New Service Development and Process DesignCustomer Benefit PackageLearning ObjectivesLevels of Service InnovationNew Service Development CycleTechnology Driven Service InnovationClassification of Service AutomationAdoption of New Technology in ServicesPowerPoint PresentationSlide 10Service Blueprint of Luxury HotelStrategic Positioning Through Process StructureStructural Alternatives for a RestaurantSlide 14Taxonomy of Service ProcessesGeneric Approaches to Service DesignSlide 17Slide 18Slide 19Slide 20Slide 21Discussion QuestionsINTERACTIVE CLASS EXERCISENew Service Development and Process DesignCustomer Benefit PackageHierarchy LevelElement Core Good ExampleCore Service ExampleCategory Business Custom clothierBusiness hotel First Core Business suits Room for the night Second PeripheralGoodGarment bag Bath robe Peripheral Service Deferred payment plansIn house restaurantThird Variant Coffee loungeAirport shuttleLearning ObjectivesDiscuss the new service development process.Prepare a blueprint for a service operation.Describe a service process using the dimensions of divergence and complexity.Use the taxonomy of service processes to classify a service operation.Compare and contrast the generic approaches to service system design.Place an example of service automation in it proper category.Discuss the managerial issues associated with the adoption of new technology.Levels of Service InnovationRadical InnovationsMajor Innovation: new service driven by information and computer based technologyStart-up Business: new service for existing marketNew Services for the Market Presently Served: new services to customers of an organizationIncremental InnovationsService Line Extensions: augmentation of existing service line (e.g. new menu items)Service Improvements: changes in features of currently offered serviceStyle Changes: modest visible changes in appearancesNew Service Development Cycle PeopleTechnology Systems ProductFull LaunchDevelopmentDesignAnalysisOrganizationalContextTeamsToolsEnablers• Formulation of new services objective / strategy• Idea generation and screening• Concept development and testing• Business analysis• Project authorization • Full-scale launch• Post-launch review • Service design and testing• Process and system design and testing• Marketing program design and testing• Personnel training• Service testing and pilot run• Test marketingTechnology Driven Service InnovationPower/energy - International flights with jet aircraftPhysical design - Enclosed sports stadiumsMaterials - Astroturf Methods - JIT and TQMInformation - E-commerce using the InternetClassification of Service AutomationFixed-sequence (F) - parking lot gateVariable-sequence (V) - ATMPlayback (P) - answering machineNumerical controlled (N) - animationIntelligent (I) - autopilotExpert system (E) - medical diagnosisTotally automated system (T) - EFTAdoption of New Technology in ServicesChallenges of Adopting New TechnologyThe Process is the ProductBack Office vs Front Office ChangesNeed for StandardizationManaging the New Technology Adoption ProcessTen step process with concern for employees and customersExample of Service BlueprintingBrushshoesApplypolishFailpointBuffCollectpaymentCleanshoesMaterials(e.g., polish, cloth)Select andpurchasesuppliesStandardexecution time2 minutesTotal acceptableexecution time5 minutes30secs30secs45secs15secsWrongcolor waxSeen bycustomer45secsLine ofvisibilityNot seen bycustomer butnecessary toperformanceService Blueprinting (Bank Lending Operation Example) Loan application Branch Officer Pay book 30min--1hr. Line of visibility Deny 1 day 2 days 3 days Fail point Customer wait Employee decision================ $ 0 $ ==== =====Receive PaymentFinal paymentDecline Notify customerIssuecheckConfirmCreditcheckAcceptPrint paymentbookDelinquentClose accountVerifyincome dataInitial screeningVerifypayerEmployerCreditbureauBranchrecordsBankaccountsAccountingData baserecordsFWConfirmwwFFFFFFService Blueprint of Luxury HotelStrategic Positioning Through Process StructureDegree of Complexity: Measured by the number of steps in the service blueprint. For example a clinic is less complex than a general hospital. Degree of Divergence: Amount of discretion permitted the server to customize the service. For example the activities of an attorney contrasted with those of a paralegal.Structural Alternatives for a Restaurant No ReservationsSelf-seating. Menu on BlackboardEliminateCustomer Fills Out FormPre-prepared: No ChoiceLimit to Four ChoicesSundae Bar: Self-serviceCoffee, Tea, Milk onlyServe Salad & Entree Together:Bill and Beverage TogetherCash only: Pay when LeavingTAKE RESERVATIONSEAT GUESTS, GIVE MENUSSERVE WATER AND BREADTAKE ORDERSPREPARE ORDERSSalad (4 choices)Entree (15 choices)Dessert (6 choices)Beverage (6 choices)SERVE ORDERSCOLLECT PAYMENTSpecific Table SelectionRecite Menu: Describe Entrees & SpecialsAssortment of Hot Breads and Hors D’oeuvresAt table. Taken Personally by Maltre d’Individually Prepared at tableExpand to 20 Choices: Add Flaming Dishes;Bone Fish at Table; Prepare Sauces at TableExpand to 12 ChoicesAdd Exotic Coffees; Sherbet betweenCourses; Hand Grind PepperChoice of Payment. Including House Accounts:Serve Mints LOWER COMPLEXITY/DIVERGENCE CURRENT PROCESS HIGHER COMPLEXITY/DIVERGENCEStructural Positioning of Healthcare Services HIGH COMPLEXITY * Hospitals Services * General Practitioner: * Forensic-Testing Lab Diagnosis & Treatment * Diagnostic services only Specialist: * Treatment only LOW DIVERGENCE HIGH DIVERGENCE Outpatient Clinic: Limited * Treatment: e.g. Broken Bones/Minor Burns only * Retailer of Orthopedic Supplies * X-Ray Lab * Medical Counseling LOW COMPLEXITYTaxonomy of Service Processes Low divergence High divergence (standardized service) (customized service) Processing Processing Processing Processing Processing Processing of goods Information of