SERVICE SCIENCE, MANAGEMENT, ENGINEERING, AND DESIGN (SSMED) CONCEPT
Service Science, Management, Engineering, and Design (SSMED) also called as Service Science is an emerging field with an interdisciplinary approach to understand the service systems. Service systems are knowledge-intensive systems, evolving more sophisticated value propositions to enhance win-win interactions, more sophisticated governance mechanisms to resolve disputes and learned to benefit from measured risk-taking, discovery, and perpetual change, as well as more sophisticated service networks that increase value creation density. In simple words we can define the service systems are sophisticated knowledge-value reasoning entities, can be people, organizations and machines.
Three fundamental concepts of service science are service systems, value propositions and governance mechanisms. Service systems interacts via value proposition to produce outcomes which either can be a win-win value co-creation or a dispute and if dispute arises then governance mechanism or second order value proposition is used to resolve the dispute. In addition to these three fundamental concepts there are other concepts like value, stakeholders, perspectives, measures and resources to understand the nature of service systems.
SERVICE BLUPRINTING CONCEPT
Traditionally we have been innovating and designing the physical products and there were tools available for that. But on contrast services are no physical products they are fluid, dynamic and frequently an output of co-production in real time involving customers, stakeholders. Hence the tools which worked for products designing and innovation failed for services due to human and interactive properties of services.
Service blueprinting is the technique to model the service process. Service blueprint is used to describe and improve customer-provider interactions in the design of new and analysis of existing services processes. Service blueprint are customer-focused, allow firms to visualize the service process and points of customer contact points (touch points). Service blueprints give a graphical presentation for service process which is easy to understand for customers and stakeholders. There are five components of a service blueprint customer actions, onstage/visible contact employee actions, backstage/invisible contact employee actions, support process and physical evidence.
APPLICATIONS OF SERVICE BLUEPRINTING IN SERICE SYSTEMS
With awakening to the domination of service systems in the world’s economies there is growing focus on innovation and co-value creation by involving different stakeholders. In SSMED approach multiple disciplines like computer science, business operation research, industrial engineering, business strategy and management sciences are effectively combined to integrate the knowledge needed to create more systematic and scientific service systems which have become a compelling need for world’s economies. Many businesses are focusing on creating value through involving customers and different stakeholders and suggest a need for innovative methods, techniques, and R&D practice for services. Well defined service and business process is increasingly becoming a need and challenge to clearly model provider and client interaction.
Service blueprinting can be utilized to meet this challenges, it can be used to understand and model the service process graphically from customers’ and stakeholders’ perspective and clearly depicts the customer contact points (touch points). Service blueprinting focuses on the service process, service innovation and improvement. This helps customers and stakeholder to better understand the steps in service process that produce value to them. Service blueprints are mostly used in concept development stage. As this is a visual service process modeling technique its relative easy for customers and stakeholders to be involved in and comprehend the service which is actually going to be design and developed.
Deep understanding of user problems and their needs not only helps to design services that are widely adopted by users but also help in innovating new ideas that create a lasting service experience on the user minds. Research has revealed a very good framework for understanding of product experience which in fact relates to the services as well. Two types of experiences which can make a service experience pleasant or unpleasant are:
1. Aesthetic Experience
At the aesthetic level, we consider the capacity of service to delight one or more of our sensory modalities.
2. Emotional Experience
At emotional level, we consider the capacity of service to affect our emotions such as, love and anger .
Apart from the importance of service experience innovation it also worth how this service experience can be designed to make the customer experience of using service memorable and delight. Following are the six important guiding principles:
Identify and fulfill correct needs
Services are only useful if the meet the users’ expectation. And to meet the user expectations it necessary to identify their actual needs. Needs can be identified and fulfilled if users’ are involved in the service design process.
Create a immemorial experience
Two factors that contribute to the immemorial services are depth and positivity. According to Pine & Gilmore five means to strength these factors are Theme the experience, Harmonize impressions with positive cues, eliminate negative cues, Mix in memorabilia and engage all five sense. Also design service from the user viewpoint.
Assure customer participation
Provide a platform for customer to participate in co-creation of service.
Improve service touch-points
Improve all important points of contacts where user interacts with the service. Do not burden users with complex options and interfaces, provide easy access to them.
Concentrate on novelty and identification of service
User must identify the service different from the existing ones and meaningful to them. At the same time service must be identifiable by users as a certain service type.
Make the service environment consistent
The consistent service environment contributes to positive service experience. This is important when service is provided by multiple providers or though multiple service events. So service environment including service event and touch-points should create the same service experience.
We should also consider that experience is derived from the interaction of service in use and individual’s mind state so the temporal and dispositional characteristics of user and culture impacts can never be neglected
Pieter Desmet*, Paul Hekkert, “FrameWork of Product Experience”, (International Journal of Design) vol. 1, No. 1, 2007.
Mikael Runonen, Sakari Tamminen, Petri Mannonen, “Reflection on how services arise”, July 2009.
In digital services getting most out of the co-creation process is very important. Different techniques can be utilized to maximize this participation like introducing incentives for participants, community recognition of participating community or Living Labs.
Living Labs are environment for open innovation and development. Idea of open innovation in digital services closely relate to Living Labs. Living Labs represent a user-centric research methodology with a focus on users in their real life for developing and testing new ICT systems. The Living Lab concept refers to a R&D methodology where innovations, such as services, products and application enhancements, are created and validated in collaborative, multi-contextual empirical real-world settings. This human-centric approach considers humans as the source of innovation, not just an object for testing and feedback. There are many benefits of Living Labs.
A. Living Labs Providing Structure and Governance
Living Labs deal with problem: How to be aware, reach and select the right ideas. This problem massive per se, becomes even greater if we include user contributions. Living Labs, small organizations that aim to capture user’s insight, prototype and validate solutions in real life contexts, aims to contribute to both problems providing structure and governance to user involvement and methodologies and organizations to filter and sense user insights.
B. Living Labs Increasing Innovative Capacity
Living Labs seek to increase innovative capacity by promoting user and societal involvements. Apart from that Living Labs provide a platform to capture user insight and properly understand their needs. Involving users in their real life environment sometimes reveals unexpected user needs.
C. Living Labs and Interdisciplinary Projects
Living Labs also play important role in the implementation of interdisciplinary projects with multiple alternatives and business models.
OTASIZZLE – AN EXAMPLE
OtaSizzle is a Living Lab that provides a mobile and social media research environment. It provides experimental facilities for developing mobile and ubiquitous services, their use and adoption in humans’ real lives.
OtaSizzle is a “living lab” for thousands of users in Otaniemi, with extensions in greater Helsinki Finland. The project will create prototype mobile social media service platforms and study them with extensive field tests, coupled with quantitative measurements and qualitative analysis. The outcome will be a “packaged” experimentation environment, “SizzleLab” concept.
1. Esteve Almirall, “Living Labs and Open Innovation: Roles and Applicability”, Vol. 10, “Special Issue on Living Labs”,Aug 2008.
2. Hans Schaffers, Marituz Guerrero Cordoba, Patrizia Hongisto, Tunde Kallai, Christian Merz, Johann van Rensburg, “Exploring Business Models for Open Innovation in Rural Living Labs”.
Today’s organizations need a constant flow of ideas while competing through added value factors like emergent technologies or fast new product development. Thus, approach to open innovation is becoming necessity. Companies are looking forward to the outsiders like customers, suppliers, independent specialists for their innovative ideas and inputs to the designing of the products and services. Though innovation can be incremental or radical, most successful companies find new ways to do things – a new twist of take on things. More and more companies are acknowledging that they can not do things alone. Companies need to integrate outside ideas, research projects and concepts into their own offering, thus acting on an open innovation fashion.
Idea behind open innovation is the involvement of large pool of outsiders to jointly cope the common problems arising because of short lifetime of technologies and inefficient output of R&D activities with in firms. Open Innovation solves these problems by leveraging external technology and research-and-development resources. Change of business model has a significant impact on open innovation. And it leads companies from close to open business models. We have different industry example like IBM and P&G which survived from crucial problems by changing their business models from close to open.
Open innovation plays an important role for digital service design and engineering. In open innovation perspective service science could be an emerging discipline that unites the many stake holders. Physical goods are increasingly become commodities, goods companies find it increasingly difficult to stay profitable. Service allows companies to escape the “commodity trap” by providing a means for business to differentiate themselves from the competition. Companies are realizing the value of the input from their customers and other stakeholders to succeed in this competitive era. Through open innovation companies are trying to figure out the ways to get the maximum input from their customers and stake holders in the design of digital service.
Because of the involvement of customers and their capable role in making a digital service successful or fail, idea of open innovation can not be neglected anymore. Recent management literature suggests that company should be more inclined to put their idea and products out on the market and further develop them with customers and other partners.
Differentiating services from goods has always remained a hot topic. Different attributes have been assigned to services to identify them separately from goods. Most famous of those attributes are Intangibility, Heterogeneity, Inseparability, Perishability. But in fact they have not performed so well to separate the services from good. And all of them have remained challengeable by showing that goods can also be applicable to Intangibility, Heterogeneity, Inseparability, Perishability. There are few other important attributes which separate the services from goods like the service provider and customer are often active participant in the service process (co-production), purchasing services does not result in ownership, core-value in services is produced with provider-client interaction (value co-creation). All this differentiation only leads to endless discussions. Point here is we should not differentiate services from goods nor are the necessarily detrimental. Instead we should differentiate the goods dominant thinking from the service thinking.
In past we always have thought about producing goods and have tried to standardize them. Our center of focus always has been physical products. And we have tried best to expand the revenue by reducing the cost and increasing efficiency. But the world has changed now and information and communication technology (ICT) is playing a major role in this change. ICT is empowering the customers with abundance of knowledge. Cost reduction and standardization of physical products is leading to nowhere else then a commodity trap. This is the time to change our thinking from goods dominant thinking to service dominant thinking. Services are the only solutions to coup with this commodity trap.
Service thinking attaches the highest priority to the customers and products are something secondary. Main focus is the customer satisfaction and long terms relations with customers. When compared to goods, instead of standardization, better service demand customization. And more attention for revenue expansion is based on providing better services as well as cutting cost via automation. Instead of focusing on profits from individual transactions, services focus on customer relationship to enhance the long-term revenue.
Service revolution is changing the way companies do the business. As goods are increasingly becoming commodities, manufacturing companies are finding it difficult to stay profitable and face the competition. Only way to differentiate business from other companies is to provide better services.
The world is changing very fast. Every thing is becoming integrated whether it’s a human being, company, organization, city, nation, man-made system or natural system is becoming interconnected, instrumented and intelligent. This has put a lot of opportunities for organizations to think and act in new ways. But on the other hands it is compelling them to change the way they do the business and this change is economical, social and technical.
These days we see there are so many business models existing on the web. All are output of the new ways of doing business on the web. Some famous models covering a broad range of doing business include Brokerage, Advertising, Infomediary, Merchant, Manufacture (Direct), Affiliate, Community, Subscription and Utility.
Where do these models come from?
In my opinion they are just the output of company’s strategy and goals, especially when our focus is on the digital services. When we talk about services we always need to have vision, vision about how the service will function and what value it will create (for organization and for customers). If we are clear about these two questions, we would surely come-up with some business model, existing or creating a new one, after all digital services are the area of opportunity and provider of open business models.
When we talk about service innovations we do not have any predetermined business models and we come-up with one after the service is live. But on the other hand its also true Dumb Business Models and Dumb Businesses Get Eaten and we do not think about business models in advance. Is it because we are just too technology & device focused?
Bus Shelters – a new type of business model
In the 1980’s, a manufacturing company made and sold bus shelters to communities in the United Kingdom.
Their bus shelters were high quality; pricing was considered reasonable and had a virtual monopoly on the bus shelter market.
Adshel’s business model
Within a few years, Adshel came into the market, and drove the existing firm out of business.
Adshel’s bus shelters were of no better quality, but their business model was entirely different. They provided the bus shelters to communities FOR FREE and charged advertisers for wall space on the shelters.
We also have a very good example of Britannica encyclopaedia replaced by Wikipedia.
So, in this interconnected, instrumented and intelligent world those who survived will be only those who are innovative and have foresight to see the future and are able to figure out the possibilities.