Innovate New Service Development in a product-oriented healthcare corporation

Abstract

To satisfy the growing needs of customers for services many product-oriented companies in various industries have started switching their focus from products towards service offerings. To stay competitive, New Service Development became an important concern for many companies to achieve. Company Z, which is one of the largest product-oriented corporations around the globe, continuously improved its New Product Development processes to successfully launch technology-driven product innovations. Aware of the current importance of service offerings, Company Z has integrated New Service Development into their processes but still faces challenges while developing their service offerings. A key role in developing and launching services plays the recently established New Services Design team of the service development and delivery function.
The aim of this project was to identify the pitfalls of the current New Service Development process of the New Services Design team of company Z and identify opportunities for overcoming them to create an improved process framework that fits the flexibility required for services. The development and delivery stages of the New Service development process of company Z were reviewed and literature was researched about Services and New Service Development. It was found that New Service Development in order to be successful require, compared to NPD, a different mindset, high customer involvement and flexibility. However, product-oriented companies tend to keep their old New Product Development approaches for certainty reasons and the rather less researched field of modern New Service Development.
Comparably, internal company research revealed that Company Z develops and delivers its service offerings with a product-oriented stage-gate process that originates from the company‘s product mindset. Based on the literature and qualitative research it was identified that this product-logic causes a highly fragmented and overstretched process that causes excessive amounts of bureaucracy, a strong focus on documentation, low customer involvement, and uncollaborative teams. In order to address any of these issues in the long term, the product-logic, which is the start point of the Causal Chain, needs to be replaced by a service-logic. To find a solution, in this rather academically unexplored research area, a Delphi study with several experts was conducted. Based on the Delphi study and literature it was discovered that an incremental change towards a service-logic can be fostered by establishing a high level of customer-centricity within the current New Service Development process. A solution was created that enables customer involvement within the New Service Development process of Company Z via early service prototyping to foster a service-oriented way of working. Finally, a Roadmap describes the implementation of the service prototyping approach in three horizons.