Product-Service Information Systems – Designing New...

Product-Service Information Systems – Designing New Services Univ.-Prof. Dr.-Ing. Wolfgang Maass Chair in Economics – Information and Service Systems (ISS) Saarland University, Saarbrücken, Germany WS 2011/2012 Fridays, 10 – 12 a.m. (c.t.) Room HS 020, B4 1

Univ.-Prof. Dr.-Ing. Wolfgang Maass

02.12.11 Slide 2

Agenda

1.  Introduction 2.  Design Science in Information Systems 3.  Nature of Products 4.  Guest Lecture: Product Design 5.  New Product Development (NPD) 6.  Nature of Services 7.  New Service Development (NSD) 8.  Nature of Product-Service Systems (PSS) 9.  Product-Service Information Systems 10.  Designing PSS (1) 11.  Designing PSS (2) 12.  Empirical Evaluation of PSS (1) 13.  Empirical Evaluation of PSS (2) 14.  Advanced Topics: Design Science of PSS


02.12.11 Slide 3

New Service Development

“A service organization has two choices in today’s combative business environment: Succeed at developing new service products, or fail as a company.” (Cooper & Edgett, 1999, p. 1)

New service development (anglo-american literature)

marketing-oriented

(Ramaswamy, 1996; Cooper & Edgett, 1999; Fitzsimmons & Fitzsimmons, 2000)

Service Engineering (german literature)

Technical-methodological

Utilise existing engineering know-how

in area of traditional product development

(Bullinger, 1995; Mandelbaum, 1998)


02.12.11 Slide 4

Service Engineering

“Service Engineering can be understood as a technical discipline concerned with the systematic development and design of services using suitable models, methods and tools.” (Bullinger et al., 2003, p. 276) “Service Engineering bezeichnet den Prozess der originären Entwicklung oder Veränderung jeglichen Ausmaßes und jeglicher Art von Leistungen, deren Produktionsprozess den Anforderungen an eine Dienst le is tung genügt , unter Verwendung geeigneter Prinzipien, Vorgehensmodelle, Me thoden und Werkzeuge sow ie un te r Berücksichtigung des unternehmerischen Umfelds, in dem dieser abläuft.” (Klein, 2007, p. 32)

R&D management of services

Development of new service product

Models

Methods

Tools

Organi-sation

Human resources

Information technology

(Bullinger et al., 2003, p. 276; Fähnrich & Opitz, 2003, p. 97)

Approach for structuring field of service engineering


02.12.11 Slide 5

Service Design Methodologies

•  Service development methodologies can take a leaf out of product development theory‘s book ...

(Bullinger et al., 2003)

•  According to Pahl & Beitz (1997, p. 11) design methodologies should:

①  Facilitate a problem-oriented approach, i.e. they must be fundamentally applicable to all other design activities regardless of specific branches of industry

②  Encourage inventive and cognitive skills for identifying optimum solution in each case

③  Be compatible with concepts, methods and findings of other disciplines

④  Generate solutions that are systematic rather than random

⑤  Allow the identified solutions to be transferred easily to related problems

⑥  Permit the use of electronic data processing systems

⑦  Be teachable and learnable

⑧  Be consistent with the findings of ergonomic analysis, i.e. simplify work tasks, save time, prevent incorrect decisions and ensure active, interested collaboration


02.12.11 Slide 6


•  Diverse service design methodologies for diverse service types

•  Contact intensity criterion mainly determine methods preferred in practice


Low High Low Service type A

e.g., teller machines Service type C e.g., call center

High Service type B e.g., life insurance

Service type D e.g., medical examination

Contact Intensity

Varie

ty

(Fähnrich et al., 1999)

Reminding last lecture…

①  Services with low contact intensity -- influenced to limited extent by customer-imposed variances -- bear numerous resemblances to physical goods o  Methods familiar in traditional product development, i.e. engineering methods, e.g., Quality Function

Development (QFD)

②  Services with high contact intensity o  Business and service-specific methods as well as social and behavioral science methods

•  When so-called soft factors play vital role – traditional product development methods are no longer transferable -- approaches devised by other disciplines are demanded (Fähnrich et al., 1999)


02.12.11 Slide 7


•  Diverse service design methodologies for diverse service types

•  Contact intensity criterion mainly determine methods preferred in practice


Low High Low Service type A

e.g., teller machines Service type C e.g., call center

High Service type B e.g., life insurance

Service type D e.g., medical examination

Contact Intensity

Varie

ty

(Fähnrich et al., 1999)

Reminding last lecture…

‘‘For this reason, simply transferring traditional product development concepts blindly would appear to be inexpedient, and an exclusively engineering-oriented approach for service development is likewise bound to be inadequate. On the contrary, what is needed are interdisciplinary approaches that are capable of mapping the interaction of human resources, technology and organisation and of rendering them plannable.’’ (Bullinger et al., 2003, p. 280 referring to Fähnrich et al.,1999)


02.12.11 Slide 8

Why Dedicated Design Methodologies?

•  “The principal challenge facing companies is the need to offer the marketplace continuously improved, if not new, services, while keeping one step ahead of their competitors and at the same time fulfilling needs and expectations of their customers.” (Bullinger et al., 2003, p. 275)

•  Coherent development processes leads to successful service products on constant quality level (Schneider et al., 2003 referring to Ehrenspiegel, 1995)

•  Avoiding redundant work; preventing repetitions of past mistakes; enabling existing know-how to be reused (Bullinger et al., 2003)

Companies begin to describe their development processes and to standardize individual development steps to a certain degree

Formalization



02.12.11 Slide 9

Formalization of Service Engineering

•  Reference models contain detailed documentation about project flows, project structures and persons responsible for a project (known from product development and software engineering) (Bullinger et al., 2003)

•  In service engineering – reference models define activities necessary to develop services; determine their interrelationships and specify their order of performance (Hofmann et al., 1998)

Waterfall model Iterative models

Spiral model Prototyping model

(Schneider et al., 2003, p. 121)


02.12.11 Slide 10

Waterfall Models - Example

•  Each transition from one phase to next expects 100% completion of previous phase

•  Example: model of service engineering of Ramaswamy (1996)

Phase 1 – developing concept of new service

Phase 2 – deployment of service and monitoring at market


Step 1: Analysis of customer needs; definition of measurable quantitive attributes (cf. House of Quality (Hauser & Clausing, 1988)

Step 2: Specifying expected value of each attribute; benchmarking

Step 3: Screening and scoring of concepts

Step 4: Optimizing functions of design concepts regarding performance standards


02.12.11 Slide 11

Waterfall Models - Example

•  Each transition from one phase to next expects 100% completion of previous phase

•  Example: model of service engineering of Ramaswamy (1996)

Phase 1 – developing concept of new service

Phase 2 – deployment of service and monitoring at market


Step 5: Preparing following steps in 6 diverse plans, e.g., project plan, life cycle plan

Step 6: After rollout measuring of performance of service; adjustment

Step 7: Measuring customer satisfaction regarding expectations and competitors

Step 8: Improving service concerning strategic financial goals, service attributes and production process


02.12.11 Slide 12

Waterfall Models – Yes or No?

•  Widely used kind of model for service engineering among professionals •  Almost all known service engineering models can be classified as waterfall

models (e.g., Rawaswamy, 1996; Cooper & Edgett, 1999; Scheuing & Johnson, 1989; Edvardsson & Olsson, 1995)

Pro Con Predefined steps ensure that process remains transparent

Lack of flexibility caused by rigid pattern

Ideally suited to outcome-based planning; end of phases represent perfect milestones for gathering intermediate outcomes

Shortening development cycles not really possible caused by sequential structure



02.12.11 Slide 13

prototypes). The advantages of prototyping mod-els notably include their excellent adaptability to avariety of service development tasks and the rapidavailability of a marketable solution. They more-over support communication between developersand customers, because even very early on thelatter are able to avail of a test version that allowsthem to incorporate their detailed requirementsinto the future development process. Among thedrawbacks of prototyping models, however, arethe complexity of the necessary communicationand coordination activities and the difficulty ofmonitoring targets. Over and above a few generalthoughts on the matter, e.g. Hope andM .uhlemann (1997), there are practically nodetailed studies dealing with the use of prototypingmodels in connection with service development.

The few scientific models that have so far takenup the challenge of service development onlyseldom cater for the needs of practical users. Thefollowing weak points can be observed in allmodels elaborated to date:

* Insufficient level of detail: The models generallydescribe the higher-level process steps, but not

the concrete activities nor the methods to bedeployed.

* Lack of configurability: All the models simplydefine a rigid development process, withoutallowing any form of adaptation to differentservice types.

* Lack of practical corroboration: All knownreference models in the area of service researchare the result of theoretical observations andhave been only inadequately tried out andtested in practice.

* Lack of ICT support: None of the models offerany points of contact that might allow thedevelopment process to be supported withmodern information and communication tech-nology (ICT).

In conclusion, it can be stated that in the field ofnew service development there are substantialdeficits when it comes to the availability of suitablereference models. Close cooperation transcendingdifferent academic disciplines will be necessary inthe future to enable the offering of seamless,integrative methods that are appropriate topractical requirements.

ARTICLE IN PRESS

Design

Analysis

Synthesis

Phase 1 Phase 2 Phase N

Design

Analysis

Synthesis

Design

Analysis

Synthesis

Masterdesign Introduction Audit

Designmodification

Final design

ImplementationDocumentation

Task planning

Fig. 6. Service development model according to Shostack and Kingman-Brundage (1991).

H.-J. Bullinger et al. / Int. J. Production Economics 85 (2003) 275–287282

Spiral Models - Example

•  Advanced version of waterfall models – top-down approach

•  Linear process steps repeated several times

•  Progressing gradually from rough development concept to refined, market-ready one by iterating individual development steps

•  Example: service development model of Shostack & Kingman-Brundage (1991)

(Bullinger et al., 2003, p. 282)

1 - Iterations until appropriate basis pattern of intended service is specified

2 – Service master design is transferred into operations, functions and requirements

5 – Adjustments according to results of introduction; modification of service design and definition of final design

3 – Documentation of user manual as well as production

process resulting in instructions, time

plans, rules

4 – Meet & greet of resulting service and potential customers

(Schneider et al., 2003)


02.12.11 Slide 14

Spiral Models – Yes or No?

•  At present practically unknown as method for developing services

Pro Con Obtaining initial, meaningful, intermediate outcomes at early stage that enable customizing following steps accordingly

Complexity along with necessary steering intensity

Opportunity to eliminate errors during iterative runs by repeating steps specific steps

Learning effects to be benefited from within single projects



02.12.11 Slide 15

Prototyping Models – Yes or No?

•  Test version (prototype) of new service is developed; taken as basis for examining and refining key attributes/functionalities at early stage

•  Development steps not discrete; overlapping

•  Types of prototypes categorized based on planned functionalities (complete vs. incomplete), level of detail and objectives of prototype etc.


Pro Con

Excellent adaptability to variety of service development tasks

Complexity of necessary communication and coordination

Rapid availability of marketable solution

Difficulty of monitoring targets

Opportunity of communication between customers and developers based on prototypes

“Over and above a few general thoughts on the matter, e.g. Hope and Mühlemann (1997), there are practically no detailed studies dealing with the use of prototyping models in connection with service development.” (Bullinger et al., 2003, p. 282)


02.12.11 Slide 16

Brainteaser

•  Imagine, you had to develop a new campus delivery service for ordering meals of the UdS cafeteria by mobile app.

•  Which type of the aforementioned models would you use for service engineering? Why?

•  Discuss it with your neighbor. One student will present his solution! (papers will be collected)

5 Minutes


02.12.11 Slide 17

Weaknesses of All Models

(1)  Insufficient level of detail •  Models describe high-level process steps, but no concrete activities nor methods

(2)  Lack of configurability •  Models define rigid development process – no form of adaptation to different service

types allowed

(3)  Lack of practical corroboration •  All reference models are result of theoretical observations – only inadequately tried out

and tested in practice

(4)  Lack of ICT support •  Models offer no points of contact for supporting development process by ICT



02.12.11 Slide 18

Application of Tools and Methods in Service Engineering

(Fähnrich & Opitz, 2003, p. 99 referring to Fähnrich, 1999)


02.12.11 Slide 19

Outlook

1.  Introduction 2.  Design Science in Information Systems 3.  Nature of Products 4.  Guest Lecture: Product Design 5.  New Product Development (NPD) 6.  Nature of Services 7.  New Service Development (NSD) 8.  Nature of Product-Service Systems (PSS) 9.  Product-Service Information Systems 10.  Designing PSS (1) 11.  Designing PSS (2) 12.  Empirical Evaluation of PSS (1) 13.  Empirical Evaluation of PSS (2) 14.  Advanced Topics: Design Science of PSS


02.12.11 Slide 20

Literature

Books: •  Cooper, R. G. and Edgett, S. J. Product Development For The Service Sector: Lessons From Market Leaders, Basic Books,

1999. •  Ehrenspiegel, K. Integrierte Produktentwicklung: Methoden für Prozeßorganisation, Produkterstellung und Konstruktion,

Hansen, 1995. •  Fitzsimmons, J. and Fitzsimmons, M. New Service Development: Creating Memorable Experiences, Sage Publications, 2000. •  Hope, C. and Mühlemann, A. Service Operations Management: Strategy, Design and Delivery, Prentice-Hall, 1997. •  Klein, R. , Scheer, A.-W., (eds.) Modellgestütztes Service Systems Engineering - Theorie und Technik einer systemischen

Entwicklung von Dienstleistungen, DUV in Kooperation mit Gabler, 2007. •  Pahl, G., Beitz, W., Feldhusen, J. and Grote, K. Konstruktionslehre - Grundlagen erfolgreicher Produktentwicklung - Methoden

und Anwendung, Springer, 2003. •  Ramaswamy, R. Design and Management of Service Processes, Addison-Wesley, 1996.

Papers: •  Bullinger, H.-J. "Dienstleistungsmärkte im Wandel", in Bullinger, H.-J., ed.,'Dienstleistung der Zukunft: Märkte, Unternehmen

und Infrastrukturen im Wandel', Gabler, 1995. •  Bullinger, H.-J., Fähnrich, K.-P. and Meiren, T. "Service engineering - methodical development of new service products,"

International Journal of Production Economics (85), 2003, pp. 275-287. •  Edvardsson, B. and Olsson, J. "Key concepts for new service development," The Service Industries Journal (16:2), 1995, pp.

140-164. •  Fähnrich, K.-P., Meiren, T., Barth, T., Hertweck, A., Baumeister, M., Demuß, L., Gaiser, B. and Zerr, K. "Service Engineering:

Ergebnisse einer emirischen Studie zum Stand der Dienstleistungsentwicklung in Deutschland", Technical report, IRB Stuttgart, 1999.


02.12.11 Slide 21

Literature

•  Fähnrich, K.-P. and Opitz, M. "Service Engineering – Entwicklungspfad und Bild einer jungen Disziplin", in Bullinger, H.-J. and

Scheer, A.-W., ed.,'Service Engineering. Entwicklung und Gestaltung innovativer Dienstleistungen', Springer-Verlag, 2003. •  Hauser, J. R. and Clausing, D. "The House of Quality," Harvard Business Review (3), 1988, pp. 63-73. •  Hofmann, H., Klein, L. and Meiren, T. "Vorgehensmodelle für das Service Engineering," IM Information Management and

Consulting (Special Edition: Service Engineering) (14), 1998, pp. 20-25. •  Mandelbaum, A. "Service Engineering: Modelling, Analysis and Inference of Stochastic Service Networks", Technical report,

Israel Institute of Technology, Haifa. •  Scheuing, E. E. and Johnson, E. M. "A proposed model for new service development," The Journal of Service Marketing (3:2),

1989, pp. 25-34. •  Schneider, K., Wagner, D. and Behrens, H. "Vorgehensmodelle zum Service Engineering", in Bullinger, H.-J. and Scheer, A.-

W., ed.,'Service Engineering - Entwicklung und Gestaltung innovativer Dienstleistungen', Springer, 2003. •  Shostack, L. and Kingman-Brundage, J. "How to design a service” 'The AMA Handbool of Marketing for the Service

Industries', AMACOM, 1991, pp. 243-261.


Univ.-Prof. Dr.-Ing. Wolfgang Maass Chair in Information and Service Systems Saarland University, Germany

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