A customer-oriented new service development process by Alam & Perry, 2002

1. TU-22.1335 Service Innovation and New Service Development P A customer-oriented new service development processby Alam & Perry, 2002 15 November 2013 Kossi AmuzuXuemei Sun

2. Agenda • Background • Research question and objectives, methodology • Literature review • Research findings • Conclusions and limitations • Questions left unanswered

3. Background • Literature • Rich in product development • Focus only on service innovation and new service success factors • Little research on NSD models • Limited knowledge about details of NSD stages and their customer interfaces in service firms • In practice • Many service firms do not obtain customer input into their NSD process, • Little is known about customer’s roles in service innovation • High F/R in new service development

4. Research question, objectives&methodology • Research question: • How can a new service development program in the financial services industry be managed? • Research objectives: • To develop the models for NSD in financial service and identify the key stages of NSD process • To explore customer inputs in different stages • Research methodology: case study • In-depth interview • 12 Australian financial service organizations • 36 ”Elite interview”, each lasts 2 hours • 2 managers of firm and 1 business customer

5. Literature review on product development • Booz, Allen & Hamilton, 1982: 8 linear stages • Cooper, 1993: the stage gate model • Cooper, 1994: 3rd generation model (parallel processing) • Rothwell, 1994: 4th generation model • Saren, 1994: ”block approach” model • Hart & Baker, 1994: multiple convergent points during new product development process Booz, Allen & Hamilton, 1982

6. Literature review on NSD – 2 models • 1st model: 8 linear and sequential stages model (Bowers, 1987, 1989) • Similar to the 8 stage model of product development • 2nd model: 15 stages model (Scheuing&Johnson, 1989) • Missing importance of cross-functional teams • Stages sequential or concurrently? • NSD and customer orientation Scheuing&Johnson, 1989

7. Research findings • 2 versions of 10 stage customer-oriented model • Linear sequential • Parallel • Identified stage of “formation of cross-functional team” • Importance of various stages • Formation of cross-functional team, idea generation and screening most important • Test marketing least important Alam and Perry, 2002

8. Research findings • Proposed 3 pairs of stages for parallel processing • Strategic planning and idea generation • Idea screening and business analysis • Personnel training and service testing • Customer input activities by stages  Alam and Perry, 2002

9. Conclusions, Limitations Conclusions: • The parallel model more useful in competitive markets, e.g., financial services • For speed, cycle reduction concern, firms can choose the recommended stages for concurrent processing • Service firms should: • adopt customer-oriented NSD model • develop the services that match customer’s needs • be proactive in developing long-term relationship with customers Limitations: • B2B, financial service only • Small number of case, Australian firms only • Relationships between customer input at various stages and new service success not tested

10. Questions left unanswered • Are the 2 models appropriate for different service industries? • Which one of the 2 models is more appropriate for different types of innovations? • Specific relationship between NSD cycle time and parallel NSD model? • How can manager get customers more involved? • ……