SERVICE INNOVATION & DEVELOPMENT

for innovation Types of innovation/development E-Service

Need

Innovation in services
Services innovation Challenges in measuring - make it hard to assess Nature of services 4 unique characteristics

Traditionally manufacturing sector - service sectors - less attention

Innovation productivity growth, skills, investment, enterprise and competition

Innovation in services
Mostly - small & incremental changes in process and procedures Easier to imitate Do not require much R&D Do not need to invest much in fixed asset Do not need to spend much on buying patents and licenses
3

something new

Dimensions of innovation in services

benefit (profits, personal growth etc) an application component

You Innovate to:

Improve products and services retain existing and win new customers find new ways to solve a problem or do something

save money

enhance your jobs

make a task easier, faster and/or more enjoyable

increase your promotability

5

achieve great results and have fun

Forms and Sources of Innovation

incremental or radical

result from technology transfer or development of new business models

Innovation can be technological or organizational

Hard vs. Soft Innovation

Hard innovation R&D - strategic investment in innovation:

Radical innovation (high-risk-high-return) - new customers, underserved markets, going a step above, new class of services, fill an obvious gap in the marketplace, steer markets in new directions Incremental innovation (low-risk-low-return) - knowledge and resources , modest technological changes to remain competitive

Soft innovation - clever, insightful, useful ideas :

Anyone in a company or organization can have a great idea.

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Managing for results: lessons from public management reform in Malaysia

Noore Alam Siddiquee
New political leadership - Dr Mahathir Mohamad - strong enthusiasm for administrative innovations & introduced radical policy changes - Keen to promote rapid socio-economic development
Reforms essential to restructure & reorient public sector - perform its new and emerging roles effectively.

National Development Policy & Vision 2020

Growing competition - destination for international trade - crucial to enhance national competitiveness - administrative reforms and innovations. Transform traditional public service into a dynamic, customer-driven, and result-oriented administration (Sarji, 1996) New pay & performance appraisal system, total quality management, ISO 9000 series, benchmarking, performance measurement, modified budgeting system (MBS) and the clients charter.
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Public management reform in Malaysia : Recent initiatives and experiences

Noore Alam Siddiquee

Public sector - inefficiency, red tape, lack of flexibility, ineffective accountability and poor performance.

Contemporary administrative reforms - new public management (NPM) advocates - application of market logic within the public sector for solving problems of big and inefficient government.

Decentralization of authority contracting out and quasi-privatization;

Management culture - centrality of citizens/customers & accountability for results

NPM as a generic model :

(osborne and gaebler, 1992; hood, 1995; pollitt and bouckaert, 2000)

Downsizing (reducing budget and staff of public agencies), deregulation & employee empowerment

Improving quality of regulation and the management of human resources Private sectorstyle management and flexibility;
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Outcomes and results rather than inputs and processes

Public management reforms in Malaysia (1981-2005) The Malaysia incorporated policy Downsizing the civil service Service process reengineering Personnel and financial management reforms Clients charter and public accountability Quality and productivity improvement drives IT culture and e-government
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Strategy, Product, and Process Innovation

Strategy Innovation - customer value to meet newly emerging customer needs, add additional value, and create new markets and new customer groups for the sponsoring company.

Product Innovation - new way to solve the customer's problem - through a new product or service development - benefits both parties

Process Innovation - increase profitability, reduce costs, improve efficiency, raise productivity, and increase employee job satisfaction
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New service development process

1) Front end planning Business strategy development or review New service strategy development Idea generation: Screen ideas against new service strategy Concept development and evaluation: Test concepts with customers and employees Business analysis: Test for profitability and practicability

2) Implementation Service development and testing: Conduct service prototype test Market testing: Test service or other marketing mix elements Commercialization Post introduction evaluation
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Types of new services

Major service innovations

New services for markets as yet undefined Fedex,e-bay

Major process innovation

New services for a market that is already served by existing products that meet the same generic needs On-line transaction, new retailing models

Product line extension

Offer existing customers - service not previously available Addition to current product lines by existing firms Retail banks that adds insurance services, health club offering nutrition classes, airline offering fax, phone and internet service during flight new ways of delivering products - more convenience & different experience for existing customer or attracting new customer who find the traditional approach unappealing Barnes & nobles added new internet subsidiary barnesandnoble.Com to compete with amazon.Com

Process line extensions 16

Supplementary service innovation

Adding new facilitating or enhancing service elements to existing core service Adding parking at a retail site, Agreeing to accept credit cards for payments, Restaurant adding new menu items, Airline offering new routes

Service improvements

Most common type of innovations Changes in features of services that are already offered: Airline adding power sockets for laptops in its business-class cabins, Faster service process, Extended hours of service

Style changes
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Represent the most modest service innovation: Changing color scheme of restaurants, Website redesign, New uniforms for employees