A Survey of New Service Development Tools
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A Survey of New Service Development Tools

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This study takes a holistic view on new service development (NSD) tools. A thorough literature review was conducted to identify the commonly used NSD tools, together with their purposes, strengths and ...

This study takes a holistic view on new service development (NSD) tools. A thorough literature review was conducted to identify the commonly used NSD tools, together with their purposes, strengths and weaknesses. We executed a large-scale survey among Singapore financial institutions to offer empirical evidences regarding NSD tools usage patterns, their impacts on NSD performance, and the contingencies on NSD innovativeness. The results showed that: (1) NSD tools are still underutilized in service firms; (2) NSD tools have positive influences on NSD performance; and (3) more tools are adopted when services are new to the firm and new to the customer.

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  • 1. A Survey of New Service Development Tools Dayu Jin, Kah-Hin Chai, Chi-Chuan Wu, Kay-Chuan Tan Department of Industrial and Systems Engineering National University of Singapore Department of Business Management Tatung University
  • 2. Introduction - Background • New service development (NSD) is important; however NSD success rate is low.  Success rate is as low as 58% (Griffin, 1997).  NSD lacks structured processes and services just “happen” ((de Jong and Vermeulen, 2003). • Critical factors for the development of quality services (Paulk et al., 1995; SEI, 2010).  People  Procedures and methods  Tools and techniques • There is no systematic review of the NSD tools used in NSD projects (Menor et al., 2002). 1
  • 3. Introduction – Research Questions RQ1: What are the NSD tools that can facilitate NSD process? RQ2: What are the usage patterns of NSD tools in service firms? RQ3: Do the use of NSD tools influence NSD performance? RQ4: Is the use of NSD tools contingent on NSD innovativeness? 2
  • 4. Research Methodology Sample: 420 financial institutions in Singapore.  Active innovators of a range of services (Menor and Roth, 2008).  Offerings are standardized which provides opportunities for tool use (Easingwood, 1986). Unit of analysis: NSD projects conducted in 3 years.  Chief executive officers as respondents. Response: 99, response rate of 23.6%.   63 responses indicated no NSD, and 2 incomplete. Data analysis is based on 34 usable replies. 3
  • 5. RQ1 – Review of NSD Tools • Definition: a precisely described framework, procedure, system or method for supporting and improving NSD processes (Brady et al, 1997). • Three different approaches to studying the development of new services (Coombs and Miles, 2000).  Assimilation: benchmarking, scenario planning, focus group, brainstorming, concept testing, QFD, SADT  Demarcation: service blueprinting, SERVQUAL  Synthesis 4
  • 6. Purpose Advantage Disadvantage To benchmark against best practices of NSD Powerful to facilitate organizational learning Difficult to select appropriate benchmarking partners Scenario Planning To predict risks and needs in the future Help establish first-mover advantage Difficult to assess future needs Focus Group To understand customers’ opinions about new service ideas Low cost and quick implementation Group might not be representative Brainstorming To generate innovative new service ideas Facilitate group participation to share ideas May result in creative yet meaningless ideas To identify promising new service ideas for further consideration Easy to implement No single best decision rule to predict market acceptance To translate customer requirements into new service specifications Provide actions-oriented guidelines to design quality into a process Complex to use and require extensive cross-functional involvement Benchmarking Concept Testing Quality Function Deployment (QFD) To map service processes Structured Analysis and with clearly defined Design Technique (SADT) responsibilities Service Blueprinting SERVQUAL To clarify service concepts and systematize service delivery processes Allow rigorous expression of Provide little instructions to high-level ideas and problems solve the identified problems Powerful to design processes Too much focus on emphasizing on efficiency and standardization and individual time reduction encounter Easy to uncover service To assess customers’ quality strengths and perceptions of service quality weaknesses Provide little instructions to narrow the identified gaps 5
  • 7. RQ2 – Usage Pattern of NSD Tools Percentage of firms that adopted NSD tools 6
  • 8. RQ2 – Usage Pattern of NSD Tools Percentage of firms applying tools across stages Market Research Tool Design Focused Tool 7
  • 9. RQ2 – Usage Pattern of NSD Tools Percentage of firms applying tools across sectors 8
  • 10. RQ3 – Effectiveness of NSD Tools Impact of NSD tools on market performance 9
  • 11. RQ3 – Effectiveness of NSD Tools Impact of NSD tools on operational performance 10
  • 12. RQ4 – Contingency on NSD Innovativeness Impact of newness to the firm on NSD tools usage 11
  • 13. RQ4 – Contingency on NSD Innovativeness Impact of newness to the customer on NSD tools usage 12
  • 14. Conclusions NSD tools are still underutilized.  Market research tools are relatively more frequently used. NSD tools are applied at various NSD stages.  Market research tools: initial phases.  Design focused tools: design and testing stages. NSD tools have positive influences on NSD performance.  Market research tools: operations performance.  Design focused tools: market performance. More tools are adopted when services are new to the firm and new to the customer. 13
  • 15. Thank you!