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Service Innovation Points of Differentiation

November 15th, 2011

Service Innovation for DifferentiationA 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, it’s not good enough to simply say I’m the largest. And when perceived quality is the final measure it is also not good enough to say I’m 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 company’s 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.

Download service innovation a short .ppt on service innovation ….

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 client’s and/or competitor’s 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 isn’t 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 you’d like to speak more about this, feel free to contact me.

  1. Jim Sutton
    November 15th, 2011 at 13:48 | #1

    Process design capabilities can be “built up” by companies that need/require them, or by service companies seeking to sell them. It can be viewed as finding a balance between skills and complexity. From the perspective of the company needing the process(es), the best process skilled people usually aren’t the ones that know the specific business complexities. Making it easy for companies to rationalize this “make versus buy” decision can be a significant differentiator for the service provider.

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