Service Innovation Points of Differentiation
A service provider seeking to grow by innovating new services must have a competitive advantage versus existing service providers, whether internal or external, when positioning new services. In services, with its low barriers to entry, its not good enough to simply say Im the largest. And when perceived quality is the final measure it is also not good enough to say Im the cheapest. A service provider must be able to provide a good value for the best work. And to meet that sort of test, it must design processes to do jobs and achieve outcomes better than whoever is doing them today.
Service and/or process design is a core capability that can be built. With stronger process design, companies can offer better deliverables at a lower price. If gaining scale is one of the service designers goals, process design can produce more scalable services since an element of scalability is consistency which can be enhanced with better process design. Process design is also an easier core capability to develop than many others because it can be contained in a small group of people that are leveraged across an entire organization. It is the service business equivalent of an R&D function whose output is leveraged by manufacturing, sales, marketing and distribution.
It is also the building of such a capability that can be promoted to change a companys brand image. Many equipment manufacturers provide services in conjunction with equipment sales. However, they are still viewed by their clients, employees and, most importantly, customers as equipment makers. If the vision is to move from being an equipment maker, with all its inherent cycles, to a service provider that has greater stability and growth, expertise is designing and executing services is a key roadmap.
In a previous post, I wrote how service innovation is different from service excellence. The latter requires knowledge of your processes while the former requires you to know your clients and/or competitors processes. I also wrote how even though you must have service excellence to establish the credibility to be given the opportunity to provide new services, expertise in delivery isnt a guarantee to be able to define and design solutions that ensure better outcomes. This article adds that one of the two basis on which you can differentiate yourself as a service provider is to design better solutions.
If youd like to speak more about this, feel free to contact me.