MGT3303 Michel Leseure Service Design and Process Selection Objectives of lecture: –Differentiate...

MGT3303Michel Leseure

Service Design and Process Selection

• Objectives of lecture:– Differentiate the different scopes of a

service design exercise– Outline the difference between the design

of services and the design of tangible goods

– Stress the importance of customer contact in the design process

– Provide a service design process model– Illustrate it with an example


A Framework for Categorizing New Services


Categories of New Services

Service Category Content Change

“Window Dressing” Not significantly different from other services

Delivered in similar fashion

Breadth of Offering Significant design change in content of service

Delivered in similar fashion

Revolutionary New in both content and delivery method

Channel Development Delivery of same/existing service through a different/new channel


Service vs. Goods

• Differences in service design and manufacturing product development:– Service design and process development can be

simultaneous– Service operations cannot be copyrighted to

protect them from imitation by competitors– The service package is the major output of NSD– Prior training strongly influences the service

package– Service organizations can change their service

offerings very rapidly


The New Service Development (NSD) Process

Stage Activity

Design Formulating the objectives and strategy of the new service.

Analysis Considering the financial implications of the new service.

Examining supply chain issues for delivery of service.

Development Testing the service design, training personnel, conducting pilot runs.

Full Launch Releasing the service to the market place.


NSD Process

(From Johnson, Menor, Roth, and Chase)


Customer ContactA Driving Specification

• Customer Contact– The presence of the customer in the system

• Extent of Contact– The percent of time the customer is involved

relative to the time required to deliver the service– An indication of how difficult the service is to

design • The higher the interaction, the more difficult

– Gives an indication of the type of systems which should be adopted


Major Differences between High- and Low-Contact Systems in a Bank


Service-System Design Matrix


The Service Process Matrix

Source: Roger W. Schemenner, “How Can Service Businesses Survive and Prosper?” Sloan Management Review 27, no. 3 (Spring 1986), pp. 21–32.


Service Design Example

Online Dating


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Designing a New Service Organization

– “Service Vision” or Strategy– Identification of the target market

• Who is our customer?

– Defining the service concept• How do we differentiate our service in the market?• What is our service package and its operating focus?

– Creating the service delivery system• What processes, staff, and facilities are needed?

– Examples: • QFD: Matching service objectives with processes• Use of SADT (Service design)


Example: Online Dating Services

• “Service Vision”– Identification of the target market

• Who is our customer?

• Example – Dating Direct– Mission statement

• “DatingDirect.com's mission statement is to serve its members needs with the best possible online dating service with the highest quality of support.”

– Identifying the customer• Established 4 years ago as a place for singles serious

about finding a partner.


Developing the Service Strategy

• Position the service– Example: service factory (online dating) rather than professional

service (introductory agency)• Use generic service strategies

– The Production Line Approach• Orientation is toward the efficient production of results—precisely controlled

execution of the “central function”.– Example: how the search can be specified, and how the results are presented– Non production line approach: customisable

– The Customer Involvement Approach• Having the customer take a greater participatory role in the production of the

service.– Example: Use automatic matching or not?

– The Personal Attention Approach• The central focus is complete customer attention and satisfaction at all times.

– Example: Not where online dating can be positioned– Nordstrom


Defining the Service Concept

• Many tools and techniques can be used to represent what the service concept is

• Example: – Using the Quality Function Deployment

Framework – One of the most thorough approach to an

integrated design approach


Using QFD: (1) Service Objectives

• Start by listing the key objectives of the service– Serious– Customer service (how to?, what if?)– Effective (introduction, matching process,

etc.)– Selective– Safe– Enjoyable– Interactive


Using QFD: (2) List Processes/Technology

• List all the processes and technologies you can use to achieve the strategic objectives– Anonymous messaging– Filtering– Rich profile

• Picture(s), self-description, basic information

– Automatic matching – Chat rooms

• Moderated, non-moderated

– Search facilities• Listing: Online• Listing: Matching• Listing: Most recently searching


Using QFD: (3) The QFD GridD Weak Potential Contribution ofO Moderate Processes to achieve the objectivesQ Important

ONLINE DATING EXAMPLE

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Provide a serious environment 5 Q Q Q D D Q

Provide Excellent Customer Service 3

Effective (introduction, matching process) 2 Q O Q O O Q

Provide selective choice 3 Q O D D O Q

Safe 5 O Q Q D O

Enjoyable 2 Q Q Q O

Interactive 1 Q Q Q Q O


Using QFD: (4) Actual vs. Current Performance


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Measure Target Actual

Provide a serious environment 5 Q D D O No Time wasters <5% 10%

Provide Excellent Customer Service 3 Answer leadtime <24 hours 18

Effective (introduction, matching process) 2 Q O Q O O Q Turnover 4 weeks 8

Provide selective choice 3 Q O D D O Q Quality of listing (active) >25% 50%

Safe 5 O Q Q D O Number of complaints <2% 5%

Enjoyable 2 Q Q Q O Surfing Time >1 hour 40 mn



Using QFD: (5) Process ImportanceONLINE DATING EXAMPLE

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Ranking 132 50 77 33 41 18 18 75

To what extent a process supportsStrategic objectives

Weak = 1 pointModerate = 3 pointsStrong = 9 points


Using QFD: (6) Objectives Conflicts


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Ranking 132 50 77 33 41 18 18 75


Using QFD

• QFD can also be used:– To map competitors’ service design

against own design– To identify the most useful technology– To identify objectives which are not

supported– To introduce and assess new processes

• Example: Add moderation to the dating example


Designing The Process

• The service industry has been criticised for its adhoc design of processes

• Embedded, tacit knowledge of service workers• Describing services through a flow chart can be difficult!• SADT:

– Structured Analysis and Design Technique– Start at a conceptual level and progress by more and

more detailed levels– Used successfully in service industry:

• Training system modelling• Back office operations in banking• Cheque processing operations• Cash management


SADT: Generic Structured Activity Box


Context Diagram


Decomposition of Activity Diagram


Suggested Homework

• Problem 3-13, p. 113• Problem 3-15, p. 113• Case problem 3.1, p. 113• Draw an SADT diagram of the registration

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MGT3303 Michel Leseure Service Design and Process Selection Objectives of lecture: –Differentiate...

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