Challenges of Service Design & New Service Development
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Transcript of Challenges of Service Design & New Service Development
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Challenges of Service Design &
New Service Development
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Challenges: Service Design
1. Difficult to Describe & Communicate:
Services are intangible & process oriented
Complexity of services increase over a long period
2. Variable in Nature:
No Two services are delivered in the same way
3. Risk of relying on Words Alone to Describe Services
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Risk of Relying on Words Alone to Describe Services
Oversimplification: Words may not always be sufficient to describe a
complex service system. (Eg. Service by tour operator for Industrial Visit)
Incompleteness: People tend to omit details with which they are not
familiar. (Eg. Tour operator if he does not know much about conducting
the IV, he may not include some essential service in his package which will
make the tour package service for IV incomplete)
Subjectivity: Persons may be biased with their personal experiences. Eg. A
tour operator who would have experienced IV may describe in one way
but students who are the customers may have different perception
towards the same and perhaps teachers accompanying the students for IV
would have different opinion about the same.
Biased Interpretation: People interpret the words in different ways.
Employees of the same service organization may interpret the same word
in different ways. Eg. Satisfaction in case of IV Tour Service, different
employees would define satisfaction in their own way. One may feel
good industries as a satisfying factor, while another may consider food,stay and transport as satisfying factors.
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New Service Development
Some Hardcore Facts:
1. Products or services needs to be designed within
a structured planning framework.
2. A New Service Development must be: Objective not subjective,
precise not vague,
fact driven not opinion driven &
methodological not philosophical
3. Thus service design must be in a structured way
but it should not be rigid & bureaucratic
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New Service DevelopmentSome Hardcore Facts: contd.
4.A new service development shall involve both: Employees aswell as Customers
5. Involvement of employees is necessary because (i) employeesdeliver the service & they know better about it and (ii) theyare in contact with the customers so identifying their(customers) requirements is easy. (Eg. KFC involves itsemployees in service design process specially front endhandling.)
6. Involvement of Customers is necessary because they are thepart of service delivery as they accepts the service deliveryand consume the service. (Eg. TV channels acceptssuggestions from customers with regards to certain aspects ofprograms telecasted.Anandi in Balika Vadhu, Name of Naitik& Aksharasson in Yeh Rishta kya kehlata hai
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Types of New Services
Start-up business
New services for the currently served market
Service line extensions Service improvements
Style Changes
Major or Radical Change
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Start-up business
New services for a market that is already servedby existing products
- Meru Cabs offering door to door services (Existing
Market: taxis, Buses, Autorickshaws)- Introduction of Chinese food, Pizza & Burger in
India by the foreign food chains (Existing Market:South Indian, Bombay Chaat like bhelpuri,
Paavbhaji, etc.)
- Introduction of Courier Services (existing market:Postal Services)
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New Services for the currently served market
Offering existing customers with new services
which were not previously available
- Gym Providing Nutrition Classes
- Theatres providing food service on the seat
- Libraries providing coffee services
- Restaurants providing special cabins forLuncheon meetings for corporates
- Restaurant organising birthday parties
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Service Line Extensions
Augmentation (Extension) of existing Service Line,
-Restaurant adding menu items
-Airlines offering additional routes
-College providing additional degrees or courses
-Tour operator adding tour destinations in service
-specific hospital getting converted into multi
specialty hospital
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Service Improvements
Bringing changes in the services for improving
their speed and other characteristics
-adding hotel rooms improves the serving
capacity of hotels
-Hospitals using Tech support devices for
recording Patients data
-Wi-fi in college campus
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Style Changes
Effect on customers perceptions, emotions
and attitudes.--- A case of change in style
- Changing interiors of Premises - NIIT
- Changing logo of the businessAirtel
- Most of the nationalised banks have changed
their interiors
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Major or Radical Innovation
New services for markets yet undefined
-home based shopping
- Buying t-shirts online with your choice of printselected from website
- Banks providing various facilities apart from
banking business are the major innovationalservices offered by the banks now-a-days
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New Service Development Process
Business Strategy development or revie
New Service Strategy Development
Idea Generation
Concept Development & Evaluation
Business Analysis
Service development & Testing
Market testing
Commercialization
Post Introduction Evaluation
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Business Strategy Development or Review
Review the mission & vision
The new service must fit within the mission & vision of the
organization
Companys orientation towards growth also affects the new service
development
Four strategic orientation towards growth taken by the co.:
1. Prospectors: innovative, search new opportunities, takes risk
2. Defenders: experts in their own areas, do not search opportunities
outside their domain of expertise
3. Analyzers: maintain stability in areas of operation, willing to search
for new opportunities & go on experimenting
4. Reactors: make adjustments because of pressure from environment
Another Perspective on growth orientation:
Cost leadership strategy, Differentiation strategy, Focused strategy
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New Service Strategy Development
Product Portfolio Strategy & Organization
structure for new service development are to
be focused upon
The type of new service that will be apt will
depend upon the organizations goals, vision,
capabilities & growth plans
Matrix for identifying growth opportunities:
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Idea Generation
Searching for new ideas
Many methods & ways are available
Eg. Brainstorming,asking for ideas from employees & customers,
Market Research,
competitors offerings,collaborating with outsiders or developing
licensing agreements
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Service Concept Development & Evaluation
Ready for initial development In case of products drawing designs of products &
checking reaction of people can be done
In services its not possible as services are
intangible, simultaneously produced &consumed, more complex.
So we need to define what exactly the oncept is.
While we involve many people in developingservice concept, opinions or views may not besame. However, by involving multiple parties onlyclear deffinition of service concept could befinalised after n number of agreements &
disagreements
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Next in this phase is to produce the description ofservice with its features & determine initial responsesfrom people say employees or customers
The service design document is essential as it would letus know the diffciulties in executing the service, discussthe reasons for offering the new service, itemize theservice process & its benefits
Role of consumers & employees would also be defined
Finally evaluation will take place by asking customersabout the concept of service, its acceptability andbenefit in terms of providing satisfaction
Service Concept Development & Evaluation
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Business Analysis
Estimating economic feasibility & potential
profit implications Demand analysis, Revenue Projections, cost
analyses, operational feasibility are checked
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Service Development & Testing
In product development, testing involves construction of
product prototype & testing for cosnumer acceptance. Butagain this is not possible in case of services & hence thisstage is also challenging
Involve everyone who have stake in the service, eg.Customers, employees, and functional area experts.
Here the service blueprint for implementation could beproduced.
Blueprint is likely to evolve over a series of iterations basedon inputs from all parties
Eg. Banks going modernised
Converting the blueprint into final implementation plan
All parties must work together for careful description &explanation of the new service.
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Market Testing
It is difficult to test new service in isolation
Moreover in some services there is only onepoint of service delivery eg. Hospitals orRestaurants or Colleges
Thus new methods are required For eg. Offering new service to the families of
employees & checking their response
or delivering the service to the real customers
under varying situations by changing pricing orpromotion policy
Pilot run is necessary
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Commercialization
Service goes live & is actually introduced atthe market stage
The main objective is to build & maintainacceptance of the new service among large
no. of service delivery personnel who areresponsible for service delivery with quality.
Another important objective is to monitor all
the aspects of the service during introduction& through the complete service cycle. Everydetail of the service shall be assessed.
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Post introduction Evaluation
Info gathered during above stages of
implementation specially commercialization
can be reviewed and changes made to
delivery process can be made
It is very much necessary to introduce the
formal evaluation & review process as service
quality is to be adhered or improved
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Service Blueprinting
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What is Service Blueprinting..??
It is a useful tool for designing & specifying
intangible service processes.
A service blueprint is a picture or a map that
accurately portrays the service system so that
the different people involved in providing it
can understand & deal with it objectively
regardless of their roles or their individualpoint of view.
Benefits of Service Blueprinting
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Benefits of Service Blueprinting Brings customer oriented focus among the employees as it provides
overview to every employee about his part of service delivery and
service as a whole.
Helps in quality improvement by identifying weak links in the servicedelivery process.
Clearly brings into picture where and what makes customer satisfied
with the service through Line of interaction
Line of visibility promotes a decision with regards to what customers
should see & which employees will be in contact with customers.
Line of internal interaction clarifies the interdependencies within the
departments within the organization and signifies quality improvement
need.
Brings into picture the clear idea of role of every employee in serviceproviding and delivery through connections and various elements.
Helps in identifying & assessing cost, revenue and capital invested in
each element of service.
Constitutes a rational basis for internal & external marketing.
Facilitates top down and bottom up approach to quality improvement.
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Components of Service Blueprints
Customer Actions
Line of interaction
__________________________________________________________________________
Onstage contact Employee ActionsLine of visibility
__________________________________________________________________________
Backstage contact Employee Actions
Line of internal interaction
__________________________________________________________________________
Support Processes
C f S i Bl i
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Components of Service Blueprints
Customer Actions: This area includes the activitiesperformed by the customer in process of purchasing,
consuming & evaluating the service. Generally, in this areacustomer experience can be easily noticed.
Onstage Contact employee actions: The steps andactivities performed by the contact employee and are
visible to the customer are the part of this area.
Backstage Contact employee actions: this area include allthose actions that occur behind the scene to support theonstage activities.
Support Processes: This section covers the internalservices, steps and interactions that take place to supportthe contact employees in delivering the service.
Th 3 H i t l Li
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The 3 Horizontal Lines:
Line of interaction:This line represents direct
interactions between the customer & theorganization.
Line of Visibility:This line separates all those
service activities that are visible to the customerfrom those that are not visible . This line alsoseparates what the contact employees doonstage from what they do back stage.
Line of internal interaction:This line separatescontact employee activities from those of other
service support activities & people