Academic journal article International Journal of Management

Issues in the Innovation Service Product Process: A Managerial Perspective

Academic journal article International Journal of Management

Issues in the Innovation Service Product Process: A Managerial Perspective

Article excerpt

Innovations in service augmentation are perceived to have a big impact on sales and profits as well as the success of other products. One of the most pivotal factors in the services innovation is the employment of champion. The "service champion" is defined as someone charged with nurturing and protecting a new service from idea generation to commercialisation stages. The whole innovation process is basically dependent upon the service champion's capability of designing and executing creativity and innovation as well as bringing people together. This paper discusses key issues to be considered in the services innovation. Strategies that can be used to enhance the services innovation management are: (1) formalising the process of innovation, (2) creating a new service charter, (3) increasing customer inputs to the overall process, (4) emphasising internal idea generation and concept development, (5) enhancing quasi-search quality, and (6) hiring and maintaining innovation champions.

1. Introduction

"How much more productivity can we get from our people and processes? Rather than continuing to invest in doing what we do faster, better, cheaper, maybe we need to look at doing something altogether different. " (Consortium for Service Innovation 2005)

These sentences have been mentioned in many places and on many occasions recently, with the main idea underpinning them is the importance of finding and managing discontinuous innovation in services. Services innovation is becoming more important due to the more significant role that the service itself plays in the business. Coffin and Mitchell (2005) argue that relative to manufacturing activities, the service sector increasingly dominates current research on innovation since:

1. The service sector accounts for more than 60% of GDP in many countries, especially in developed nations.

The economy basically comprises three main sectors - agriculture, industry, and service - that also indicate the development stage of the country. The first development phase is focused on agriculture as heretofore prevailing in developing countries. When the country improves, the needs for agricultural products are satisfied and the development embarks on focusing on industrialisation. Finally, when the industrial products have fulfilled people's demand, they are then concerned about intangible aspects of product consumption, making services a crucial element at this stage.

2. In the business environment with suffer competition than ever, services are mostly utilised for differentiating manufacturing products. The technology is more convergent over time since the information flow is easily access through information and communications technology (ICT). Hence, services are notably used to differentiate product attributes. For instance, many car buyers are considering after-sales services to be the most important criterion for choosing a brand.

3. Services somehow have distinct characteristics relative to the manufacturing activities such that specific approaches to managing innovation in service area are needed.

Staggeringly, although managers and leaders realise the importance of services innovation to survival and maintaining competitive advantage, the statistics show that research and development (R&D) expenditures are relatively low albeit showing an increasing trend. For instance, service sector contributes 80% of the GDP in the U.S. whilst the R&D expenditures for service sector are only 24% (Coffin and Mitchell 2005). In the U.K., the service industries contribute 72% to the economy yet receive just 14% of R&D investment (Live Work 2005). The examples indicate that there is still a big room for improvement in the service area.

In this paper, the innovation management of services is the focal point. The discussion is divided into three sections: characteristics of services, issues in managing services innovation, and strategy for enhancing services innovation. …

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