Systematic Service Innovation - Brigham Young University

Dr. Scott E. Sampson


James M. Passey Professor

Brigham Young University

Provo, Utah, USA

Systematic Service

Innovation

Systematic Service Innovation 1

©2014-rev


What is innovation?



Innovation

“the application of better solutions that meet new

requirements, inarticulated needs, or existing

market needs.”



Service innovations

ATM

curved shower curtain rod in hotels

frequent flier programs

restaurant concepts



Where does innovation come from?

Product innovation

“Engineering”

Service innovation

“Engineering?”



What is the process of innovation?Product innovation process…

1. Identify a market opportunity.

2. Turn it over to engineers.

3. Prototype.

4. Product design.

5. Production design.

6. Testing.

7. Release to “production.”

Service innovation process…

1. Identify a market opportunity.

2. Then what???



What is service innovation?



Systematic Service Innovation

using PCN Analysis

Pizza case study



Service Innovation using PCN Analysis

1. Document a base process.

2. Select steps to focus on for innovation.

3. Enumerate and interpret process options.

4. Identify process configuration with desirable

operating characteristics.




1. Document

2. Select

3. Enumerate

4. Identify

10Systematic Service Innovation




2. Select

3. Enumerate

4. Identify




Provider Customer

Pizza Restaurant Pizza Consumer

Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

develop

appetite

eat

pizza

return

home

serve

pizza

wait to be

seatedseat customer

review menu

present

check

prepare

check

pay

check

eat

leftovers

wait for

pizza

create order


prepare

components

preheat

ovens

maintain

supplies

develop

recipes

cook

pizza

assemble

pizza





3. Enumerate

4. Identify




Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

develop

appetite

eat

pizza

return

home

serve

pizza

wait to be

seatedseat customer

review menu

present

check

prepare

check

pay

check

eat

leftovers

wait for

pizza

create order


prepare

components

preheat

ovens

maintain

supplies

develop

recipes

cook

pizza

assemble

pizza






4. Identify




Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

develop

appetite

eat

pizza

return

home

serve

pizza

wait to be

seatedseat customer

review menu

present

check

prepare

check

pay

check

eat

leftovers

wait for

pizza

create order


prepare

components

preheat

ovens

maintain

supplies

develop

recipes

cook

pizza

assemble

pizza



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing


assemble

pizza

cook

pizza


Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

make to

ordermake together

make it

yourself

make to

stock

make it

at home


assemble

pizza

cook to

order

cook it

at home

cook to

stock

cook it together cook it

yourself

(self serve)

cook

pizza



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

make to

ordermake together

make it

yourself

make to

stock

make it

at home

Process Configuration #1

assemble

pizza

cook to

ordercook to

stock

cook

pizza


yourself

(self serve)

cook it

at home



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

make to

ordermake together

make it

yourself

make to

stock

make it

at home


assemble

pizza

cook to

ordercook to

stock

cook

pizza


yourself

(self serve)

cook it

at home



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

make to

ordermake together

make it

yourself

make to

stock

make it

at home


assemble

pizza

cook to

ordercook to

stock

cook

pizza


yourself

(self serve)

cook it

at home


Pizze-da-Firenze


Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing


assemble

pizza

cook

pizza

make to

ordermake together

make it

yourself

make to

stock

make it

at home

cook to

ordercook to

stock


yourself

(self serve)

cook it

at home



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing


assemble

pizza

cook

pizza

make to

ordermake together

make it

yourself

make to

stock

make it

at home

cook to

ordercook to

stock


yourself

(self serve)

cook it

at home



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing


assemble

pizza

cook

pizza

make to

ordermake together

make it

yourself

make to

stock

make it

at home

cook to

ordercook to

stock


yourself

(self serve)

cook it

at home



make to

ordermake together

make it

yourself

make to

stock

make it

at home

cook to

ordercook to

stock


yourself

(self serve)

cook it

at home

Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

assemble

pizza

cook

pizza



cook

pizza


make to

ordermake together

make it

yourself

make to

stock

make it

at home

cook to

ordercook to

stock


yourself

(self serve)

cook it

at home

Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing


assemble

pizza

cook

pizza



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing


cook

pizza

assemble

pizza

make to

ordermake together

make it

yourself

make to

stock

make it

at home

cook to

ordercook to

stock


yourself

(self serve)

cook it

at home







4. Identify process configuration with

desirable operating characteristics.



Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

make to

ordermake together

make it

yourself

make to

stock

make it

at home

Operating characteristics

assemble

pizza

cook to

order

cook it

at home

cook to

stock

cook it together

cook it

yourself

(self serve)

cook

pizza


assemble

pizza

cook

pizza

assemble

pizza

cook

pizza

assemble

pizza

cook

pizza

assemble

pizza

cook

pizza

greater scale and expertise greater customization potential

lowest

operating efficiency

process requires

specialized skillsprocess requires

customized attention

process

requires both

Process positioning decision…

or low-cost labor and

provider wants control


Optimized design?

Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

deliver pizza

assemble

pizza base

wrap

pizza

cook

pizza

eat

pizza

accept

offer

notify nearby

customers

of offer

want pizza?

yes

drive to

neighborhood

sell toppings

add

toppings

student team Ryan,

Rachel, and Clarke


http://www.google.com/imgres?imgurl=http://www.purposeinc.com/images/2008/january/31/la-jolla-pizza-girl.jpg&imgrefurl=http://www.purposeinc.com/pwp/2008/02/01/will-seo-for-pizza-and-a-salad&usg=__C8fi8ha9QUBhpl0PRPn9uPRMYTs=&h=387&w=450&sz=151&hl=en&start=2&um=1&itbs=1&tbnid=SX4CbVAWBiEcJM:&tbnh=109&tbnw=127&prev=/images?q=pizza+eat&um=1&hl=en&tbs=isch:1

http://www.google.com/imgres?imgurl=http://www.purposeinc.com/images/2008/january/31/la-jolla-pizza-girl.jpg&imgrefurl=http://www.purposeinc.com/pwp/2008/02/01/will-seo-for-pizza-and-a-salad&usg=__C8fi8ha9QUBhpl0PRPn9uPRMYTs=&h=387&w=450&sz=151&hl=en&start=2&um=1&itbs=1&tbnid=SX4CbVAWBiEcJM:&tbnh=109&tbnw=127&prev=/images?q=pizza+eat&um=1&hl=en&tbs=isch:1


Value proposition?

Provider Customer


Independent

processing

Surrogate

interaction

Direct

interaction

Direct

interaction

Surrogate

interaction

Independent

processing

deliver pizza

assemble

pizza base

wrap

pizza

cook

pizza

eat

pizza

accept

offer

notify nearby

customers

of offer

want pizza?

yes

drive to

neighborhood

sell toppings

add

toppings

greater scale and expertise greater customization potential

lowest

operating efficiency



Educational example



Lecture course


Professor Student

process domain process domain

Independent

processing

Surrogate

interaction

Direct interaction Surrogate

interaction

Independent

processing

need

knowledge

enroll in

course

acquire

book

more

material?

no

have

knowledge

prepare

syllabus

give

lecture

design

course

prepare

lecture

listen and

take notes

review

book and

notes

go to

class

acquire

knowledge

take

exam

yes

grade

exam

have grade

write

exam

ask

questions

give

answers


Course configuration #1


Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

give

lecture

prepare

lecture

ask

questions

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

ask

questions

prepare

lecture

give

lecture

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

ask

questions

prepare

lecture

give

lecture

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

ask

questions

give

lecture

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

ask

questions

give

lecture

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

ask

questions

give

lecture

give

answers

prepare

lecture




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

ask

questions

give

lecture

give

answers

prepare

lecture




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

ask

questions

give

lecture

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

give

lecture

give

answers

ask

questions




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

give

lecture

ask

questions

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

give

lecture

ask

questions

give

answers

ask

questions

ask

questions

give

answers




Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

give

lecture

ask

questions

ask

questions

give

answers

ask

questions

give

answers


Operating characteristics?


Professor Student


Independent

processing

Surrogate

interaction


interaction

Independent

processing

prepare

lecture

give

lecture

ask

questions

ask

questions

give

answers

ask

questions

give

answers

“skillful

customization”


Summary: Innovation using PCN Analysis


• baseline PCN Diagram


• improving value offering

• improving economics


• principles of Strategic Process Positioning

4. Identify process configuration with desirable

operating characteristics.


Documents

Systematic Service Innovation - Brigham Young University