This document discusses service innovation and design. It outlines challenges in describing services through words alone, including oversimplification, incompleteness, subjectivity, and biased interpretation. Effective service design focuses on improving internal processes and employee experience to indirectly enhance the customer experience. Service design maps how an organization operates and delivers its services through a service blueprint. Innovation in services can come through new offerings, processes, technologies, customer roles, or service solutions. Strategic orientation is also important, with options including cost leadership, differentiation, or a focus strategy for a niche market.

1. Unit 03 Service innovation and design
• Contents of syllabus –
• Challenges and important consideration of services innovation
• Types of Service Innovation
• Stages in service innovation and development
• Service blueprinting

2. By IMD Professor of Service
Management Stefan Michel
Service innovation means changing the way you serve your customers
to create greater value for them and deliver more revenue for
your organisation.

3. Service innovation
• ebay—A Radical Service innovation
• Facebook – A radical service innovation
• SPARC- SEE,PLAN,ACT,REFINE AND COMMUNICATE – SERVICE
INNOVATION AT THE MAYO CLINIC
• LinkedIn –Service innovation in connecting communicating and
sharing platform for professionals.

4. Service Design
• Most organizations are centered around products and delivery
channels. Many of the organizations’ resources (time, budget,
logistics) are spent on customer-facing outputs, and the internal
processes (including the experience of the organization’s employees)
are overlooked; service design focuses on these internal processes.

5. • Service design is the activity of planning and organizing a business’s
resources (people, props, and processes) in order to (1) directly
improve the employee’s experience, and (2) indirectly, the
customer’s experience.

6. Example
• Imagine a restaurant where there are a range employees: hosts,
servers, busboys, and chefs. Service design focuses on how the
restaurant operates and delivers the food it promises—from
sourcing and receiving ingredients, to on-boarding new chefs, to
server chef communication regarding a diner’s allergies. Each
moving part plays a role in the food that arrives on the diner’s
plate, even though it is not directly part of their experience.
Service design can be mapped using a service blueprint.

7. Service Design and Innovation
• Service Design –aims to ensure service interfaces are useful, usable
and desirable from clients points of view and efficient and distinctive
from suppliers points of view.
• Service design is focus on bringing service strategy and innovative
service ideas to life by aligning various internal and external
stakeholders around the creation of holistic service experience for
customers, clients, business partners ,employees and citizens.

8. Continued …..
• Five principles of service design thinking
• User centred ---- services should be experienced and designed
through customers eye.
• Cocreative – all stakeholders should be included in the service design
process.
• Sequencing- A service should be visualized as sequence of
interrelated actions.
• Evidencing –intangible services should be visualized in terms of
physical interfaces.
• Holistic – entire environment of service should be considered.

9. Service Innovation
• Offering innovation – McDonald significant restaurant redesign and
menu changes
• Process innovation—Netflix
• Technology innovation – Apps
• Customer role innovation—Self service Role, Netflix
• Innovation through service solution=Caterpillar offers a service of
managing the earthmoving equipment that its customers own
regardless of their equipment brand.
• Facebook – Social solution for consumers offered online.

10. Challenges of Service innovation and design
• Oversimplification----------
• Incompleteness--------
• Subjectivity --------
• Biased interpretation ----------

11. • Challenges of service innovation and design
• risks in describing services in words alone: oversimplification, incompleteness, subjectivity, and biased
interpretation.
• Oversimplification
• words are simply inadequate to describe a complex service system.
• Incompleteness
• in describing services, people tend to omit details or elements of the service with which they were not
familiar.
• Subjectivity
• any one person describing a service in words will be biased by personal experiences and degree of exposure
to the service.
• Biased interpretation
• now two people will define " responsive," "quick," or "flexible" in exactly the same way.

12. Next, we must understand the strategic orientation that our company
has decided to take to excel in the marketplace. A strategy is
essentially a means to reaching business goals that our company has
decided for itself. Generic strategies are game plans for operating and
surviving in the marketplace. Michael Porter has written about three
generic strategies in 1980. These are: 1. cost leadership strategy, i.e.,
becoming the lowest cost provider of services, 2. differentiation
strategy, i.e., providing unique set of benefits to the customers which
are not offered by our competitors, and 3. focus strategy, i.e., focusing
on a niche or narrow market segment and fulfilling the needs of that
segment through its service offerings.