Oral Defense - The Effectiveness, Adoption and Application of New Service Development (NSD) Tools and Techniques (by Dayu JIN)
NUS Presentation Title 2001The Effectiveness, Adoption andApplication of New ServiceDevelopment (NSD) Tools andTechniquesJin DayuSupervisor: A/P Chai Kah Hin and A/P Tan Kay ChuanDepartment of Industrial and Systems Engineering14 Nov 2012
NUS Presentation Title 2001Agenda Introduction Study 1: New Service Development: Research Themes, IntellectualStructure, and Future Research Opportunities Study 2: New Service Development Tools and Techniques: Use andEffectiveness (revised) Study 3: Organizational Adoption of New Service Development Tools Study 4: New Service Development Maturity Model Research Contributions Limitations and Future Research1
NUS Presentation Title 2001Introduction – BackgroundNSD is not an easy task.• Involves adaptive combinations of various elements (Ostrom et al., 2010).• Success rate is as low as 58% (Griffin, 1997).2New Service Development (NSD) is at the heart of service firm’scompetitiveness.• Enhances the profitability, attracts customers, and opens a newmarket (Storey and Easingwood, 1999).Services are becoming the front edge of the economy.• 80+% of jobs in developed countries (Tidd and Hull, 2003).• Huge growth in developing countries (Metters and Marucheck, 2007).
NUS Presentation Title 2001Tools and equipmentProcedures andmethods defining therelationship of tasksPeople with skills,training, andmotivationIntroduction – Motivation3• There are few studies focused on the tools employed for successfulNSD (Menor et al., 2002).• The determinants of tool adoption are unclear (Kettinger et al, 1997).• Formal tools especially designed for NSD are few (Menor et al., 2002).(Source: Paulk et al., 1995; SEI, 2010)
NUS Presentation Title 2001Introduction – Outline and Objectives4Study 1 Literature review of NSDStudy 2 EffectivenessObjective 1: to investigate the usage pattern and theeffectiveness of NSD tools.Study 3 AdoptionObjective 2: to identify antecedents of NSD tooladoption.Study 4 ApplicationObjective 3: to design a service-specific tool—NSDMaturity Model.
NUS Presentation Title 2001New Service Development: Research Themes,Intellectual Structure, and Future ResearchOpportunitiesSTUDY 1
NUS Presentation Title 2001Study 1– Literature Review5Qualitative literature review has its limitations.• Subjective judgements (Kunz and Hogreve, 2011).• Individual interests (Baumgartner and Pieters, 2003; Podsakoff et al., 2005).A number of NSD literature reviews have been conducted (e.g., Johneand Storey, 1998; Menor et al., 2002; de Jong and Vermeulen, 2003; Droege et al., 2009;Papastathopoulou and Hultink, 2012).• Current developments in the field.• Future research opportunities.Bibliometric analysis complements qualitative NSD reviews.• Quantifiability and objectivity (Nerur et al., 2008).• Unveil undetected research themes (Kunz and Hogreve, 2011).To provide a quantitative review of the NSD research and to suggest future researchopportunities based on bibliometric analysis techniques.
NUS Presentation Title 2001Study 1– MethodologyDiscipline: service, innovation management,marketing, operations, and management(Bitner and Brown, 2006; Tronvoll et al., 2011).Step 1: Journal Selection Step 2: Sample PreparationPublished 1981-2010 and with key words -“service innovation”, “service development”,“service design” (Goldsten et al., 2002).Top ten journalsfrom eachdisciplineStep 3: Sample RefinementSample was manually filtered by two authorsand another two NSD scholars.472 articlesCorrect database errors, such as misspelledauthor names and missing publication years.Step 4: Coding and Purification187 articles• Citation analysis• Bibliographic coupling analysis (via MDS)Step 5: Analysis of Source Articles• Co-citation analysis (via factor analysis)Step 6: Analysis of Cited ReferencesCleansed database• Impacts of NSD works• Research themes of NSD• Intellectual structure of NSD6
NUS Presentation Title 2001Study 1– Results & Implications (3)9Co-citation analysis.Increasing sophistication, depth andrigor, and consistency evidence thatNSD has reached the mature stage.
NUS Presentation Title 2001New Service Development Tools and Techniques: Useand Effectiveness.Revision:- Innovativeness removed from framework- Descriptive sections addedSTUDY 2
NUS Presentation Title 2001Study 2– Literature Review10NSD tool is defined as a precisely described method for supportingand improving NSD processes (Brady et al., 1997).Various NSD tools have been proposed by researchers.• Tool plays an enabling role in the innovation process (Chiesa et al., 1996).• Prototype new offerings, identify customer needs, and trouble-shoot problems (Shostack, 1984; Alam, 2002).Existent NSD tool studies have their limitations.• Focus on one particular NSD tool.• Few empirical descriptive studies.• Efficacy of NSD tools is mainly demonstrated by case studyresearch (e.g., Wind et al., 1989; Thomke, 2003; Bitner et al., 2008).To investigate (1) what are the common NSD tools? (2) How are they used inservice firms? and (3) Whether their use improves NSD performance?
NUS Presentation Title 2001Study 2– What are common NSD Tools?11Services result from cross-functional efforts of operations andmarketing management (Zeithaml et al., 2009).• Market tools: to engage customers for a better understanding oftheir needs and commercial potentials.• Development tools: to support development efforts of technicaldesign and testing.Idea generationand screenBusiness andmarket analysisService design Service testingServicelaunchingMarketToolsBrainstorming ●Focus Groups ●Benchmarking ●Scenario Planning ●DevelopmentToolsConcept Testing ● ●Quality Function Deployment(QFD)● ●Service Blueprinting ● ● ●Structured Analysis andDesign Technique (SADT)● ● ●● main role n ● supporting role
NUS Presentation Title 2001Study 2– How NSD Tools are Used? (1)12Industry: financial service.• Financial institutions are active innovators (Menor and Roth, 2008).• Financial services are standardized and available off-the-shelf, andthis provides opportunities to use NSD tools (Easingwood, 1986).Data collection strategy: large-scale survey.• Able to unveil NSD tool usage patterns and effectiveness.• Invitation letter questionnaire 1st/2nd reminder phone call.Location: Singapore and Taiwan.• Subtle differences in NSD practices (Song et al., 2000).• Post-hoc analysis passed Mann-Whitney U test (Siegel and Castellan, 1988).Unit of analysis: NSD projects conducted in recent 3 years.• 75 projects for analysis (Singapore: 34 and Taiwan:41).
NUS Presentation Title 2001Study 2– How NSD Tools are Used? (2)13Overall usage of NSD tools.● Market Tool ● Development ToolMarket tools are heavily used while development tools are under-utilized.
NUS Presentation Title 2001Study 2– How NSD Tools are Used? (3)14Use of NSD tools in different financial service sectors.The fluctuations of tool usage levels across industries are small, yet distinguishable.
NUS Presentation Title 2001Study 2– How NSD Tools are Used? (4)15Use of NSD tools in different NSD stages.Idea generationand screenBusiness andmarket analysisService design Service testingServicelaunchingMarketToolsBrainstorming 71% 47% 68% 12% 20%Focus Groups 39% 53% 45% 39% 29%Benchmarking 45% 75% 49% 25% 16%Scenario Planning 53% 57% 45% 28% 17%DevelopmentToolsConcept Testing 39% 24% 42% 39% 21%Quality Function Deployment(QFD)17% 17% 58% 29% 13%Service Blueprinting 15% 22% 54% 37% 34%Structured Analysis andDesign Technique (SADT)41% 38% 69% 31% 21%Market tools are used more frequently in early stages while development tools aremore likely to be used in later stages.
NUS Presentation Title 2001Study 2– Whether NSD Tools are Useful?Measurement quality.• Reliability: α > 0.7, composite reliability > 0.7 (Nunnally, 1978).• Convergent validity: AVE > 0.5 (Fornell and Larcker, 1981).• Discriminant validity: correlation < 𝐴𝐴𝐴 (Fornell and Larcker, 1981).Data analysis method: Partial Least Squares (PLS).• Ideal for study which is exploratory in nature (Wold, 1985).• Well handle small sample size (Chin et al., 2003).16Dependent Variable Predictor β t-ValueOperational Performance(R2=0.10)Development tool usage 0.02 0.29Market tool usage 0.29 2.53Product Performance(R2=0.30)Development tool usage 0.08 0.91Market tool usage -0.08 1.09Operational Performance 0.55 5.09Market tool usage positively influences operational performance.Operational performance positively influences product performance.Use of NSDdevelopment toolsUse of NSD market tools Product performanceOperational performanceH1a (+)H2b (+)H3 (+)H1b (+)H2a (+)
NUS Presentation Title 2001Organizational Adoption of New Service DevelopmentToolsSTUDY 3
NUS Presentation Title 2001Study 3– Literature Review17NSD tools have not been widely adopted.• Study 2 shows that only 3 tools are used by 70%+ respondents.• Tool usage level is not high in service industry (Barczak et al., 2009).• Service firms are less likely to introduce new elements (e.g., tools)(Damanpour and Gopalakrishnan, 2001).To conceptualize and empirically test a theory-driven model thatattempts to explain antecedents of NSD tool adoption.Ajzen’s (1985) Theory of Planned Behaviour is adapted.• Popular psychological model with high predictive power (Ajzen, 2011).• Frequently used to study organizational adoption of processinnovation.
NUS Presentation Title 2001Study 3– Methodology19Data collection is conducted in conjunction with Study 2.• 79 responses: 34 from Singapore and 45 from Taiwan.• Post-hoc analysis passed Mann-Whitney U test (Siegel and Castellan, 1988).Data analysis method: PLS.• Competitive pressure, compatibility, and resource commitment areformative constructs.Measurement quality.• Reflective : reliability, convergent validity, discriminant validity.• Formative: content validity, indicator reliability, constructreliabilityModel fit.• GoFmodel (0.62) > GoFlarge (0.36) (Wetzels et al., 2009).
NUS Presentation Title 2001Study 3– Results & Implications (1)20Antecedents of adoption intention.• A, SN, and PBC positively influence adoption intention of NSD tools.• Explain 47% of the total variance.TPB has high predictive power for process innovation adoption.It is reasonable to apply TPB at firm level.Dependent Variable Predictor β t-ValueBehavioral intention(R2 = 0.47, F2 = 0.41)Attitude 0.26 2.30Subjective norm 0.22 1.86Perceived behavioral control 0.34 3.08AdoptionIntentionAttitudeSubjective NormPerceivedBehaviorControlH1 (+)H2 (+)H3 (+)
NUS Presentation Title 2001Study 3– Results & Implications (2)21Antecedents of A, SN, and PBC.• Perceived usefulness and ease of use positively influence A.• Only competitive pressure positively influence SN.• Compatibility and resource commitment positively influence PBC.Scholars who develop new tools should balance trade-offs among these antecedents.Managers should allocate adequate resources whilebeing cautious about competitors’ influences.Dependent Variable Predictor β t-ValueAttitude(R2 = 0.54, F2 = 0.40)Perceived usefulness 0.56 7.14Perceived ease of use 0.27 3.27Subjective norm(R2 = 0.30, F2 = 0.27)Supplier coercive pressure -0.01 0.19Competitive pressure 0.43 3.34Customer coercive pressure 0.18 1.43Perceived behavioral control(R2 = 0.50, F2 = 0.39)Compatibility 0.45 5.27Resource commitment 0.40 3.69AttitudeSubjectiveNormPerceivedBehaviorControlPerceivedUsefulnessPerceivedEase of UseH4 (+)H5 (+)SupplierCoercivePressureCompetitivePressureCustomerCoercivePressureH7 (+)CompatibilityResourceCommitmentH9 (+)H10 (+)
NUS Presentation Title 2001New Service Development Maturity ModelSTUDY 4
NUS Presentation Title 2001Study 4– Literature Review22To develop a maturity model which facilitates the evaluation ofNSD process and shows direction for continuous improvement.The execution quality of NSD process is critical.• Good execution reduces miscommunications, eliminates non-value-added activities, and improves project flows (Froehle et al., 2000).Maturity model can be used as a process management tool.• High maturity leads to consistent and repeatable processes (Paulk etal., 1995).• Maturity model assesses current situation and provides guidelinesfor continuous improvement (Niessink et al., 2005).There is a shortage of NSD process assessment tool.• Determining project execution capability is something less than ascience but more of an art (Crawford, 2002).
NUS Presentation Title 2001Study 4– Methodology23-1• Aim: (1) assess current NSD process; and (2) diagnose opportunities forcontinuous improvement.• Audience: organizational unit which is responsible for NSD.Step 1: Define aim and specify audience• Four process areas are solicited from NSD success factors: strategymanagement, process formalization, knowledge management, andcustomer involvement.• Maturity dimensions are constructed to capture critical aspects.Step 2: Select process areas• Five maturity levels are constructed for each process area by referring torigorous theories which model evolutionary path of capabilities.Step 3: Select maturity levels• Determine behavioural characteristics associated with different maturitylevels of each process area.Step 4: Formulate maturity grid
NUS Presentation Title 2001Study 4– Methodology23-2
NUS Presentation Title 2001Study 4– NSD Maturity Model (1)24Strategy management.• Capability of strategic planning of NSD.• Maturity dimensions: new product strategy (Cooper and Edgett 2010).• Maturity levels: four phases of strategic management (Gluck et al. 1982).Goals and objectives Arenas of focus Resource allocationInitial No clear goal or objectiveNo market researchNo focus of marketsNo established practicesFinancialplanningDon’t screw upInformal market researchSimilar markets as competitorsInformally documented practicesfor single projectForecast-basedplanningDon’t let competitors gain toomuch of an advantage of usFormal market researchNiche marketsFormally documented practicesfor almost all projectsExternallyorientedplanningDo better than competitorsIn-depth market researchMarkets with high synergyFormally documented practiceswhich are institutionalizedStrategicmanagementDo things that competitorscannot doAdvanced market researchNew markets by creating needsFormally documented practicesto improve effectiveness
NUS Presentation Title 2001Study 4– NSD Maturity Model (2)25Process formalization.• Capability of executing formal NSD processes.• Maturity dimensions: process formality (Avlonitis et al., 2001).• Maturity levels: software capability maturity model (Paulk et al., 1995).System behavior Documentation Assignment of responsibilityInitial None None NoneManagedInformal ruleBasic metricsInformal documentationIntermediate-/summary-levelBasic definition for key membersDefinedFormal ruleInformal metricsFormal documentationSummary-/detail-levelFormal definition for allmembersQuantitativelymanagedInstitutionalized rulesFormal metricsInstitutionalized documentationDetail-levelFormal definition for allmembers through mandateOptimizingInstitutionalized rulesFormal metricsInstitutionalized documentationDetail-levelFormal definition for allmembers through mandate
NUS Presentation Title 2001Study 4– NSD Maturity Model (3)26Knowledge management.• Capability of managing skills and know-how pertaining to NSD.• Maturity dimensions: KM (Chait, 2000; Gold et al., 2001)/KMMM (Pee et al., 2008).• Maturity levels: 4I model (Crossan et al., 1999).Culture Processes TechnologyInitial Management is not aware None NoneIntuitingManagement becomes awareValued by none team memberTacit personal experienceNo sharingIndividualIndividual knowledgerepositoriesInterpretingManagement recognizesValued by some team membersExplicit personal experienceInformal sharingPersonal networkPersonal network knowledgerepositoriesIntegratingManagement makescommitmentsValued by all team membersBasic trainingCollective understandingFormal sharingNSD teamNSD team knowledgerepositoriesInstitutionalizingInstitutionalizedTeam members find it easyAdvanced trainingOrganizational rulesInstitutionalized sharingService firmEnterprise-wide knowledgerepositories
NUS Presentation Title 2001Study 4– NSD Maturity Model (4)27Customer involvement.• Capability of engaging customers in NSD.• Maturity dimensions: customer involvement (e.g., Martin and Horne, 1995;Kaulio, 1998; Lagrosen, 2005).• Maturity levels: customer involvement continuums (Ives and Olson, 1984;Alam, 2002; Nagele, 2006).Customer role Stage MethodNo involvement Pure buyer None NoneInvolvement byobservationObject of study Only in early stage. Indirect need analysis techniques.Involvement byadviceSource of information In early and late stages.Direct and structured needanalysis techniques.Involvement bydoingCo-designer Through all NSD stages.Direct and unstructured needanalysis techniques and co-development methods.Involvement bystrong controlPartnerMaintain long-termrelationship with customers.Long-term relationshipmaintenance methods.
NUS Presentation Title 2001Study 4– Implementation28
NUS Presentation Title 2001RESEARCH CONTRIBUTIONS
NUS Presentation Title 2001Research Contributions29Theoretical PracticalStudy 1(LiteratureReview)Bibliometric analysis reveals researchthemes, intellectual structure, andfuture research directionsMajor outlets of NSD work have beenidentified.Study 2(Effectiveness)Understanding of NSD tools has beenadvanced as for the usage pattern andeffectiveness.Managers can refer to our research toidentify appropriate NSD tools whichcan be used for certain purpose.Study 3(Adoption)TPB is extended to predictorganizational adoption behavior.Managers should pay attentions to theidentified adoption antecedents so as tofacilitate the diffusion of NSD tools.Study 4(Application)Four process areas crucial to NSDsuccess have been identified.NSDMM can be used to analyze andimprove NSD processes.
NUS Presentation Title 2001LIMITATIONS & FUTURE DIRECTIONS
NUS Presentation Title 2001Limitations & Future Directions30Limitation.• Size and nature of the sample do not allow us to make robustinferences.• Results are susceptible to CMV due to key informant approach.• NSDMM has yet to be tested in service firms.Future directions.• Review of NSD field has identified several research themes whichneed to be further strengthened.• More comprehensive reviews on NSD tools.• Empirically test NSDMM in the corporate setting.