Service implementation and management requires a keen
understanding of the organization and the process of development. Executives
that understand these steps are likely to realize higher levels of success when
designing new services and creating new revenue streams. Ignoring any aspect of
the process could result in poor design, poor implementation, ineffective
customer interface or poor cultural fit that loses capital and investments.
Ideas for service innovation can come from a variety of
sources ranging from individual employees to customer feedback. When such ideas
are brought forward they are often screened to ensure feasibility and fit with
the organization’s strategic plan. As a basic process the organization develops
the concepts, analyzes its utility, designs the product and then launches it into
the market (Johnson, et. al., 2000). The process is cyclical in that feedback
from customers and improvements in design encourages produce relevancy.
No matter how effective innovation is it must have some
value to customers. This value can be real or imaginary in terms of a cost or
social benefit. Since these values are often dependent on individual perception
some organizations consider using a more systematic approach to possible
revenue streams.
The value of the product to the customer is one of the most
important ways of determining whether or not the successes of such innovations
are likely. Some organizations use an equation to determine the relative value
of the product or service. An analysis helps to maintain a level of objectivity
when making important strategic offerings.
Value = Results produced for the customer + process
quality/price to customer + costs of acquiring the service.
In such an equation the results produced are based on the
value to the customer, the process quality is the value of the delivery system,
price to the customer is its monetary cost, and costs of acquiring the service
is the amount of effort in obtaining the product. Each of these factors is
analyzed in terms of their quantitative value in order to determine the market
value of the product or service.
Organizations that have moved online and capitalized in the
virtual e-commerce market have created dominance in commercial selling and
activity. With a proper customer interface and a strong distribution network
such organizations allow customers to complete much of their shopping and
effort themselves. More importantly the amount of actual customer cost in terms
of effort has been reduced significantly with improved search engine
performance.
Technology has also been beneficial in developing efficient
service quality by bridging the virtual and physical worlds. Ensuring that the
entire process of purchasing online to delivery at the door is efficient raises
the perceived value of the service. The easier the process the more
satisfaction created. Some organizations might use the SEVQUAL approach which
includes analysis of reliability, responsiveness, assurance, empathy and
tangibles (Fitzscommon & Fitzscommon, 2011).
The nature of the Internet also creates world integration
of services, ideas, and interaction. Despite this growing trend specific
cultures still have their own particular customs. Organizations that bridge
these cultural gaps to sell products seek ways of understanding how to not only
operate businesses but how to manage the labor thus associated. Gert Hofstead (n.d.)
conducted a survey that assessed the work-related values in fifty countries
that used the following five dimensions of Power Distance (equality),
Individualism (individual treatment), Masculinity (traditional work roles),
Uncertainty Avoidance (ambiguity tolerance) and Long-Term Orientation (time
commitment). Each of these aspects shed lights of how local customers impact business imperatives.
The success of service innovation and development rests on
understanding how new developments are processed within organizations, assessed
for value, implemented in the market, and relate to specific cultural needs of
the target customers. Understanding this chain of development helps to create
executive awareness of the overall wider steps to successful service
development. Failure is more likely to occur when steps are either skipped or
discounted in development.
Johnson, S., Menor, L. Roth, A. & Chase, R. A critical
evaluation of the new service development process: Integrating service
innovation and service design. In New Service Development, eds.
Fitzsimmons and
Fitzsimmons. Thousand Oaks, Calif.: Sage Publications, 2000, pp.1-32.
Fitzsimmons, J. & Fitzsimmons, M. (2011). Service
Management: Operations, Strategy, Information Technology (Seventh Edition).
NY: McGraw-Hill.
Hofstead, G. (n.d.) Cultural Insights. Retrieved April 2nd,
2013 from http://geert-hofstede.com/
