The McKinsey 7-S framework is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company. (Peters and Waterman 1982)
The socio-technical approach to service and business process development is concerned with change and its impact on people and organisations. New technology invariably involves changes to work processes and to the organisations within which they take place – and both of these have an affect for the people concerned. Technology projects that fail to recognize and deal with this reality are going to run into difficulties. The socio-technical design process is similar to business process re-engineering, but places greater emphasis on designing processes for people as well as efficiency. The philosophy being that high job satisfaction leads to high performance and therefore to superior economic achievement. (Pioneers within the socio-technical approach are also Enid Mumford and Tom Gilb. Their philosophies were the foundation of the “Scandinavian model” for system development.)
3. Comparing production characteristics
Table 3.1 Comparison of goods, IT-applications (systems) and services.
The distinction between goods and services is not of great consequence any longer (Gummesson, 1995)(Kristensson, 2003).
From table 3.1 we may deduct that the development or production of IT-applications, especially for in-house consummation, is near related to production of services. As the automated content in a service is increasing and the manual content is decreasing, this relation will be strengthened in the future.
4. Service content and trends
Services was at the outset solely manual, but tools have been to a greater extent included since the first tools were invented (Olduvai in Tanzania about 40.000 years ago). IT-tools started to be common in service industry in the nineteenseventies and they have steadily increased in numbers and size. IT-tools are now ubiquetus and they are interworking and making the manual service, deductions and deceicions less neccesary.
Many services, external and internal, are today 100% automated, banking is an obvious example here. Only handling exception reports and monitoring may be manual for such services.
There are a steadily increasing number of tools and IT-solutions in service deliveries. Today, no new or re-engineered service may be developed without considering the IT support. However, all the main stakeholders must be actively involved in service development, the customer/user, the service production worker, the IT management, and the business management.
5. Development processes
Researching into the area of Business Services should result in a soft product, a service, beneficial to the business domain in question. Indeed it is also product development.
The product (service) is not to be built first and hoping the customers will arrive (remember the movie “Build it, and they will come!”). Reverse engineering has to be applied. The service user (customer) must be understood, interviewed and his requirements must be evaluated. I.e. the real need must be found and then the work has to be done reversibly until the right service is in place. This is in accordance to Plato’s postulate: “The beginning is the most important part of the work!”
5.1 Information System development processes
The major formal system development processes are included in the table 5.1. They are described by relevant characteristics and given an intuitive mark from 1 to 5, where 5 is the best mark. As no development houses utilizes, or are even familiar with, a large number of development processes, the marking is done by interviewing lecturers and graduates. The results are henceforth subjective and only indicative. The marking is however not of importance here, as these processes are able to include enhancements at will.
Table 5.1 Software development processes, intuitively assesed.
There are several other development processes out in the development communities, however, they are mainly offspring’s of one or more of the ones discussed here.
The Rational Unified Process (RUP or UP) is the most complete process when the full process is adhered to. However, RUP may also be scaled down into a lightweight, agile process if so requested.
The Extreme Programming process (XP) is the provocative, agile process from Kent Beck which is positively stirring up the development communities.
The Microsoft Solution Framework (MSF) is the Microsoft in-house development process. MSF may be regarded as a cross breed of the old Waterfall process and The Spiral process by Barry Boehm.
The Rapid Application Development process (RAD) is in fad again as it now has included the iterative and incremental philosophies.
The Water-fall process is still the most widespread process, but major defects has been shown (Chaos report 2003), hence it is now rapidly on its way out of usage.
5.2 Service development processes identified
The process depicted below does have some similarities to the well known, but today obsolete “Water-fall method”. Hence it is important to also implement the iterative and incremental philosophies.
5.2.1 The Empirical Service Development Process, ESDP.
Figure 5.2.1 Empirical Service development process (Lavelle, Louis, Freeport, 2004)
The process rendered above is well known, but to what extent do we all adhere? Are we humble enough, or are we champions?
5.2.2 The Soft Service Development Model (SSDM).
A more soft process, reminding us much of RAD (Rapid Application Development) including JAD (Joint Application Development) and prototyping might be laid out as follows:
1 The “problem situation” is stated, but perhaps in an unstructured way.
2 “Root definitions” – in effect the perspectives of the system’s stakeholders – are collected and explored. This might be the prioritised list of the stakeholders critical success factors (CSF).
3 Based on the root definitions, a number of conceptual models are built that show what a human activity system would look like if built from each model.
4 The various conceptual models are compared and discussed and agreement is sought on a model that all stakeholders can agree represents the way forward.
5 Real-world constraints – such as time, cost, culture and politics – are considered to see what changes are desirable and feasible.
6 Actions are generated to implement the change.
Many of you would have stage 5 more early in the process; however empiri has shown that we are too obsessed with the real-world, that we inhibit our minds from innovation. Do not forget prof. Leonard’s stress on the innovative part in all service development.
5.2.3 Other service development processes
Among the well described service development and re-engineering processes we must mention the Critical Incident Technique (CIT) (Gremler, D.D., 2004) which is mainly a service analysis process. The assessment method Consensual Assessment Technique (CAT) (Amabile, 1996) must also be mentioned.
The Process Improvement for Strategic Objectives (PISO) (Deeks, D.A., 2000) is a full analysis and development process and has its strength in the strong involvement of the organisations employees in the process.
The Quality Function Deployment (QFD) method dates back to the 1960s with the purpose to translate the customers’ vague statements into actionable design specifications. The QFD approach was not embraced by all managers, as the tasks can be enormous and can take a great deal of time to complete.
Also , Indiana, among several other institutions, has been active in developing a relevant service development process.
6. Framework for service analysis and development processes
6.1 Lay-out of ISDF
The processes discussed above are well described elsewhere, however this paper will pick the proven and relevant characteristics from the processes mentioned to include these in The Inductive Service Development Framework, named ISDF:
Service-
analysis
IT-dev.
Manuel
dev.
Service IT-analysis Training New service
identified start workers in production
Figure 6.1. The Inductive Service Development Framework, ISDF
The figure above shows the four partly parallel processes necessary to create or re-engineer a service. Vertical lines indicate ties between the processes. Only one vertical process, Innovation, is rendered.
The choice of relevant process models must be in relation to the resources and task at hand.
There will be horisontal prosesses confined to own organisation with the objective to maximise the development output for own benefit.
There must be vertical processes to influence and indeed at all achieve an attractive service, in all respects.
6.2 Processes in service development
Every time a stakeholder make a move horisontally, at least two processes are initiated, one interorganisational (bilateral or multilateral) and one intraorganisational (unilateral), i.e. inside the contacted party’s organisation. For each stakeholder there will be an internal and a co-operative (external) process. The more parties involved, the more complexity. There are no doubt that to obtain successful new services walls have to be knocked down in many directions. Developing a service for a multi-client, i.e. a customer group with hopefully similar interests, will require very professional management. A service to one customer is seldom not exactly identical to the “same” service when provided to another customer (Grönroos, 2001)
Creating or re-engineering a service will involve multiple processes which all may be influenced, and all must be managed. Let us discuss some of them.
Customer process
Regardless if the initiation of developing a new or re-engineered service comes from the customer or the service provider, there will be an internal process inside the relevant part of the customer organisation. The service provider may start this process and indeed seek to influence its results.
From the service providers point of view, the customers must be identified and defined, if need be by means of demographic studies. Customer participation is undoubtly a must, be it representatives for a multiclient group, or single major customers. The organisation having a new service created or re-engineered needs to find the right balance between market and customer orientation when picking customer representatives. It must also be taken into account the customer role when the service is put into operation, if the customer is a part in the service production or an external user, or both.
Service analysis process
There are several options for the Service analysis process, Critical Incident Technique, CIT, is shown in the figure above, but the Process Improvement for Strategic Objectives, PISO, may be another candidate. As mentioned in 5.2.3, there are several options.
After the re-engineered service is put into production, a new Service analysis is depicted in the figure above, to evaluate the results of the re-engineering.
IT development process
For the IT-development; RUP is shown in the figure above, however, alternatives may be RAD, XP, MSF,…, or a mixture of these.
Prototyping is both possible and indeed necessary in service development. However, the prototyping should involve parts of, or if possible, the whole value chain in the business domain for the service in question.
The validation must be focused on early in the process, while full verification is only possible after the service is constructed and implemented.
Worker development process
The workers participating in the production of the service in question are of prime importance. Their partaking in the service analysis and in the IT development is the only way to achieve success in the task at hand.
There is also indeed a need to rework the human contribution to the service in question, schooling and on the job training programmes must be tailored to the organisation at large.
The Innovation processes
In ISDF only one vertical process is rendered, the Innovation. No new or re-engineered service may be created successfully without an innovation process.
Dorothy A. Leonard, Professor at Harward Business School, convey to us that customers do have problems with articulating their real wishes and demands and their understanding of the future and new innovations are vague. Accordingly, businesses which only base themselves on customer focused adherence to the market are in danger of loosing out to businesses with larger innovation believes. We have to understand the market first, then, and only then, are we able to add on our innovation. See fig. 6.2.
There is a need to nurture the ecology of innovation. Large companies remake themselves by combining their technological strengths with ethnographic and behavior practices from anthropology and psychlogy to bring them closer to the needs and wants of their customers. (Editorials, Business Week, Oct.11th 2004). Alam and Perry (2002) report empirical data that demonstrates idea generation as the most important phase of new service development. (Kristensson, P., 2003).
Figure 6.2 Main states and transitions in service development.
One may render four main states in a service development process:
State 1 contains a model of the full excisting service.
State 2 contains a model of the excisting service’s functional requirements.
State 3 contains a model of the new service with its total requirements.
State 4 contains a model of the new service fully implemented.
The four transistions are:
1 -> 2: All implementation details of the excisting service are removed.
2 -> 3: New requirements and innovations are added.
3 -> 4: Implementation is added, including new implementation requirements and innovative implementation.
4 -> 1: New service in operation. The duration is becoming ever shorter.
6.3 Running the ISDF
The point of regarding service creation/re-engineering as a super-process composed by four main processes within a common framework is the all encompassing need of concerting all stakeholders. Each of the four processes may well belong to different management, even inside different organisations.
The execution of the ISDF requires a project to be established and run. The project might be broken down into three or four sub-projects, however, it is of outmost importance that there is a well functioning communication path also horisontally in such a project.
The ISDF is laid out as a Gantt diagram where activities are replaced by processes to facilitate the planning of the total development work. However it is strongly recommended that the processes are broken down into sub-processes and that a comprehensive network diagram, be it Pert or CPM, is created. By laying down such a major concern for planning, the necessary understanding and humbleness for the total task will be appreciated. The strength of ISDF is the clear statement of the separate, but also interoperational processes.
There is a steadily greater need for time compression in developing or re-engineering new services, likewise there is a need for flexibility and adjustability. Hence agile and adaptive processes are indeed necessary to embrace changes in the service requirements. We do know changes will come, and at a steady faster pace.
7. Risk management
Changing an organisations services towards its customers will normally be mission crithical indeed. The project established running the ISDF must appreciate the inherent risk in such an adventure. A full risk management process (Cadle and Yeates, 2004) must be run concurrent with ISDF development project.
8. Service quality
Best service is no quality objective, but right service is. Christian Grönroos, a pioneer thinker in the marketing of services, postulates that perceived service quality consists of two parts: technical quality and functional quality.
The short version of a definition of service quality is how the service fulfils its objectives, be it productivity, be it customer satisfaction, be it cost reduction, differentiation, etc., or a defined mixture of these.
Both validation and verification is necessary. The validation will answer the question: Did we make the right service? The verification will answer the question: Did we make the service right?
The validation must be focused on early in the process, while full verification is only possible after the service is constructed and implemented.
Controlling the perceived quality is complicated as customers are often either direct observers of the service in production, or active participants. It is important to identify all the moments of truth perceived by customers and manage those carefully.
Below the line of visibility from the customers point of view, there are the internal services (Grönroos calls them functions) that enable the firm to provide and enhance the quality. The so called invisible internal services will also have direct influence on the firm’s production of services.
One could also point to academic research on user acceptance, like “The IS success model” (DeLone and McLean, 2003) and “The Unified Theory of Acceptance and Use of Technology (Venkatesh, Morris, Davis and Davis, 2003), however, these models and methods are only indicative and are so far mainly confined to academic interest only.
9. Ethical consideration
Consumer services delivered must not only be inside the official laws and regulations, the service production company and the service development undertakers does also have clear moral and ethical responsibilities. The aerea of concern is the service content, the service marketing and regarding the service development work itself.
10. Conclusion
It will take well tailored and defined development processes to introduce a new service.
By comparing production of Goods, IT-applications and Services, it is shown that the two latter are closely related. As the manual content in a service is decreasing and the IT content is steadily increasing, this relation will be ever more strengthened. Accordingly, tools from Systems and Application development may successfully be used also in the total service development.
In the above we have seen that services must be developed, modified and managed and that a unified process framework must be in place to do so. Relevant processes are discussed. A thorough understanding of the business domain is imperative, old moulds are not good enough. The human factor is indeed important. The composition of four processes into the Inductive Service Development Framework, ISDF, is here proposed. The ISDF must be as agile and lightweight as possible, and tailored to the problem and resources at hand.
Service quality is tightly connected to the service objectives. The need for simplicity is a concern to manage and communicate inherent risks and ethical issues regarding the service development work and the service itself.
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