Service innovation for energy services: how to get from an idea to a service innovation
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The presentation describes the service innovation process. It describes how to get from a service idea to successful service innovations. We highlight innovation methods for facilitating the ...

The presentation describes the service innovation process. It describes how to get from a service idea to successful service innovations. We highlight innovation methods for facilitating the creativity and for describing the actual service.

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Service innovation for energy services: how to get from an idea to a service innovation Presentation Transcript

  • 1. Innovation approach for identifying, developing, and launching new services PD Dr. Heiko Gebauer Business innovation in utility sectors Swiss Federal Institute of Aquatic Science and Technology (EAWAG) Zurich, Switzerland
  • 2. Service innovation approaches Benchmarking Goals −Imitating services from competitors −Using competitor services as a facilitator for creating new services Procedures Customers Partners −Creating services through an in-depth understanding of customer needs −Creating services based on the competences of partners −Predicting changes in the service needs and emergence of new service needs −Creating services based on partner’s in-depth understanding of customer needs −Monitoring competitive offerings −Identification of service ideas −Monitoring crossindustry offerings and service innovations −Service development −Market launch of new services −Partner workshops Company −Creating services based on company’s competencies and skills −Leverage existing services into new customer segments −Improving and reinnovating existing services −Competence analysis −Critical incident techniques for existing services
  • 3. Customer-driven service innovation approach Customers Supplier of ideas and challengers Innovation process Definition Definition Tasks − − − − Instruments − Behavioral orientation for segmenting customers − Process mapping (Lifecycle analysis) − Utility layers − Brainwriting Objectives Customer segmentation Customer processes Customer needs Idea generation Co-developer and tester Entwicklung Development − Idea description − Module description − Process description − Check-lists − Modularization − Blueprinting − Resource planning − Development workshops − Prototyping Purchaser and Feedback provider Market launch − Executing market tests − Roll out − Cost and sales supervision − Test markets − Capacity management − Customer observation − Optimization workshops Efficiency Effectiveness Source: Dörner, Gassmann & Gebauer (2011)
  • 4. Customer-driven service innovation approach Customers Supplier of ideas and Challengers Innovation process Definition Definition Tasks − − − − Instruments − Behavioral orientation for segmenting customers − Process mapping (Lifecycle analysis) − Utility layers − Brainwriting Objectives Customer segmentation Customer processes Customer needs Idea generation Co-developer and tester Entwicklung Development − Idea description − Module description − Process description − Check-lists − Modularization − Blueprinting − Resource planning − Development workshops − Prototyping Purchaser and Feedback provider Market launch − Executing market tests − Roll out − Cost and sales supervision − Test markets − Capacity management − Customer observation − Optimization workshops Efficiency Effectiveness Source: Dörner, Gassmann & Gebauer (2011)
  • 5. Task 1: Behavioral description of customer segments Households Households Households Customer segments − Commercial customers (e.g., industry, retails, farmers, branches and so on) − Public institutions (e.g., schools, public buildings) − Private customers (landlords, tenants, families) Usage behavior −Stand-by, temperature, light, washing clothes & dishes, cooking, PC work Adaptive behavior −Purchasing and exchange of devices (fridges, tv, energy saving lamps, timers, sensors windows & doors …) Investment behavior −Installation of heating pumps, solar panels, air conditioning, heating systems, windows, cladding isolation ...
  • 6. Example – Household description according to social milieus Usage behavior Investment behavior Adaptive behavior Households Social milieus according to social status and basic values General for consumer behavior Social status Specific for utilities Performers & Achievers Traditionals Environmentally conscious Materialistic Basic values
  • 7. Short description of „Traditionalists“ Characteristics Description Values − − − − − − Interests − Product interests: Garden, Health, Food − Potential interests on utility services - today: Day/Night tariff, customer centre, information material, disconnectable electric meter and - future: Displays or specific, but simple invoices for controlling energy consumption, support services, exchange programs for household devices, detection of heating leakages Willingness to pay − Medium, limited financial resources, sufficient time, highest savings through the exchange programs for household devices Social status − − − − − Certainty, frugality, and continuity Saving is an essential attitude Concrete analysis and control of energy consumption Limited acceptance of technological innovations Strong effort on understanding energy efficiency Long-term decisions Mostly women Age: +50 Education: low to medium Income: medium level Jobs: Pensioners, housewives, basic employees, farmers
  • 8. Illustration of „Traditionalists“
  • 9. Task 2: Identification of household energy related processes and daily routines Search housing at Buying Appliances Source: Philips / B2E e en Home Renovation Sleeping Daily life g ie Hy l ne Source: Philips / B2E nn Di Meal Leisure & Entertainment Kids er l ea M School i ng av Le ome h Kids are home and watch TV Source: B2E Work Source: Philips Breakfast Meal ea M Work e en gi Hy i ng av e Le om h ne i ng av Le ome h gi Hy Leisure & Entertainment Entertainment l ea M Sleeping Shared living Energy audit gie Hy … Lights on Vacation Work Energy bills Sleeping . Leisure & Entertainment g Hy ne ie Moving in Leaving er igh Ne W Utility contracts ing av e Le om h Source: B2E
  • 10. Task 3: Classification of energy related processes Relevance of the processes/activities for energy issues High Results of task 2 Low Low High Frequency of processes /activities
  • 11. Task 4: Analyzing the utility layers for selected energy related processes Selected energy related processes Results of task 3 Utility layers 1 Relevance for energy issues Customer productivity High A B Simplicity Convience Risks Low Low Frequency High Image & fun Environemental friendliness 1 – Based on von Kim, W.C. and Mauborgne, R. (2005), Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, Harvard Business Review Press. ...
  • 12. Task 5: Brainwriting for identifying innovative ideas for utility services Brainwriting Examples 1 • Information services for saving energies • Feasibility studies for solar panels • Case studies on how to save energy Utility layer maps as a input for idea generation 2 Round 1: Within 5 Minutes writing down 3 Suggestions on a flip chart Circulating the flip charts among the team Result: List of innovative ideas • Customer card • Thermal imaging of buildings • ...
  • 13. Task 7: Description and evaluation of the service ideas (Check list) Value-benefit analysis Customer Customer situation needs Service idea Competence −Demanded by customers −Recognized by customers −Existing in the utility Importance for customer −High −Medium −Low Differentiation Revenue Charging Implementation time −Standard −High −Differen- −Medium tiator −Low −Future −+ −- −Short-term −Mediumterm −Long-term
  • 14. Customer-driven service innovation approach Customers & partners as Supplier of ideas and Challengers Innovation process Definition Definition Tasks − − − − Instruments − Behavioral orientation for segmenting customers − Process mapping (Lifecycle analysis) − Utility layers − Brainwriting Objectives Customer segmentation Customer processes Customer needs Idea generation Co-developer and tester Entwicklung Development − Idea description − Module description − Process description −... − Check-lists − Modularization − Blueprinting − Resource planning − Development workshops − Prototypes Purchaser and Feedback provider Market launch − Executing market tests − Roll out − Cost and sales supervision − Test markets − Capacity management − Customer observation − Optimization workshops Efficiency Effectiveness Source: Dörner, Gassmann & Gebauer (2011)
  • 15. Task 1: Preliminary description of the service ideas (Check list) A) Short summary a) Main objectives b) Customer needs c) Service description B) Strategy a) Consistency with the overall strategy b) Strategic importance c) Synergies to other services and products C) Customer needs a) Customer situation b) Customer needs b) „Unique selling proposition“ D) Service description a) Core elements b) Standards c) Service levels and options d) Involved partners and organizational units E) Service Process a) Rough process description b) Responsibilities within the process c) Execution of the processes F) Service marketing a) Target group b) Key market c) Competition d) Pricing model e) Selling f) Promotion G) Preconditions a) Feasibility studies b) Preconditions c) Restrictions (rlaw, others) H) Cost & revenue estimation a) Developing costs and investments b) Delivery cost c) Sales prices and sales volume I) Development plan a) Time line for the implementation plan b) Milestones c) Resource planning J) Risks a) Product & service risks b) Project risks c) Market and competitive risks d) Others
  • 16. Task 2: Modularisation of services Service definitions Service platform ? Pure must element Modul description ServiceModul ? ServiceModul Upgrading Elements ? ServiceModul Optional Elements Necessary basic elements Extension of the basic elements Additional services Must‘s Functional analysis Analysis of customer requirements Service functions for all customer types Could‘s Service functions for specific customer types Customer type 1 Customer type 2 Customer type 3
  • 17. Sun Power Service packages This idea had been developed for a specific utility Core idea − House-owner has a sufficient roof-surface. By installing photovoltaic equipment (5 KWPeak), houseowners make significant contribution to sustainability − Utility copes with all challenges and provides a total solution. Challenges include (house-owner has limited knowledge and wrong expectations) − Utility covers the whole process starting from a first counseling, access to financial support, installation and maintenance of the photovoltaic equipment − Utility guarantees quality of product and services through partnering with installers − Sun Power Service packages contributes to the extension of renewable energy usage Key issues: − Service package descriptions − Partnering concept − Communication and promotion of the services Modul 1: Consulting Modul 2: Interest clarification Modul 3: Feasibility study Modul 4: Proposal, Execution (installation), and operation
  • 18. Thermal imaging services (1) This idea had been developed for a specific utility Core idea − Cost-competitive, simple and neutral entry with a substantial and clear recommendation for the customers − Awareness and engagement into the topic on energy losses in private buildings − Modules go beyond the existing offerings of other service providers and provides more substantial recommendations to the houseowner − High standardization and automatization of the modules Key issues: − Full descriptions of each module − Pilot study and market launches Module 1: Mini-Check Thermal imaging service Module 2: Full-scale thermal imaging services Optional module 3: Energy Performance Certificate (for Buildings)
  • 19. Thermal imaging services (2) This idea had been developed for a specific utility Module 1: Mini-Check Thermal imaging service Module 2: Fullscale thermal imaging services Optional module 3: Energy Performance Certificate (for Buildings) Objectives •Easy and cost-competitive entry of customers into the issue of energy efficiency of buildings •Offering a small-size service package, which makes technical sense and offers an additional value for the house-owners •Differentiation compared to existing offerings through quality levels •Clear restrictions of the applications of the thermal images (e.g., no applications for reclamation on new buildings) Contents: •Personal customer contacts •Written introductions (Check lists for the customer preparations) •Customer preparations •Executions of the thermal imaging (selection of specific thermal imaging days) •Standardized analysis of the thermal image •Sending the information to the customers Charging •Cost-coverage charging methods of the mini-check of about 100 Euro (labor costs about 2h equals 100 Euro) without travel costs of 75 Euro and overhead-cost
  • 20. Thermal imaging services (3) This idea had been developed for a specific utility Objectives: •Identification and description of technical-feasible recommendations for improving the energy-efficiency of buildings Module 2: Fullscale thermal imaging services Contents: •Personal customer contact •Written or verbal introduction (Check list for the customer preparation) •Detailed preparation of the customers necessary (about 3 days including windows, heating and building) •Execution of thermal imaging services (inside and outside) •Detailed analysis of the images and the formulation of the report •Discussion of the report with the customers •Support for the getting subsidies and financial support for energy efficiency actions •Implementation of the actions together with the customers Optional module 3: Energy Performance Certificate (for Buildings) Charging: •Charging of the standard module 2 1200 Euro (labor costs of 2 days – 900 Euro costs internally •Intermediate finances for the implementation actions could be provided by the utility Module 1: Mini-Check Thermal imaging service
  • 21. Thermal imaging services (4) This idea had been developed for a specific utility Objectives: •Energy performance certificates are mandatory in various areas. For example, in the field of subsidized housing, every new, extended, and re-build house with more than 1000 m2 and renting and selling of houses (buildings). Module 1: Mini-Check Thermal imaging service Content: •Energy performance certificate contains all building information and calculations related to the thermal characteristics of the building •Specific norms apply to the energy performance certificate Module 2: Fullscale thermal imaging services Optional module 3: Energy Performance Certificate (for Buildings) Charging: •Optional module: Energy performance certificates for about 1500 Euro •Prices are similar to competitive offerings
  • 22. Task 3: Service blueprinting Procedure 1 The identification of the service process, that is supposed to be blueprinted 2 The identification of the customer segment or the supposed to experience the service 3 Picturing the service from the customer’s perspective 4 Picturing the actions of the contact employee (onstage and backstage), and/or technology actions 5 Linking the contact activities to the needed support functions 6 Adding the evidence of service for every customer action step
  • 23. Sun Power Service packages This service blueprint had been developed for a specific utility Customers Sales Solar power center Installation partners Local authorities  Processes Activities Open discussion Answering FAQs  Clarification of interest Service description   Legal conditions   Self-financing information   Feasibility study Technical feasibility  Economic feasibility Proposal preparation for subsidies  Proposal development  Self-financing clarification  Informing partners about the proposal evaluations (accepted, waiting list, and rejected) Implementation Scheduling of partners       Installation  Acceptance test Operation   Monitoring  Trouble shooting  - Parties involved in and/or conducting the activities  
  • 24. Task 4: Business plan development Template for business plan development Contents Main content Content elements Executive summary Service description Customer benefits Service objectives Financial key indicators *R eferenz zu DL-Ressourcen Services Service elements Service variants Service documentation Service marketing * F equenz r Service processes Customer activities Internal activities Customer contact points Personal resources Personal resource demand Personal qualifications Personal training & education Personal assessment & compensation Service partners Partner agreements Partner activities Service quality Quality standards Quality control Financial aspects Labor costs Material costs Educational costs Overhead costs Service pricing & controlling Risk assessment Product & service risks Project risks Market and competitive riss Implementation plan Time line Milestones Resource planning Bächli AG Sei te 6 DL-Kon zep t: 5) Q ualitätsstand ards A) Q ua litätsstanda rds de finieren (bs pw. lei stungsbezogen, kommunikati onsbez., bedürf ni sbez.) B) Form der Q ualitä tskontrolle Periodisch, d.h. alle ........ W ochen Ad hoc, d.h. stichpr obenweise (bs pw. Kunden-Feed-back, S ic hproben, Rev iew, Kennzahlen) t C) Ve ra ntw or tliche r Q -D ef./Kontr olle 6) Fina nz aspekte A) Ge schätzt e Koste n pro N achfr age Personalkosten Ma erialkost en t Hardwarekosten Ge inkostenanteil me CHF T otal * * * * * Totale Kosten pro Periode ......... CH F CHF CHF CHF CHF * Bemerkungen
  • 25. Business plan development for energy checks (1) This business plan had been developed for a specific utility Objectives: Short-term objectives: •Conducting energy consulting services •Supporting behavioral and investment related actions for improving the energy efficiency Module 1: Measure and analysis of energy efficiency Long-term objectives •Enabling customers to execute energy efficiency actions themselves •Establishing a platform for self-services for energy efficiency •Access to information on value-added services (energy-efficiency recommendations, energy savings calculator) Module 2: Guiding the implementation actions Contents: •Module 1: Measure and analysis of energy efficiency •Module 2: Guiding the implementation actions •Optional module: online energy accounting Optional module: Online Energy accounting Key financial indicators: •Separate prices for Module 1 and 2 •Yearly cost contribution for online energy accounting depending on the identified energy saving potential
  • 26. Business plan development for energy checks (2) This business plan had been developed for a specific utility Hotels Main implementation steps • Pilot study • Building partner network • Final service development • Market launch and assistance Offices • Transfer experiences of doctor's office to general offices • Pilot study • Market launch and assistance Doctor offices • Final service development • Pilot studies • Market launch and assistance Schools • Pilot study during Feel-the-Energy program • Market launch and assistance Time frame 2010-2014 2012-2016 2011-2015 open Revenues 164‘000 € 607‘500 € 103‘000 € open Investments 210‘000 € 910‘000 € 140‘000 € open 90 Mwh 270 Mwh 50 Mwh open Yearly energy savings
  • 27. Business plan development for energy checks (3) This business plan had been developed for a specific utility Service modules Electricity Module 1: Measure and analysis of energy efficiency Module 2: Guiding the implementation actions Optional module: Online Energy accounting Heating Water
  • 28. Business plan development for energy checks (3) This business plan had been developed for a specific utility Initial situation for hotel energy checks − Energy-saving potential is relative high, and covers different applications (heating, warm water, electricity and so on) − Until now limited number of actions implemented by hotels − If one hotel will demand the energy check, other hotels are very likely to follow − Challenges –technical competencies to conduct the energy check is beyond the competence base of the utility. Utility has to rely on a various partners Short-term objectives − Execution of energy consulting service together with interested hotels − Supporting hotels in changing their behavior and investment-related actions Long-term objectives − Enabling hotels to execute energy efficiency actions themselves − Establishing a platform for self-services for energy efficiency − Access to information on value-added services (energy-efficiency recommendations, energy savings calculator)
  • 29. Business plan development for energy checks (4) This business plan had been developed for a specific utility Target market − Hotels within the regions, which are confronted with an above-theaverage energy consumption and strong interest in saving energy − High market potential, because it is a touristic region Competition − No competition for measuring energy consumption in hotels (today) − No competitor or partner is able to systematically and comprehensively cover energy efficiency in hotels Pricing − Prices are based on individual prices for each module − Basic modules are relative cheap (cost-covering) in order to avoid to high upfront investments. − 60% of the realized energy saving go to the utility within the first years
  • 30. Business plan development for energy checks (5) This business plan had been developed for a specific utility Implementation plan Pilot study with a single hotel Development of the energycheck for hotels Market launch and assistance • 100 WD (Working days) • Costs (about 500 Euro per WD) = 50‘000 Euro Setting-up partners • Identification of potential partners • Developing a partnering concept (quality criteria, cooperating forms) Service development • Standardization of the service delivery processes • Setting-up conditions for service delivery processes • Market capacity is estimated to be 325 hotels Estimated effort and costs • 40 WD • Costs (about 500 Euro per WD) = 20‘000 Euro • Within the first three years about 10% of the hotels can be convinced to use the energy checks (32 hotels) • Following number of hotels are estimated: • 1st year = 8 hotels • 2nd year = 12 hotels • 3rd year = 12 hotels • Estimated effort without consideration of learning effects • 1st year= 40 WD • 2nd year = 60 WD • 3rd year = 60 WD Comment: Resource demand and costs depend strongly on the time frames, when hotels would demand the services. Most probably. Hotel only would demand the service during the off-season or rebuilding periods. Peak management is, therefore, essential for the financial success of the service
  • 31. Business plan development for energy checks (6) This business plan had been developed for a specific utility Service delivery process and activities (1): Effort to conduct the service activities is estimated to take 5 days Process / activities Short description Preparation of the hotel visits • Previous energy consumption analysis and definition of performance indicators Order clarification at the hotel • Checking the technical pre-conditions and economic potentials of the services and modules (e.g., GSM-Standard, offline or online data transmission) • Definition of necessary actions together with selected partners based on a preliminary analysis Order explanation • Price information / explanation of the service, service elements, and modules • Information on involving customers (e.g., hotel energy manager) • Service and consulting contents, guarantees and reliabilities, integration of partners Technical measurement • Installing measurement equipment depending on the modules • Online or offline data transmission Detailed analysis and assessment of energy savings • Data analysis • Discussion of the data together with the customers (e.g. electric (energy) consumers together with the hotel energy managers and technical energy saving potentials identifications) • Detailed measurements with dedicated measurement instruments
  • 32. Business plan development for energy checks (6) This business plan had been developed for a specific utility Service delivery process Process / activities Short description Developing actions & recommendations • Developing potential actions for increasing energy efficiency • Cost-benefit-analysis Report development • Categorizing and describing the recommended actions • Categories • Immediate actions (low costs, independent from other actions, favorable cost-benefit ratio • Short-term actions (economic interesting under the assumption of today’s energy prices or low increases in the energy prices) • Specific actions (implemented together with other actions such as rebuilding or new investments. Might get attractive by higher energy prices) Report presentation • Report – Design and explanation (pdf and ppt) are key enablers • Suitable language, clear suggestions • Discussing the report with the customers Guiding the implementation of tthe actions • • • • Discussion of the actions together with the customers Creating awareness and motivation Supporting the implementation and coordination of the partners Labeling – once the actions pay-off in terms of energy efficiency
  • 33. Customer-driven service innovation approach Customers Supplier of ideas and Challengers Innovation process Definition Definition Tasks − − − − Instruments − Behavioral orientation for segmenting customers − Process mapping (Lifecycle analysis) − Utility layers − Brainwriting Objectives Customer segmentation Customer processes Customer needs Idea generation Co-developer and tester Entwicklung Development − Idea description − Module description − Process description − Check-lists − Modularization − Blueprinting − Resource planning − Development workshops − Prototyping Purchaser and Feedback provider Market launch − Executing market tests − Roll out − Cost and sales supervision − Test markets − Capacity management − Customer observation − Optimization workshops Efficiency Effectiveness Source: Dörner, Gassmann & Gebauer (2011)
  • 34. Thank you very much for your attention