Understanding Users: Service Design and Innovation

1. INF5120 Modellbasert systemutvikling 14th of March 2011 Marika Lüders, forsker ved SINTEF IKT /marika.luders@sintef.no Service design/service innovation: Understanding users

2. Outline • Defining services • Service innovation/service design • Touchpoints • Service Journey • Involving users in service design/service innovation • Example: From user-studies to new iterations of services/interfaces

3. From Per Egil Pedersen’s lecture 1. Service defined • A goods dominant logic (GDL) definition won’t do: • A service is the intangible equivalent of an economic good • Proposed definition: • Services are economic activities offered by one party to another, most commonly employing time based performances to bring about desired results in recipients themselves or in objects or other assets for which purchasers have responsibility. In exchange for their money, time, and effort, service customers expect to obtain value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved (Lovelock and Wirtz, 2001 and later) • Service Dominant Logic (SDL)-based characteristics: • Activities • Processes (time based performances) • Value in use (as opposed to value in exchange) • Nonownership Defining services - Service innovation - Touchpoints - Service journey - Involving users - Example

4. Defining services Often also summarized by IHIP or similar: INTANGIBILITY: you can’t touch this. No storage or transport needed. HETEROGENEITY (variability): always unique, modified for each service consumer. INSEPARABILITY: you can’t separate service from service provider. PERISHABILITY: experienced at a definite period of time.

5. What we can do: • Think of services in a more tangible way:

6. Service innovation As a consequence of the nature of services, we need to include a specific focus on customers and users in order to work with service innovation or service design. SERVICES ARE OFFERINGS THAT ARE EXPERIENCED over time and that are shaped by various points of contact between the service provider and the customer (some of which are beyond the control of the service provider). Points to the importance of touchpoints and service journeys. Defining services - Service innovation - Touchpoints - Service journey - Involving users - Example

7. TOUCHPOINTS Any point of contact between a service provider and their users. The tangible elements of a service – everything that a person accessing the service sees, hears, interacts with. Includes points of contact beyond the control of the service provider (e.g. 3rd parties, unofficial Facebook pages). http://www.service-innovation.org/?p=349 (AT-ONE) Defining services - Service innovation - Touchpoints – Service journey - Involving users - Example

8. Service journey A service consists of a series of activities and interactions over time. A service journey describes this process, and needs to be customized to the service provider and services in question. Describes how the touchpoints come together over a period of time. A tool for identifying and mapping how customers experience the offering at various points. Defining services - Service innovation - Touchpoints - Service journey - Involving users - Example

10. Service Journey Oslo University Hospital’s ideaportal

12. The challenge: providing a holistic service experience • Interaction with a service is distributed in space, and across contexts, places, in time, and across a multitude of touchpoints. • How do you provide a consistent and compelling user experience? • Already significant challenges with co-ordinating multiple touchpoints, all of which affect the service experience. • With the Future Internet, the amount of touchpoints will only increase, further intensifying the challenges associated with providing a holistic user experience.

13. WIKINOMICS as a business model? “These new forms . . . enable firms to harvest external knowledge, resources, and scale that were all previously impossible. Whether your business is closer to Boeing or P&G, or more like YouTube or Flickr, there are vast pools of external talent that you can tap with the right approach. Companies that adopt these models can drive important changes in their industries and rewrite the rules of competition”

14. DiGangi, P.M. and Wasko, M (2009): ”Steal my idea! Organizational adoption of user innovations from a user innovation community: A case study of Dell IdeaStorm” in Decision Support Systems 48(1): 303-312.

16. Include users / why and how? The point is not necessarily to ask customers what kind of services or service innovations they want (which they might not know), but for service providers to understand who the customers are, how they experience the offerings at important touchpoints, and how existing services and potential service innovations comply with explicit and latent customer needs. Service journeys and touchpoints might also be helpful tools when preparing user-sessions or in user-sessions. Defining services - Service innovation - Touchpoints - Service journey - Involving users - Example

17. Self-centered vs. user-centered design Being self-centered is easy and natural. But: as service-provider, designer or researcher you do not represent users. We need tools, methods and techniques for including the user in the service innovation process. Either directly or indirectly.

18. User needs Maslow’s hierarchy of needs? 1. Physiological needs such as food, drink and shelter. 2. Safety needs such as security and protection. 3. The love and affection and belongingness needs. 4. The esteem needs such as self-respect, self-esteem and the esteem of others. 5. The need for self-actualization, such as self-development and realization. Hiearchical pyramid: if you lack food, love and self-esteem, your need for food will be most pressing.

19. Photo by sam j stanton (CC): http://www.flickr.com/photos/samstanton/3200143335/

20. Expressed needs are defined as the needs a customer is aware of, and therefore, can express. Narver, J. C., Slater, S. F., & MacLachlan, D. L. (2004). Responsive and Proactive Market Orientation and New Product Success. The Journal of Product Innovation Management, 21(5), 334-347.

21. Latent needs are needs that the customer is unaware of, and which are not in her/his consciousness. Narver, J. C., Slater, S. F., & MacLachlan, D. L. (2004). Responsive and Proactive Market Orientation and New Product Success. The Journal of Product Innovation Management, 21(5), 334-347.

23. Always consider the expressed needs of customers. For attracting and retaining customers in the prolonged perspective as well as for gaining a unique market position, a business must move beyond the expressed level to the latent needs of their customers. (Narver, Slater, & MacLachlan, 2004) Incrementalvs. radicalinnovations.

24. Leading companies can beheld captive by their customers if they listen to closely to what they claim they want and need. Christensen, Clayton (1997). The Innovators Dilemma

25. The disk-drive industry (Christensen) The 5.25 inch architecture did not address the perceived needs of mini-computer manufacturers at that time. On the other hand, the 5.25-inch drive had features that appealed to the desktop computer market segment just emerging in the period between 1980 and 1982. (…) They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream. Photo by sainz (CC): http://www.flickr.com/photos/sainz/3015818920/ / 25

26. Eric von Hippel:Lead-user innovation Brukerdreven innovasjon “Users that innovate can develop exactly what they want, rather than relying on manufacturers to act as their (often very imperfect) agents” Foto: jeanbaptisteparis CC 2.0 Generichttp://www.flickr.com/photos/jeanbaptisteparis/3362243959/

27. (…) the innovations toward which the customers in von Hippel’s study led their suppliers would have been in sustaining innovations. We would expect disruptive innovations to have come from other sources. (Christensen, C., 1997)

28. Our plan is to lead the public with new products rather than ask the public what is possible. The public does not know what is possible, but we do. (Morita, Reingold & Shimomura)

29. Howshould customersbe involved in service- and product innovation?

30. I study people Field studies: understanding the context of use Qualitative interviews: understanding expectations (or lack thereof), motivations, user-experiences, needs (users, stakeholders) Surveys/Living Lab: mapping users and user-patterns, predicting adoption Design feedback/Living Lab: Iterative user-centrerd development. Usability and user experience. Content/textual analysis: user-patterns, motivations.

31. Rather than asking customers to come up with new solutions, customers should be asked about desired outcomes, i.e. what they want a (new) service to do for them. Ulwick, A. W. (2002). Turn Customer Input Into Innovation. Harvard Business Review, 80 (1), 91-97

32. There is consequently a need to distinguish between ways of involving customers in service design: both in terms of how customers are involved (e.g. are customers interviewed or are they invited to participate in the design process) and for what purpose(e.g. are customers asked to suggest ultimate solutions or merely asked questions concerning how they experience and use a service?)

34. Use of Living Labs

35. Example User-tests and walkthroughs are appropriate methods for gathering data for improving user-interfaces in terms of usability and user experience. I will shortly show you one example from a walkthrough (combined with focus-groups) we did on Platekompaniet MP3 just when it was launched: Defining services - Service innovation - Touchpoints - Service journey - Involving users - Example

36. Expert walkthrough • Introduction: object of evaluation is presented. Objectives and principles of usability explained. Walkthrough procedure explained. • Scenario-based evaluation: evaluators are taken through a series of scenarios of use. • Test-leader goes through each scenario twice. First time, evaluators identify problems, taking notes, not talking. The second time, evaluators report and discuss problems. • Evaluators classify problems as critical, serious or minor. Følstad, A. (2007). Work-Domain Experts as Evaluators: Usability Inspection of Domain-Specific Work-Support Systems. International Journal of Human-Computer Interaction, 22(3), 217-245.

38. What users wanted • Improved advanced search option. • Social functions: integration with Facebook, Twitter etc. • Several options wrt. quality (e.g. different bitrates, OGG, FLAC). • A cleaner search result page. Evaluators regarded it as difficult to find what they wanted. • More contextual information about artists and albums (current artists as well as similar artists). • Integration with streming-service/WIMP (study was conducted before WIMP was public). • Shorter and less complex ToS.

40. Summary • Service journeys and tocuhpoints make make services and service innovation more ”tangible” and highlight services as experienced by users. • New digital and networked touchpoints: more challenging to provide a holistic service experience, but also new opportunities wrt. open innovation. • Open innovation, wisdom of crowds, wikinomics etc. Dell Idea-storm, MyStarbucksidea. • User-centered design: involving users in one way or another to uncover expressed and latent needs. Yet different modes of involvement have different purposes.