This article contains wording that promotes the subject in a subjective manner without imparting real information.(May 2011) |
Service innovation is used to refer to many things. These include but not limited to:
The Finnish research agency TEKES defines service innovation as "a new or significantly improved service concept that is taken into practice. It can be for example a new customer interaction channel, a distribution system or a technological concept or a combination of them. A service innovation always includes replicable elements that can be identified and systematically reproduced in other cases or environments. The replicable element can be the service outcome or the service process as such or a part of them. A service innovation benefits both the service producer and customers and it improves its developer's competitive edge. A service innovation is a service product or service process that is based on some technology or systematic method. In services however, the innovation does not necessarily relate to the novelty of the technology itself but the innovation often lies in the non-technological areas. Service innovations can for instance be new solutions in the customer interface, new distribution methods, novel application of technology in the service process, new forms of operation with the supply chain or new ways to organize and manage services."
Another definition proposed by Van Ark et al. (2003) states it as a "new or considerably changed service concept, client interaction channel, service delivery system or technological concept that individually, but most likely in combination, leads to one or more (re)new(ed) service functions that are new to the firm and do change the service/good offered on the market and do require structurally new technological, human or organizational capabilities of the service organization." This definition covers the notions of technological and non-technological innovation. Non-technological innovations in services mainly arise from investment in intangible inputs.
Many literatures on what makes for successful innovations of this kind comes from the New Service Development research field (e.g. Johne and Storey, 1998; Nijssen et al., 2006 ). Service design practitioners have also extensively discussed the features of effective service products and experiences. One of the key aspects of many service activities is the high involvement of the client/customer/user in the production of the final service. Additionally, firms cooperate with both horizontal (e.g., competitors) and vertical (e.g., suppliers) business partners in order to develop relevant service innovations. Without this co-production (i.e. interactivity of service production), the service would often not be created. This co-production, together with the intangibility of many service products, causes service innovation to often take forms rather different from those familiar through studies of innovation in manufacturing. Innovation researchers have, for this reason, stressed that much service innovation is hard to capture in traditional categories like product or process innovation, and that its effects are diverse. [1] The co-production process, and the interactions between service provider and client, can also form the focus of innovation. A growing number of professional association have service sections that promote service innovation research, including INFORMS, ISSIP, and others.
Thus den Hertog (2000) who identifies four “dimensions” of service innovation, takes quite a different direction to much standard innovation theorizing.
In practice, the majority of service innovations will almost certainly involve various combinations of these four dimensions. For instance:
An elaboration of this model to suggest six dimensions of innovation was developed in the course of work on creative sectors, by Green, Miles and Rutter. As well as Technology and Production process, four dimensions were specified whose linkages are very strong in creative sectors like videogames, advertising and design: Cultural Product, Cultural Concept, Delivery and User Interface.
The service innovation literature is surprisingly poorly related to the literature on new product development, which has spawned a line of study on new service development. This often focuses on the managerially important issue of what makes for successful service innovation. See for example Johne and Storey (1998), 4 who reviewed numerous New Service Development studies.
Ian Miles of the Manchester Institute of Innovation Research (MIoIR), The University of Manchester, is one of the scholars on the study of 'Service Innovation'. He coined the term in his 1993 article in the journal FUTURES, (Vol. 25, No. 6, pp. 653–672,) . He listed a series of characteristic features of services, and associated these with particular types of innovation. Such innovations are often aimed at overcoming problems associated with service characteristics like the difficulty in demonstrating the service to the client, or the problems in storing and building up stocks of the service.
After Miles (1993), numerous studies were made, one of the more recent studies that reaches similar conclusions was from a qualitative survey of service organizations by Candi (2007). [2] ) Note that the “product” related innovations below have a lot in common with new service development as discussed above. In the following list, features of services are linked to innovation strategies by the symbol >>>.
Additionally, a number of general tendencies in the innovation process in services have been noted. These include:
In the traditional product-service system (PSS) business model, industries develop product with value-added service instead of single product itself, and provide their customers services that are needed. In this relationship, the market goal of manufacturers is not one-time product selling, but continuous profit from customers by total service solution, which can satisfy unmet customers’ needs. Most of PSS systems focus on ‘human-generated or human-related data’ instead of ‘machine-generated data or industrial data’, which may include machine controllers, sensors, manufacturing systems, etc. Early work using web-based product monitoring for remote product services including GM OnStar Telematics, Otis Remote Elevator Maintenance (REM), and GE Medical InSite during the 1990s.
In recent years policy makers have begun to consider the potential for promoting services innovation as part of their economic development strategies. Such consideration has, in part, been driven by the growing contribution that services activities make to national and regional economies. It also reflects the emerging recognition that traditional policy measures such as R&D grants and technology transfer supports have been developed from a manufacturing perspective of the innovation process.
The European Commission and the OECD has been particularly active in seeking to generate reflection on services innovation and its policy implications. This has resulted in studies such as the OECD's reports into knowledge intensive services, and the European Commission Expert Group report on services innovation – the report of the group, "Fostering Innovation in Services" [3] as well as various TrendChart studies. [4] The European Commission has also launched a number of Knowledge Intensive Services Platforms designed to act as laboratories for new public policies for services innovation. Few economic development agencies at the member state level, and fewer still at the regional level, have translated this new thinking on services innovation into policy action. Finland is an exception, where knowledge intensive business services have been a focus of much regional work (esp. the Uusimaa region).
Finland has been active in thinking about the policy implications of services innovation. This has seen TEKES – the Finnish Funding Agency for Technology and Innovation – launch the SERVE initiative, designed to support ‘Finnish companies and research organizations in the development of innovative service concepts that can be reproduced or replicated and where some technology or systematic method is applied.’ a Germany has also undertaken initiatives for services R&D. Canada and Norway have programs as well.
Ireland has been considering a services-focused innovation policy, with Forfás – its national policy and advisory board for enterprise, trade, science, technology and innovation – having undertaken a review of Ireland's existing policy and support measures for innovation, and outlined options for a new policy and framework environment in support of service innovation activity.
At the regional level, limited information is available on how Europe's regions are responding to the challenges presented by service innovation. [CM International] has recently published a European survey on services innovation and regional policy responses. The results of this suggest that very few regions in France, the UK and Ireland have an explicit focus on services and innovation. Many do, however, express a desire to address this issue in the coming future.
A business model describes how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.
Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a new or changed entity realizing or redistributing value". Others have different definitions; a common element in the definitions is a focus on newness, improvement, and spread of ideas or technologies.
A service is an act or use for which a consumer, firm, or government is willing to pay. Examples include work done by barbers, doctors, lawyers, mechanics, banks, insurance companies, and so on. Public services are those that society as a whole pays for. Using resources, skill, ingenuity, and experience, service providers benefit service consumers. Services may be defined as intangible acts or performances whereby the service provider provides value to the customer.
In business and engineering, product development or new product development covers the complete process of bringing a new product to market, renewing an existing product and introducing a product in a new market. A central aspect of NPD is product design, along with various business considerations. New product development is described broadly as the transformation of a market opportunity into a product available for sale. The products developed by an organisation provide the means for it to generate income. For many technology-intensive firms their approach is based on exploiting technological innovation in a rapidly changing market.
Technology transfer (TT), also called transfer of technology (TOT), is the process of transferring (disseminating) technology from the person or organization that owns or holds it to another person or organization, in an attempt to transform inventions and scientific outcomes into new products and services that benefit society. Technology transfer is closely related to knowledge transfer.
A business process, business method or business function is a collection of related, structured activities or tasks performed by people or equipment in which a specific sequence produces a service or product for a particular customer or customers. Business processes occur at all organizational levels and may or may not be visible to the customers. A business process may often be visualized (modeled) as a flowchart of a sequence of activities with interleaving decision points or as a process matrix of a sequence of activities with relevance rules based on data in the process. The benefits of using business processes include improved customer satisfaction and improved agility for reacting to rapid market change. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos.
Software prototyping is the activity of creating prototypes of software applications, i.e., incomplete versions of the software program being developed. It is an activity that can occur in software development and is comparable to prototyping as known from other fields, such as mechanical engineering or manufacturing.
Technological change (TC) or technological development is the overall process of invention, innovation and diffusion of technology or processes. In essence, technological change covers the invention of technologies and their commercialization or release as open source via research and development, the continual improvement of technologies, and the diffusion of technologies throughout industry or society. In short, technological change is based on both better and more technology.
Operations management is concerned with designing and controlling the production of goods or services, ensuring that businesses are efficient in using resources to meet customer requirements.
User innovation refers to innovation by intermediate users or consumer users, rather than by suppliers. This is a concept closely aligned to co-design and co-creation, and has been proven to result in more innovative solutions than traditional consultation methodologies.
Open innovation is a term used to promote an information age mindset toward innovation that runs counter to the secrecy and silo mentality of traditional corporate research labs. The benefits and driving forces behind increased openness have been noted and discussed as far back as the 1960s, especially as it pertains to interfirm cooperation in R&D. Use of the term 'open innovation' in reference to the increasing embrace of external cooperation in a complex world has been promoted in particular by Henry Chesbrough, adjunct professor and faculty director of the Center for Open Innovation of the Haas School of Business at the University of California, and Maire Tecnimont Chair of Open Innovation at Luiss.
Design management is a field of inquiry that uses design, strategy, project management and supply chain techniques to control a creative process, support a culture of creativity, and build a structure and organization for design. The objective of design management is to develop and maintain an efficient business environment in which an organization can achieve its strategic and mission goals through design. Design management is a comprehensive activity at all levels of business, from the discovery phase to the execution phase. "Simply put, design management is the business side of design. Design management encompasses the ongoing processes, business decisions, and strategies that enable innovation and create effectively-designed products, services, communications, environments, and brands that enhance our quality of life and provide organizational success." The discipline of design management overlaps with marketing management, operations management, and strategic management.
Knowledge Intensive Business Services are services and business operations heavily reliant on professional knowledge. They are mainly concerned with providing knowledge-intensive support for the business processes of other organizations. As a result, their employment structures are heavily weighted towards scientists, engineers, and other experts. It is common to distinguish between T-KIBS,, and P-KIBS, who are more traditional professional services - legal, accountancy, and many management consultancy and marketing services. These services either supply products which are themselves primary sources of information and knowledge, or use their specialist knowledge to produce services which facilitate their clients own activities. Consequently, KIBS usually have other businesses as their main clients, though the public sector and sometimes voluntary organisations can be important customers, and to some extent households will feature as consumers of, for instance, legal and accountancy services.
A service delivery platform (SDP) is a set of components that provides a service(s) delivery architecture for a type of service delivered to consumer, whether it be a customer or other system. Although it is commonly used in the context of telecommunications, it can apply to any system that provides a service. Although the TM Forum (TMF) is working on defining specifications in this area, there is no standard definition of SDP in industry and different players define its components, breadth, and depth in slightly different ways.
A service system is a configuration of technology and organizational networks designed to deliver services that satisfy the needs, wants, or aspirations of customers. "Service system" is a term used in the service management, service operations, services marketing, service engineering, and service design literature. While the term frequently appears, it is rarely defined.
Dominant design is a technology management concept introduced by James M. Utterback and William J. Abernathy in 1975, identifying key technological features that become a de facto standard. A dominant design is the one that wins the allegiance of the marketplace, the one to which competitors and innovators must adhere if they hope to command significant market following.
Innovation management is a combination of the management of innovation processes, and change management. It refers to product, business process, marketing and organizational innovation. Innovation management is the subject of ISO 56000 series standards being developed by ISO TC 279.
The technological innovation system is a concept developed within the scientific field of innovation studies which serves to explain the nature and rate of technological change. A Technological Innovation System can be defined as ‘a dynamic network of agents interacting in a specific economic/industrial area under a particular institutional infrastructure and involved in the generation, diffusion, and utilization of technology’.
Operations management for services has the functional responsibility for producing the services of an organization and providing them directly to its customers. It specifically deals with decisions required by operations managers for simultaneous production and consumption of an intangible product. These decisions concern the process, people, information and the system that produces and delivers the service. It differs from operations management in general, since the processes of service organizations differ from those of manufacturing organizations.
Knowledge-intensive services, abbreviated as KIS, are services that involve activities that are intended to result in the creation, accumulation, or dissemination of knowledge, where knowledge-intensiveness refers to how knowledge is produced and delivered with highly intellectual value-add. Knowledge intensive business services are the knowledge-intensive service activities for developing a customized service or product solution to satisfy the client's needs and they are provided mainly for other companies or organizations. These concepts are continuously discussed, formulated, and developed as a part of the constantly evolving academic discipline of knowledge management.