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Service development tools in action

Jari Kuusisto Arja Kuusisto Pirjo Yli-Viitala

Lappeenranta University of Technology Department of Industrial Management

Reser Conference Hamburg, September 8-9, 2011


Focus & Motivation Service innovation is a key source of productivity gains and competitive advantage across the industries At the same time, systematic management of complex service innovation activities is still at an early stage of its development There clearly is significant scope for improvements This paper proposes two management tools that assist businesses in developing more systematic and effective service development process The focus is on making optimal use of customer and user inputs during the service innovation process.

Lappeenranta University of Technology

Objectives and approach

1. To utilize (service) innovation literature in management tools development 2. To make visible strategic level questions of the desired role of customers and users in new service development. 3. Propose a reference process for engaging customers effectively in service innovation activities 4. Test and refine the usability of the tools in real life business cases

Lappeenranta University of Technology

Developed tools
1. Integration of Customers into a New Service Development Project
A seven step reference process

2. Selecting a most suitable Customer- or User-driven New Service Development Method

Three key approaches for innovation management

Lappeenranta University of Technology

TOOL # 1
Integration of Customers into a New Service Development Project

Lappeenranta University of Technology

Customer- and user-driven service innovation

Tool assists businesses in setting up joint service development projects with their customers or users A 7-step model gives a structure to the process of integrating customers or users into a new service development project It highlights key issues that managers of an innovating service provider should be aware and make conscious choices of

Lappeenranta University of Technology

Integrating customers in the NSD

Flow diagramme and key modules of new service development

1. Define the focus of the service innovation project in terms of the type of the customer and the service category / service. 2. Define goals for customer /user engagement in the project.

5. Contact potential customers/users and arrange a session to discuss and set up the joint development project.

6. Co-develop a good understanding of the customer need(s) and preliminary new service concepts to address this need. 7. Make agreements on the details of the joint development project.

3. Identify customer groups or individual customers who are able and willing to participate in the project.

4. Ensure resources and motivation to engage in a co-development project in your own organization.

Evaluation of the key outcomes; New Service Concept and Renewed Service Development Process.

Lappeenranta University of Technology

TOOL # 2
Selecting a most suitable Customer- or User-driven New Service Development Method

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User as drivers of innovation activities

Supplier driven R&D&I and market research

Developing understanding on user needs

New research methods that provide in-depth understanding on users needs

Users as R&D&I actors and resources

New level of interaction gives users more power & responsibilities in the R&D&I process

User innovations and their commercialization

User innovations represent great potential but the effective commercialization requires new skills and capabilities

Kuusisto, 2009

Lappeenranta University of Technology

Three alternative methods

Building deep customer understanding
Generates insights and contextual understanding on users needs Transforms this information into the service providers innovation process Ethnographic approach, emphatic design, contextual enquiry, contextual interviewing

Involving customers in new service development

Customers directly participate in one or several stages of innovation process Customer or user roles or tasks vary Customer involvement has many objectives Participatory design, Conversational approach, In situ identification of needs

Making use of user-generated content and innovations

Customers and users are innovators on their own Effective commercialization of services that users have developed for their own use Harness user communities, innovation tool kits for users, lead user method

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The desired role of customers or users in service innovation - strategic considerations

What kind of influence are we willing to grant to our customers and users in new service development?
Active subjects or rather as objects?

The contextual nature of service use - and its implications for new service development?
Where and by whom do we think customer needs are best identified, and new ideas most likely to be created?

What challenges and changes do the desired new customer or user roles impose on existing new service development process?
What is realistic? How can management act to facilitate the change?


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Lappeenranta University of Technology

Concluding comments
Presented tools focus on customers and users role in new service development. The tools can be useful as they
Provide a road map for the often vaguely defined early stages of customer co-operation Sharpen the focus and structure of the development project (modularity) Direct attention to key issues (e.g., objectives of engaging customers or users; allocation of resources). Introduce customer perspective into the innovation effort from the very beginning which creates customer commitment to the process and its results Stimulate assessment of various options Facilitate better informed, realistic choices Help communication inside organization and to external development partners

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Concluding comments
From research-based concepts into practical development tools
Literature analysis was essential in tools development But not sufficient as such

Insights and feedback from the businesses were essential

Translation of research-based concepts into practical service development tools Tools need to be highly flexible and sensitive for situational elements


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Concluding comments
Developed tools proved to be very useful for business practitioners They clarify complex new service development situation and sharpen the management objectives Tool highlighting options of user involvement proved to be an effective eye opener for the management
It demonstrated various ways to obtain information on user needs, and possibilities to involve them into service development projects. A critical issue was how much influence and power the business really is ready to distribute for the users?


Lappeenranta University of Technology

Concluding comments
Modular approach can
Enhance well-focused and systematic service development efforts Tackle the complex and often abstract nature of service innovation projects Divide service process into manageable parts that focus the attention to key tasks and actors relevant in each stage Divide the process into concrete work packages that are easier work with Make communications much more effective across the organisation and partners, content and requirements of each individual module

User involvement
It is easier to involve and motivate users module by module It is possible to specify required contributions and skills module by module Modules enable effective monitoring of service development project

Lappeenranta University of Technology

Thank you!


Lappeenranta University of Technology