The findings of this research suggest that interfunctional cooperation is present in the NSD context of ICT/IT organizations in the Benelux. This research shows empirical support for the involvement of interfunctional cooperation in the NSD process of service organizations. As expected, the findings suggest that individuals from different disciplines (e.g. marketing, sales, engineering, operations etc.) drive interfunctional cooperation in technology oriented service organizations. Moreover, technology oriented service organizations should include the interfunctional cooperation mechanism in their NSD process, which is in line with the suggestions of Johne and Storey (1998) in the literature review of this research. Therefore, technology oriented service organizations should recognize that interfunctional cooperation is vital and needed to successful implement new services and achieve service performance. A comparison between the involved units/department/disciplines during the different stages in the development process in the NPD context and NSD context is shown and generalized in appendix 12. There are some similarities and differences of how interfunctional cooperation is structured in the NPD context and the NSD context. The different stages in the NSD contain

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multiple disciplines. However, which departments are involved during the different stages depends on the different characteristics of physical products and intangible services. A reason for this could be that services often are highly dependent on experts, have a high knowledge intensity nature and are simultaneous produced and consumed. Moreover, almost every service is unique and requires engineering during the operations and it is indicated that operational disciplines (e.g. front-line and service desk employees) play an essential role in the NSD process because they are present in almost every stage. This is in line with the suggestions of De Brentani (2001). ICT/IT service organizations follow more or less a systematic development process. This is in line with the suggestions of Bitner et al. (2008) and contradicts the suggestion of Kelly and Storey (2000). Overall, the NSD process is dependent on the inner workers, expertise and cooperation of the employees and in the NSD process more than one individual is responsible for the development and launch. Now, that it is clear that interfunctional cooperation is used in the NSD context of ICT/IT service organizations, it will be interesting which factors could influence interfunctional cooperation and what the consequences of the interfunctional cooperation mechanism could be. In comparison with NPD, little is known about the antecedents of interfunctional cooperation in NSD. Therefore, the next paragraphs elaborate on the antecedents and consequences of interfunctional cooperation in the NSD context.

6.1.2 Antecedents of interfunctional cooperation in the NSD context

One of the objectives of this research was to examine some manageable factors that affect the level of interfunctional cooperation and the subsequent consequences in the NSD context. More specifically, the relationships between the manageable antecedents as independent variables and interfunctional cooperation as a dependent variable is investigated. Furthermore, the relationship between the interfunctional cooperation mechanism and the success of services was investigated. The empirical findings are discussed in the following paragraphs. Personal antecedents

First, functional expertise shows, in figure 3, to have a positive significant relationship on information sharing between the different units in the NSD process. This is consistent with the way in which hypothesis H1a was argued in chapter 3. Atuahene-Gima and Evangelista (2000) theorized that functional expertise power (of both marketing and R&D) has a positive relationship with interfunctional cooperation in the NPD process. The SmartPLS model does not give any insight into the reason why the relation between functional expertise and information sharing in NSD occurs. The suggestion of Johne and Storey (1998) that the NSD process is highly dependent on the expertise (the marketing and sales employees know a lot about commercial issues and engineering employees know a lot about design) of employees from the different functions could be a reason. With the expertise, employees can complete each other in the variety of competences needed during the process. Another reason can be that the ICT/IT services are very high knowledge intensive and less productive oriented. Thus, employees should have a high level of functional expertise when developing solutions and this drives the level of information sharing between different disciplines. Second, department power shows to have a negative significant relationship on the level of interfunctional coordination. This is consistent with the way in which hypothesis H1d was argued in chapter 3. Previous research documented the importance of functional expertise and department power primarily in NPD settings. There exists no significant evidence for the

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negative relationship of department power in previous research and the SmartPLS does not give any insight in the reasons. Based on the literature review it could be that the operational department wants to make the decisions (e.g. tend to develop marketing knowledge to deal with customers in order to reduce their dependence on marketing) and reduce their dependency to interact and exchange information with other departments during the NSD process and this can lead to disharmony between departments. In the NSD context, department power hinder the harmonization and synchronization of individual contributions. A reason for this could be that the operational disciplines (front-line employees and service desk) deals contiunually with the customer involvement and produces and delivers the service simultaneously. In this situation, the interfunctional coordination with other departments will be probably lower. Concluding, this research provides additional empirical evidence in NSD settings that conditions containing functional expertise tend to enhance interfunctional cooperation and that conditions containing department power tend to hinder interfunctional cooperation. From the findings it can be concluded that personal related antecedents show roughly copy relationships in the NPD context as in the NSD context. Those same sort relations in NSD and NPD can have several reasons; 1) Functional expertise provides confidence to team members about usefulness of other’s (important) information in both NPD and NSD, 2) When studying innovation in services, it can be seen that like innovation in products it is about change and the development is highly dependent on inner workings and expertise of those employees and 3) The NSD process can similar be viewed as the NPD process; because the NSD process is as the NPD process the transformation of input information about customer needs and market opportunities into output information (Krishan et al. 1997). Project related antecedents

First, the level of service innovativeness shows, in figure 3, to have a positive significant relationship on interfunctional coordination. This is consistent with the way in which hypothesis H2b was argued in chapter 3. A reason can be that services with a higher level of innovativeness enhance cooperation because the experience with the service will be lower and employees need to complete each other in the variety of needed competences. In other words, a higher level of innovativeness stands for a lower level of familiarity and higher level of uncertainty and risk. Then, there will be greater need for coordination (harmonization and synchronization of individual contributions) between different units/disciplines to overcome problems and find solutions. This relationship contradicts the findings of Atuahene-Gima and Evangelista (2000). They empirically concluded that product innovativeness is negatively related for the involvement of R&D in the NPD project. Second, the complexity of this service was valid but not reliable in this research. Therefore, this antecedent could not be tested and discussed. Third, the importance of the service showed a positive significant relationship on the level of interfunctional coordination in the NSD process. This is consistent with the way in which hypothesis H2f was argued in chapter 3. A reason for this can be that more important projects and task leads to commitment and enthusiasm of the involved employees to harmonize and synchronize with the other involved resources. Atuahene-Gima and Evangelista (2000) empirically concluded that the level of product importance negatively is related to the involvement of R&D and Marketing in the project. From the findings it can be concluded that project related antecedents show different relationships in the NSD context compared to the NPD context. Previous research documented the importance of level of innovativeness, complexity and importance primarily in NPD settings.

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This research provides additional empirical evidence in NSD settings that conditions containing a higher level of innovativeness and importance enhance interfunctional cooperation. For example, innovativeness in NSD enhance the level of interfunctional coordination between units and in NPD it hinders R&D’s influence. It also illustrates that the importance of the project in NSD enhance interfunctional coordination between functional units and in NPD it hinders the involvement of Marketing and R&D.

Organizational related antecedents

First, technology orientation antecedent, show to have a positive significant relationship on the level of interfunctional coordination. This contradicts with the way in which the hypothesis H3b was argued in chapter 3. A reason for this could be that in the NSD context, the operational department do not undervalues the input of marketing or engineering department because they do not generate, develop and deliver the (technical) solution directly with and to the customer. Atuahene-Gima and Evangelista (2000) empirically concluded that technology orientation of the organization negatively impact the involvement of marketing in the NPD project. Hence, the development department is likely to deal directly with the customers. Second, the formalization antecedent, show to have a positive significant relationship on the level of information sharing between involved units in the NSD process and on the level of interfunctional coordination between different units. This is consistent with the way in which the hypotheses H3c and H3d were argued in chapter 3. This is in line with the suggestions of De Brentani (1989); it are the characteristics (intangibility, co-producement and consumption etc.) of services that affect the need for a formalized development process and a formal NSD process stimulates the effectiveness and efficiency of the innovation outcome (Frohle et al., 2000). Previous research documented the importance of technology orientation, formalization of plans and procedures and supportive culture primarily in NPD settings. Atuahene-Gima and Evangelista (2000) established that the level of formalization of projects negatively is related to the influence of Marketing in the project. Therefore, the level of interfunctional cooperation probably will be lower. Third, the culture antecedent, show to have a positive relationship on the level of information sharing between the different units in the NSD process. This is consistent with the way in which the hypothesis H3e was argued in chapter 3. According to Trent and Monczka (1994), interfunctional team integration asks for a corporate culture of teamwork in all levels of the organization. Interfunctional cooperation in organizations is greater when senior managers support the use of the creative of participant’s potential (Jassawalla and Sashittal, 1998). Song et al. (1997) empirically shown that top management plays a key role in determining the degree of interfunctional cooperation in the NPD process. Concluding, this research provides additional empirical evidence in NSD settings that conditions containing a higher level of technology orientation, formalization and supportive culture (e.g. management should) champion the project and provide strategic directions that foster interfunctional cooperation. are positively related to the level interfunctional cooperation. From the findings can be concluded that organizational related antecedents show different relationships in the NPD context as in the NSD context. The findings illustrate for example that technology orientation in NSD enhance the level of interfunctional coordination and in NPD it hindrance marketing departments influence. This research illustrates also that the formalization improves the information flow between different functions and the level of interfunctional cooperation in NSD because it allows greater clarification of responsibilities, recognition and acceptance of the

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importance of the involved functions in the project. The culture in the organization show roughly similar relationships in NPD and NSD. Interfunctional cooperation in organizations is greater when senior managers support the use of the creative of participant’s potential (Jassawalla and Sashittal, 1998).

6.1.3 Consequences of interfunctional cooperation in the NSD context

As stated in the literature part of this research, interfunctional cooperation is a means to an end. Therefore, the relationship between interfunctional cooperation as independent variable and service performance as a dependent variable is also investigated. This research shows that information sharing as well as interfunctional coordination between different units/departments in the NSD process has a significant positive relation on the service performance. This is consistent with the way in which the hypotheses H4a and H4b were argued in chapter 3. Therefore, the effect of interfunctional cooperation is positive statistically significant on the performance. Previous research documented the importance of interfunctional cooperation primarily in NPD settings. Ottum and Moore (1997) have found that sharing information across functional departments is critical to innovation success. Hoegl and Gemuenden (2001) stated that the coordination is of critical importance to the successful design, development and launching of innovations. Song et al. (1997) empirically concluded that interfunctional cooperation is positively related to the performance of NPD. This research provides additional empirical evidence in NSD settings that conditions containing the involvement of interfunctional cooperation between units are positively related to service performance. This is in line with the suggestions of Mahajan et al. (1994) because they argued that interfunctional cooperation in NSD is crucial for profitable new service. From the findings can be concluded that the consequences of interfunctional cooperation show the same relationships in both the NPD context and the NSD context. One important reason is the fact that the objectives, being able to provide innovative services 1) shorter cycle-time, 2) cheaper, 3) higher quality, of NPD for manufacturing organizations are similar to NSD for service organizations and are a source of strategic success (Kelly and Storey, 2000). Moreover, this research underscores also the importance of incorporating the interfunctional cooperation mechanism in NSD processes.

6.2 Main conclusions

This paragraph contains conclusions of this research. Implementing the interfunctional cooperation mechanism in the NPD process to enable the performance of new tangible product is most of the times important. This research was stimulated by lack of understanding and insights of interfunctional cooperation in the NSD process of technology oriented service organizations. No stable link has been established until now between the structured interfunctional cooperation mechanism in the context of (the iterative and knowledge intensive nature) NSD process in technology oriented service organizations. Therefore, this research investigates the role of interfunctional cooperation in NSD of technology oriented service organizations. The research is based on the following central research problem:

“Would the nature of technology oriented services (iterative process,

important role of customers and employees, high knowledge intensity etc.)

suggest that organizations could benefit (higher level of success) from

interfunctional cooperation during NSD?”

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When formulating an answer for this research problem, two research questions were determined: “1) Will technology oriented service organizations benefit from interfunctional cooperation

during the new service development (NSD) process? And 2) What could be antecedents and

consequences of interfunctional cooperation in the new service development (NSD) process?”.

In the second chapter a literature review has been conducted. Services, service innovations and interfunctional cooperation have been discussed. Concluding from the literature, to enhance efficiency and effectiveness in the NSD process of ICT/IT services, organizations should divide up various work tasks between co-workers and provide interfunctional coordination. Therefore, it is suggested that the NSD context of technology oriented service organizations is an environment to introduce the interfunctional cooperation mechanism. In this research, a model of antecedents and consequences was developed and empirically tested in Benelux ICT/IT organizations. Building on previous research from the NPD literature, this research conceptualized personal, project and organizational factors as major antecedents. Information sharing, interfunctional coordination and service performance are set as dependent variables in this research model. Furthermore, personal, project, organizational antecedents, information sharing and interfunctional coordination are set as independent variables. Based on interfunctional cooperation research in the NPD context, the following personal, project and organizational antecedents were recognized: 1) Functional expertise power, 2) Department power, 3) Innovativeness, 4) Complexity, 5) Importance, 6)Technology, 7) Formalization and 8) Culture of the organization. The conceptual model and the associated hypotheses tried to add detail to the understanding of interfunctional cooperation and service performance. Overall, the empirical findings and the analyses of the data show evidence for nine of the eighteen (hypothesized) relationships in ICT/IT service organizations. So, when the question: “What could be antecedents and consequences of interfunctional cooperation in the new service

development (NSD) process?” has to be answered the following facts can be stated. The findings support that Functional expertise, Formalization and Culture are identified as positive antecedents for the level of information sharing during the NSD process. Next to these findings, statistical evidence for positive influences of Innovativeness, Importance, Technology orientation and Formalization are identified as positive antecedents for Interfunctional coordination. The construct between Department power and Interfunctional coordination show a negative relationship. Furthermore, the positive effects of Information sharing, Interfunctional coordination directly affect the Service performance. Moreover, the research model accounted for the variances in the independent variables; 1) Information sharing, 2) Interfunctional coordination and 3) Service performance. The R2 represents the variance in the independent variable and the value varies between 0 and 1. Knowing the values of functional expertise, formalization and culture, this can explain 34,9% of the variance in information sharing. This means that the factors were well chosen to interpret the relationship with information sharing. Knowing the values of department power, innovativeness, service importance, technology orientation, formalization and size of the organization (# of employees), this can explain 44,4% of the variance in interfunctional coordination. This means that the factors were well chosen to interpret the relationship with interfunctional coordination. Knowing the values of information sharing, interfunctional coordination, structure of the organization and completed projects a year, this can explain 29,2% of the variance in service performance. This means that the

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interfunctional cooperation mechanism can interpret the service performance. Moreover, when the question: “Will technology oriented service organizations benefit from interfunctional

cooperation during the new service development (NSD) process?” has to be answered directly; the answer should be yes. Since, this research does empirically confirm that information sharing between different disciplines and interfunctional coordination (harmonization and sunchronization of goals) positively relate to the success of the new service. This suggest that the intangible, knowledge-intensive and iterative nature of services asks for time and effort to communicate and develop shared understanding of the goals and tasks. Concluding from the findings there are some similarities between the drivers of interfunctional cooperation in NPD of manufacturing and NSD of ICT/IT organizations, but significant differences, as discussed in preceding paragraphs, exist. With the hypotheses H4a and H4b supported, the empirical findings provide validation and point to the important role of interfunctional cooperation in the NSD process of ICT/IT service organizations. Finally, when the research problem: “Would the nature of technology oriented services (iterative process,

important role of customers and employees, high knowledge intensity etc.) suggest that

organizations could benefit (higher level of success) from interfunctional cooperation during

NSD?” has to be answered directly; the answer should be yes. Since, information sharing and interfunctional coordination between different disciplines in the iterative NSD context of high-knowledge intensity ICT/IT organizations, was empirically found to be positively related for the success and performance of the new services. The literature about technology oriented services stated that the NSD process is often an iterative, high knowledge intensive, high level of customer involvement, intangible, co-production and consumption etc. The lack of tangible elements can make the development of a common service in the organization a difficult task and shared understanding of development goals is important. Therefore, interfunctional coordination (synchronization and harmonization) between disciplines is needed at least. In NPD, development parameters can be specified and made tangible to the different functions but in NSD the intangible and simultaneous production and consumption of the services could mean that effort is needed to communicate and understand the goals and tasks of and during the iterative NSD process. In other words, when organizations want to efficiently develop intangible services an appropriate mechanism to integrate different functions in the interative and knowledge-intensity NSD process is needed. A mechanism to interpret, communicate and share information throughout the NSD process could be the interfunctional cooperation mechanism.

6.3 Theoretical contribution and (managerial) implications

The findings and results discussed and summarized in the preceded chapters contribute to the available theory and have several (managerial) implications for technology oriented service organizations. The first part of this paragraph describes the contribution to the scientific field. The second part of this paragraph describes the (managerial) implications of this research. Theoretical contribution

This research contributes to the existing literature in several ways. First of all, to develop a theoretical perspective for understanding the links between factors, interfunctional cooperation and service performance. Interfunctional cooperation was empirically measured using two dimensions; 1)information sharing and 2)interfuntional coordination in the NSD context of ICT/IT organizations in the Benelux. Existing literature primarily empirically studied the

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interfunctional cooperation mechanism in the NPD context of manufacturing organizations. Some studies argued for having more than one expert responsible for the NSD process. The fact that this research takes the interfunctional cooperation into account improves the insight of how this mechanism could influence the success of NSD in technology oriented service organizations. A second contribution to existing literature is the measurement of antecedents/drivers which could influence the level of interfunctional cooperation (interfunctional coordination and information sharing) during the iterative and the high knowledge intensity NSD process of technology oriented service organizations. Existing literature primarily studies the driver on interfunctional cooperation in the NPD context of manufacturing organizations. The fact that this research takes the drivers into account in the NSD context improves the insight of how the antecedents could influence the level of interfunctional cooperation in the NSD context. The present research discovered that the nature of technology oriented services would suggest that organizations also could benefit from the interfunctional cooperation mechanism during NSD. Moreover, the interfunctional cooperation mechanism will also work within the NSD context of ICT/IT service organizations. Therefore, the present research empirically extents existing knowledge in that interfunctional cooperation was also found to increase the level of success of the NSD process. Managerial implications

Given the role of interfunctional cooperation in the NSD process of ICT/IT service organizations, it is important to understand the implications of the findings in this research for practice. However, as is the case in all empirical research, this research is based on a simplified representation of the reality in the technology oriented service organizations. Nevertheless, from this research, a number of implications for organizations regarding interfunctional cooperation in the NSD process can be suggested. This research has shown the interfunctional cooperation mechanism in the inherently complex nature (high-knowledge intensive, iterative process, customer involvement, intangibility etc.) of the NSD context. As was already mentioned, this research adopted conceptual models from the NPD literature and interpret those models and the interfunctional cooperation mechanism in the NSD context of ICT/IT service organizations. As was already argued in the preceding chapters, implications of this research can primarily be found in the positive and negative relationships of the manageable antecedents and the interfunctional cooperation mechanism in the iterative and high-knowledge intensive NSD process. First, the insights into the relationship between personal antecedents and interfunctional cooperation imply that functional expertise plays a role in information sharing during NSD and it is beneficial for service organizations to integrate functional expertise in the interfunctional cooperation mechanism during the NSD process. Functional expertise is defined as the degree which an individual is regarded as having expert knowledge about relevant issues in the development process. A possible explanation for this phenomenon could be that it appears that organizations should invest in mechanism to secure appropriate functional input (e.g. knowledge and skills) in the NSD process. By this, this body of knowledge could increase the innovative creativity and problem solving capabilities. For example, one employee could have the available knowledge about the organization, customers and processes and a colleague can have the knowledge to justify the innovative ideas. In this situation the organization need both employees and need to develop and use the right information sharing tools. The organization should belief and use the expertise of different functions to synthesize knowledge. Moreover, having

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knowledgeable and highly motivated front-line experts is important. Because in the nature of technology services (intangible, interactions with customers and knowledge intensity etc), front-line employees play an essential role generating and differentiating the service and fulfill the customers’ requirements. Second, service organizations needs to control the level of department power in the interfunctional cooperation in the NSD process because of the negative relationship to the level of interfunctional cooperation. Department power is defined as the degree to which a specific department is perceived to be more powerful than other departments in the NSD process. Meaning that the power of a department is negatively related to the harmonization and synchronization of the tasks, goals and objectives of the NSD process. It appears that organizations should overcome this problem in the NSD process. Therefore, a possible solution for this problem could be that the service organizations needs to invest in clear and structured hierarchy of authority in the interfunctional cooperation mechanism during the NSD process. Senior management could for example derives strategic direction and provides strategic and operational directives to the different disciplines involved during the NSD process. Another solution for this phenomenon could be that organizations should map the different stages (e.g. idea screening, analysis etc.) to the right different disciplines/departments. Third, service organizations should focus on the level of innovativeness and the importance of the service, because more innovative and important services need a higher level of interfunctional cooperation. Service innovativeness is defined as the extent to which the service is new to the organization and/or to the market. It reflects the degree of experience the organization has with the NSD project. Organizations need to encouraging interfunctional coordination (harmonization and synchronization of task and goals) at least when the service innovativeness is high because of the new combinations of knowledge and competencies needed in the organization. In this situation, service organizations are less familiar with the new services and organizations effort and resources commitment is required in the NSD process. An explanation could be that innovativeness enhances the uncertainty of the NSD process. Such a service need new information. Service importance is defined as the degree to which it is perceived to have great significance for the organizations profitability. It is suggested in this research that more important service innovations enhance interfunctional coordination. A possible explanation for this could be that when employees face more important tasks and challenges, they will be more motivated for commitment and enthusiasm on the part of the influence target comply with demands of an influence source. Another explanation could be that management may set priorities and greater control when the NSD process is more important, then room for interfunctional coordination is given. Fourth, it is important to focus on the organizational antecedents because in general it seems beneficial for service organizations to integrate a more formalized structured or structured parts of the NSD process. Formalization is defined as extent to which an organization emphasizes a more structured and formal NSD approach or activities. A possible solution to enhance information sharing and interfunctional coordination organizations should depict objectives, goals and plans during the NSD process in a written form. Another possible solution could be the use of a more systematic NSD process, because it is empirically suggested as important driver to success of interfunctional cooperation and indirectly to the success of services. Organizations should map the different stages (e.g. idea screening, analysis etc.) to different. Then organizations can benefit from a well-planned NSD process.

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Fifth, organizations should also be aware of the fact that if the organization has a higher level of technology orientation and an entrepreneurial and collaborative culture the need for interfunctional cooperation will be higher. Technology orientation is defined as the value system that promotes technology in the new service at the expense of customers’ needs and wants. In the NSD context, the organization should be aware of the fact that the operational department do not undervalues the input of marketing or other department because then interfunctional coordination (harmonization and synchronization of goals and tasks among disciplines) will be established. Culture of the organization in this research is defined as the type of culture of the organization during the NSD process. In this research it is suggested that management of organizations should place strong and visible support in an entrepreneurial and innovative environment. Managers should have a high degree of confidence in the involved employees. Another solution to an entrepreneurial and innovative environment could be that management share ideas with employees from different functions and vice versa and that the organization provide visible leadership during the NSD process. In this research it is suggested that the success at developing services that involve technologies, requires a corporate environment that promote and supports creativeness and out of the box thinking. Senior managers should be visionaries and leaders when moving into unknown areas and when creating an open, creative and entrepreneurial environment. In other words, management should provide strategic direction, as well as create policies and procedures that support the strength of the culture. Sixth, from the service performance construct and their relationships a conclusion can be drawn. As can be seen in figure 3, the reported relationships of information sharing and interfunctional coordination have a positive and significant effect on service performance. This research suggest that service organizations need interfunctional cooperation in the NSD process to achieve service performance. Moreover, service performance is mentioned to be positively influenced by the existence of interfunctional cooperation in the high-knowledge and iterative NSD process of ICT/IT service organizations. Meaning that a mix of different disciplines might lead to more opportunities and success, because then from one single innovation more opportunities could arise because of the different expertise, knowledge and skills of the different involved functions. Overall, this research contributed to service organizations in the ICT/IT sector in a practical sense by making clearer on which antecedents to focus when using interfunctional cooperation to achieve service success. This research draws attention to a broader understanding of what could be drivers of the interfunctional cooperation mechanism in the NSD context. The findings provide directions for action depending on how to manage the development process and to manage the interfunctional cooperation mechanism in the NSD process of technology oriented service organizations.

7 Limitations and suggestion for future research

In the first paragraph, the limitations of this research will be described. The second paragraph suggests for future research directions.

7.1 Limitations

The first limitation is the selected context. This research focuses on the interfunctional cooperation mechanism in ICT/IT service organizations which were operating in the Benelux. As stated earlier, IT services sector consist of a high knowledge-intensity nature. An example of less knowledge-intensity but more production intensity service industry could be insurances and

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transport. Therefore, more extensive research is required in other industries (and eventually countries) to test if the results can be applied more general. A second limitation is the cross-sectional design of this research. In this research a cross-sectional research was conducted, because the data will only be collected once, due to time and financial constraints. According to (Levin, 2006), within a cross-sectional research it is difficult to make causal relationships and the results may provide differing results if another timeframe was chosen. A third limitation could be that in most (84 out of the 88) only one employee per organization participated in this research. Beforehand, this research stated that it would be better for the reliability to get two or more respondents per organization. However, this could not be achieved because of some constraints. One of the constraints is that organizations did not want to deliver more than one respondent. A second constraint is that organization made promises but they did not stick to their word. This could be a problem because then the dependent and independent variables were measured trough a single respondent, which may introduce common-method bias. Then, the relationships are based on single perspectives.

7.2 Suggestions for future research

The findings of this research hold several implications for future research. This paragraph will discuss some suggestions for future research. It is necessary to replicate this research across other industries and cultural contexts to establish the robustness of these research conclusions. The research is performed amongst organizations in the Benelux, with respondents coming primarily from Belgium and The Netherlands. This research might also be conducted in another setting in which for example the antecedents and consequences of interfunctional cooperation are tested in Europe or in other industries/sectors to see if there is culture effects on the findings. Findings of this research show antecedents that were negatively and positively related towards interfunctional cooperation. This research also suggested that interfunctional cooperation is positively related towards service performance. However, the conclusions of this research are based on a cross-sectional design. Therefore , the same research problem could be addressed with a different methodology. For instance, a qualitative research could be conducted to provide additional insights on the research problem or a longitudinal design can be used. By this, the interfunctional cooperation mechanism in the NSD process can be tested by the same items over a long period of time and conclusions about causality can be given. An important area for further research is the expansion of the model in this research to include additional external environmental factors. The focus of this research was on internal manageable drivers. Besides testing the effects of the internal manageable antecedents on interfunctional cooperation, also the effects of external antecedents could be included to create an understanding of their contribution to interfunctional cooperation and service performance.

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to precision. European Management Journal, Vol. 25, No. 5, pp. 373-383. − Song, X.M. and Parry, M.E. (1992), The R&D-marketing interface in Japanese high technology

firms, Journal of product innovation management, vol. 9, no. 2, pp.91-112 − Song, X.M., Montoya-Weiss, M.M. and Schmidt, J.B. (1997). Antecedents and consequences of

cross-functional cooperation: A Comparison of R&D, Manufacturing and Marketing perspectives. Journal of Product Innovation Management, Vol. 14, pp. 35-47.

− Song, X.M., Thieme, R.J. and Xie, J.(1998). The impact of cross-functional joint involvement across product development stages: an exploratory study, Journal of Product Innovation

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Research, Georgia State University, University of Georgia, Drexel University, pp.1-70. − Tax, S.S. and Stuart, I. (1997), Designing and implementing new service: the changellenges of

integrating service systems, Journal of retailing, vol. 73, No. 1, pp. 105-134. − Tannenbaum, S. I., R. L. Beard, E. Salas. (1992), Team building and its influence on team

effectiveness: An examination of conceptual and empirical developments. K. Kelley, ed. Issues,

Theory, and Research in Industrial/Organizational Psychology, pp. 117–153. − Tether, B.S. & J.S. Metcalfe (2001), Services and Systems of Innovation, paper at DRUID 2002. − Trent, R.J. and Monczka, R.M., (1994), Effective cross-functional sourcing teams: critical success

factors, International journal of purchasing and materials management, Vol. 30, No. 4, pp. 3-11 − Ulrich, K.T., and Eppinger, S.D. (2000), Product Design and Development, 2nd Edition, McGraw

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− Urban, G. L., and Hauser, J. R. (1993). Design and marketing of new products (2nd ed.). Englewood Cliffs, NJ: Prentice-Hall.

− Van Aken, J.E., Berends, H., and van der Bij, H. (2007) Problem Solving in Organizations: A Methodological Handbook for Business Students, Cambridge: Cambridge University Press.

− Van der Aa, W. (2000), Organisatorische innovaties en groeistrategieën van dienstverlenende bedrijven, EUR: Rotterdam.

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Hill. European edn

− Yin, R.K. (2003) Case Study Research: Design and Methods, London: Sage Publications.

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Appendices

Appendix 1: Tangibility spectrum services

Tangibility spectrum (adopted from Shostack, 1977) In the tangibility spectrum, services are generally speaking those that are found to have a dominant intangible component to them. Kotler (1997) proposed five categories in the tangibility spectrum. The categories represents different types of projects and are graphically depicted in the figure with roman numbers;

1. Pure tangible products, are entirely tangible with no accompanying service. Such a product is a pen.

2. Tangible products with accompanying service, a tangible product is provided with services to add overall value. For example, a computer (tangible product) is purchased and the technician (service) helps to install.

3. Hybrid off, the tangible and intangible components are virtually equal. An example is the Restaurant; they offer food (tangible) but cook the food (intangible).

4. Major services with accompanying products, bulk is intangible but there are some tangible elements. For example a hotel, the accommodation is intangible but meals and drinks are tangible.

5. Pure intangible services, are entirely intangible with no accompanying tangible elements. Consulting services, doctors and advisers are examples.

To give an impression of the positioning on the (in) tangibility spectrum scale, ICT/IT service organizations and their services are represented in the fourth or fifth category. In this research, ICT/IT service organizations deliver Software as a Service (SaaS), management information systems etc. Therefore, they are located in category four/five because the major service is intangible with some tangible elements.

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Appendix 2: Model of Atuahene-Gima and Evangelista (2000)

Appendix 3: Model of Song et al. (1997)

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Appendix 4: Model of Cohen and Bailey (1997)

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Appendix 5: Hypotheses

Hypotheses developed

Hypot

hesis

Independent

variable

Dependent

variable Description

H1a

Functional expertise

Information sharing Functional expertise is positively related to information sharing

H1b

Functional expertise

Interfunctional coordination

Functional expertise is positively related to interfunctional coordination

H1c

Department power

Information sharing

Department power is negatively related to the level of information sharing

H1d

Department power

Interfunctional coordination

Department power is negatively related to the level of interfunctional coordination

H2a Innovativeness Information sharing

Service innovativeness) is positively related to information sharing

H2b Innovativeness Interfunctional coordination

Service innovativeness is positively related to interfunctional coordination

H2c Complexity Information sharing Service complexity is positively related to information sharing

H2d Complexity Interfunctional coordination

Service complexity is positively related to interfunctional coordination

H2e Importancy Information sharing

The importance of the new service is positively related to iinformation sharing

H2f Importancy Interfunctional coordination

The importance of the new service is positively related to interfunctional coordination

H3a Technology Information sharing

Technology orientation is negatively related to information sharing

H3b Technology Interfunctional coordination

Technology orientation is negatively related to interfunctional coordination

H3c Formalization Information sharing

Formalization of NSD project activities is positively related to information sharing

H3d Formalization Interfunctional coordination

Formalization of NSD project activities is positively related to interfunctional coordination

H3e Culture Information sharing

The culture, management support and common goals of a service organization are positively related to information sharing

H3f Culture Interfunctional coordination

The culture, management support and common goals of a service organization are positively related to interfunctional coordination

H4c

Information sharing

Service performance

Infomation sharing positively impacts new service performance (satisfaction, future use of service, strategic success) in the market.

H4d

Interfunctional coordination

Service performance

Interfunctional coordination positively impacts new service performance (satisfaction, future use of service, strategic success) in the market.

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Appendix 6: Dutch version questionnaire

Samenwerking in het ontwikkelproces services

Voor mijn masterstudie Innovation Management aan de Technische Universiteit te Eindhoven ben ik momenteel bezig met mijn afstudeeronderzoek. Met dit onderzoek wil ik in kaart brengen welke factoren invloed hebben op het gebruik van inter-functionele samenwerking en wat de consequenties van deze samenwerking zijn voor het uiteindelijke succes van nieuwe services. Met inter-functionele samenwerking wordt in dit onderzoek bedoeld de samenwerking tussen de verschillende (bedrijfs)functies of afdelingen in uw organisatie (bv. marketing, verkoop of R&D etc). Ik wil u vriendelijk verzoeken alle vragen te beantwoorden. Ook wanneer u onverwacht de vraag niet naar alle redelijkheid kunt beantwoorden, wil ik u verzoeken deze alsnog met uw beste oordeel te beantwoorden. Het gaat immers niet om het 'goed' of 'fout' beantwoorden, maar het belangrijkste is uw mening over de onderwerpen. Het beantwoorden van de vragen duurt ongeveer 12 minuten. Uw antwoorden zullen met uiterste vertrouwelijkheid worden behandeld. Alleen ik en mijn begeleiders van de TU/e hebben toegang tot de dataset. Wanneer u problemen, vragen of suggesties heeft neem dan gerust contact met mij op via e-mail; r.t.m.peters@student.tue.nl of per telefoon. Bij voorbaat dank voor uw medewerking. Veel succes met het beantwoorden van de vragen! Frank Peters 06-52 52 36 06 TU/e, Department of Industrial Engineering & Innovation Sciences

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Belangrijk: Denk bij het beantwoorden van de vragen in dit onderzoek aan de service die als laatste ontwikkeld is in uw organisatie! Kunt u de laatst ontwikkelde service van uw organisatie kort definiëren? Wat bedoelen we met nieuwe services?

• Nieuwe versie Security Services; In deze nieuwe versie staat de noodzaak om gevoelige informatie binnen organisaties beter te beveiligen centraal. De organisatie ontwikkelde en lanceerde deze nieuwe versie van haar Security Service om nog beter aan de stijgende vraag naar security-oplossingen te voldoen. Met de nieuwe versie van Security Service beschikken IT-beheerders tevens over nieuwe dynamische en interactieve rapportages.

• Cloud Computing in de logisitieke sector;Via internet op aanvraag beschikbaar stellen van hardware, software en gegevens. De gebruiker hoeft op deze manier geen eigenaar meer te zijn van de gebruikte hard- en software en heeft geen onderhoud. De gebruiker betaalt gebruik van computers en applicaties naar gelang van het gebruik dat hij ervan maakt. Zo kan hij kosten besparen of de aankoop van software, hardware en onderhoud.

Onderdeel 1: Specifieke inter-functionele eigenschappen Geef aan in welke mate u het eens bent met de vragen over de activiteiten om nieuwe services te identificeren, herkennen, ontwerpen en ontwikkelen. Informatie delen

- Belangrijke informatie wordt altijd verspreid naar alle functionele afdelingen (zoals marketing en R&D) binnen de organisatie - Stategieën worden vastgesteld in samenwerking met andere functionele afdelingen - Periodiek worden er inter-functionele bijeenkomsten georganiseerd om belangrijke marktinformatie te bespreken - De organisatie waardeert het feit dat verschillende functionele afdelingen belangrijke informatie op een informele manier met elkaar delen - Verschillende afdelingen delen regelmatig hun ervaringen tijdens het ontwikkelproces van nieuwe services Inter-functionele coördinatie

- Al het uitgevoerde werk van de (sub)taken was uiteindelijk een samenhangend geheel - In het nieuwe service project waren duidelijke en begrijpelijke doelstellingen beschreven voor de (sub)taken - De doelstellingen van de (sub)taken waren geaccepteerd door alle medewerkers - Er was onenigheid in het team over (sub)taken en (sub)doelen tijdens het nieuwe service project (R)

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Onderdeel 2: Specifieke functionele eigenschappen Geef aan in welke mate u het eens bent met de volgende vragen op functioneel niveau van de nieuw ontwikkelde service. Expertise van werknemers

- Werknemers met expertise over specifieke onderwerpen hebben een zekere mate van bevoegdheid in de nieuw ontwikkelde service - Werknemers met deskundige kennis over specifieke onderwerpen in het ontwikkelproces (bv.marketing of ontwikkeling) zijn belangrijk en hebben persoonlijke invloed in de nieuw ontwikkelde service - De organisatie gebruikt de expertise van verschillende functies om kennis te verkrijgen tijdens de nieuw ontwikkelde service - De organisatie gelooft dat individuen met deskundige kennis over specifieke onderwerpen de beste beslissingen maken over deze onderwerpen Afdelingen

- Alle afdelingen in de nieuw ontwikkelde service zijn even belangrijk(R) - Top management vindt een specifieke afdeling belangrijker dan andere afdelingen - Eén specifieke afdeling lijkt andere afdelingen te domineren in de organisatie - Over het algemeen heeft één specifieke afdeling meer invloed in de nieuw ontwikkelde service dan andere afdelingen Onderdeel 3: Specifieke project eigenschappen Geef aan in welke mate u het eens bent met de volgende vragen op het niveau van de nieuw ontwikkelde service. Nieuwheid van het project

- De nieuw ontwikkelde service was nieuw voor zowel de markt als de organisatie - De nieuw ontwikkelde service was nieuw voor de organisatie - De nieuw ontwikkelde service was een uitbreiding op het bestaande servicepakket - De nieuw ontwikkelde service was een verandering van een bestaande service die de

organisatie leverde

Complexiteit

- De nieuw ontwikkelde service moest gedetailleerd ontworpen en ontwikkeld worden in relatie tot het voorgaande service project - De nieuw ontwikkelde service was minder technologisch in relatie tot het voorgaande service project (R) Belang van het project

- De nieuw ontwikkelde service heeft veel impact op de rentabiliteit van de organisatie - Hoe belangrijker de nieuw ontwikkelde service bleek te zijn voor de organisatie; des te actiever functionele afdelingen zijn in het zoeken en delen van informatie - Alle werknemers in de nieuw ontwikkelde service waren zich bewust van de potentiële voordelen die het project zou hebben voor de organisatie

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Onderdeel 4: Specifieke organisatorische eigenschappen Geef aan in welke mate u het eens bent met de volgende vragen op organisatorisch niveau van de nieuw ontwikkelde service. Technologie

- In de organisatie is een technologische focus belangrijker dan een klantgerichte focus

- De technologische focus van de organisatie draagt bij aan de innovativiteit van de organisatie - De technologische focus van de organisatie beïnvloedt de samenwerking tijdens een project op een negatieve manier (R); - Services worden ondersteund door innovatieve technologie Formalisering

- Doelstellingen en plannen voor de nieuw ontwikkelde service staan gedetailleerd beschreven - Vanaf het begin van de nieuw ontwikkelde service werd een stap-voor-stap plan geschreven en doorlopen - De organisatie formaliseert niet hoe projecten worden doorlopen en doelen worden bereikt; ad hoc is voldoende (R) - De selectie voor het idee van de nieuw ontwikkelde service was het eerste formele review

moment

Cultuur van organisatie

- Senior management ondersteunt de nieuw ontwikkelde service op een goede en zichtbare manier - Top management vindt team loyaliteit belangrijker dan functionele loyaliteit

- De systemen en procedures die aanwezig zijn in de organisatie ondersteunen een ondernemende, innovatieve en samenwerkende omgeving - Management creëert een omgeving die inter-functionele communicatie ondersteund Onderdeel 5: Specifieke prestatie eigenschappen Geef aan in welke mate u het eens bent met de volgende vragen op prestatieniveau van de nieuw ontwikkelde service - Het ontwikkelproces van de nieuw ontwikkelde service is goed verlopen en de service is rendabel - De tijd voor het ontwikkelen van de service was relatief korter vergeleken met de concurrenten - De prestatie van de nieuw ontwikkelde service is beter dan die van de concurrenten - De nieuw ontwikkelde service heeft een positieve impact op het imago van de organisatie en op de loyaliteit van de klanten - Het ontwikkelproces heeft voldaan aan de doelstellingen van de organisatie Onderdeel 6: Basis eigenschappen Wat is de naam van uw organisatie?

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Wat is uw functie in de organisatie? Binnen welke afdeling bent u werkzaam? 1. Management 2. Marketing 3. Verkoop 4. Financieel 5. Operationeel (Front-line) 6. Onderzoek en Ontwikkeling 7. Juridisch 8. Service ontwikkeling 9. Service desk 10. Technologische ontwikkeling 11. Personeel en arbeid 12. Anders,… Hoe groot is uw organisatie (# werknemers)? - 1-5 - 6-10 - 11-50 - 51-100 - 101-300 - 301-500 - 500 of meer Hoeveel succesvol afgeronde nieuwe service projecten worden gemiddeld per jaar door uw organisatie geïntroduceerd (# afgeronde projecten)? Hoeveel medewerkers zijn gemiddeld, dus van idee generatie tot lancering in de markt, betrokken geweest tijdens het ontwikkelen van de nieuwe service(# gemiddeld betrokken medewerkers)? Kunt u een schatting maken van de totale kosten van het nieuwe service project, van idee generatie tot lancering (euro’s)? - 0 - 20.000 - 20.001 - 50.000 - 50.001 - 100.000 - 100.001 - 500.000 - 500.001 - 1.000.000 - 1.000.001 of meer In welke mate heeft u ervaring met inter-functionele teams?

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Kunt u aangeven in welke fases/stappen in het ontwikkelproces u invloed had?

1. Idee generatie, Geeft mogelijkheden voor nieuwe inspiraties en kansen. Deze fase wordt gezien als generen van bruikbare ideeën.

2. Ídee screening, In deze fase worden de meer bruikbare ideeën gefilterd van de mindere ideeën.

3. Business en Marketing analyseren, Deze fase is voor het analyseren van het idee op marketing, concurrenten en financieel niveau.

4. Service (proces/systeem) ontwikkeling, Hier wordt het idee operationeel bedacht en ontwikkeld.

5. Service testen (pilot run en marketing test), In deze fase wordt de service operationeel en op marketing niveau in de organisatie en/of in de markt getest.

6. Commercialisering / Lanceren service, In deze fase wordt het project in de markt gelanceerd/geïntroduceerd

Kunt u aangeven welke functionele afdelingen in het team aanwezig waren tijdens de

ontwikkeling?

1. Management 2. Marketing 3. Verkoop 4. Financieel 5. Operationeel (Front-line) 6. Onderzoek en Ontwikkeling 7. Juridisch 8. Service ontwikkeling 9. Service desk 10. Technologische ontwikkeling 11. Personeel en arbeid 12. Anders,… Geef aan welke van de drie op de figuur aangegeven vereenvoudigde organisatie structuren

het 'beste' past bij uw organisatie (Druk met linker muisknop op de juiste structuur)

1. Lijn structuur, de werknemers zijn verdeeld in afdelingen, gebaseerd op wat ze uitvoeren bv. ontwikkeling, inkoop etc.

2. Segment structuur, verdeelt de werknemers op product/klanten/segment locatie. Bijvoorbeeld, iedere afdeling is verantwoordelijk voor een bepaald product en geeft een eigen marketing, financiële etc. sub afdelingen.

3. Matrix structuur, combineert de eerste twee structuren. Bijvoorbeeld, er kan een lijnstructuur zijn, waarbij een manager voor een bepaald product verantwoordelijk is.

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Geef aan in het figuur hieronder welke communicatielijn type het 'beste' past bij uw

organisatie(Druk op de juiste communicatielijn met uw linker muisknop)

1. Top-down, is een autocratische en hiërarchischer manier van beslissen, organisatorische veranderingen en leiding geven. Op deze manier worden strategieën, doelen en plannen vanuit senior management door de gehele organisatie verspreid.

2. Bottom-up, is een democratische en adviserende manier van beslissen, organisatorische veranderen en leiding geven. Werknemers vanuit alle lagen in de organisatie worden betrokken.

3. Goals down/plans-up , Top management formuleert de doelen en targets en de overige werknemers formuleren op hun beurt de plannen voor het bereiken van deze doelen.

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In welke mate bent u zeker van uw antwoorden in dit onderzoek? Noteer hieronder uw e-mailadres als u geïnteresseerd bent in een samenvatting van de resultaten van dit onderzoek. Bedankt voor deelname aan dit onderzoek! Wanneer er vragen zijn, neem dan gerust contact op via e-mail; r.t.m.peters@student.tue.nlof per telefoon (06-52 52 36 06).

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Appendix 7: English version questionnaire

Cooperation in New Service Development

I’m a master student at the Eindhoven University of Technology. I’m doing research for my master research project. The ultimate goal of my study is to discover the antecedents and consequences of cross-functional cooperation in the new service development process. In this survey, cross-functional cooperation refers to the cooperation between different (organizational) functions or departments (e.g. Marketing, Sales or R&D) in an organization. Please answer all questions. However, if you cannot answer specific questions for any reasons, please try to give the best judgment and proceed to the next question. In this research, it is not about the 'right' or 'wrong' answer but your best opinion about the subjects is most important. Filling out the survey takes approximately 12 minutes. All responses will be held in strictest confidence. No one except me and my supervisors will have access to the raw data. If you have any problems, questions, or suggestions feel free to contact me by e-mail; r.t.m.peters@student.tue.nl or by phone. Thank you in advance for your help. Lots of success with the questions! Frank Peters 06-52 52 36 06 TU/e, Department of Industrial Engineering & Innovation Sciences

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Important: When you answer the questions in this survey, think of the last finished and successful in the market launched new service project! Please give a short description of the last new service in your organization? What are new services? • New version Security Services, In this new version, the central issue is the necessity to

improve the protection of sensitive and important information in organizations. This new version fulfil the growing market demand of better security solutions. IT-managers can also identify new dynamic and interactive reports.

• Cloud Computing in the logistic sector, Hardware, software and service is available on demand over the internet. The customer do not own the physical infrastructure, instead avoiding capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use.

Part 1: Interfunctional specific characteristics Please indicate your agreement with the following activities to capture, recognize, generate and develop new services. Information sharing

- Major market information is always spread over all the organization's functional departments - Marketing strategies are always drawn up in agreement with the other business functions - The organization periodically organizes cross-functional meetings to analyze all important market information - The organization encourages informal exchanges of information between the different functions - Different functional departments often share the experiences in the new service development process Interfunctional coordination

- The work done on subtasks within the new service project was closely harmonized - There were clear and fully comprehended goals for subtasks within the new service project - The goals for subtasks were accepted by all included functions - There were conflicting interests in our team regarding subtasks/subgoals (R)

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Part 2: Function specific characteristics Please indicate your agreement with each of the following statements with respect to functional factors in the new developed service Expertise of individuals

- Individuals who have expertise about specific subjects are a source of power in the new service project - Individuals with expert knowledge about relevant issues in the developing process (e.g. marketeer, developer) are very important and have individual influence in the project - The organization uses expertise of different functions to synthesize knowledge - The organization beliefs that individuals with expertise about specific issues make the best decision about those issues Department

- All departments in the new service project are just as important (R) - Top management considers a specific department to be more important than others - A specific department tends to dominate others in the affairs of the organization - A specific department is generally regarded as being more influential than others Part 3: Project specific characteristics Please indicate your agreement with each of the following statements with respect to factors on project level of the new developed service Innovativeness

- The new service was totally new for the world - The new service was totally new to the organization - The new service created a new line for the organization - The new service was a modification/ repositioning of an existing service of the organization

Complexity

- The new service was sophisticated to generate and develop relative to previous NSD projects - The new service was non-technical relative to previous NSD projects (R) Importance

- The new service project has a great impact on the profitability of the organization - If the new service became more important for the organization; departments are more proactive in seeking information and using information of each other - All people involved in the new service project were aware of the potential benefit(s) the project has to the organization

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Part 4: Organization specific characteristics Please indicate your agreement with each of the following statements with respect to organizational factors of the new developed service Technology

- In the organization, technology focus was more important than a customer focus

- Technology orientation leads to the promotion of innovative behavior - Technology orientation of the organization struggles the cooperation (R) - The new service was supported by innovative technology Formalization

- Objectives, goals and plans are depicted in a written form in the new service project - A step-by-step plan was drawn up in the beginning of the new service project - The organization has no need for formalization in the new service project; ad hoc is sufficient (R) - Idea screening was the first review moment in the new service project

Culture

- Senior management placed strong and visible support behind the new service project - Top management promotes team loyalty over functional loyalty

- Organizational systems and procedures support a more entrepreneurial, innovative and collaborative environment - Management provides an environment for easy inter-departmental communication Part 5: Performance specific characteristics Please indicate your agreement with each of the following statements with respect to the performance of the new developed service - The new developed service has been successful and the service was profitable - Compared to competitors, our development cycle time has been relatively less - The overall performance of our new service is higher than those of our competitors - The service had a positive impact on the organization's perceived image and loyalty of the customers - The NSD program has met organizational objectives Part 6: Basic characteristics What is the name of your organization? What is your function in the organization? Which functional department do you work in? 1. Management 2. Marketing 3. Sales

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4. Finance 5. Operational (Front-line) 6. Research and Development (R&D) 7. Legal 8. Service development 9. Service desk 10. Technological engineering 11. Human resources 12. Other,… Please indicate the size of your organization (#of employees)? - 1-5 - 6-10 - 11-50 - 51-100 - 101-300 - 301-500 - 500 or more Please indicate how many successful completed projects are introduced by your organization on average a year (# of completed projects)? Please indicate the average involved employees, from idea generation till launching, in the last project (# average involved employees)? Please estimate the total costs made in the project, from idea generation till launching (euro's)? - 0 - 20.000 - 20.001 - 50.000 - 50.001 - 100.000 - 100.001 - 500.000 - 500.001 - 1.000.000 - 1.000.001 or more Please indicate in which phase(s) in the project you had influence? 1. Idea generation; Addresses sources for new inspiration and opportunities to improve. This

phase of the process can be seen as the idea pool. 2. Ídea screening; In this phase the more promising ideas have to be separated from the less

promising ideas. 3. Business and Marketing analysis; Here the ideas are analyzed in terms of marketing,

competitors and costs. 4. Service (process/system) design; is related to the design and development of process

procedures and systems design. Thus, it is the development of an operational entity. 5. Service testing (pilot run and test marketing); here the service’s operational and marketing

aspects are tested in house and/or in the market. 6. Commercialization / Launching; Refers to the introduction of the service in the market.

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Please indicate the level of experience with interfunctional teams? Please indicate which functional areas (departments) were represented on the team whose members were fully involved in the project?

1. Management 2. Marketing 3. Sales 4. Finance 5. Operational (Front-line) 6. Research and Development (R&D) 7. Legal 8. Service development 9. Service desk 10. Technological engineering 11. Human resources 12. Other,…

Please indicate which of the simplified structures fits 'best' to your organization </I> (Push on the right structure in the picture)

1. Line structure, the employees are working in departments based on what they are doing e.g. we have engineering department, maintenance purchasing department.

2. Divisional structure, divides the employees based on the product/customer segment/geographical location. For example, each division is responsible for certain product and has its own resources such as finance, marketing, warehouse, maintenance, etc.

3. Matrix structure, combines the functional and divisional structures. For example, we can have a functional structure and then assign a manager for each product. Some employees will have two managers: functional manager and product manager. Please indicate in the picture below which of the communication lines fits 'best' to your organization(Push on the right part of the picture for your answer)

1. Top-down approach, is an autocratic and hierarchical style of decision-making, organizational change and leadership, in which

strategies or plans are first conceived by one or a few senior managers, and then disseminated further down the organization.

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2. Bottom-up approach , is a democratic and consultative style of decision-making, organizational change and leadership, in which employee participation is promoted at all levels of the organization.

3. Goals down/plans-up approach, Top management formulates the goals and targets and the employees formulate the plans to establish those goals. It’s a combination of the above mentioned approaches.

Please indicate your agreement with respect to your answers in this survey When you are interested in a summary of the results of this survey list your e-mail address. Thank you for participating in the survey! If there are questions, feel free to contact me by e-mail r.t.m.peters@student.tue.nl or by phone (06-52 52 36 06).

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Appendix 8: List of potential organizations

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Appendix 9: Letter mailing

Geachte heer/mevrouw, Ik ben Frank Peters, master student aan de Technische universiteit te Eindhoven. Momenteel ben ik met mijn afstudeeronderzoek bezig. Het doel van dit onderzoek is te achterhalen welke factoren invloed hebben op het gebruik van inter-functionele samenwerking in het ontwikkelproces van nieuwe services in de ICT/IT-branche. En wat de invloed is van inter-functionele samenwerking op de prestaties van nieuwe services. Aan het einde van het onderzoek kunt u aangeven of u een samenvatting van de resulltaten wenst te ontvangen. Ik wilde u het volgende vragen: Zou u kunnen organiseren dat zowel een Technisch Developer/Specialist/Engineer als een

Marketing/Sales medewerker mijn online onderzoek invult? Via onderstaande link wordt u naar de Nederlandse versie geleid: http://net.mwm2.nl/go.aspx?vp=4E4BC857-C509-4BD5-BF97-417B970E6C17 Via onderstaande link wordt u naar de Engelse versie geleid: http://net.mwm2.nl/go.aspx?vp=1090B85D-6767-4AFE-97F7-2CF6775AF9C1 Het invullen van het onderzoek kost ongeveer 12 minuten. De antwoorden worden vertrouwelijk behandeld. Ik zie uw reactie met belangstelling tegemoet! Bij voorbaat dank voor uw medewerking! Met vriendelijke groet, Frank Peters 06-52 52 36 06 TU/e, Department of Industrial Engineering & Innovation Sciences

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Appendix 10: Letter reminder mailing

Geachte heer/mevrouw, Onlangs heeft uw organisatie een e-mail ontvangen met betrekking tot mijn onderzoek waarmee ik de inter-functionele samenwerking in het ontwikkelproces van nieuwe services in de ICT/IT sector in kaart wil brengen. Uit de gegevens is gebleken dat het onderzoek (nog) niet door uw organisatie is ingevuld. Wellicht is er nog geen tijd geweest. Aangezien ik meer reacties nodig heb om een representatief beeld weer te geven en de kwaliteit van mijn onderzoek te waarborgen, breng ik het onderzoek nogmaals onder de aandacht met de vraag: Zou u kunnen organiseren dat een Marketing/Sales en/of Engineering medewerker (of u

zelf?) mijn onderzoek invult? U en uw organisatie zouden mij hiermee ontzettend helpen. Aan het einde kan er aangegeven worden of uw organisatie de resultaten wenst te ontvangen. Via onderstaande link wordt u naar de Nederlandse versie geleid: http://net.mwm2.nl/go.aspx?vp=4E4BC857-C509-4BD5-BF97-417B970E6C17 Via onderstaande link wordt u naar de Engelse versie geleid: http://net.mwm2.nl/go.aspx?vp=1090B85D-6767-4AFE-97F7-2CF6775AF9C1 Het invullen kost ongeveer 12 minuten. Ik garandeer u dat al uw gegevens vertrouwelijk zullen worden verwerkt. Bij voorbaat dank voor uw hulp en medewerking! Met vriendelijke groet, Frank Peters 06-52 52 36 06 TU/e, Department of Industrial Engineering & Innovation Sciences

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Appendix 11: Team size vs. Departments involved

Teamsize vs. departments

Commercieel Engineering Operational Other

Ind

ica

ted

tea

m s

ize

Ind

ica

ted

dep

art

men

ts

Ma

na

gem

ent

Ma

rket

ing

Sa

les

Fin

an

cia

l

R&

D

Ser

vic

e d

evel

op

men

t

Tec

hn

olo

gic

al

dev

elo

pm

ent

Op

era

tio

na

l

Ser

vic

e d

esk

Leg

al

Hu

ma

n r

eso

urc

es

Arcade ICT 4 3 X X

X

Integrace 4 3 X

X

X

Intercare NV 4 2

X

X

Quality Software bvba 4 2 X X

BKM NV 5 4 X

X

X

X

In Summa 5 2

X X

Offimac NV 5 4 X X X X

Databasement 6 5 X X X

X X

IT Partner BV 6 5 X X X X X

Anubex 7 3 X X X

ConXioN 8 7 X X X X

X

X X

LogSys 8 5 X X X

X X

Maint-IT 8 5 X X X

X X

Westbury 8 5 X

X

X X X

WMC 8 7 X X X X X X X

-99 10 4

X X

X

X

2e2 10 4 X

X X

X

Bartosz 10 5 X X X X

X

Gemeente Deventer 10 4 X

X X X

Getronics 10 8 X X X X

X X

X X

Omines 10 8 X X X X X X X X

Pecoma business Technology 10 7 X X X X X

X

X

Planon b.v. 10 5 X

X X

X X

SAS Nederland 10 6 X X X X X X

SecureLink Nederland 10 7 X X X X X X X

Invantive 11 4 X X X X

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NPQ Solutions 15 8 X X X X X X X X

Redwood 15 6 X

X X X X

X

SCC Services BV 15 5 X X X X X

AccountView 20 5 X X

X X X

Exact 20 6 X X X X

X

X

ITQ 20 9 X X X X X X X X X

NextiraOne 20 6 X X X X X

X

SonicWALL 20 9 X X X X X X X X X

VPO 20 7 X X X X X X X

Circle Software Group BV 25 7 X X X X X X X

Fujitsu 30 6 X X X X

X

X

KPN International 30 4

X X X

X

SDE 30 8 X X X X

X X X

X

TOPdesk Nederland 30 6 X

X

X X X X

VASCO Data Security 35 9 X X X X X X X X X

SD Worx 40 6 X

X X X X

X

Vasco 40 5 X X X X X

BUSINESSCOM 2 2 X

X

Dynamics Software 4 4 X X X X

Realworld 4 4 X

X X X

Nova Business Software 5 5 X X X X

X

Priox.com bv 6 6 X X X X X X

Qi ict 8 8 X X X X

X X X X

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Appendix 12: Comparing NPD and NSD

In this figure, interfunctional cooperation (joint involvement between R&D-Marketing-Manufacturing) in the NPD context is based on the study of Song et al. (1998). They studied and tested the interfunctional cooperation between marketing, R&D and manufacturing in the different stages of the NPD process.

Comparing NPD/NSD context

Concluding from the figure; 1. In the market opportunity related stages in both NPD and NSD processes the units

R&D/Engineering and Marketing indicate a productive joint involvement. Therefore, in these stages manufacturing and technology oriented service organizations focus almost on the same joint involvements.

2. In the development related stage of NPD can be concluded that R&D-Marketing and R&D-Manufacturing are productive joint involvements and in the development related stage of NSD can be concluded that there exists joint involvement between three units Engineering-Marketing-Operational. Therefore, in this stage manufacturing and technology oriented service organizations focuses almost on the same interfunctional cooperation.

3. In the testing related stage of NPD R&D-Marketing and Marketing-Manufacturing are productive joint involvements. In the testing related stages of NSD all the three units Engineering-Marketing-Operational form interfunctional cooperation. Therefore, in this stage

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it can be concluded that manufacturing and technology oriented service organizations focuses more or less on the same joint involvements.

4. In the launching related stages of NPD the units R&D and Manufacturing show a productive interfunctional cooperation. In the NSD context Marketing and Operational show an interfunctional cooperation. Therefore, in this stage it can be concluded that manufacturing and technology oriented service organizations focuses on different types of joint involvement. A reason for this can be the tangibility characteristic between the physical product and the intangible service developed by technology oriented services.