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Strategy based service business development for sm es
This document outlines a strategy-based approach to developing product-service bundles for small and medium enterprises. It discusses integrating IT-based services systematically to satisfy customer needs. Standard services are traditionally added to products, while smart services are embedded in core products and have greater potential to adapt to customers. The document proposes a service concept and engineering approach to developing complex offerings that combine physical goods and services.
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Strategy based service business development for sm es
- 1. 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 1 -‐
- 2. AGENDA 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 2 -‐
- 3. AGENDA 0. Introduc1on to comprehensive service systems 1. What are IT-‐based services? 2. Systema1c Service Extension 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 3 -‐
- 4. INTEGRATION OF SERVICE SHARES “…..innova0on consists in carrying out New Combina0ons…..“ SCHUMPETER: THE GRAND OLD MAN IN INNOVATION THEORY 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. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 4 -‐
- 5. SERVICE CONCEPT – INTEGRATION OF SERVICE SHARES A. Customer needs B. Design of the offer Primary Core service/ needs product Secondary Suppor0ng, needs services The Service Concept shows the approach to sa1sfying customer needs with services. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 5 -‐
- 6. PRODUCT – SERVICE SYSTEMS Core physical goods Product 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 oen become a component in an umbrella service concept. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 6 -‐
- 7. STANDARD SERVICE VS. SMART SERVICE „Standard Services“ „Smart Services“ S1 S2 S1 S2 P Core P Product S4 S3 S4 S3 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 7 -‐
- 8. STANDARD SERVICE VS. SMART SERVICE „Standard Services“ • Tradi1onal standard services use S1 S2 service efforts by adding them to the product (physical product or core service) P • This concept refers to the S4 S3 customer needs along the customer contact cycle before, during and aer the use of the product. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 8 -‐
- 9. STANDARD SERVICE VS. SMART SERVICE • The so called Smart services are „Smart Services“ embedded in the core product itself • The main difference between S1 S2 standard and smart services is in the P potenRal of smart services to enable S4 S3 service providers to establish closer Res with customers by iden1fying customer needs intelligently by using IT. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 9 -‐
- 10. 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 10 -‐
- 11. HOLISTIC SERVICE OFFERINGS Best PracRce: Die Heidelberg Druckmaschinen AG S1 sSn sS1 S2 sS2 Sn S3 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/ h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 11 -‐
- 12. AGENDA 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 12 -‐
- 13. INCREASING IT USAGE IN SERVICES 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. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 13 -‐
- 14. IT-‐ BASED SERVICES Soware Service Through IT Integrated hybrid IT-‐accompanied IT supported services Products services Smart services In Anlehnung an Fähnrich und Van Husen 2009 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 14 -‐
- 15. AGENDA 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 15 -‐
- 16. SERVICE EXTENSIONS STRATEGIES (1/2) h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 16 -‐
- 17. SERVICE EXTENSIONS STRATEGIES (2/2) three-‐dimensional Service Development graph Integra1ng IT-‐based services into the service umbrella All forms of smart services can be integrated in the product core to Adding classical increase customer (value added) value and secure services. rela1onships. systema1c strategic service extensions based on the three kinds of service types h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 17 -‐
- 18. AGENDA 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 18 -‐
- 19. SERVICE DEVELOPMENT IN PRACTISE How many months pass from the finding of an idea to market implementaRon of a new service? more than 12 months 0 % 6 to 12 55 % months 3 to 6 30 % months less than 15 % In which form are Service Development 3 months processes formalized? Formalized 21% process, well Formalized documented process, but not 12% documented form Process 18% marginal Expert Interviews, 2009 formalized No formalizaRon 48% N=33 (ad hoc) h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 19 -‐
- 20. AGENDA 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 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 20 -‐
- 21. 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.“ SERVICE SERVICE ENGINEERING CREATION sSn S1 Idea-‐ Require-‐ Service Im-‐ Comprehensive ment plement-‐ sS1 crea1on Design Product-‐, Service and Analysis a1on S2 Systems assess-‐ ment sS2 Sn S3 Bullinger et al., Service Engineering – Methodical Development of New Service Products, Int. J. Produc1on Economics 85 (2003) 275–287, S. 2 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 21 -‐
- 22. STRATEGY BASED SERVICE ENGINEERING APPROACH Outcome of a research project with pilot studies Pilot tes1ng Strategy Audit Idea Genera1on Business Service Concept and Service and Assessment Case (product – service Assessment Descrip1on bundling) Strategic Analysis Service CreaRon Service Design Service Management ………… ………… ………… ………… Input-‐, documents und – ………… ………… ………… ………… ………… ………… ………… ………… sources (Marke1ng …) Tools and Methods Toolbox (Choice depends on innova1on culture, habits and strategy) assignments, templates and checklists h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 22 -‐
- 23. REFERENCEPROCESS SERVICE ENGINEERING -‐ IBI Entwicklung neuer Dienstleistungen Market Research and Marke0ng Issues Strategic Idea Business Service Service-‐ Analysis Genera1ng Cases Concept Management • 1 Market Ideen-‐ Informa1on gewinnung All these stages are defined Input-‐ • Strength-‐ by : documents, Weaknesses Ideen-‐ (SWOT) auswahl 1.) specific inputs (documents and -‐sources, • Objec1ves/ results of the step before – e.g. Strategies: Ideen-‐ -‐ Strategic market research, customer bewertung Search fields sa1sfac1on survey etc.) -‐ ……………… Idea DescripRon h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 23 -‐
- 24. REFERENCEPROCESS SERVICE ENGINEERING -‐ IBI Entwicklung neuer Dienstleistungen Market Research and Marke0ng Issues Strategic Idea Business Service Service-‐ Analysis Genera1ng Cases Concept Management • 9 Windows 2 Ideen-‐ Tool 2.) a number or set of recommended gewinnung 635 brain • Ideen-‐ methods and tools (SWOT analysis, Tools and Methods awri1ng uswahl customer contact circle, porrolio Customer Toolbox • Contact Circle analysis, 9 Windows operator, etc.) Ideen-‐ bewertung Value Benefit and 3.) Analysis a specific outcome and deliverables (e.g. Assessemt search box for targeted genera1ng of Assignments porrolio Formulares und Checklists ideas – phase 1) ………. Idea descripRon 3 h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 24 -‐
- 25. REFERENCEPROCESS SERVICE ENGINEERING -‐ IBI Development of new Services Marke1ngplan, -‐concept Market research and Marke1ng (Customer Integra1on) Strategic Analysis of Pilot the offer Genera1ng and Rough Concept with Strategy Audit Detailled Service evalua1ng Ideas Business Cases und Service Concept for new services Assessment Strategic Analysis Service CreaRon Service Design Service Management Market Entry …………. …………. …………. …………. Cont. Improvement …………. …………. …………. …………. …………. …………. …………. …………. Toolbox Toolbox h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 25 -‐
- 26. FOR EACH STRATEGIC OBJECTIVE THE RIGHT SERVICE STRATEGY Maintenance services h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 26 -‐
- 27. REFERENCEPROCESS SERVICE ENGINEERING -‐ IBI Development of new Services Marke1ngplan, -‐concept Market research and Marke1ng (Customer Integra1on) Strategic Analysis of Pilot the offer Genera1ng and Rough Concept with Strategy Audit Detailled Service evalua1ng Ideas Business Cases und Service Concept for new services Assessment Strategic Analysis Service CreaRon Service Design Service Management Market Entry …………. …………. …………. …………. Cont. Improvement …………. …………. …………. …………. …………. …………. …………. …………. Toolbox Toolbox h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 27 -‐
- 28. CUSTOMER CONTACT CIRCLE Information Phase: Decision- and Project Phase: Usage Phase: Awareness and Purchasing Phase Customer Service / Re- Interest Integration Purchase / Renewal …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… U I services …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… …………………………… P D …………………………… …………………………… …………………………… …………………………… h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 28 -‐
- 29. CUSTOMER CONTACT CIRCLE Information Phase: Decision- and Project Phase: Usage Phase: Awareness and Purchasing Phase Customer Service / Re- 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. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 29 -‐
- 30. CUSTOMER CONTACT CIRCLE Information Phase: Decision- and Project Phase: Usage Phase: Awareness and Purchasing Phase Customer Service / Re- 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. . h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 30 -‐
- 31. CUSTOMER CONTACT CIRCLE Information Phase: Decision- and Project Phase: Usage Phase: Awareness and Purchasing Phase Customer Service / Re- 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.. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 31 -‐
- 32. CUSTOMER CONTACT CIRCLE Information Phase: Decision- and Project Phase: Usage Phase: Awareness and Purchasing Phase Customer Service / Re- Interest Integration Purchase / Renewal • Service/re-‐purchase/renewal: When a customer returns with a problem or with the inten1on to re-‐purchase/renew. h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 32 -‐
- 33. AGENDA 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) 5. Systema1c development of product-‐service bundles – Strategy based Service Engineering Approach of the IBI-‐Department 6. Summary and Outlook h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 33 -‐
- 34. 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 h)p://iwi.campus02.at IESS 2011 Genf 4-34 © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 34 -‐
- 35. CODESIGN SERVICE – SOFTWARE SYSTEM h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 35 -‐
- 36. SEQUENTIAL VS. PARALLEL DEVELOPMENT Time Costs Quality Co-‐Design Parallel development h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 36 -‐
- 37. THANKS FOR YOUR ATTENTION! International Service Research Conference Ernst Kreuzer University of Applied Sciences CAMPUS 02 Department of Information Technologies & Business Informatics h)p://iwi.campus02.at IESS 2011 Genf © 2011CAMPUS 02 Informa1ontechnologies & Business Informa1cs FH-‐Prof. MMag. Dr. Ernst Kreuzer, MSc Seite -‐ 37 -‐