Strategy based service business development for sm es

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h)p://iwi.campus02.at © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs

IESS 2011 FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc

STRATEGY BASED SERVICE BUSINESS DEVELOPMENT FOR SMALL AND MEDIUM SIZED ENTERPRISES (SME´S)

IESS 2011, Geneve Ernst Kreuzer

University of Applied Sciences CAMPUS 02 Department of Information Technologies

& Business Informatics




0. Introduc1on to comprehensive service systems

1.  What are IT-‐based services? 2.  Strategies to develop complex product-‐service bundles

3.  How do SME´s innovate and improve services in prac1ce ? – results of an empirical study in Styria (Austria)

4.  Systema1c development of product-‐service bundles – Strategy based Service Engineering Approach of the IBI-‐Department

5.  Summary and Outlook

AGENDA





1.  What are IT-‐based services? 2.  Systema1c Service Extension



5.  Summary

AGENDA




SCHUMPETER: THE GRAND OLD MAN IN INNOVATION THEORY

“…..innova0on consists in carrying out New Combina0ons…..“

Schumpeter, 1939

The systemaRc integraRon of service shares to product-‐service systems is conRnuously gaining importance in a service society. Services especially allow beZer insight into added customer value in 1mes of increasing global compe11on.

INTEGRATION OF SERVICE SHARES




SERVICE CONCEPT – INTEGRATION OF SERVICE SHARES

A. Customer needs

Primary needs

Core service/ product

B. Design of the offer

Suppor0ng, services

Secondary needs

The Service Concept shows the approach to sa1sfying customer needs with services.




PRODUCT – SERVICE SYSTEMS

Core Product

physical goods

services

• Today the core “product” can increasingly be exchanged or subsRtuted by the customer.

•  Meanwhile the physical product or the service product as a core product has o\en become a component in an umbrella service concept.




STANDARD SERVICE VS. SMART SERVICE

„Smart Services“ „Standard Services“

P

S1 S2

S3 S4

P

S1 S2

S3 S4 Core Product





„Standard Services“

P

S1 S2

S3 S4

•  Tradi1onal standard services use service efforts by adding them to the product (physical product or core service)

•  This concept refers to the customer needs along the customer contact cycle before, during and a\er the use of the product.





„Smart Services“

P

S1 S2

S3 S4

•  The so called Smart services are embedded in the core product itself

•  The main difference between standard and smart services is in the potenRal of smart services to enable service providers to establish closer Res with customers by iden1fying customer needs intelligently by using IT.




SMART SERVICE CHARACTERISTICS

  DiagnosRcs: The applica1on enables a device to self-‐op1mise and allows troubleshoo1ng, monitoring and repair.

  Replenishment and commerce: The applica1on monitors the consump1on of a device and consumer behaviour.

  Status: The applica1on reports on performance and usage of the product or the service.

  Upgrades: The applica1on op1mises the performance of a given device.

  Profiling and behaviour tracking: This applica1on monitors varia1ons in loca1on, culture, performance, usage and sales of the device.

  LocaRon mapping and logisRcs: The service support system can be op1mised with this applica1on.

Allmendinger & Lombreglia, 2005




HOLISTIC SERVICE OFFERINGS

Best PracRce: Die Heidelberg Druckmaschinen AG

Allmendinger, Glen; Lombreglia, Ralph (2005): Four strategies for the age of smart services. In: Harvard Business Review; October 2005, reprint R0510j

Grafik: © Heidelberg Druckmaschinen AG; hZp://www.design.heidelberg.com/

S1

sS1

S2

sS2

S3 Sn

sSn








5.  Summary

AGENDA




Due to the fact that the modern customer demands a sophisRcated turn key product-‐service bundle and in addi1on to this new innova1ve business concepts and models can only be realised by using IT (informa1on systems, human workflows suppor1ng specific steps of the processes) there is also a trend to higher IT usage in classical bundling of value-‐added services.

INCREASING IT USAGE IN SERVICES




IT-‐ BASED SERVICES

Service

IT

So\ware

In Anlehnung an Fähnrich und Van Husen 2009

Through IT supported services

Integrated hybrid Products

IT-‐accompanied services

Smart services








5.  Summary

AGENDA




SERVICE EXTENSIONS STRATEGIES (1/2)




SERVICE EXTENSIONS STRATEGIES (2/2)

All forms of smart services can be integrated in the product core to increase customer value and secure rela1onships.

three-‐dimensional Service Development graph

systema1c strategic service extensions based on the three kinds of service types

Adding classical (value added) services.

Integra1ng IT-‐based services into the service umbrella








5.  Summary

AGENDA




How many months pass from the finding of an idea to market

implementaRon of a new service? more than 12 months

6 to 12 months

3 to 6 months

less than 3 months

In which form are Service Development processes formalized?

Formalized process, well documented Formalized process, but not documented form

Process marginal formalized No formalizaRon (ad hoc)

21%

12%

18%

48%

0 %

55 %

30 %

15 %

SERVICE DEVELOPMENT IN PRACTISE

Expert Interviews, 2009 N=33








5.  Summary

AGENDA




SERVICE ENGINEERING

  Service Engineering : „Service Engineering can be understood as a technical discipline concerned with the systemaRc development and design of services using suitable procedures, methods and tools.“

Bullinger et al., Service Engineering – Methodical Development of New Service Products, Int. J. Produc1on Economics 85 (2003) 275–287, S. 2

SERVICE CREATION

Idea-‐crea1on and assess-‐ment

SERVICE ENGINEERING

Require-‐ment Analysis

Service Design

Im-‐ plement-‐ a1on

S1

sS1

S2

sS2 S3 Sn

sSn Comprehensive Product-‐, Service Systems




STRATEGY BASED SERVICE ENGINEERING APPROACH

Idea Genera1on and Assessment

Business Case Descrip1on

Service CreaRon Service Design Service Management

Strategy Audit and Service Assessment

Service Concept (product – service bundling)

Pilot tes1ng

Strategic Analysis

assignments, templates and checklists

Toolbox Tools and Methods (Choice depends on

innova1on culture, habits and strategy)

Input-‐, documents und –sources (Marke1ng …)

………… ………… …………

………… ………… …………

………… ………… …………

………… ………… …………

Outcome of a research project with pilot studies




Market Research and Marke0ng Issues

•  Ideen-‐ gewinnung

•  Ideen-‐ auswahl

•  Ideen-‐ bewertung

Market Informa1on

Strength-‐Weaknesses (SWOT)

Objec1ves/ Strategies: -‐ Strategic Search fields -‐ ………………

Input-‐ documents, -‐sources,

Idea DescripRon

1

REFERENCEPROCESS SERVICE ENGINEERING -‐ IBI

Strategic Analysis

Idea Genera1ng

Business Cases

Service Concept

Service-‐Management

Entwicklung neuer Dienstleistungen

All these stages are defined by :

1.) specific inputs (documents and results of the step before – e.g. market research, customer sa1sfac1on survey etc.)




•  Ideen-‐ gewinnung

•  Ideen-‐ auswahl

•  Ideen-‐ bewertung

Tools and Methods

Toolbox

9 Windows Tool

635 brain wri1ng Customer Contact Circle

Value Benefit Analysis

Assessemt porrolio

……….

2

Idea descripRon

Assignments Formulares und

Checklists

Market Research and Marke0ng Issues

Strategic Analysis

Idea Genera1ng

Business Cases

Service Concept

Service-‐Management

REFERENCEPROCESS SERVICE ENGINEERING -‐ IBI Entwicklung neuer Dienstleistungen

3

2.) a number or set of recommended methods and tools (SWOT analysis, customer contact circle, porrolio analysis, 9 Windows operator, etc.) and 3.) a specific outcome and deliverables (e.g. search box for targeted genera1ng of ideas – phase 1)




Genera1ng and evalua1ng Ideas for new services

Rough Concept with Business Cases


Strategy Audit und Service Assessment

Detailled Service Concept


Market research and Marke1ng (Customer Integra1on) Marke1ngplan, -‐concept

Pilot

Strategic Analysis

Toolbox

Strategic Analysis of the offer

Market Entry Cont. Improvement ………….

…………. ………….

…………. …………. ………….

…………. ………….

………….

Development of new Services

Toolbox

…………. …………. ………….




Maintenance services

FOR EACH STRATEGIC OBJECTIVE THE RIGHT SERVICE STRATEGY




Genera1ng and evalua1ng Ideas for new services

Rough Concept with Business Cases


Strategy Audit und Service Assessment

Detailled Service Concept


Market research and Marke1ng (Customer Integra1on) Marke1ngplan, -‐concept

Pilot

Strategic Analysis

Toolbox

Strategic Analysis of the offer

Market Entry Cont. Improvement ………….

…………. ………….

…………. …………. ………….

…………. ………….

………….

Development of new Services

Toolbox

…………. …………. ………….




……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

Information Phase: Awareness and

Interest

Decision- and Purchasing Phase

Project Phase: Customer

Integration

Usage Phase: Service / Re-

Purchase / Renewal

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………

CUSTOMER CONTACT CIRCLE

I

D P

U services

……………………………

……………………………

……………………………

……………………………

……………………………

……………………………





Interest



Integration


Purchase / Renewal


•  InformaRon stage: to raise awareness: when a prospec1ve consumer is looking for solu1ons to sa1sfy specific needs. The poten1al customer is first exposed to your service system, e.g. when exposed to an ad or reading a review.





Interest



Integration


Purchase / Renewal


•  Decision and purchasing stage: Now the customer is interested in purchasing your product/service. Examples include visi1ng the service provider or trying out the service. .





Interest



Integration


Purchase / Renewal


•  Project stage: The services are customised in consulta1on with the customer. The service provider or front-‐line employee must maintain a professional role and treat the customer with respect and dignity..





Interest



Integration


Purchase / Renewal


•  Service/re-‐purchase/renewal: When a customer returns with a problem or with the inten1on to re-‐purchase/renew.




0. short overview on UAS CAMPUS 02 and Graz

1.  Introduc1on to comprehensive service systems 2.  What are IT-‐based services

3.  Service Integra1on Strategies 4.  How do SMEs innovate and improve services in prac1ce ? – results

of an empirical study in Styria (Austria)


6.  Summary and Outlook

AGENDA




ADVANTAGES OF PRODUCT – SERVICE SYSTEMS

•  A 1ghter rela1onship between the service provider and the customer business partner

•  The chance to implement an automa1c feedback system •  Reduc1on of quality problems •  Fulfilment of customer requirements •  Smart services assist in building closer customer

rela1onships •  In dis1nc1on to value-‐added services following the core

product/service IT-‐based services and smart services are not as easily matched by compe1tors

4-34




CODESIGN SERVICE – SOFTWARE SYSTEM




SEQUENTIAL VS. PARALLEL DEVELOPMENT

Co-‐Design Parallel

development

Time

Quality Costs




THANKS FOR YOUR ATTENTION!

International Service Research Conference Ernst Kreuzer

University of Applied Sciences CAMPUS 02

Department of Information Technologies & Business Informatics

Education

Strategy based service business development for sm es