Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Syllabus
MIS 714 – Service Innovation
Semester
Spring 2013
Dr. Michael zur Muehlen
Stevens Institute of Technology
Howe School of Technology Management
Babbio 639
Day of Week/Time
Tuesdays, 6:15-8:45
Office Hours:
By appointment
Class Website:
Moodle
Catalog Description
This course leads students through the identification, analysis, definition, and deployment of service
opportunities within public and private organizations. Each of these phases is analyzed in detail to
encompass the principal activities, methods, tools and techniques applied in the respective phase.
Students will learn how to identify appropriate supporting techniques and information technologies for
the different phases of the service life cycle, assess the role of technology, and gauge the organizational
impact of service-focused operations. The objective of the course is to enable students to identify,
implement and evaluate innovative service offerings in their organization.
Prerequisite course: none
Overview
This course prepares students for positions in service-centric organizations, ranging from the
traditional service sector (e.g., finance, logistics, professional services) to public administration and
product-oriented services organizations. Students will be able to assess the service portfolio of their
organization, evaluate opportunities and emerging service trends, and learn the formal analysis and
modeling techniques that are essential to realize new service offerings.
The course primarily addresses the needs of public and private organizations with service offerings. It
covers topics relevant for IT staff that is participating in designing support systems for services,
Business personnel involved in service modeling projects, and executives involved in service selection
and portfolio decisions. The course makes use of real-world case studies to illustrate specific aspects of
service analysis, specification, and implementation, and to test student comprehension of the material.
Castle Point on Hudson, Hoboken, New Jersey 07030
www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Introduction to Course
A service is a means of delivering customer value by providing certain outcomes that customers want
to achieve without the need to own specific assets, costs, or risks. Services represent an increasing
share of the GDP of developed nations, and a rapidly climbing source of revenue for organizations in
all sectors of the economy. There is a fundamental shift for goods- and parts-producing organizations
to restructure their offerings around the needs of their customers and to include supply, maintenance,
and in-field operations to their services portfolio. Professional service organizations are increasingly
taking over roles that members of their client organizations used to play, and within companies shared
service centers allow for the effective deployment of service solutions that otherwise would have
required large training or contracting expenditures. It seems that anything can be made a service, but
few know in detail how this can be done.
As organizations are shifting from requirements-driven product design to needs-focused service design,
they need to understand the full lifecycle of service identification, design, transition, and operation,
supported by continual service improvement. They need to synchronize the different lifecycles of
products, customers, and services. The course highlights case studies of organizations that have
successfully engineered service offerings in product-centric, technology-centric, information-centric and
people-centric environments. Students will learn how to identify and realize innovative service
opportunities and how modern information technology enables service innovation. The concepts
conveyed in this course are applicable to enterprises in traditional service industries (e.g. finance,
healthcare, telecom, logistics, professional services), as well as organizations in traditionally productfocused industries (e.g. manufacturing, high technology).
The modules – and the areas of focus for the course - are:
– Module 1: Overview of the Service Economy and Service Organizations
– Module 2: Product-, Technology-, Process- and People-centric Services
– Module 3: Techniques for Service Analysis and Specification
– Module 4: Technology Support for Service Innovation
Relationship of Course to Rest of Curriculum
This course is part of the MS in Service Management curriculum and can be taken as part of the fourcourse concentration in Business Process Management & Service Innovation, or as an elective within
the MSIS program.
The course leverages the existing research program around Business Process Management in the Howe
School to incorporate aspects of Service-Oriented Architectures and Process-as-a-Service offerings, and
uses partnerships with academics and industry to incorporate new research findings and technology
into the curriculum.
Castle Point on Hudson, Hoboken, New Jersey 07030
www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Learning Goals
After taking this course:
1.
Remembering: Students will be able to name the characteristics of services, and the different
areas of service innovation organizations can engage in.
2. Understanding: Students will be able to explain the features of successful service designs.
3. Applying: Students will be able to apply the lessons learned in the course case studies to their
own organizations or to other organizations in different industry sectors.
4. Analyzing: Students will be able to specify data, process, and organizational requirements that
emerge from a service initiative. They will be conversant in both mainstream and specialized
documentation techniques, such as Service Blueprinting, BPMN, Entity-Relationship Modeling
and Speech-Act Modeling
5. Evaluating: Students will be able to determine the economic rationale behind a service offering
and will be able to provide a qualitative assessment of the service potential of an organization.
6. Creating: Students will apply the lessons learned in this course to their own organization and
prepare a service innovation proposal as the final project of the course.
7. Students will improve their ability to communicate in group and presentation settings.
Pedagogy
-
Lecture, reinforced through online discussion
Case Studies
Guest speakers from industry
Hands-on student exercises
Student individual and team presentations
Readings from texts and selected relevant articles and publications
Required Cases
–
–
–
–
–
–
Lynda M. Applegate; Robert D. Austin; Kalle Lyytinen; Esko Penttinen; Timo Saarinen: F-Secure Corporation:
Software as a Service (SaaS) in the Security Solutions Market. Harvard Business School Case 9-809-099
Thomas J. Delong, Ashish Nanda, Monica Mullick: &Samhoud Service Management. Harvard Business School
Case 9-801-389
Sandra J. Sucher, Stacy McManus: Ritz-Carlton Hotel Co. Harvard Business School Case 9-601-163
P. Hemp, “My week as a room service waiter at the Ritz,” Harvard Business Review, 80, 2002, pp. 54.
F. Warren McFarlan, Guoqing Chen, Kai Reimers, Xunhua Guo: Digital China Holdings Ltd.: Managing the
Transition from a Product-Oriented Towards a Service-Oriented Company. Harvard Business School Case 9307-093
Vanita Yadav, Sangeeta S. Bharadwaj, K.B.C. Saxena: Tecnovate: Challenges of Business Process Outsourcing.
University of Hong Kong Teaching Case HKU611
Castle Point on Hudson, Hoboken, New Jersey 07030
www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Required Readings (will be provided as PDF)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
S. Alter, “Service system fundamentals: Work system, value chain, and life cycle,” IBM Systems Journal, 47,
2008, Armonk, NY: International Business Machines Corp, pp. 71-86.
R. C. Basole, and W. B. Rouse, “Complexity of service value networks: Conceptualization and empirical
investigation,” IBM systems journal, 47, 2008, IBM, pp. 53.
L. L. Berry et al., “Improving Service Quality in America: Lessons Learned [and Executive Commentary],” The
Academy of Management Executive (1993-2005), 8, 1994, Academy of Management, pp. 32-52.
L. L. Berry et al., “Creating new markets through service innovation,” MIT Sloan Management Review, 47,
2006, Sloan Management Review Association, pp. 56.
M. J. Bitner, A. L. Ostrom, and F. N. Morgan, “Service blueprinting: A practical technique for service
innovation,” California Management Review, 50, 2008, University of California, pp. 66ff.
R. J. Clarke, and A. G. Nilsson, “Business services as communication patterns: A work practice approach for
analyzing service encounters,” IBM Systems Journal, 47, 2008, IBM, pp. 129-142.
T. H. Davenport, “The coming commoditization of processes,” Harvard Business Review, 83, 2005, pp. 100108.
F. Frei, “The four things a service business must get right,” Harvard Business Review, 86, 2008, pp. 70.
J. M. Hall, and M. E. Johnson, “When should a process be art, not science,” Harvard Business Review, 87,
2009, pp. 58-65.
M. Hammer, and S. Stanton, “How process enterprises really work,” Harvard Business Review, 77, 1999, pp.
108-120.
M. Komssi et al., “Transforming a Software Product Company into a Service Business: Case Study at FSecure,” 2009, IEEE Computer, pp. 61-66.
F. Leymann, D. Roller, and M. T. Schmidt, “Web services and business process management,” IBM systems
Journal, 41, 2002, IBM Corp, pp. 198-211.
P. P. Maglio et al., “Service systems, service scientists, SSME, and innovation,” Communications of the ACM,
49, 2006, ACM, pp. 85.
I. Miles, “Patterns of innovation in service industries,” IBM Systems Journal, 47, 2008, Citeseer, pp. 115.
K. Moller, R. Rajala, and M. Westerlund, “Service innovation myopia? A new recipe for client-provider value
creation,” California Management Review, 50, 2008, pp. 31.
A. Parasuraman, V. A. Zeithaml, and L. L. Berry, “A conceptual model of service quality and its implications
for future research,” The Journal of Marketing, 49, 1985, American Marketing Association, pp. 41-50.
H. A. Reijers, S. Limam, and W. M. P. Van Der Aalst, “Product-based workflow design,” Journal of
Management Information Systems, 20, 2003, ME Sharpe, pp. 229-262.
M. Sawhney, R. C. Wolcott, and I. Arroniz, “The 12 different ways for companies to innovate,” IEEE
Engineering Management Review, 35, 2007, IEEE, pp. 45-52.
V. Shankar, L. L. Berry, and T. Dotzel, “A Practical Guide to Combining Products and Services,” Harvard
business review, 2009,
J. Sheehan, “Understanding service sector innovation,” Communications of the ACM, 49, 2006, ACM, pp. 47.
M. zur Muehlen, and D. T. Ho, “Service process innovation: a case study of BPMN in practice,” 2008, IEEE
Computer Society, pp. 372.
Castle Point on Hudson, Hoboken, New Jersey 07030
www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Additional Readings (Optional References)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
E. Brynjolfsson, Y. Hu, and M. D. Smith, “From niches to riches: Anatomy of the long tail,” MIT Sloan
Management Review, 47, 2006, Sloan Management Review Association, pp. 67.
L. L. Berry, V. A. Zeithaml, and A. Parasuraman, “Five imperatives for improving service quality,” Sloan
Management Review, 31, 1990, pp. 29-38.
H. Chesbrough, and J. Spohrer, “A research manifesto for services science,” Communications of the ACM,
49, 2006, ACM, pp. 40.
H. W. Chesbrough, and A. R. Garman, “How open innovation can help you cope in lean times,” Harvard
business review, 87, 2009, pp. 68.
B. Dietrich, “Resource planning for business services,” Communications of the ACM, 49, 2006, ACM, pp. 64.
N. S. Caswell et al., “Estimating value in service systems: A case study of a repair service system,” IBM
Systems Journal, 47, 2008, Armonk, NY: International Business Machines Corp, pp. 87-100.
L. C. Harris, and E. Ogbonna, “Service sabotage: The dark side of service dynamics,” Business Horizons, 52,
2009, pp. 325-335.
W. B. Rouse, and M. L. Baba, “Enterprise transformation,” Communications of the ACM, 49, 2006, ACM, pp.
72.
R. T. Rust, and C. Miu, “What academic research tells us about service,” Communications of the ACM, 49,
2006, ACM, pp. 54.
A. Majchrzak, and Q. Wang, “Breaking the functional mind-set in process organizations,” Harvard Business
Review, 74, 1996, pp. 92-101.
S. Michel, S. W. Brown, and A. S. Gallan, “Service-logic innovations: How to innovate customers, not
products,” California Management Review, 50, 2008, University of California, pp. 49.
P. P. Maglio, and J. Spohrer, “Fundamentals of service science,” Journal of the Academy of Marketing Science,
36, 2008, Springer, pp. 18-20.
Parasuraman, V. A. Zeithaml, and L. L. Berry, “Understanding customer expectations of service,” Relationship
marketing, 2005, Sage Pubns Ltd, pp. 336.
F. Payne, K. Storbacka, and P. Frow, “Managing the co-creation of value,” Journal of the Academy of
Marketing Science, 36, 2008, Springer, pp. 83-96.
G. Piccoli et al., “Process completeness: Strategies for aligning service systems with customers’ service
needs,” Business Horizons, 52, 2009, Elsevier, pp. 367-376.
P. G. Raverdy et al., “Service Lifecycle Management,” 2009, EU Project Report.
J. Spohrer, and P. P. Maglio, “The emergence of service science: Toward systematic service innovations to
accelerate co-creation of value,” Production and Operations Management, 17, 2008, POMS, pp. 238-246.
K. Swank, “The lean service machine,” Harvard Business Review, 81, 2003, pp. 123-130.
V. A. Zeithaml, A. Parasuraman, and L. L. Berry, “Problems and strategies in services marketing,” The Journal
of Marketing, 49, 1985, American Marketing Association, pp. 33-46.
Castle Point on Hudson, Hoboken, New Jersey 07030
www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Assignments
The course consists of nine weekly assignments and a final project. The weekly assignments focus on the
course content taught in the respective week and serve to reinforce and expand the lessons learned.
Students are asked to identify organizations or examples of specific types of service innovation, perform
blueprinting and other types of analysis and report their findings in short papers or presentation.
The final project is a service innovation proposal that the students prepare either for their own
organization (for part-time students), or an organization of their choice (for full-time students). This
proposal combines the content taught in the course with an analysis of an actual organization and its
market offerings. The final project consists of a paper and a presentation.
Assignments
Weekly Assignments
Final Project Report
Due
Week 2-11
Week 14
Grading
Grading for each deliverable will be done on a scale from 0-100. The final grade will be computed based on the
weighting of the deliverables according to the following resolution:
Points (100 scale)
96-100
90-95
85-89
80-84
75-79
65-74
55-64
50-54
0-49
Grade
A
AB+
B
BC+
C
CF
Types of Assignments
Final Grade Weight
Weekly Assignments
60
Final Project Report
30
Reliability and Participation
10
Total Grade
100
Ethical Conduct
The following statement is printed in the Stevens Graduate Catalog and applies to all students taking Stevens
courses, on and off campus.
“Cheating during in-class tests or take-home examinations or homework is, of course, illegal and immoral. A
Graduate Academic Evaluation Board exists to investigate academic improprieties, conduct hearings, and
determine any necessary actions. The term ‘academic impropriety’ is meant to include, but is not limited to,
cheating on homework, during in-class or take home examinations and plagiarism.“
Consequences of academic impropriety are severe, ranging from receiving an “F” in a course, to a warning from
the Dean of the Graduate School, which becomes a part of the permanent student record, to expulsion.
Reference:
The Graduate Student Handbook, Academic Year 2009-2010 Stevens
Institute of Technology, page 10.
Castle Point on Hudson, Hoboken, New Jersey 07030
www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
Consistent with the above statements, all homework exercises, tests and exams that are designated as
individual assignments MUST contain the following signed statement before they can be accepted for
grading. ____________________________________________________________________
I pledge on my honor that I have not given or received any unauthorized assistance on this
assignment/examination. I further pledge that I have not copied any material from a book, article, the
Internet or any other source except where I have expressly cited the source.
Signature ________________
Date: _____________
Please note that assignments in this class may be submitted to www.turnitin.com, a web-based anti-plagiarism
system, for an evaluation of their originality.
Course Schedule
#
Title
Description
Assignment
Due
Reading

1
Introduction and
Overview
What is the difference
between Goods- and
Service-centric
organizations?



2
3
Technical and
Organizational
Levers for Service
Innovation
People-Centric
Services
What can an organization
change in order to innovate
its service offerings?
What are typical
characteristics of peoplefocused service
organizations, such as
Professional Service
businesses?
Case Study: Ritz Carlton
Castle Point on Hudson, Hoboken, New Jersey 07030
Description of a
Service-centric
Organization
Case Analysis:
Ritz Carlton



A. Parasuraman, V. A. Zeithaml, and L. L.
Berry, “A conceptual model of service
quality and its implications for future
research,” The Journal of Marketing, 49,
1985, American Marketing Association, pp.
41-50.
P. P. Maglio et al., “Service systems,
service scientists, SSME, and innovation,”
Communications of the ACM, 49, 2006,
ACM, pp. 85.
F. X. Frei, “The four things a service
business must get right,” Harvard business
review, 86, 2008, pp. 70.
M. Sawhney, R. C. Wolcott, and I. Arroniz,
“The 12 different ways for companies to
innovate,” IEEE Engineering Management
Review, 35, 2007, IEEE, pp. 45-52.
J. Sheehan, “Understanding service sector
innovation,” Communications of the ACM,
49, 2006, ACM, pp. 47.
Ritz Carlton HBS Case
P. Hemp, “My week as a room service
waiter at the Ritz,” Harvard Business
Review, 80, 2002, pp. 54.
www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
#
4
Title
Techniques for
Service Analysis:
Service Blueprinting
5
Product-Centric
Services
6
Techniques for
Service Analysis:
Work System Method
7
Technology-Centric
Services
8
Process-Centric
Services
9
Techniques for
Specifying Services:
Data-as-a-Service
Description
Assignment
Due
What matters to the
customer?
What happens in front of and
behind the line of visibility?
How do product-centric
organizations move from
selling products to selling
services?
Case Study: Digital China
Holdings Ltd.
Case Analysis:
Digital China
Holdings Ltd.
How can we analyze the
interaction between service
provider and consumer, and
identify issues?
How can organizations
leverage technical
competencies to sustain a
service advantage?
Case Study: F-Secure
How do process-as-a-service
organizations work?
Case Study: Tecnovate
Case Analysis: FSecure
Case Analysis:
Tecnovate
Reading

M. J. Bitner, A. L. Ostrom, and F. N.
Morgan, “Service blueprinting: A practical
technique for service innovation,” California
Management Review, 50, 2008, University
of California, pp. 66.


Digital China Holdings Ltd. HBS Case
V. Shankar, L. L. Berry, and T. Dotzel, “A
Practical Guide to Combining Products and
Services,” Harvard business review, 2009,

S. Alter, “Service system fundamentals:
Work system, value chain, and life cycle,”
IBM Systems Journal, 47, 2008, Armonk,
NY: International Business Machines Corp,
pp. 71-86.


F-Secure HBS Case
M. Komssi et al., “Transforming a Software
Product Company into a Service Business:
Case Study at F-Secure,” 2009, IEEE, pp.
61-66.


Tecnovate UHK Case
T. H. Davenport, “The coming
commoditization of processes,” Harvard
Business Review, 83, 2005, pp. 100-108.
M. zur Muehlen, and D. T. Ho, “Service
process innovation: a case study of BPMN
in practice,” Proceedings of the Hawai’i
International Conference on System
Sciences 2008, IEEE Computer Society,
pp. 372.
H. A. Reijers, S. Limam, and W. M. P. van
der Aalst, “Product-based workflow design,”
Journal of Management Information
Systems, 20, 2003, ME Sharpe, pp. 229262.
M. Hammer, and S. Stanton, “How process
enterprises really work,” Harvard Business
Review, 77, 1999 pp. 108-120.
J. M. Hall, and M. E. Johnson, “When
should a process be art, not science,”
Harvard Business Review, 87, 2009, pp.
58-65.
BPMN 2.0 Poster from HPI Germany
R. J. Clarke, and A. G. Nilsson, “Business
services as communication patterns: A
work practice approach for analyzing
service encounters,” IBM Systems Journal,
47, 2008, IBM, pp. 129-142.


How can data be the source
for service offerings?

10
11
Techniques for
Specifying Services:
Process-as-a-Service
Techniques for
Specifying Services:
Actor-oriented
Analysis
How can processes become
services?
What is the role of
relationship management in
service innovation?
Castle Point on Hudson, Hoboken, New Jersey 07030
Analysis of Dataas-a-Service
provider
Analysis of
Process-as-aService provider



www.stevens.edu
Howe School of Technology Management
Center for Business Process Innovation
Tel +1 201 216 8293
Fax +1 201 216 5385
#
12
13
14
Title
A Technical View of
Services:
Leveraging IT in the
Services Enterprise
A Technical View of
Services:
Services
Orchestration and
Choreography
An Economic View of
Services: Service
Value Networks
Description
Assignment
Due
What are the ideas,
concepts, technologies, and
standards behind a ServiceOriented Architecture?
How can basic services be
bundled and orchestrated to
achieve higher-level
offerings?
How can the value of a
service offering be evaluated
and enhanced?
What are the stages of the
service value chain?
Service
Innovation
Proposal
Reading

SOA articles from OMG.org and W3C.org,
TBA

F. Leymann, D. Roller, and M. T. Schmidt,
“Web services and business process
management,” IBM Systems Journal, 41,
2002, IBM Corp, pp. 198-211.

R. C. Basole, and W. B. Rouse,
“Complexity of service value networks:
Conceptualization and empirical
investigation,” IBM systems journal, 47,
2008, IBM, pp. 53.
All assignments are due as noted. In fairness to others, late work will be penalized 10% per week overdue.
Castle Point on Hudson, Hoboken, New Jersey 07030
www.stevens.edu