MGT3303 Michel 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

MGT3303 Michel Leseure A Framework for Categorizing New Services

MGT3303 Michel Leseure Categories of New Services

MGT3303 Michel Leseure 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

MGT3303 Michel Leseure The New Service Development (NSD) Process

MGT3303 Michel Leseure NSD Process (From Johnson, Menor, Roth, and Chase)

MGT3303 Michel Leseure Customer Contact A 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

MGT3303 Michel Leseure Major Differences between High- and Low-Contact Systems in a Bank

MGT3303 Michel Leseure Service-System Design Matrix

MGT3303 Michel Leseure 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.

MGT3303 Michel Leseure Service Design Example Online Dating

MGT3303 Michel Leseure

MGT3303 Michel Leseure

MGT3303 Michel Leseure

MGT3303 Michel Leseure

MGT3303 Michel Leseure

MGT3303 Michel Leseure

MGT3303 Michel Leseure 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)

MGT3303 Michel Leseure 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.

MGT3303 Michel Leseure 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

MGT3303 Michel Leseure 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

MGT3303 Michel Leseure 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

MGT3303 Michel Leseure 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

MGT3303 Michel Leseure Using QFD: (3) The QFD Grid

MGT3303 Michel Leseure Using QFD: (4) Actual vs. Current Performance

MGT3303 Michel Leseure Using QFD: (5) Process Importance To what extent a process supports Strategic objectives Weak = 1 point Moderate = 3 points Strong = 9 points

MGT3303 Michel Leseure Using QFD: (6) Objectives Conflicts

MGT3303 Michel Leseure 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

MGT3303 Michel Leseure 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

MGT3303 Michel Leseure SADT: Generic Structured Activity Box

MGT3303 Michel Leseure Context Diagram

MGT3303 Michel Leseure Decomposition of Activity Diagram

MGT3303 Michel Leseure 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 process