MODULE 5

SERVICE DESIGN

The course introduces the student to the basic principles, methods and tools,
characteristics of service design and its ecosystem.

Intended learning outcomes

After the course, the student should be able to:

 Account for and apply basic Service Design thinking, related theories, methods
and tools.
 Recognize essential characteristics of services.
 Describe the role of digitalization in services.
 Identify and analyze elements of service ecosystems.
 Design, analyse and evaluate services using a suitable variety of service design
methods and tools.
 Connect design results with related analyses, and account for service
optimization opportunities.

Learning activities

Teaching consists of video lectures and students’ presentations and case-based

exercises.

Learning Content

Service design was first introduced as a design discipline at the Köln

International School of Design in 1991. As a new field, the definition of service design is
evolving in academia. But in practice, service design is:

The activity of planning and organizing people, infrastructure, communication and

material components of a service in order to improve its quality and the interaction
between service provider and customers. The purpose of service design methodologies
is to design according to the needs of customers or participants, so that the service is
user-friendly, competitive and relevant to the customers.

Service design is a human-centered approach that starts with an obsession

about customer experience and the ability to deliver quality as a key value of
success. For many organizations, service design focuses on evolving product-focused
businesses into service-oriented ones through the use of effective design and superior
customer experience.

Several authors of service design theory including Pierre Eiglier, Richard

Normann, Nicola Morelli, emphasize that services come to existence at the same
moment they are being provided and used. In contrast, products are created and "exist"
before being purchased and used.

Five Principles

How does the concept of service design translate into practice? One of the first
textbooks on service design, This is Service Design Thinking by Marc Stickdorn and
Jakob Schneider, outlines five key principles to keep in mind when re-thinking a service:

1. User-Centered: People are at the center of the service design.

2. Co-Creative: Service design should involve other people, especially those who
are part of a system or a service.
3. Sequencing: Services should be visualized by sequences, or key moments in a
customer’s journey.
4. Evidencing: Customers need to be aware of elements of a service. Evidencing
creates loyalty and helps customers understand the entire service experience.
5. Holistic: A holistic design takes into account the entire experience of a
service. Context matters.

Tools of the Trade

Here are a few tools to try if you are interested in innovating a service:

 Personas: A persona is a summary of a specific type of customer that

represents a broader customer segment. After conducting qualitative interviews,
a persona is an archetype of a specific aspects about many customers who fall
into the same segment. A persona is used to summarize psychographics, like
motivations, desires, preferences and values. Personas help you create a design
with specific customers in mind and ensure the process is user-
centered. Persona templates are available online.
 Customer Journey Map: A customer journey map is a tool that shows the best
and worst parts of a customer’s experience. The journey starts long before a
customer starts to take an action, and shows the entire experience of the service
through the customer’s perspective. The authors of the This Is Service Design
Thinking, offer a blank customer journey canvas. You can work with customers
to ensure your customer journey map is co-creative.
 Service Blueprinting: A service blueprint goes beyond a customer journey map
and allows you to understand a customer from a more holistic viewpoint,
including the work and processes that go into creating and delivering an
experience.

Even though service design is in its infancy, there are many robust and free resources
available online. The Service Design Tools website and the Service Design Toolkit
summarize possible design activities to use when innovating services and systems.
SERVICE DESIGN – A STEP-WISE PROCESS

1. Step 1: Align Vision and Goal. ...

2. Step 2: Brainstorm. ...
3. Step 3: Conduct a Market Analysis. ...
4. Step 4: Identify Barriers and Limitations. ...
5. Step 5: Establish a User Profile/Personas. ...
6. Step 6: Prototype and Test
7. Step 7: Evaluate Users' Experience. ...
8. Step 8: Get Feedback, Improve the Service, & Evolve.

There are various objectives that Service design focuses at and some of the same are
mentioned as below to provide you better insights on Service design.

 Designing services to meet agreed business outcomes

 Identifying and managing risks
 Designing secure and resilient IT infrastructures, environments, applications and
data resources and capability design measurement methods and metrics.
 Producing and maintaining plans, processes, policies, standards, architectures,
Frameworks and documents to support the design of quality IT solutions

Four P’s of Service Design:

1. People: This refers to the people, skills and competencies involved in the
provision of services
2. Products: This refers to the technology and management systems used in
service delivery
3. Processes: This refers to the processes, roles and activities involved in the
provision of services
4. Partners: This refers to the vendors, manufacturers and suppliers that are used
to assist and support service provision

Individual Aspects of Service Design:

There are five individual aspects of Service design and these are stated as below:

 New or changed service solutions

 Service management systems and tools
 Technology architectures and management systems
 Processes, roles and capabilities
 Measurement methods and metrics
Top 10 Characteristics of Services

1. Intangible nature

As mentioned earlier, services are intangible or invisible. One cannot see, feel, taste or
smell it. A business marketing service is actually selling an idea and not a product.

In promoting sales the business will face the following problems:

1. Demonstration or display cannot be done.

2. No samples can be given.
3. No containers can be shown to the buyers.

The intangible nature of service brings the following advantages also for the marketers:

1. There is no need for a warehouse as there is nothing to store.

2. Transportation costs are totally avoided.
3. There is no problem of unsold stock.
4. There is no loss on account of pilferage, deterioration in quality, evaporation and
so on.

2. Simultaneous production and distribution

In the case of marketing of goods, production and distribution need not be done
at the same time. But in the marketing of most services, both production and distribution
will have to be done simultaneously. Provision of electricity offers a good example. In
the case of banking, insurance, educational and legal services too, there is nothing that
can be physically stored now and delivered later.

As a result, there is no need for a long chain of middlemen comprising the

wholesalers, retailers and so on in the marketing of services. In certain cases, agents
are employed to procure clients for the business, e.g., Insurance.

3. Loss due to lack of sales cannot be recovered

A product that is not sold today can be sold tomorrow. This is not possible in the case of
service marketing. For example, if 25 seats are empty in cinema hall for a show, the
resulting loss of revenue is a loss for ever. Loss on account of empty seats in a bus,
train or plane cannot be made good. Similarly, electricity once produced has to be
distributed at once. If not, it becomes a waste.

4. Fluctuating demand

The demand for services, in most cases, is of fluctuating nature. For example,
telephone service is active during day time compared to night hours. The number of
people using the telephone during night hours is much less. It is for this reason that the
telephone department is coming out with certain concessions for using the STD or ISD
facilities during night hours. Likewise, although we have 24-hours hospital service, 24-
hours banking and so on, the number of clients is not much during night time.

5. Lack of uniform performance standards

The quality of service varies not only between business units in the same industry but
also between one transaction to another. The basic reason for the variation in quality is
the involvement of the human factor. For example, it may take 10 minutes for a client to
get things done in a bank. It may take half an hour or so for another customer for a
similar transaction.

6. Irrelevance of certain marketing functions/activities

Some of the marketing functions/activities, which are very much relevant in the
marketing of tangible goods, are irrelevant in service marketing. These include
transportation, grading, standardization, storage, inventory control, branding, packing,
labeling and so on.

7. Direct distribution

The marketers of most services resort to direct distribution. The wholesalers, retailers
and dealers, who are normally seen in product marketing, are absent in service
marketing. In certain cases, the service marketer may rely on agents, e.g., Insurance
business.

8. Heterogeneous nature of service

Two or more units of a product are similar and give the same satisfaction to the buyer.
But it is not so in the case of service. For example, a client may be praising a doctor
while another person may be cursing him. A surgery might have been successfully done
today. An identical surgery to be done a few days later may prove to be a failure.

The heterogeneous nature of service brings certain advantages also for the marketer. It
provides greater flexibility for the marketer in performing his task, For example, the
marketer can ascertain the individual needs of the client and try to offer the service in a
manner suitable to his tastes and preferences.

9. Personal relationship between the service provider and the client

There is no personal relationship between a seller of goods and the buyer. It is not so in
most of the cases of service marketing. For example, a patient has to take the doctor
into confidence and abide by the advice of the latter. It is true in the case of a lawyer-
client relationship also.
10. Skill orientation

A product is bought more for its utility value than for the skill of the marketer to sell. In
the case of service marketing, it is the skill of the service provider which determines the
fate of the business. The efficiency of the individuals plays a crucial role in service
marketing. The quality of the product is the main deciding factor in product marketing.

Service Ecosystem

Building on a review of core elements in the definitions of service ecosystems, a

research paper proposes a conceptual model of service ecosystem initiation based on
three components: actors, resources, and value propositions. It was explained and
illustrated how each of these three fundamental components may function as the
initiator of a service ecosystem (cf. fig. 1): An actor (e.g., an organization or individual)
may start to collaborate with others and thereby draw on resources in order to create a
joint value proposition; a resource (e.g., in the form of a new technology or an outdated
patent) may emerge as a platform on which several actors can develop a new value
proposition; a value proposition (e.g., a business opportunity or a business idea) may
form the starting point for actors to collaborate and integrate resources in order realize
the value proposition. The initiator of a service ecosystem could for example be an actor
(Mark Zuckerberg), resources (website for Harvard students) or value proposition (share
messages, photos, videos, etc. with friends). Processes of configuring actors,
resources, and value propositions are influenced by the structural embeddedness of the
service ecosystem (e.g., regional infrastructure, existing networks of actors, or resource
availability) as well as guided by the actors’ own and shared institutions (e.g., rules,
norms,and beliefs). The study contextualize each starting point with illustrative cases
and analyze the service ecosystem configuration process: “Axoon/Trumpf” (initiated by
resources), “JOSEPHS – the service manufactory” (initiated by a value proposition),
“facebook” (initiated by an actor).
Originality/Value:

The contribution of the research study is a deeper understanding of the

emergence of service ecosystems – as an addition to service system theory, providing
hints for catalysing service ecosystems in practice as well as establishing an agenda for
further research. Future research questions that emerge from the discussion are for
instance “what governance is adequate?”, “are there certain criteria for expanding an
ecosystem?” and “what role do platforms have in the growth of an ecosystem?”.
Example of Service Ecosystem

Core Elements of Successful Service Design

1. Understanding the customer’s needs: definition of possible service scenarios,

verifying use cases, and sequences of actions and actors’ roles in order to define
the requirements for the service and its logical and organizational structure.
2. Building a defensible, customer-driven business case to evangelize the concept
and gain buy in.
3. Understanding current people, process, practices and systems including physical
elements, interactions, logical links and temporal sequences.
4. Visualizing the desired customer experience.

4.Building an execution/implementation plan to deliver quick results.

Take Aways

 Develop a design culture. Consideration for employee competencies and an

environment that assists to enhance innovation and a language rooted in
customer experiences and needs is critical to successful service design thinking.
  Candidly assess your internal capabilities and partner to augment needed
service design skills. Organizations need to know their internal strengths and
consider alliances to deepen competencies and bring their service design
solutions to fruition.
 Be nimble. Creating new and improving existing services that are useful and in
demand requires effective and efficient design. Remain focused on flexibility and
agility in your service design philosophy and approach.

Self Assessment Question

1. The activity of planning and organizing people, infrastructure,

communication and material components of a service in order to improve
its quality and the interaction between service provider and customers.
(Comment.)

2. The purpose of service design methodologies is to design according to the

needs of customers or participants, so that the service is user-friendly,
competitive and relevant to the customers.( Agree or Disagree)

3. Number each step according to the appropriate sequence.

___ conduct market analysis ____ identify barriers and limitations

___align vision and goal ____ get feedback, improve the service
and evolve
___ evaluate user’s experience ____establish a user profile/persona
___brainstorm ____ prototype and text
___ estimate cost

4. Enumerate the top 10 Characteristics of Services

5. Illustrate and explain the components of service ecosystem.

Answer to Self-Assessment Questioins

1 The student should express agreement or disagreement on the given definition, if a

student prefers other definition he or she must define and justify the merits of his or her
definition.

Other definition:

I disagree,I think the definition is weak. I prefer this definition below because it is
more concrete and closely describe what service design is.
 Service design is a human-centered approach that starts with an obsession
about customer experience and the ability to deliver quality as a key value of success.

2. Agree. The purpose of service design methodologies is to design according to the

needs of customers or participants, so that the service is user-friendly, competitive and
relevant to the customers. This statement fully descrive what is the purpose of service
design.

3. Top 10 Characteristics of Service

1. Intangible nature

2. Simultaneous production and distribution

3. Loss due to lack of sales cannot be recovered

4. Fluctuating demand

5. Lack of uniform performance standard

6. Irrelevance of certain marketing functions/activities

7. Direct Distribution

8. Heterogenous nature of service

9. Personal relationship between the service provider and the client

10. Skill orientation

 4. Presenting the service ecosystem with its components, actors, resources and
the value proposition.

The service ecosystem above shows different components starting from

ecosystem capabilities ( collaboration, service delivery, product offering etc.) next
component is the members ( enterprise, institutions, individuals) services (business
services, infrastructure services and infrastructure (enablers for service engineering,
service delivery, service governance)
References:

(Sources: live|work & Wikipedia)

https://www.simplilearn.com/service-design-basics-article

https://www.yourarticlelibrary.com/marketing/7-important-characteristics-of-
services/30016

https://accountlearning.com/top-10-characteristics-services/
https://research.cbs.dk/en/publications/formation-of-service-ecosystems-a-
service-science-concept-to-cater

https://www.simplilearn.com/service-design-basics-article

https://www.yourarticlelibrary.com/marketing/7-important-characteristics-of-
services/30016

https://accountlearning.com/top-10-characteristics-services/