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
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
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
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.
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
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Michel Leseure
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Michel Leseure
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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
Potential Contribution of
Processes to achieve the objectives
Q
Q
Provide Excellent Customer Service
3
Effective (introduction, matching process)
2
Provide selective choice
D
D
Q
O
Q
O
O
Q
3
Q
O
D
D
O
Q
Safe
5
O
Enjoyable
2
Q
Q
Interactive
1
Q
Q
Q
Q
Listing: Matching
Q
Listing: online
Chatrooms
5
Automatic Matching
Provide a serious environment
Filtering
Wt.
Listing: Most recently searching
ONLINE DATING EXAMPLE
Anonymous Messaging
Weak
Moderate
Important
Rich Profile
D
O
Q
Q
D
Q
O
O
Q
Q
O
MGT3303
Michel Leseure
Using QFD: (4) Actual vs. Current
Performance
D
Provide Excellent Customer Service
3
Effective (introduction, matching process)
2
Q
O
Q
O
O
Provide selective choice
3
Q
O
D
D
O
Safe
5
O
Enjoyable
2
Q
Q
Interactive
1
Q
Q
Q
Q
D
Q
O
Q
Q
Listing: Most recently searching
D
Listing: Matching
Q
Listing: online
Filtering
5
Chatrooms
Anonymous Messaging
Provide a serious environment
Automatic Matching
Wt.
Rich Profile
ONLINE DATING EXAMPLE
Measure
O
No Time wasters
<5%
Answer leadtime
<24 hours
Q
Turnover
4 weeks
Q
Quality of listing (active)
>25%
O
Number of complaints
<2%
Surfing Time
>1 hour
Target
Actual
10%
18
8
50%
5%
40 mn
O
MGT3303
Michel Leseure
Using QFD: (5) Process Importance
D
D
Provide Excellent Customer Service
3
Effective (introduction, matching process)
2
Q
O
Q
O
O
Provide selective choice
3
Q
O
D
D
O
Safe
5
O
Enjoyable
2
Q
Q
Interactive
1
Q
Q
Ranking 132
Q
50
Q
77
Listing: Matching
Q
Listing: online
Filtering
5
Chatrooms
Anonymous Messaging
Provide a serious environment
Automatic Matching
Wt.
Rich Profile
Weak = 1 point
Moderate = 3 points
Strong = 9 points
D
Q
33
Listing: Most recently searching
ONLINE DATING EXAMPLE
Measure
O
No Time wasters
<5%
Answer leadtime
<24 hours
Q
Turnover
4 weeks
Q
Quality of listing (active)
>25%
50%
O
Number of complaints
<2%
5%
Surfing Time
>1 hour
O
Q
Q
O
41
18
18
Target
Actual
10%
18
8
40 mn
75
To what extent a process supports
Strategic objectives
MGT3303
Michel Leseure
Using QFD: (6) Objectives Conflicts
D
Provide Excellent Customer Service
3
Effective (introduction, matching process)
2
Q
O
Q
O
O
Provide selective choice
3
Q
O
D
D
O
Safe
5
O
Enjoyable
2
Q
Q
Interactive
1
Q
Q
Ranking 132
Q
50
Q
77
D
Q
33
Listing: Most recently searching
D
Listing: Matching
Q
Listing: online
Filtering
5
Chatrooms
Anonymous Messaging
Provide a serious environment
Automatic Matching
Wt.
Rich Profile
ONLINE DATING EXAMPLE
Measure
O
No Time wasters
<5%
Answer leadtime
<24 hours
Q
Turnover
4 weeks
Q
Quality of listing (active)
>25%
50%
O
Number of complaints
<2%
5%
Surfing Time
>1 hour
O
Q
Q
O
41
18
18
Target
Actual
10%
18
8
40 mn
75
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
MGT3303
Michel Leseure