A Survey of New Service Development Tools Dayu Jin, Kah-Hin Chai, Chi-Chuan Wu, Kay-Chuan Tan Department of Industrial and Systems Engineering National University of Singapore Department of Business Management Tatung University
A Survey of New Service Development Tools
Sep 14, 2014
This study takes a holistic view on new service development (NSD) tools. A thorough literature review was conducted to identify the commonly used NSD tools, together with their purposes, strengths and weaknesses. We executed a large-scale survey among Singapore financial institutions to offer empirical evidences regarding NSD tools usage patterns, their impacts on NSD performance, and the contingencies on NSD innovativeness. The results showed that: (1) NSD tools are still underutilized in service firms; (2) NSD tools have positive influences on NSD performance; and (3) more tools are adopted when services are new to the firm and new to the customer.
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A Survey of
New Service Development Tools
Dayu Jin, Kah-Hin Chai, Chi-Chuan Wu, Kay-Chuan Tan
Department of Industrial and Systems Engineering
National University of Singapore
Department of Business Management
Tatung University
Introduction - Background
1
• New service development (NSD) is important; however
NSD success rate is low.
Success rate is as low as 58% (Griffin, 1997).
NSD lacks structured processes and services just “happen” ((de Jong and
Vermeulen, 2003).
• Critical factors for the development of quality services (Paulk et al., 1995; SEI, 2010).
People
Procedures and methods
Tools and techniques
• There is no systematic review of the NSD tools used
in NSD projects (Menor et al., 2002).
Introduction – Research Questions
2
RQ1: What are the NSD tools that can facilitate NSD
process?
RQ2: What are the usage patterns of NSD tools in
service firms?
RQ3: Do the use of NSD tools influence NSD
performance?
RQ4: Is the use of NSD tools contingent on NSD
innovativeness?
RQ1: What are the NSD tools that can facilitate NSD
process?
RQ2: What are the usage patterns of NSD tools in
service firms?
RQ3: Do the use of NSD tools influence NSD
performance?
RQ4: Is the use of NSD tools contingent on NSD
innovativeness?
Research Methodology Sample: 420 financial institutions in Singapore.
Active innovators of a range of services (Menor and Roth, 2008).
Offerings are standardized which provides opportunities for tool use (Easingwood, 1986).
Unit of analysis: NSD projects conducted in 3 years.
Chief executive officers as respondents.
Response: 99, response rate of 23.6%.
63 responses indicated no NSD, and 2 incomplete.
Data analysis is based on 34 usable replies.
3
RQ1 – Review of NSD Tools
4
• Definition: a precisely described framework, procedure,
system or method for supporting and improving NSD
processes (Brady et al, 1997).
• Three different approaches to studying the development
of new services (Coombs and Miles, 2000).
Assimilation: benchmarking, scenario planning, focus group,
brainstorming, concept testing, QFD, SADT
Demarcation: service blueprinting, SERVQUAL
Synthesis
5
Purpose Advantage Disadvantage
Benchmarking To benchmark against best practices of NSD
Powerful to facilitate organizational learning
Difficult to select appropriate benchmarking partners
Scenario Planning To predict risks and needs in the future
Help establish first-mover advantage
Difficult to assess future needs
Focus Group
To understand customers’ opinions about new service ideas
Low cost and quick implementation
Group might not be representative
Brainstorming To generate innovative new service ideas
Facilitate group participation to share ideas
May result in creative yet meaningless ideas
Concept Testing
To identify promising new service ideas for further consideration
Easy to implement No single best decision rule to predict market acceptance
Quality Function Deployment (QFD)
To translate customer requirements into new service specifications
Provide actions-oriented guidelines to design quality into a process
Complex to use and require extensive cross-functional involvement
Structured Analysis and Design Technique (SADT)
To map service processes with clearly defined responsibilities
Allow rigorous expression of high-level ideas and problems
Provide little instructions to solve the identified problems
Service Blueprinting
To clarify service concepts and systematize service delivery processes
Powerful to design processes emphasizing on efficiency and time reduction
Too much focus on standardization and individual encounter
SERVQUAL To assess customers’ perceptions of service quality
Easy to uncover service quality strengths and weaknesses
Provide little instructions to narrow the identified gaps
RQ2 – Usage Pattern of NSD Tools
6
Percentage of firms that adopted NSD tools
RQ2 – Usage Pattern of NSD Tools
7
Percentage of firms applying tools across stages
Market
Research
Tool
Design
Focused
Tool
RQ2 – Usage Pattern of NSD Tools
8
Percentage of firms applying tools across sectors
RQ3 – Effectiveness of NSD Tools
9
Impact of NSD tools on market performance
RQ3 – Effectiveness of NSD Tools
10
Impact of NSD tools on operational performance
RQ4 – Contingency on NSD Innovativeness
11
Impact of newness to the firm on NSD tools usage
RQ4 – Contingency on NSD Innovativeness
12
Impact of newness to the customer on NSD tools usage
Conclusions
NSD tools are still underutilized.
Market research tools are relatively more frequently used.
NSD tools are applied at various NSD stages.
Market research tools: initial phases.
Design focused tools: design and testing stages.
NSD tools have positive influences on NSD performance.
Market research tools: operations performance.
Design focused tools: market performance.
More tools are adopted when services are new to the firm
and new to the customer. 13
Thank you!
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