Resource Type: White Paper
Published by: Astea
Title: What is the next phase of service innovation
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Innovation causes company evolution and every year service is becoming more important to companies not only as a source of revenue but also as a key driver of customer loyalty...
It is no longer enough to merely deliver quality service in a timely manner. Customer demands and competitive pressures are driving service companies toward service innovation – developing new service offerings and service delivery mechanisms that their customers will find valuable.
To remain competitive, service organisations need to make investments in developing and designing new service products, tapping into new markets, and finding new ways to deliver service – making innovation part of the culture, from the executive suite to the field technicians.
This White Paper published by Astea takes a look at best practices for companies looking to innovate their service and it covers:
- Where the best opportunities for service innovation exist
- How to institutionalise innovation with 'service innovation teams'
- What metrics to use to measure the ROI of innovation activities
As service has grown in importance as a source of revenue and a key driver of customer loyalty, customer expectations of service delivery have increased. It is no longer enough to merely deliver quality service in a timely manner. Service organisations have to do more than simply keep costs low and maintain market share.
Customer demands and competitive pressures are driving service companies toward service innovation – developing new service offerings and service delivery mechanisms that their customers will find valuable.
This type of service innovation has become an increasingly vital component in a company’s competitive strategy. Executives recognise that focusing on cost control is not in line with long-term value creation. To grow, organisations need to reinvent customer relationships and embrace new technologies and business models.
Where is Service Innovation Needed?
In March 2016, The Service Council (TSC) conducted a survey on service innovation to gauge respondents’ perceptions of their own organisations.
When asked how innovative their entire organization was, the majority of respondents said their company was somewhat innovative (58%), while roughly one-third (31%) said their company was innovative. Asked specifically about their service organization, the responses were very close, with 23% responding “innovative,” 56% “somewhat innovative.” A slightly larger group said the service organization was not innovative (11% for service compared to 3% for the entire company).
Service companies can innovate on a number of levels: the service delivery process, customer management and communication, service design, new product/ service development, the client interface, and in their technological choices.
According to The Service Council survey, just 31% of respondents have a service innovation team in place. For service organisations to thrive in a marketplace that puts greater value on innovation, that has to change.
Service organizations have to look at innovation on a strategic level, and at all the ways that the service team can innovate – from developing new services and process-oriented changes to focusing on external service delivery processes and finding more opportunities to provide service.
These companies need to develop a service innovation team focused on fostering such projects. The team should include input from supervisors and managers, frontline employees/technicians, VP-level service leaders, regional leaders, and C-level executives.
Measure Your Success
Those innovation investments can’t be made blindly, however. Establishing whether a given innovation provides a return on investment (ROI) requires metrics around those innovation activities and their results. In The Service Council survey, just 20% of respondents said they already had innovation metrics in place.
Measuring innovation is a combination of art and science, which makes those metrics difficult to develop. You have to find the right things to measure; every company has its own organizational culture, so every company must fine-tune what it measures to reinforce the goals, values, and norms that it finds critical for inspiring innovation and best practices.
Technology Enables Innovation
One key enabler of both new service products and new service delivery mechanisms has been technology. Digital technologies have driven radical change and disruption in the service sector.
These include customer self-service portals and mobile apps, mobile field service automation and work order management solutions, GPS-enabled fleet tracking/management systems, and automated dispatch and scheduling solutions.
Service organisations that want to improve these efforts should institutionalise innovation by establishing dedicated innovation teams and resources and develop metrics to measure the effect of innovation. Frontline employees should be involved, and customer needs and insights should be analysed to develop an innovation road map.
- Begin with customer insights
- Understand the funding mechanism
- Determine who will develop and deliver new innovative service products and models
- Track innovation activity
- Institutionalize innovation